Peerless Systems Announces New PeerlessTrapping(TM) SDK

New SDK Provides OEMs the Ability to Improve Image Quality and Reduce the Design Cost of MFPs and Printers

Peerless Systems Corporation (NASDAQ: PRLS), a provider of advanced imaging and networking technologies and components to the digital document market, today announced a new PeerlessTrapping(TM) software development kit (SDK) for evaluation by original equipment manufacturers (OEMs) of multifunction products (MFP) and printers. PeerlessTrapping provides customers with an advanced set of software libraries that compensate for misalignments and imaging errors inherent in color MFP and printer engines. The PeerlessTrapping SDK is a cost effective software solution that enables our customers to improve the image quality of a variety of printing engines -- from desktop printers to production class products.

PeerlessTrapping is a raster-based software solution that is independent of Page Description Languages (PDLs) such as PostScript or PCL. It can be used with color printing devices driven by any PDL or Graphic Device Interface (GDI) system. Future Microsoft Longhorn systems can utilize PeerlessTrapping embedded in the device controller. PeerlessTrapping can scale down to the very cost sensitive GDI systems by running in a host-based environment. The PeerlessTrapping SDK is highly configurable and supports laser and LED engines. The trapping enhancements can be set to automatic or enabled by a simple driver option selected by the user without any need to input trapping parameters.

"MFP and printer manufacturers are under a tremendous amount of pressure to decrease manufacturing costs while increasing image quality," said Steve Robinson, vice president, marketing, Peerless. "PeerlessTrapping enables our customers to deliver significant improvements in output quality inexpensively -- with no need for costly changes to their engine designs or internal electronics. Whether printing to a $500 color printer or a $50,000 production MFP, the PeerlessTrapping solution provides dramatic image quality enhancements cost effectively."

Key features of the PeerlessTrapping SDK include:

--  Smart rules based algorithms offer selectable trapping methods

--  Easy integration into an MFP / printer controller or host-based
    imaging system

--  Small requirement for RAM and processor resources minimizes
    performance degradation

--  Raster-based processing benefits all print files -- no need for
    application software to generate object hints.
    

The new PeerlessTrapping SDK comes complete with documentation and usage examples for our customers. Peerless can also support customers with training, engineering support, contract engineering or co-development for product integration and hardware design. Detailed technical information and white papers about PeerlessTrapping are available in both English and Japanese. The Windows based evaluation program of PeerlessTrapping will be available next month.

About Peerless Systems Corporation

Founded in 1982, Peerless Systems Corporation is a provider of imaging and networking controllers to the digital document markets, which include manufacturers of color, monochrome and multifunction office products and digital appliances. In order to process digital text and graphics, digital document products rely on a core set of imaging software and supporting electronics, collectively known as an imaging controller. Peerless' broad line of scalable software and silicon offerings enables its customers to shorten their time-to-market and reduce costs by offering unique solutions for multiple products.

Peerless' customer base includes companies such as Canon, IBM, Konica Minolta, Kyocera Mita, Lenovo, OkiData, Ricoh, RISO, Seiko Epson and Xerox. Peerless also maintains strategic partnerships with Adobe and Novell. For more information, visit Peerless' web site at www.peerless.com.

Editor's Note: Peerless is a registered trademark of Peerless Systems Corporation. PeerlessTrapping is a trademark of Peerless Systems Corporation. All other trademarks are the property of their respective owners. This news release may refer to various products and companies by their trade names which designations are claimed as trademarks or registered trademarks by their respective companies.

Safe Harbor Statement Under The U.S. Private Securities Litigation Reform Act of 1995.

This Release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The use of forward-looking statements in connection with or related to any discussion of or reference to future operations, opportunities or financial performance sets apart forward-looking statements. In particular, statements regarding the Company's outlook for future business, financial performance and growth, profitability, product availability and potential applications and successes and the impact on future performance of organizational and operational changes all constitute forward-looking statements.

These forward-looking statements are just predictions and best estimations consistent with the information available to the Company at this time. Thus they involve known and unknown risks and uncertainties such that actual results could differ materially from those projected in the forward-looking statements made in this Release. Risks and uncertainties include those set forth in Peerless' public filings with the Securities and Exchange Commission, including but not limited to the Company's most recent Annual Report on Form 10-K dated January 31, 2004 in the Section called Certain Factors And Trends Affecting Peerless And Its Business at pages 16 through 23, inclusive, filed on April 30, 2004, and the Company's most recent Quarterly Report on Form 10-Q dated October 31, 2004 in the Section called Certain Factors and Trends Affecting Peerless and Its Business at pages 21 through 29, inclusive, filed on December 15, 2004.

Current and prospective stockholders are urged not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company is under no obligation, and expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained herein are qualified in their entirety by the foregoing cautionary statements.

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