Rainbow Technologies, IRVINE

Nature of business: Develops and manufactures software protection products.

Total employees: 165

In Orange County: 102

Stock listing in The Times: On Nasdaq “RainTc”

Ticker symbol: “RNBO”

Friday’s stock close: $19.75

One-week change: Down $1

Analyst review: “Rainbow technologies is currently the leader in software protection, with a 50% market share. It recently developed a new application, The VendorSystem, to allow its customers to distribute multiple products on a single compact disc and other media while remotely controlling access to data. The company has managed to grow in excess of 30% based on its original product. With its new application, it should be able to further expand its potential revenue base. Also, approximately 90% of Rainbow’s revenues are derived from reorders, enhancing its revenue stability. Because the company continues to strengthen its presence in the software protection market, we recommend initial purchases for growth-oriented investors.”

--Christin C. Armacost, analyst, OLDE Stockbrokers, Detroit

Revenue

In millions of dollars

‘89: 11.2

‘90: 13.7

‘91: 18.9

‘92: 28.3

‘93: 35.1

Profits

In millions of dollars

‘89: 1.7

‘90: 1.9

‘91: 3.5

‘92: 5.1

‘93: 6.0

Corporate outlook: “We experienced favorable growth in our software protection business in North America and the Asia Pacific region. The VendorSystem, the company’s latest product, added some major new accounts which contributed to overall sales and is creating an increased level of interest among existing and potential customers.” Patrick Fevery, vice president/CFO

RETURN ON INVESTMENT: 5-YEAR SUMMARY

Fiscal year ending Dec. 31 Dec. 31 Dec 31 Dec. 31 1989 1990 1991 1992 1993 52-week high $11.63 $14.00 $25.00 $32.75 52-week low $3.06 $4.75 $5.75 $11.75 Book value per share $1.69 $2.21 $5.68 $6.48 Price per share $6.94 $6.88 $24.75 $20.75 Net profit per share $0.45 $0.49 $0.80 $0.95 Price-to-earnings ratio 15:1 14:1 31:1 22:1 Avg. return on investor equity 26.0% 22.0% 14.0% 15.0%

Fiscal year ending Dec. 31 1989 52-week high $32.00 52-week low $16.00 Book value per share Price per share $19.00 Net profit per share $1.06 Price-to-earnings ratio 18:1 Avg. return on investor equity 15.0%

For more information call or write, Rainbow Technologies Inc.: 9292 Jeronimo Road, Irvine, CA 92718. (714) 454-2100 Source: Rainbow Technologies ; Bloomberg Business News