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Rainbow Technologies Announces Q1 1999 Results.

IRVINE, Calif.--(BUSINESS WIRE)--April 20, 1999--

Rainbow Technologies Inc. (Nasdaq:RNBO), the leading provider of cryptographic technology for digital rights, Internet, satellite and telecommunications security, Tuesday announced that first-quarter revenues increased 4% to $26,086,000.

Net income for the quarter increased by $1,904,000 to $1,285,000 from a net loss of $619,000 in the quarter ended March 31, 1998. Earnings per share for the quarter ended March 31, 1999, were $0.10, compared with a loss of $0.05 in the corresponding 1998 quarter.

"First-quarter 1999 software protection revenues increased 1% to $14,275,000. Our overall business continued to be impacted by the economic problems in Asia and other emerging markets, as well as the strong dollar vs. foreign currency," said Patrick Fevery, chief financial officer.

"Our information security business revenues, which include satellite and telecommunications products increased 2% to $11,049,000, primarily due to increased demand for network security products and commercial satellite products. Profitability of the segment was seriously impacted by a reduction in government-funded development programs.

"The government is increasingly buying commercially developed products resulting in the company having to use its own funds to finance research and development. In addition, commercial application of this business segment continues to grow, resulting in the company incurring related research and development expenses," continued Fevery.

"Internet security product revenues for the quarter increased by $687,000 to $735,000. The significant increase in first-quarter sales of Internet Security Products is a result of wider end-user acceptance of the products."

The company continues to invest significantly in its family of Internet solution products. Recently, the company announced the iKey family of cryptographic tokens, providing end-user client authentication to VPNs and enabling operator access to secured network equipment such as routers, switches or firewalls.

The statements made in this news release could be forward- looking statements based on expectations that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially include the following: economic conditions and growth in the personal computer hardware and software industry; competitive factors and pricing pressures; changes in product mix; the timely development and acceptance of new products; changes in government procurement; and the risks described from time to time in the company's SEC reports, which include the Annual Report on Form 10-K. -0-

 Financial Highlights

 Three Months Ended
 March 31, 1999 March 31, 1998
 (unaudited) (unaudited)

Net revenues $26,086,000 $25,030,000
Net income (loss) $ 1,285,000 $ (619,000)
Net income (loss) per share
 Basic $ 0.11 $ (0.05)
 Diluted $ 0.10 $ (0.05)
Shares used in computing net
 income (loss) per share:
 Basic 11,804,000 11,650,000
 Diluted 12,628,000 11,650,000


 Three Months Ended
 March 31, 1999 March 31, 1998
 (unaudited) (unaudited)


Software Protection $14,275,000 $14,171,000
Information Security 11,049,000 10,801,000
Internet Security 735,000 48,000
QMT 27,000 10,000
Consolidated $26,086,000 $25,030,000

Operating Income

Software Protection $ 2,665,000 $ 3,314,000
Information Security 571,000 2,141,000
Internet Security (1,262,000) (1,564,000)
QMT (422,000) (288,000)
Non-recurring expenses -- (1,500,000)
Consolidated $ 1,552,000 $ 2,103,000
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Article Details
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Publication:Business Wire
Geographic Code:1USA
Date:Apr 20, 1999
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