(FORTUNE Magazine) – CUSTOM CHROME Has Nace Panzica changed much since he brought Custom Chrome public 18 months ago? The CEO points to the tie and business suit he is wearing and bursts out laughing. He and most of Custom Chrome's management are motorcycle enthusiasts. They sell to a market they know well: one million Harley-Davidson riders in the U.S., Europe, and Japan. Custom Chrome, in Morgan Hills, California, designs and distributes some 9,500 engine parts (carburetors, clutches, oil filters) and accessories (handlebars, seats, leather goods) for the Harley-Davidson after-market. The company can supply parts -- which are sold under brand names such as RevTech, C.C. Rider, and Premium -- for Harley models as far back as 1936. ^ Harley riders have ''an almost fanatical passion for altering the look of their bikes,'' says C. Marks Hinton Jr., a security analyst in Houston with Principal/EGT regional brokerage. Hinton estimates that Custom Chrome has an 11% share of the $480-million-a-year motorcycle after-market business, second only to Harley-Davidson itself, which has 27%. It sells parts to 700 Harley dealerships in North America alone, as well as to thousands of other motorcycle shops. Says Panzica, who owns 12 Harleys, including a 1916 model: ''We have a love-hate relationship with Harley. On the love side, we represent the company in the very best light. But it hates the competition.'' Panzica and some friends began the company as a retailer of motorcycle parts in 1970. They knew of many riders who customized their motorcycles with homemade parts not available on the market. Seeing an opportunity, Custom Chrome began designing its own parts, contracting out the manufacturing, and wholesaling them to dealers from three distribution centers. Now it can ship an order anywhere in the U.S. in two days or less. Hinton expects that the fast service and new products will help raise operating income 26% in 1993, to $9 million, on a 19% increase in revenues, to $62 million. The stock traded recently at $14 a share, or 14 times Hinton's estimate of 1993 earnings per share. Prior to its public offering, Custom Chrome endured two years under a debt burden piled high in a management-led leveraged buyout. Operating income continued to rise, but interest payments ate away cash needed for expansion and research, threatening future growth. All the LBO debt has now been paid off.

DATA RACE Data Race designs and manufactures high-speed modems for notebook computers. Customers include Dell, Texas Instruments, and Tandy, which use Data Race's 9,600 and 14,400 bits-per-second modems in their products. Although the company, in San Antonio, sells mainly to the notebook manufacturers, CEO Herb Hensley is moving closer to consumers. Last month computer retailers began carrying Data Race modems. Antoine Tristani, an analyst with Southcoast Capital in Austin, Texas, expects 1993 net income to rise 71%, to $6.4 million, on revenue growth of 70%, to $57 million. The stock traded recently at $19.63, or 15 times Tristani's estimate of 1993 earnings per share. Data Race gets about 30% of revenues from a line of products known as multiplexers. These devices offer a money-saving breakthrough in office-to- office communications. A single phone line plugged into a multiplexer can link as many as 64 telephone, computer, and fax users, reducing long-distance service costs. Although multiplexer technology has been available for computers for some time, Data Race is one of the few companies to include voice and fax service.

ATMEL CORP. CEO George Perlegos ceaselessly looks for new applications for Atmel's memory and logic chips. The company already sells them for telecommunications, computer, and military uses, and, says Perlegos, ''consumer and automotive markets are our next targets.'' Perlegos, who previously worked as an engineer at Intel, founded Atmel in 1984. The San Jose, California, company introduced several new lines of memory and logic chips last year. Its best-seller, called ''flash memory,'' is an easily reprogrammable chip with as much as one megabit of storage. The flash chip doesn't lose memory when the power goes off, and it requires just five volts for reprogramming, vs. 12 volts needed for similar chips. Customers include Motorola, NEC, and Toshiba, which use Atmel's flash in such products as cellular phones and portable computers. Unlike other small chipmakers, Atmel manufactures primarily in the U.S., at its plant in Colorado Springs. John Marren of Alex. Brown & Sons expects 1993 net income to rise 66%, to $23 million, on a 37% increase in revenues, to $191 million. The stock traded recently at $19.13, or 16 times Marren's estimate of 1993 earnings per share.