Exhibit 1
FOR MORE INFORMATION CONTACT
George A. Hervey
Sr. VP Finance & CFO
(408) 367-1400-228
Galileo Website Location: http://www.galileoT.com
FOR IMMEDIATE RELEASE
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GALILEO TECHNOLOGY LTD. REPORTS
RECORD REVENUE AND PROFITS
San Jose, CA - October 19, 1999 -- Galileo Technology Ltd. (Nasdaq:
GALT) today reported net sales for the third quarter of 1999 increased 92% to a
record $22.0 million, compared to $11.5 million for the third quarter of 1998.
Net income for the quarter increased 147% to a record $7.1 million, or $0.16 per
share, compared to net income of $2.9 million, or $0.07 per share, for the
corresponding quarter last year. All per share amounts are diluted earnings per
share and reflect the 2 for 1 stock split, which was effective
September 17, 1999. Diluted shares used in computing earnings per share for the
third quarter of 1999 were 45.4 million, compared to 42.0 million shares for the
third quarter of 1998.
Net sales for the third quarter 1999 increased 21% from the second
quarter 1999 net sales of $18.3 million. Third quarter 1999 net income increased
15% compared to the second quarter 1999 net income of $6.1 million, with
earnings per share increasing sequentially 14%.
Net sales for the first nine months of 1999 totaled $55.4 million
compared to $38.0 million for the first nine months of 1998. Net income for the
first nine months of 1999 totaled $18.2 million, or $0.41 per share compared to
$11.2 million or $0.26 per share for the first nine months of 1998. Diluted
shares used in computing earnings per share for the first nine months of 1999
were 44.7 million, compared to 42.3 million shares for the first nine months of
1998.
"Q3 was the fourth consecutive quarter of sequential increase in both
revenue and profits," stated Avigdor Willenz, Galileo's Chairman and CEO. "Both
our GalNet-II family of devices and the GT-64120 system controller product
continued to see increasing demand and have grown to more than 60% of our
quarterly revenue, resulting in sequential quarterly revenue growth of over 20%
for the second consecutive quarter."
About Galileo Technology Ltd.
Galileo Technology Ltd., a market leader in complex data
communications systems on silicon, is one of the semiconductor industry's
fastest growing suppliers of complex, high performance, integrated circuit
devices. Galileo's products include single-chip Ethernet switches,
high-performance system controllers for RISC processors and WAN coprocessors.
Galileo's products form the heart of many advanced data communications
systems built by leading OEMs, such as Cisco Systems, D-Link, Hewlett Packard,
Intel, Lucent Technologies, Nbase Communications and Nortel Networks.
Galileo employs more than 230 people worldwide with business
headquarters in San Jose, California and R&D headquarters in Manof, Israel.
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Any forward-looking statements contained in this document reflect
management's current intentions and expectations. Actual future results could
vary materially depending on certain risks and uncertainties, including
dependence on new product development, customer acceptance and competition and
other risk factors listed in the company's most recent report on form 20-F on
file with the SEC.
GALILEO TECHNOLOGY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars, in thousands, except per share data)
Three Months Ended Nine Months Ended
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September 30, September 30, September 30, September 30,
1999 1998 1999 1998
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Net sales $ 22,024 $ 11,454 $ 55,447 $ 37,952
Cost of sales 7,620 4,343 19,314 14,301
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Gross profit 14,404 7,111 36,133 23,651
Operating expenses:
Research and development 4,689 2,807 11,653 8,011
Selling, marketing and administrative 3,404 2,285 8,786 7,008
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Total operating expenses 8,093 5,092 20,439 15,019
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Operating income 6,311 2,019 15,694 8,632
Other income, net 1,123 984 3,415 3,106
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Income before provision for income taxes 7,434 3,003 19,109 11,738
Provision for income taxes 375 150 955 535
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Net income $ 7,059 $ 2,853 $ 18,154 $ 11,203
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Earnings per share:
Basic $ 0.17 $ 0.07 $ 0.44 $ 0.28
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Diluted $ 0.16 $ 0.07 $ 0.41 $ 0.26
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Shares used in computing earnings per share:
Basic 41,472 40,742 41,059 40,722
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Diluted 45,399 42,014 44,676 42,332
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GALILEO TECHNOLOGY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars, in thousands)
September 30, December 31,
1999 1998
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ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 102,708 $ 86,445
Accounts receivable 10,990 5,207
Inventories 6,846 2,851
Prepaid expenses and other 3,159 1,745
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Total current assets 123,703 96,248
Other assets 2,082 1,857
Property and equipment, net 7,991 4,816
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Total $ 133,776 $ 102,921
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,949 $ 4,826
Accrued and other liabilities 8,444 6,078
Deferred income 1,480 771
Current maturities of long-term debt 10 128
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Total current liabilities 20,883 11,803
Accrued severance pay 346 283
Long-term debt - 6
Other liabilities 1,351 1,030
Total shareholders' equity 111,196 89,799
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Total $ 133,776 $ 102,921
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