<PAGE>
EXHIBIT 99.1
FOR MORE INFORMATION CONTACT
Mike Tate
Chief Financial Officer, VP of Finance
(408) 367-1400 x244
Galileo Website Location: http://www.galileoT.com
FOR IMMEDIATE RELEASE
---------------------
GALILEO TECHNOLOGY LTD. REPORTS
SECOND QUARTER 2000 RESULTS
San Jose, CA -- July 18, 2000 -- Galileo Technology Ltd. (Nasdaq: GALT)
today reported net sales for the second quarter of 2000 increased 33% to a
record $24.3 million, compared to $18.3 million for the second quarter of 1999.
Net income for the quarter decreased 8% to $5.7 million, or $0.13 per share,
compared to net income of $6.1 million, or $0.14 per share, for the
corresponding quarter last year. All per share amounts are diluted earnings per
share. Diluted shares used in computing earnings per share for the second
quarter of 2000 were 45.1 million, compared to 44.5 million for the second
quarter of 1999.
Net sales for the second quarter of 2000 increased 21% from the first
quarter of 1999 net sales of $20.2 million. Second quarter 2000 net income
increased 28% compared to the first quarter pro forma net income of $4.4
million, which excludes charges totaling $2.5 million pre-tax to increase the
Company's inventory reserves and write off investments and intellectual property
for discontinued projects.
"We are pleased to report record revenues for Q2," stated Avigdor Willenz,
Galileo's Chairman and CEO. "During the quarter we experienced strong demand for
our current production products, namely our GalNet(R)-II family of switched
Ethernet products and our internetworking products. Additionally, we are
encouraged by the level of design activity and acceptance of our new product
families, GalNet-2+, GalNet-3 and Horizon(TM), with GalNet-2+ expected to
commence volume shipments in Q3."
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About Galileo Technology Ltd.
Galileo Technology, a market leader in communications systems on silicon,
is one of the semiconductor industry's fastest growing suppliers of complex,
high-performance, integrated circuit devices serving the needs of the LAN, MAN,
and WAN markets. Galileo is organized around two principal product groups:
Internetworking Products, consisting of system controllers and WAN
communications controllers, and Switching Products, which consists of switched
Ethernet controllers and switched PoS/ATM controllers.
Galileo's products form the heart of many advanced communications systems
built by leading OEMs, such as Accton, Alcatel, Cabletron, Cisco Systems, D-
Link, Ericsson, Hewlett Packard, Intel, Lucent, Marconi, NBase Communications,
and Nortel Networks.
Galileo employs more than 275 people worldwide and has business
headquarters in San Jose, California and R&D headquarters in Manof, Israel. For
more information on Galileo, call 1-888-GALTEK-1 or visit its website at
http://www.galileoT.com.
###
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.
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<PAGE>
GALILEO TECHNOLOGY LTD.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- ----------------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net sales $ 24,318 $ 18,271 $ 44,470 $ 33,423
Cost of sales 9,573 6,247 17,319 11,694
--------------------------- ----------------------------
Gross profit 14,745 12,024 27,151 21,729
Operating expenses:
Research and development 5,977 3,679 11,334 6,964
Selling, marketing and administrative 4,180 2,971 7,948 5,382
--------------------------- ----------------------------
Total operating expenses 10,157 6,650 19,282 12,346
--------------------------- ----------------------------
Operating income 4,588 5,374 7,869 9,383
Other income, net 1,372 1,076 2,711 2,292
--------------------------- ----------------------------
Income before provision for income taxes 5,960 6,450 10,580 11,675
Provision for income taxes 300 320 532 580
--------------------------- ----------------------------
Net income $ 5,660 $ 6,130 $ 10,048 $ 11,095
=========================== ============================
Earnings per share:
Basic $ 0.13 $ 0.15 $ 0.24 $ 0.27
=========================== ============================
Diluted $ 0.13 $ 0.14 $ 0.22 $ 0.25
=========================== ============================
Shares used in computing earnings per share:
Basic 42,579 41,010 42,233 40,852
=========================== ============================
Diluted 45,059 44,544 45,237 44,316
=========================== ============================
</TABLE>
(1) The Pro Forma Condensed Consolidated Statement of Operations for the six
months ended June 30, 2000, excludes one-time charges of $1.5 million to cost of
sales; $0.7 million to research and development; $0.3 million to other income,
net; and a $0.1 million reduction to the provision for income taxes.
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<PAGE>
GALILEO TECHNOLOGY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- ----------------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net sales $ 24,318 $ 18,271 $ 44,470 $ 33,423
Cost of sales 9,573 6,247 18,819 11,694
--------------------------- ----------------------------
Gross profit 14,745 12,024 25,651 21,729
Operating expenses:
Research and development 5,977 3,679 11,979 6,964
Selling, marketing and administrative 4,180 2,971 7,948 5,382
--------------------------- ----------------------------
Total operating expenses 10,157 6,650 19,927 12,346
--------------------------- ----------------------------
Operating income 4,588 5,374 5,724 9,383
Other income, net 1,372 1,076 2,406 2,292
--------------------------- ----------------------------
Income before provision for income taxes 5,960 6,450 8,130 11,675
Provision for income taxes 300 320 408 580
--------------------------- ----------------------------
Net income $ 5,660 $ 6,130 $ 7,722 $ 11,095
=========================== ============================
Earnings per share:
Basic $ 0.13 $ 0.15 $ 0.18 $ 0.27
=========================== ============================
Diluted $ 0.13 $ 0.14 $ 0.17 $ 0.25
=========================== ============================
Shares used in computing earnings per share:
Basic 42,579 41,010 42,406 40,852
=========================== ============================
Diluted 45,059 44,544 45,148 44,316
=========================== ============================
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
GALILEO TECHNOLOGY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars, in thousands)
June 30, December 31,
2000 1999
-------------------- -------------------
ASSETS
<S> <C> <C>
Current assets:
Cash, cash equivalents and short-term investments $ 107,466 $ 105,653
Accounts receivable 10,584
12,523
Inventories 8,094
11,545
Prepaid expenses and other 2,287 3,049
------------ ------------
Total current assets 131,882 129,319
Other assets 8,091 2,031
Property and equipment, net 12,462 9,388
------------ ------------
Total $ 152,435 $ 140,738
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,134 $ 6,495
Accrued and other liabilities 8,023 8,969
Deferred income 2,394 1,817
------------ ------------
Total current liabilities 18,551
17,281
Accrued severance pay 731 500
Other liabilities 1,675
1,652
Total shareholders' equity 131,478 121,305
------------ ------------
Total $ 152,435 $ 140,738
============ ============
</TABLE>
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