<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
THIRD QUARTER 2000 RESULTS
San Jose, CA - October 17, 2000 -- Galileo Technology Ltd. (Nasdaq: GALT)
today reported net sales for the third quarter of 2000 increased 31% to a record
$28.8 million, compared to $22.0 million for the third quarter of 1999. Net
income for the quarter decreased 5% to $6.7 million, or $0.15 per share,
compared to net income of $7.1 million, or $0.16 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 third quarter
of 2000 were 45.9 million, compared to 45.4 million for the third quarter of
1999.
Net sales for the third quarter of 2000 increased 18% from the second
quarter of 2000 net sales of $24.3 million. Third quarter 2000 net income
increased 18% compared to the second quarter net income of $5.7 million.
"We are pleased to report record revenues for Q3," stated Avigdor Willenz,
Galileo's Chairman and CEO. "During the quarter we experienced very strong
demand for our GalNet(R)-II switched Ethernet products as many new customer
programs began to ramp into production. Additionally, we continue to garner
significant design wins with our GalNet-3 and Horizon(TM) product families."
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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 300 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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GALILEO TECHNOLOGY LTD.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------ -----------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
------------------------ -----------------------
<S> <C> <C> <C> <C>
Net sales $ 28,786 $ 22,024 $ 73,256 $ 55,447
Cost of sales 11,489 7,620 28,808 19,314
------------------------ -----------------------
Gross profit 17,297 14,404 44,448 36,133
Operating expenses:
Research and development 7,016 4,689 18,350 11,653
Selling, marketing and administrative 4,761 3,404 12,709 8,786
------------------------ -----------------------
Total operating expenses 11,777 8,093 31,059 20,439
------------------------ -----------------------
Operating income 5,520 6,311 13,389 15,694
Other income, net 1,509 1,123 4,220 3,415
------------------------ -----------------------
Income before provision for income taxes 7,029 7,434 17,609 19,109
Provision for income taxes 350 375 882 955
------------------------ -----------------------
Net income $ 6,679 $ 7,059 $ 16,727 $ 18,154
======================== =======================
Earnings per share:
Basic $ 0.16 $ 0.17 $ 0.39 $ 0.44
======================== =======================
Diluted $ 0.15 $ 0.16 $ 0.37 $ 0.41
======================== =======================
Shares used in computing earnings per share:
Basic 42,816 41,472 42,543 41,059
======================== =======================
Diluted 45,906 45,399 45,401 44,676
======================== =======================
</TABLE>
(1) The Pro Forma Condensed Consolidated Statement of Operations for the nine
months ended September 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.
<PAGE>
GALILEO TECHNOLOGY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------ -----------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
------------------------ -----------------------
<S> <C> <C> <C> <C>
Net sales $ 28,786 $ 22,024 $ 73,256 $ 55,447
Cost of sales 11,489 7,620 30,308 19,314
------------------------ -----------------------
Gross profit 17,297 14,404 42,948 36,133
Operating expenses:
Research and development 7,016 4,689 18,995 11,653
Selling, marketing and administrative 4,761 3,404 12,709 8,786
------------------------ -----------------------
Total operating expenses 11,777 8,093 31,704 20,439
------------------------ -----------------------
Operating income 5,520 6,311 11,244 15,694
Other income, net 1,509 1,123 3,915 3,415
------------------------ -----------------------
Income before provision for income taxes 7,029 7,434 15,159 19,109
Provision for income taxes 350 375 758 955
------------------------ -----------------------
Net income $ 6,679 $ 7,059 $ 14,401 $ 18,154
======================== =======================
Earnings per share:
Basic $ 0.16 $ 0.17 $ 0.34 $ 0.44
======================== =======================
Diluted $ 0.15 $ 0.16 $ 0.32 $ 0.41
======================== =======================
Shares used in computing earnings per share:
Basic 42,816 41,472 42,543 41,059
======================== =======================
Diluted 45,906 45,399 45,401 44,676
======================== =======================
</TABLE>
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GALILEO TECHNOLOGY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars, in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 111,429 $ 105,653
Accounts receivable 12,599 12,523
Inventories 12,875 8,094
Prepaid expenses and other 3,238 3,049
------------ ------------
Total current assets 140,141 129,319
Other assets 11,090 2,031
Property and equipment, net 16,236 9,388
------------ ------------
Total $ 167,467 $ 140,738
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,274 $ 6,495
Accrued and other liabilities 10,024 8,969
Deferred income 3,948 1,817
------------ ------------
Total current liabilities 25,246 17,281
Accrued severance pay 651 500
Other liabilities 1,652 1,652
Total shareholders' equity 139,918 121,305
------------ ------------
Total $ 167,467 $ 140,738
============ ============
</TABLE>
