BW0307 APR 22,1998 13:05 PACIFIC 16:05 EASTERN
( BW)(GALILEO)(GALTF) Galileo Technology Ltd. Reports Record First Quarter 1998 Results
Business Editors and Computer Writers
SAN JOSE, Calif.--(BUSINESS WIRE)--April 22, 1998--Galileo Technology Ltd. (NASDAQ:GALTF) today reported net sales for the first quarter of 1998 increased 244% to $15.1 million, compared to $4.4 million for the first quarter of 1997. Net income for the quarter increased to $5.2 million, or $0.25 per share, an increase of 981%, compared to net income of $0.5 million, or $0.03 per share, for the corresponding quarter last year. All per share amounts are diluted earnings per share.
Net sales for the first quarter 1998 increased 15% from the fourth quarter 1997 net sales of $13.2 million. First quarter 1998 net income increased 18% compared to the fourth quarter 1997 net income of $4.4 million. First quarter ordinary and equivalent shares outstanding increased to 21.3 million compared to 21.1 million in the fourth quarter, with earnings per share increasing sequentially 19%.
"We are pleased with our Q1 1998 record revenue and profits," stated Avigdor Willenz, Galileo's Chairman and CEO. "We continue to experience strong acceptance by our customers of our Datacom Systems on Silicon(TM) products, enabling us to maintain a high level of design-in activity and expansion of our customer base for all products."
Manuel Alba, President of Galileo stated, "During the first quarter we began sampling several new products. For the Switched Ethernet market, these included the new Galaxy(TM) family, our integrated single chips with Ethernet and Fast Ethernet ports, the GT-48004A with four-ports of Fast Ethernet and the GT-48006, with two-ports of Fast Ethernet designed to support the cost sensitive dual-speed repeater market. For the System Controller market, we began sampling the GT-64120, the industry's first system controller to offer 66MHz, 32/64-bit PCI and I2O support for the MIPS CPU architecture family. Customer response has been positive, with a significant number of design wins for these new products."
"We believe that these new products will continue to keep Galileo in a technology leadership position. In the short term our challenge will be to assist our customers in ramping these products into their production programs, but as we move into the second half of 1998 we expect these products to contribute significantly to our future growth."
Galileo Creates Three New Product/Business Units
On April 8, 1998 Galileo announced, in order to manage its rapid growth with the highest possible focus, it recently organized into three business units: a LAN Products Business Unit, a WAN Products Business Unit, and a System Controllers Business Unit. Each Business Unit will be co-managed by a Business Director in the San Jose business headquarters and Product Director in the Israel technical headquarters.
About Galileo Technology Ltd.
Galileo Technology Ltd., defines, develops and markets advanced digital semiconductor devices that perform critical functions for network systems. Galileo's Datacom Systems on Silicon(TM) are designed to simplify design efforts, reduce development risks and costs, and substantially improve time-to-market for OEM's in the data communications equipment market. The company's product lines - system controllers, switched Ethernet LAN controllers and remote access WAN controllers - provide three of the key functionalities of data communications systems. Galileo Technology Ltd., founded in Karmiel, Israel, began operations in early 1993, and opened its business operations, Galileo Technology, Inc., in San Jose, California, in early 1994. Galileo employs more than 120 employees worldwide.
Note to Editors: 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
March 31, March 31,
1998 1997
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Net sales $ 15,139 $ 4,401
Cost of sales 5,603 1,749
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Gross profit 9,536 2,652
Operating expenses:
Research and development 2,627 1,168
Selling, marketing
and administrative 2,475 1,042
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Total operating expenses 5,102 2,210
----------- ------------
Operating income 4,434 442
Other income, net 1,027 45
----------- ------------
Income before provision
for income taxes 5,461 487
Provision for income taxes 220 2
----------- ------------
Net income $ 5,241 $ 485
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Earnings per share:
Basic $ 0.26 $ 0.04
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Diluted $ 0.25 $ 0.03
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Shares used in computing earnings per share:
Basic 20,307 12,259
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Diluted 21,264 17,488
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GALILEO TECHNOLOGY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars, in thousands)
March 31, December 31,
1998 1997
------------ -------------
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $ 79,023 $ 71,236
Accounts receivable 5,233 4,566
Inventories 2,621 2,387
Prepaid expenses and other 1,388 1,336
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Total current assets 88,265 79,525
Property and equipment, net 3,426 2,967
Total $ 91,691 $ 82,492
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,292 $ 2,932
Accrued and other liabilities 4,877 4,979
Deferred income 1,438 1,014
Current maturities
of long-term debt 165 228
--------- ----------
Total current liabilities 10,772 9,153
Accrued severance pay 216 210
Long-term debt 94 131
Total shareholders' equity 80,609 72,998
--------- ---------
Total $ 91,691 $ 82,492
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CONTACT: Galileo Technology Ltd.
George A. Hervey, 408/367-1400 x228
galileot.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED EARNINGS |
