Formula Systems Reports First Quarter Results

All the Subsidiaries Contributed Positively to Formula's Operational Profit First Quarter Net Income of $2.9 million

May 28, 2007

Herzliya, Israel – May 28, 2007 – Formula Systems (1985) Ltd. (NASDAQ: FORTY) a leading provider of information technology products, solutions and services, announced today results for the first quarter of 2007.

Revenues for the first quarter totaled $136.1 million an increase of 20% compared to $113.5 million in the first quarter of 2006.

Operating income in the first quarter of 2007 was $9.2 million compared to $4.4 million in the same quarter of 2006, an increase of 108%. 

Net income generated from continued operation for the first quarter of 2007 was $2.9 million compared to net income generated from continued operation of $0.4 million in the first quarter of 2006, an increase of 557%.

On December 26, 2006, we spun-off Formula Vision Technology (F.V.T.) Ltd., so that Formula Vision is no longer a subsidiary of ours.

Gad Goldstein, President & CEO of Formula, commented: "As previously stated, our first mission for this year was to make sure that all the subsidiaries will contribute positively to Formula's operational profit while maintaining a high level of transparency to our shareholders. I am pleased that this mission was fully achieved in this quarter accompanied by a strong cash flow from operations in our subsidiaries.
The improvement in the operations of our public subsidiaries is already partially expressed in the value of their shares. The value of Formula's holdings in the public companies it controls rose from the beginning of the year by more than 60 million dollars.
Considering the material improvement in our business environment and the hidden value in our portfolio, we believe that 2007 is going to be an exceptional year for Formula."

Click here to download Formula Systems Q1 07 Results

About Formula
Formula Systems Ltd. is a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based business solutions.

Statements made in this press release that are not historical facts are forward-looking statements. Such statements involve various risks that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to: market demand for the company’s products, dependence on strategic partners, integration of new business, successful implementation of Formula’s products, economic and competitive factors, international market conditions, management of growth, technological developments, the ability to finance operations and other factors which are detailed in Formula’s Securities and Exchange Commission filings, including its most recent report on Form 20‑F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.

Except for historical information contained herein, the matters set forth in this release are forward-looking statements that are dependent on certain risks and uncertainties, including such factors, among others, as market acceptance, market demand, pricing, changing regulatory environment, changing economic conditions, risks in new product and service development, the effect of the Company's accounting policies, specific system configurations and software needs of individual customers and other risk factors detailed in the Company's SEC filings.

Contact:

Israel:	Gad Goldstein, President, Formula Systems Ltd.
	Naamit Salomon, CFO, Formula Systems Ltd. +972-9-959-8800