Formula Systems Reports Third Quarter Results

Nine Months Net Income of $27.9 million
Nine Months Operating Income of $21.2 million

November 28, 2007

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

Revenues for the third quarter totaled $124.7million an increase of 14% compared to $109.7million in the third quarter of 2006.
Revenues for the nine months ended September 30, 2007 totaled $365.5 million compared to $311.7 million in the same period of 2006, an increase of17%.

Operating income in the third quarter of 2007 was $7.7 million compared to $1.1million in the same quarter of 2006, an increase of 603%.
Operating income in the first nine months of 2007 was $21.2 million compared to $6.3 million in the first nine months of 2006, an increase of 235%.

Net income in the third quarter of 2007 was $2.7 million compared to net loss of $1.0 million in the third quarter of 2006. Net income in the first nine months of 2007 totaled $27.9 million compared to $3.7 million in the same period of 2006.

In the second quarter we sold our entire holdings in BluePhoenix Solutions Ltd which resulted in capital gain for us of approximately $18 million.

Gad Goldstein, President & CEO of Formula, commented: "In the first nine months of the year alongside the day to day activities, we focused on two additional, substantial areas, improving the operational results of our subsidiaries and creating financial resources to support the continuing growth of the Formula Group.
I am satisfied with the results in these two areas. The operating income of the group increased 235% in the first nine months of 2007 and 603% in the third quarter, compared to the same periods in 2006 and more importantly, all of our subsidiaries contributed positively to the operating income.
The financial resources of the group grew due to the issue of debentures in our subsidiary Matrix, private placement in Sapiens and mainly as a result of the sale of our entire holdings in BluePhoenix. These activities increased our group cash and cash equivalents to approximately $200 million and the current ratio to 2.44."
Mr. Goldstein added:" Completion of the establishment of the group infrastructures will allow us to increase M&A activities and to focus on redesigning the group structure in order to support the growth and further development of the group." 

Click here to download Formula Systems Q3 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