Magic Software Enterprises Ltd. Expects to Report Record Fourth Quarter Results

OR YEHUDA, Israel - Magic Software Enterprises (Nasdaq:MGIC - news), a leader in providing e-commerce and other enterprise-level business solutions, Thursday announced that it expects to report record revenues and earnings for the fifth consecutive quarter.

Magic estimates that fourth quarter 1999 revenues will exceed $18.6 million, resulting in fiscal year 1999 revenues of approximately $63.9 million. Net income for the fourth quarter is expected to exceed $3.8 million, resulting in net income for fiscal year 1999 of approximately $10.9 million.

Earnings per share are expected to be approximately $0.42 for the fourth quarter and $1.29 for fiscal year 1999 on a fully diluted basis. 1999 fourth quarter and full year financials are expected to be released in late March.

As previously reported, Magic's shareholders approved a three-for-one stock split, entitling shareholders of record on Feb. 4, 2000 to receive two bonus shares for each share held. The bonus shares will be distributed by the company's transfer agent on or about Feb. 11, 2000. The shares will trade on a post-split basis beginning Feb. 14, 2000.

About Magic Software

Magic Software Enterprises, a member of the Formula Group (Nasdaq:FORTY - news), develops, markets and supports software development and deployment technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems.

Magic technology applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. The company's U.S. subsidiary is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone 949/250-1718, fax 949/250-7404, http://www.magic-sw.com.

The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based solutions.

Except for the historical information contained herein, the matters discussed I this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon on a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, changing economic conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the company's most recent annual report and other filings with the Securities and Exchange Commission.

Contact:
Magic Software Enterprises Inc., Irvine
Katharine Hanley, 949/250-1718 ext. 220
E-mail: khanley@magic-sw.com
or
Magic Software Enterprises, Ltd.
Israel Teiblum, +972-3-538-9311 or 9489
E-mail: iteiblum@magic-sw.com