Monday October 2, 12:55 pm Eastern Time

Magic Software Enterprises Creates Powerful E-Commerce Solution for One of Italy's Largest Food Chains Using Magic eMerchant

IRVINE, Calif.- (BUSINESS WIRE)- Magic Software Enterprises (Nasdaq:MGIC - news), a leading provider of state-of-the-art technology and business solutions, Thursday announced that it has developed and implemented a powerful business-to-business e-commerce solution for PAC 2000A Coop. Associates s.r.l. (PAC 2000A), one of Italy's largest food chains.

The solution, which was built using Magic's award-winning e-commerce template (Magic eMerchant(TM)) and has been operational since July, is the first Web-based solution of its kind to be implemented in Italy. By improving supply chain efficiencies, food suppliers and distributors are able to cut time and costs by approximately two-thirds.

Let's Talk Turkey

Over the course of a year, PAC 2000A is responsible for implementing more than 150 complex promotional initiatives designed to promote sales of foodstuffs to supermarkets. In addition, the cooperative handles bookings of all seasonal items.

Historically, PAC 2000A had employed traditional catalogs, price lists and sales representatives to handle the myriad of tasks associated with these activities, which involve more than 1,000 points-of-sale. However, the costs of using such antiquated methods had become prohibitive.

What was needed was a Web-based application for the management of orders and delivery of goods related to its initiatives. PAC 2000A also needed a system that could provide follow-up, planning and analysis capabilities to allow the cooperative to better gauge the success or failure of each initiative.

The solution developed by Magic using Magic eMerchant is a powerful e-commerce solution that provides several advantages:

• It gives points of sale (cooperative members) the ability to browse PAC 2000A's complex catalog system and insert large orders via the Web
• It allows promotional initiatives to be personalized using catalogs that can incorporate such multimedia effects as video, descriptive images, sounds and text to better illustrate initiatives and their associated items
• It makes the production of orders much more flexible since the orders can be produced at anytime, from anywhere and modified up to the last minute using the Web
• It helps eliminate recording errors between points-of-sale and headquarters since all elements of the promotional planning is managed online
• It provides customer purchase histories using three-dimensional graphs and reports for better resource management

"Only Magic, with its Web development experience and Magic eMerchant solution, could provide us the extensive functionality, legacy integration capabilities and power we needed to manage the large number of transactions arising out of 1,000 points of sale," said Firmano Proietti Righi, CIO for PAC 2000A.

The Magic eMerchant-based solution has led to significant savings in time and resources for PAC 2000A. The planning cycle for each promotional initiative, originally three weeks from catalog printing to delivery, has been reduced by two-thirds. Further, because the solution operates 24-hours a day, the selling period has been extended without the additional overhead burden.

And, errors have been dramatically reduced, removing the need to verify the state of an order or items in stock, both of which can be checked via the Web.

"This has been an enormous project, and one of tremendous importance to Italy. It is their first implementation of a business-to-business solution to increase distribution efficiencies," said David Leichner, vice president of worldwide marketing for Magic. "We are extremely proud to have had this opportunity to demonstrate the superiority of our Magic eMerchant application and to help PAC 2000A realize all of its objectives."

PAC 2000A

PAC 2000A is a cooperative formed under CONAD, Italy's National Retailers Association. It is responsible for all food distribution in Central Italy, particularly in the regions of Umbria, Lazio and Campania.

PAC 2000A represents more than 1,000 points-of-sale (cooperative members) with "sell-in" revenue (revenue from points-of-sale) totaling approximately 1,500 billion Liras and "sell-out" revenue (revenue from sales to consumers) amounting to more than 2,500 billion Liras.

About Magic Software Enterprises

Magic Software Enterprises, a member of the Formula Group (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 North American subsidiary is located at 1642 Kaiser Ave., 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 producing computer-based solutions.

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product 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
Katharine Hanley, 949/250-1718, ext. 220
khanley@magic-sw.com