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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000876779-03-000007.txt : 20030225
<SEC-HEADER>0000876779-03-000007.hdr.sgml : 20030225
<ACCEPTANCE-DATETIME>20030225085701
ACCESSION NUMBER:		0000876779-03-000007
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030225
FILED AS OF DATE:		20030225

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MAGIC SOFTWARE ENTERPRISES LTD
		CENTRAL INDEX KEY:			0000876779
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				330477418
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19415
		FILM NUMBER:		03578329

	BUSINESS ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			602
		BUSINESS PHONE:		97235389322

	MAIL ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			602
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>q42002earningsreleasefinal.htm
<DESCRIPTION>MAGIC SOFTWARE ENTERPRISES ANNOUNCES 4TH QUARTER AND FULL YEAR 2002 RESULTS
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
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<TITLE>Contact:</TITLE>
<META NAME="author" CONTENT="Kathy Hanley">
<META NAME="date" CONTENT="02/25/2003">
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<BODY>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>________________________________________________________________</P>
<P style="margin-left:0pt; margin-top:6pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>________________________________________________________________</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:14pt; color:#000000" align=right><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>Washington, D.C. &nbsp;20549</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>______________________</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:14pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>F O R M &nbsp;6-K</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:14pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center><B>REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center><B>For the month of February 2003</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:18pt; font-size:16pt; color:#000000">MAGIC SOFTWARE ENTERPRISES LTD.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=center>(Name of Registrant)</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align=center><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">5 HaPlada Street, Or-Yehuda, Israel 60218</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=center>(Address of Principal Executive Office)</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<B><P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:72pt; line-height:14pt; font-size:10pt; color:#000000">Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:36pt; line-height:14pt; font-size:12pt; color:#000000"><B>Form 20-F <U>&nbsp;&nbsp;X &nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form 40-F <U>--------- </U></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<B><P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:72pt; line-height:14pt; font-size:12pt; color:#000000">Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):<U>------</U></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<B><P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:72pt; line-height:14pt; font-size:12pt; color:#000000">Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):<U> ------</U></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<B><P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:72pt; line-height:14pt; font-size:12pt; color:#000000">Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center><B>Yes <U>--------</U> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No <U>---X-----</U></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000" align=center><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:72pt; line-height:14pt; font-size:12pt; color:#000000"><B>If &quot;Yes&quot; is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- <U>-------------</U></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>________________________________________________________________</P>
<P style="margin-left:0pt; margin-top:6pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>________________________________________________________________</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Contact:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">David Leichner</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Vice President, Worldwide Marketing</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Magic Software Enterprises Ltd.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">(949) 250-1718 ext. 299</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">davidl@magicsoftware.com</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Guy Bernstein</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Vice President, Finance</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Magic Software Enterprises Ltd.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">+972-3-538-9292</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">gbernstein@magicsoftware.com</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align=center><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=center><B>Magic Software Enterprises Announces Fourth Quarter and Full Year 2002 Results</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
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<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">OR YEHUDA, ISRAEL (February 25, 2003) -- Magic Software Enterprises Ltd. (Nasdaq: MGIC), a leading provider of state-of-the-art application development technology and business solutions, announced today results for the fourth quarter 2002 and year ended December 31, 2002.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><U>Fourth Quarter Results</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Total revenues for the fourth quarter ended December 31, 2002 were $13.76 million as compared with $17.42 million for the comparable quarter of 2001 and $13.82 million posted for the third quarter of 2002. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Net loss for the fourth quarter of 2002 was $3.29 million (or $0.11 cents per share) compared with net loss of $27.78 million (or $0.94 cents per share) for the fourth quarter of 2001. Excluding restructuring costs, impairment and amortization expenses, net loss in the reported quarter reached $2.17 million, compared to $3.75 million in the comparable 2001 quarter. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Software tool sales for the quarter, at $3.58 million, increased from $3.45 million in the third quarter of 2002 and decreased from $4.31 million for the fourth quarter of 2001. Application sales were $1.25 million for the fourth quarter as compared to $1.92 million for the third quarter of this year and $3.07 million for the fourth quarter of 2001.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Revenues from consulting and other services, at $6.17 million, increased from $5.69 million in the third quarter of 2002, and decreased from $7.66 million for the fourth quarter of 2001. Revenues from maintenance and support, at $2.77 million, were identical to the revenues recorded in the third quarter of 2002, and increased from $2.38 million in the same period of 2001. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">In the fourth quarter of 2002, Europe accounted for 31% of the Company&#146;s total revenues, North America for 40%, Asia for 24% and Israel accounted for 5%.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><U>Fiscal Year 2002 Results</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">For the year ended December 31, 2002, Magic reported total revenues of $60.00 million as compared with $76.56 million in the previous year. Net loss for 2002 was $5.66 million, (or $0.19 cents per share), as compared with a net loss of $42.79 million (or $1.45 dollars per share) in 2001. Excluding restructuring costs, impairment and amortization expenses, net loss in 2002 was $4.54 million, as compared with $11.79 million in 2001.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Application sales for the year ending December 31, 2002 were $7.36 million as compared to $11.21 million for 2001, while consultancy and other services in 2002 were $26.63 million as compared to $35.28 million in 2001.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">In 2002, Europe accounted for 33% of Company revenues, North America for 37%, Asia for 24% and Israel accounted for 6%.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">&#147;We have emerged stronger than ever from one of the most difficult years in the history of the computing industry,&#148; said Menachem Hasfari, chief executive officer of Magic Software Enterprises. &#147;Magic Software is well positioned with eDeveloper and the recently announced iBOLT Integration suite to face the challenges that 2003 has in store for us. The current market trends are pointing to the beginning of a recovery in exactly the areas where Magic Software has traditionally played well, application development and enterprise integration.&#148;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">A recent IDC survey highlighted the increasing importance of integration projects in organizations. Not only are integration projects currently deemed extremely critical by more than 25% of the study respondents, but this percentage nearly doubles when one considers the anticipated importance of these projects in the coming two years. In addition, more than 80% of the respondents also indicated that integration is either mandatory for addressing mission-critical activities or is a key enabler for meeting business-critical needs.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">In order to meet changing requirements, organizations require an integration solution that can rapidly build new composite applications from existing and legacy applications and components, existing business processes, data sources and integration connections. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Hasfari continued, &#147;The iBOLT Integration suite is perfectly suited to meet these market requirements and provide one of the key drivers in the solution development effort, the inherent application development core technology that provides iBOLT its powerful business process engine.&#148;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><U>Accomplishments</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">The following highlights were announced or occurred since Magic Software Enterprises&#146; last earnings statement:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><I>Corporate Roadmap and Three-point Strategy</I></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">During the quarter, the Company unveiled its strategic roadmap for the affordable iBOLT Integration Suite. The Company revealed its corporate roadmap and three-point strategy for entering the Enterprise Application Integration (EAI) market with the delivery of its new iBOLT Integration Platform to mid-sized organizations around the globe. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Evolving from the company's years of expertise in application development and integration, and business process automation, Magic Software's three-point strategy promises to deliver innovative new products based on its existing core development technology eDeveloper and the iBOLT family of products. As part of this strategy, Magic Software will make available high-level business analysts and technology architects through expanded partnerships and leverage a proven global support system to provide customers with expert services and support.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><I>Product Development and Enhancements</I></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">The Company is preparing to shortly release the next version of its core technology, eDeveloper V9.4. This version contains significant enhancements in the areas of application and component development and deployment, security and integration with full support for the J2EE and .NET architectures, COM, XML and Web services. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><I>New Deals</I></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Among the significant new deals closed during the quarter were:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Hungarian Government, as Magic Software announced a framework agreement that enables Magic Software's Hungarian subsidiary to sell up to a million dollars of software and services to governmental institutions; </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Pilat Media, a leading provider of solutions for the broadcasting industry, purchased new licenses and upgrades, following recent wins at National Geographic and the Playboy Channel;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">TotalFinaElf, a leading European petroleum company for a web development and modernization project;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Dutch Badminton Federation, for the implementation of a solution for member registration, tracking and statistics;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Hungarian Ministry of Education, in support of the school internet program which will integrate around 3,000 schools all over Hungary. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">In addition, the Company announced that it has joined the Web Services Interoperability Organization (WS-I), an organization whose mission is to promote Web services interoperability across platforms, applications and programming languages. Magic Software joins a consortium of vendors and user companies who work together to accelerate the development and deployment of interoperable Web services. The Company brings excellent experience to the consortium in the area of development and integration of Web services.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><U>Conference Call</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Magic will host a conference call today, February 25, 2003, at 12:00 p.m. EST (9:00 a.m. PST), to discuss the Company&#146;s fourth quarter financial results. To participate, interested parties should call the appropriate number listed below five to ten minutes prior to the start of the call:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-12pt; padding:0pt; text-indent:72pt; line-height:12pt; font-size:10pt; color:#000000">North America</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:12pt; font-size:10pt; color:#000000">(800) 450-0818</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-12pt; padding:0pt; text-indent:72pt; line-height:12pt; font-size:10pt; color:#000000">International</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:12pt; font-size:10pt; color:#000000">(612) 332-0345</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Callers should reference &#147;Magic Software Q4 Earnings Conference Call&#148; with the AT&amp;T Operator.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">A replay of the conference call will be available from 3:30 p.m. EST, February 25, 2003, through 4:59 p.m. EST, March 11, 2003. &nbsp;Interested parties should call the appropriate number below:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-12pt; padding:0pt; text-indent:72pt; line-height:12pt; font-size:10pt; color:#000000">North America</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:12pt; font-size:10pt; color:#000000">(800) 475-6701</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-12pt; padding:0pt; text-indent:72pt; line-height:12pt; font-size:10pt; color:#000000">International</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:12pt; font-size:10pt; color:#000000">(320) 365-3844</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Callers should reference Access Code No. 675810.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><U>About Magic Software</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Magic Software Enterprises, a member of the Formula Group (<B>Nasdaq: FORTY</B>), 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. &nbsp;Magic technology, applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. &nbsp;The Company's North American subsidiary is located at 17310 Redhill Avenue #270, Irvine, CA 92614-5637, telephone (800) 345-6244, (949) 250-1718, fax (949) 250-7404, http://www.magicsoftware.com/. &nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">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.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><I>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. &nbsp;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&#146;s most recent annual report and other filings with the Securities and Exchange Commission.</I></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<TABLE style="margin-left:0pt"><TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=620 colspan=6><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>Consolidated Statement of Operations</B></P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=center><I>(US Dollars in Thousands)</I><B> </B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="background-color:#FFFFFF; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width=168 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>Three Months ended</P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>December 31,</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width=162 colspan=3><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>Twelve Months ended </P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>December 31,</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="background-color:#7C7C7C; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:10pt; font-size:8pt; color:#000000" align=center>2002</P>
</TD><TD style="background-color:#7C7C7C; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:10pt; font-size:8pt; color:#000000" align=center>2001</P>
</TD><TD style="background-color:#7C7C7C; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:10pt; font-size:8pt; color:#000000" align=center>2002</P>
</TD><TD style="background-color:#7C7C7C; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:10pt; font-size:8pt; color:#000000" align=center>2001</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>Revenues</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Software sales</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$3,575</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$4,314</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$15,136</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$19,110</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Applications</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,253</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>3,069</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>7,355</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>11,212</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Maintenance</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>2,767</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>2,378</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>10,882</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>10,956</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Consultancy &amp; other services</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>6,166</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>7,656</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>26,631</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>35,284</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>Total revenues</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$13,761</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$17,417</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$60,004</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$76,562</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>Cost of revenues</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Software sales</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$1,079</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$1,052</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$3,318</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$4,187</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Applications</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>716</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>651</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>2,334</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>2,399</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Maintenance</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,024</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,157</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>4,100</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>4,334</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Consultancy &amp; other services</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>4,758</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>5,728</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>19,239</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>25,622</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>Total cost of revenues</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$7,577</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$8,588</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$28,991</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$36,542</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>Gross profit</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$6,184</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$8,829</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$31,013</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$40,020</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Research &amp; development, net</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,322</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>2,115</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>5,336</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>7,547</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Sales, Marketing, General </P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">and administrative expenses </P>
</TD><TD style="background-color:#808080; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>6,920</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>10,446</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>28,962</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>40,332</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Depreciation</P>
</TD><TD style="background-color:#808080; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>450</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>456</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,732</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,961</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Amortization</P>
</TD><TD style="background-color:#808080; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>-</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,032</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>-</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>4,305</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Restructuring costs &amp; non-recurring expenses</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,123</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>2,919</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,123</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>6,613</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Impairment expense</P>
</TD><TD style="background-color:#808080; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>-</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>20,081</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>-</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>20,081</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>Operating income (loss)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(3,631)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(28,220)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(6,140)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(40,819)</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Financial income, net</P>
</TD><TD style="background-color:#808080; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>383</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>52</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>958</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>575</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Capital (income) loss</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>-</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(20)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>-</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>2,199</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Income (loss) before taxes</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(3,248)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(28,148)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(5,182)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(42,443)</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Taxes on income</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(47)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>233</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(384)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(167)</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Income (loss) before minority</P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;Interest</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(3,295)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(27,915)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(5,566)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>42,610</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Minority interests in losses</P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;(income) of subsidiaries</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>115</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>134</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>11</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(176)</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Equity in losses of affiliate</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(108)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>-</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>(108)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>-</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>Net income </B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(3,288)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(27,781)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(5,663)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><B>$(42,786) </B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Earnings (loss) per share, basic and diluted</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(0.11)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(0.94)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(0.19)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(1.45) </P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Weighted avg. shares outstanding (000&#146;s), basic and diluted</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>29,599</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>29,710</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>29,690</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>29,604</P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<TABLE style="margin-left:0pt"><TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=590 colspan=3><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>Consolidated Balance Sheets</B></P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center><I>(US Dollars in Thousands)</I></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="background-color:#FFFFFF; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; font-size:9pt; color:#000000" align=center><BR></P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>December 31, 2002</P>
</TD><TD style="background-color:#FFFFFF; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; font-size:9pt; color:#000000" align=center><BR></P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>December 31,2001</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000"><B>Assets</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><B><I>Current assets</I></B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Cash and cash equivalents</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>$24,785</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>$27,900</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Accounts receivable </P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">&nbsp;&nbsp;Trade receivables</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>13,605</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>18,993</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">&nbsp;&nbsp;Related parties</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>624</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>465</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">&nbsp;&nbsp;Other receivables and prepaid expenses </P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>4,113</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>4,134</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">&nbsp;&nbsp;Inventory</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>175</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>401</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><I>Total current &nbsp;assets</I></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>43,302</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>51,893</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Severance pay fund</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>1,465</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>1,400</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Long term receivables and investments</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>748</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>106</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Fixed assets, net</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>8,432</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>9,395</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Goodwill</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>20,839</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>20,757</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Other assets, net</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>9,736</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>11,061</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000"><B>Total assets</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:0.75pt double #000000" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$84,522</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:0.75pt double #000000" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$94,612</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000"><B>Liabilities</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><B><I>Current liabilities</I></B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Short-term bank debt</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>$3,405</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>$783 </B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Trade payables</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>2,831</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>4,508</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Accrued expenses and other liabilities</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>13,690</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>18,474</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><B><I>Total current liabilities</I></B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>19,926</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>$23,765</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Long-term loans</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>486</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>669</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Accrued severance pay</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>1,861</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>1,907</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Minority interests</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>1,228</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>1,378</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000"><B>Shareholders' equity</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156>&nbsp;</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144>&nbsp;</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Share capital</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>788</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>787</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Capital surplus</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>114,760</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>114,727</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Treasury stock</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>(5,667)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>(5,424)</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000">Accumulated deficit</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>(48,860)</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>(43,197)</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000"><B>Total shareholders' equity</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$61,021</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$66,893</B></P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=290><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000"><B>Total liabilities and shareholders&#146; equity</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:0.5pt double #000000" align=left valign=top width=156><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$84,522</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:0.5pt double #000000" align=left valign=top width=144><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$94,612 </B></P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>SIGNATURES</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:36pt; line-height:14pt; font-size:12pt; color:#000000">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=justify><U>MAGIC SOFTWARE ENTERPRISES LTD.</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:36pt; line-height:14pt; font-size:12pt; color:#000000" align=justify>(Registrant)</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; font-size:12pt; color:#000000" align=justify><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; font-size:12pt; color:#000000" align=justify><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; font-size:12pt; color:#000000" align=justify><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=justify>By<U> /s/ Menachem Hasfari</U></P>
<U><P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:252pt; font-size:12pt; color:#000000" align=justify><BR></U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:36pt; line-height:14pt; font-size:12pt; color:#000000" align=justify>Menachem Hasfari</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:36pt; line-height:14pt; font-size:12pt; color:#000000" align=justify>Chief Executive Officer</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Date: 25 February 2003</P>
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