-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 C+cNOE5emOqS8PCwA5oL6oYueCYBdRUAEtSd0VCCtXQBGOCm66f9rjc7u1gaIUju
 1MZWoiSlZBjLBrEqbQCBLA==

<SEC-DOCUMENT>0000876779-03-000043.txt : 20031105
<SEC-HEADER>0000876779-03-000043.hdr.sgml : 20031105
<ACCEPTANCE-DATETIME>20031105065833
ACCESSION NUMBER:		0000876779-03-000043
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20031105
FILED AS OF DATE:		20031105

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:		03977839

	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>q32003final.htm
<DESCRIPTION>MAGIC SOFTWARE ANNOUNCES SOLID THIRD QUARTER RESULTS
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>Contact:</TITLE>
<META NAME="author" CONTENT="Kathy Hanley">
<META NAME="date" CONTENT="11/05/2003">
</HEAD>
<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 November, 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 [x] &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>
<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): [-]</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): [-]</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 [-] &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No [x]</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 - </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">CFO</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; font-size:12pt; color:#000000" align=center><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:16pt; font-size:14pt; color:#000000" align=center><B>Magic Software Announces Solid Third Quarter Results</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>and Significant Growth in License Sales and Net Profit</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000" align=center><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000" align=center><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">OR YEHUDA, ISRAEL (November 5, 2003) -- Magic Software Enterprises Ltd. (Nasdaq: MGIC), a leading provider of state-of-the-art business integration and development technology, today reported its results for the quarter ended September 30, 2003.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; 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:11pt; color:#000000">Third Quarter Results</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; color:#000000">Net profit for the third quarter of 2003 was $813,000 (or $0.03 per share) as compared with a net loss of $2.16 million (or ($0.07) per share) recorded in the third quarter of 2002. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">Total revenues for the third quarter ended September 30, 2003 were $15.67 million, a 13% increase from $13.82 million in the comparable quarter of 2002. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">Software license revenues have reached $4.75 million in the reported quarter, a 38% increase from sales of $3.45 million in the third quarter of 2002. Application sales were $1.70 million for the reported quarter, compared with $1.92 million in the comparable quarter of 2002. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">Revenues from consulting and other services in the third quarter reached $6.46 million, a 14% increase from $5.69 million for the third quarter of 2002. Maintenance and support revenues reached $2.76 million in the third quarter of 2003, almost identical to the $2.77 million in the third quarter of 2002.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">In the third quarter of 2003, sales in Europe increased by 48% as compared to the third quarter of 2002, accounting for 40% of total revenues, while North America and Asia/Pacific accounted for 33% and 27% of total revenues in the reported quarter, respectively. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">&#147;Once again, we have delivered a profitable quarter and continued growth in license revenues. We are pleased with our third quarter numbers in what still continues to be an uncertain technology market,&#147; said Menachem Hasfari, chief executive officer of Magic Software Enterprises. &#147;We are encouraged with the continued signs of momentum and penetration we are experiencing with new and existing customers, and our growing pipeline. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; color:#000000">Although it is too early to say that the technology market has fully recovered, we are building the infrastructure and tools needed to enable growth and continued profitability in 2004, with a focus on strategic planning, product development, strict expense monitoring, extensive personnel training and the forging of new partnerships.&#148; </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">&#147;We are optimistic about our long-term business model and the Business Integration, Process Management and Development markets we are focused on with our iBOLT Integration Suite strategy,&#148; stated Hasfari. &#147;We continue to invest in our product roadmap and the supporting infrastructure to capitalize on what we believe is an exciting high growth market.&#148; </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; color:#000000">&nbsp;</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"><U>Accomplishments</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">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:11pt; color:#000000"><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"><I>New Partnerships </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; line-height:13pt; font-size:11pt; color:#000000">During the quarter, Magic Software announced new iBOLT partnerships in an effort to strengthen its iBOLT delivery capacity, including:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Avesta, a global US-based system integrator signed on as an iBOLT Integration partner to provide their clients with an open standards business integration and process framework;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">ISDC, a leading Dutch System Integrator who became an iBOLT Integration partner to enable their customers to be more successful by delivering cost efficient customizable solutions incorporating the latest emerging technologies;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">and Gruppo Engineering, one of the leading system integrators in Italy to become an iBOLT Integration partner after being convinced that iBOLT enables them to implement business and process integration more rapidly and at a lower cost than competitive products.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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"><I>New Deals </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; line-height:13pt; font-size:11pt; color:#000000">Among the significant new deals closed or announced during the quarter were:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">King Solutions in the USA, a subsidiary of King Companies, to implement and integrate supply chain automation solutions using the iBOLT Integration Suite;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">CoreTech Consulting, a subsidiary of Magic Software, to provide development and enterprise application integration (EAI) services to a global human resources consulting company and outsourced services for a new security tool deployment for a global pharmaceutical company;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Paz Gaz, the largest gas distribution company in Israel, to upgrade and automate gas distribution systems with eDeveloper; </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Bayerngrund, a leading German real estate and land development company, to develop and deploy new applications for the iSeries using eDeveloper; </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">SVP in France, a leading provider of business advisory, research and consulting services, to integrate complex systems and applications including SAP, using iBOLT;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">OTP Garancia Insurance, one of the largest insurance companies in Hungary to implement an internal IT customer service and help desk system with eDeveloper;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Rappold Winterthur Technology, the 3rd largest manufacturer of bonded abrasives for industrial applications in Europe, to develop and deploy new applications for the iSeries;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Israeli Electricity Company, to implement an enterprise information portal with the iBOLT Portal solution. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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"><I>Industry Recognition</I></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">During the quarter, the Company continued to receive significant recognition from leading industry analysts. The iBOLT Integration Suite received confirmation of compliance within Giga Group&#146;s Application Integration Framework (AIF) model. In addition, Giga highlighted Magic Software as a leading vendor of Business Process Management (BPM) functionality.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:11pt; 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:11pt; color:#000000">The Company also continued to build credibility in the market with the launch of its Autumn Webinar Series, in conjunction with IBM and ebizQ. The series includes a range of online seminars promoting best practices in business integration and application development. Already, hundreds of IT and business professionals have taken part in these Webinars to learn more about the Company&#146;s products and trends in the integration market. </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Conference Call</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 will host a conference call today, November 5, 2003, at 12:00 p.m. EST to discuss the Company&#146;s third 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:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-13pt; padding:0pt; text-indent:72pt; line-height:13pt; font-size:11pt; color:#000000">North America</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:13pt; font-size:11pt; color:#000000">1-(888) 273-9885</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-13pt; padding:0pt; text-indent:72pt; line-height:13pt; font-size:11pt; color:#000000">International</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:13pt; font-size:11pt; color:#000000">1-(612) 332-0530</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Callers should reference &#147;Magic Software Q3 Earnings Conference Call&#148; with the AT&amp;T Operator. &nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">A replay of the conference call will be available from 3:30 p.m. EST on November 6, 2003, through 4:59 p.m. EST on November 20, 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:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-13pt; padding:0pt; text-indent:72pt; line-height:13pt; font-size:11pt; color:#000000">North America</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:13pt; font-size:11pt; color:#000000">(800) 475-6701</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-13pt; padding:0pt; text-indent:72pt; line-height:13pt; font-size:11pt; color:#000000">International</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:180pt; line-height:13pt; font-size:11pt; color:#000000">(320) 365-3844</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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">Callers should reference Access Code No. 702493.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; 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:13pt; font-size:11pt; color:#000000"><U>About Magic Software Enterprises</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, deployment and integration 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:11pt; color:#000000"><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">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:11pt; color:#000000"><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">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.</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:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:144pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:36pt; 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:16pt; font-size:14pt; color:#000000" align=center><B>Consolidated Balance Sheets</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:144pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:36pt; line-height:11pt; font-size:9pt; color:#000000"><I>(US Dollars in Thousands)</I></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>&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>&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><U>September 30, 2003</U></P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>(Unaudited)</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><U>December 31,2002</U></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">&nbsp;&nbsp;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>$12,797</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>$24,785</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;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>17,306</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>13,605</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>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>624</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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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>4,224</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>4,113</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;&nbsp;Inventories</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>191</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>175</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 &nbsp;assets</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>34,746</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>43,302</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>1,699</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>1,465</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">Investments in affiliated companies</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>137</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>748</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>7,896</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>8,432</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>20,649</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>20,721</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>10,390</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>9,854</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>$75,517</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>$84,522</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>$2,702</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>$3,464</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>2,690</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>2,831</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>14,850</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>13,703</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>20,242</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>19,998</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>332</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>414</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>2,105</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>1,861</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>1,227</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>1,228</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>788</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>103,620</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>114,760</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>(5,773)</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>(5,667)</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>(47,024)</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>(48,860)</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>$51,611</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>$61,021</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>$75,517</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>$84,522</B></P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000" align=center><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; 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>
<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=618 colspan=6><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:18pt; font-size:16pt; color:#000000"><B>Unaudited Consolidated Statement of Operations</B></P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; font-size:9pt; color:#000000"><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=288>&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>September 30,</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>Nine Months ended </P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:11pt; font-size:9pt; color:#000000" align=center>September 30,</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=288>&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>2003</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>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=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:10pt; font-size:8pt; color:#000000" align=center>2003</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>2002</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; 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=288><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>$4,750</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>$3,446</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>$13,352</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>$11,561</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=288><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>1,700</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>1,921</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>5,025</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>6,102</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=288><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>2,756</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>2,769</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>8,000</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>8,115</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=288><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>6,462</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>5,685</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>19,718</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>20,465</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; 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:12pt; font-size:10pt; color:#000000" align=right><B>$15,668</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:12pt; font-size:10pt; color:#000000" align=right><B>$13,821</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:12pt; font-size:10pt; color:#000000" align=right><B>$46,095</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:12pt; font-size:10pt; color:#000000" align=right><B>$46,243</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=288>&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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; 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=288><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>$1,150</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>$1,287</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>$3,559</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>$3,857</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=288><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>651</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>966</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>1,906</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>3,076</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=288><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>4,039</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>4,603</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>12,489</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>14,481</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; 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:12pt; font-size:10pt; color:#000000" align=right><B>$5,840</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:13pt; font-size:11pt; color:#000000" align=right><B>$6,856</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:12pt; font-size:10pt; color:#000000" align=right><B>$17,954</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:12pt; font-size:10pt; color:#000000" align=right><B>$21,414</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=288>&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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; 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:12pt; font-size:10pt; color:#000000" align=right><B>$9,828</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:13pt; font-size:11pt; color:#000000" align=right><B>$6,965</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:12pt; font-size:10pt; color:#000000" align=right><B>$28,141</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:12pt; font-size:10pt; color:#000000" align=right><B>$24,829</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=288>&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=288><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>1,242</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>1,299</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>3,390</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>4,014</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Sales, marketing, and general </P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;&amp; administrative 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>6,928 </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>7,317</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>21,274</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>22,042</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Depreciation</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>502</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>414</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>1,312</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>1,283</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; 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:12pt; font-size:10pt; color:#000000" align=right><B>$1,156</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$(2,065)</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:12pt; font-size:10pt; color:#000000" align=right><B>$2,165</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>$(2,510)</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=288>&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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Financial income (loss), 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>(31)</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>63</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>199</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=288><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>1,125</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>(2,002)</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>2,364</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>(1,935)</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=288><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>111</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>68</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>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>337</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Income (loss) before 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=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>1,014</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>(2,070)</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>2,241</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>(2,272)</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Minority interests in</P>
<P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">&nbsp;&nbsp;income of subsidiaries and capital 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>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>85</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>370</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>103</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Capital 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>35</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=77.333><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>35</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>&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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000"><B>Net 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:12pt; font-size:10pt; color:#000000" align=right><B>$813</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right><B>$(2,155)</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:12pt; font-size:10pt; color:#000000" align=right><B>$1,836</B></P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:12pt; font-size:10pt; color:#000000" align=right><B>$(2,375)</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=288>&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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Basic Earnings per Share</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>$0.03</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(0.07)</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>$0.06</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(0.08)</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Diluted Earnings per Share</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>$0.03</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(0.07)</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>$0.06</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=84.667 colspan=2><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=right>$(0.08)</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Weighted Avg. Shares Outstanding (000)</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>29,480</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>29,748</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>29,488</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>29,752</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=288><P style="margin:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000">Diluted Weighted Avg. Shares Outstanding (000)</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>30,685</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>29,748</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>30,339</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>29,752</P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><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>SIGNATURES</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:11pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:36pt; line-height:13pt; font-size:11pt; 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:11pt; 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:13pt; font-size:11pt; 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:13pt; font-size:11pt; 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:11pt; 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:11pt; color:#000000" align=justify><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-13pt; padding-left:180pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; 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:11pt; 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:13pt; font-size:11pt; 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:13pt; font-size:11pt; 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:11pt; color:#000000"><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">Date: 5 November, 2003</P>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
