FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the Month of March 2010

FORMULA SYSTEMS (1985) LTD.
(Translation of Registrant's Name into English)

5 HaPlada st., Or-Yehuda, Israel
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-F  x               Form 40-F  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨                           No  x

If "Yes" is marked indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ....................

Attached to Registrant's Form 6-K for the month of March 2010 and incorporated by reference herein is the Registrant's immediate report dated March 22, 2010.

SIGNATURE

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.

FORMULA SYSTEMS (1985) LTD.
(Registrant)

By:/s/ Guy Bernstein
Guy Bernstein CEO
dated:       March 22, 2010

 
 
 

PRESS RELEASE - FOR IMMEDIATE RELEASE

Formula Systems Reports Fourth Quarter and Fiscal Year 2009 Results; Annual Net Income Increased by 61% to $19.1 million; Following the results, the Company will distribute a dividend of $1.47 per share

Or-Yehuda, Israel – March 22, 2010 – Formula Systems (1985) Ltd. (NASDAQ: FORTY) a provider of information technology products, solutions and services, announced today its results for the fourth quarter and full year ended December 31, 2009.

Financial Highlights for the Fourth Quarter
 
·
Revenues totaled $123.7 million (Q4 2008: $129.8 million).
 
·
Operating income increased by 22% to $9.5 million (Q4 2008: $7.7 million).
 
·
Net income from continuing operations attributable to Formula increased by 59% to $3.7 million (Q4 2008: $2.3 million).
 
·
Net income attributable to Formula reached $8.0 million, an almost three-fold increase compared to $1.7 million for the fourth quarter of 2008.
 
·
Formula’s consolidated cash and short term investments totaled approximately $158.6 million as at 31 December 2009.
 
·
During the fourth quarter Formula sold its entire stake in nextSource Inc. for a total consideration of $12.0 million, comprised of cash and release of bank pledges. Formula recorded a capital gain in the discontinued operations of $4.3 million.
 
Financial Highlights for the Full Year ended December 31, 2009
 
·
Revenues totaled $469.4 million (2008: $503.2 million). The vast majority of Formula's revenues are generated in NIS (New Israeli Shekel). The decline is therefore mostly attributed to the negative impact of the NIS vs. US Dollar devaluation on translation of revenues from NIS to USD.
 
·
Operating income increased to $35.4 million (2008: $32.5 million).
 
·
Net income from continuing operations attributable to Formula increased by 25% to $14.2 million (2008: $11.3 million).
 
·
Net income attributable to Formula reached $19.1 million, an increase of 61% compared to $11.9 million in 2008.
 
·
Formula will distribute a dividend of $1.47 per share
 
Comments of Management
Guy Bernstein, Chief Executive Officer of Formula Systems, said: "I am pleased to report that despite the inevitable affects of the difficult global economic environment, we have continued to develop our group as a strong, profitable and cash generating business. All our subsidiaries have continued to generate positive operating and net profits, an impressive achievement considering the world wide recession. Going forward we will continue to focus on profitability and growth as well as examine merger and acquisition opportunities that are compatible with our strategy and current portfolio of companies."

 
 
 

Distribution of Dividend
Following the positive results and cash flow, and in accordance with the company’s dividend policy, Formula’s board of directors have approved the distribution of a cash dividend to the holders of Formula ordinary shares, payable on April 21, 2010 (the "Distribution Date") with respect to each outstanding Formula ordinary share held as of the close of business day on April 6, 2010, (the "Record Date") subject to withholding tax as described below.  The cash distribution will be in the amount of $1.47 per share, or $20 million in the aggregate. The calculation of the cash distribution per share is based on the assumption that all of the outstanding options under Formula's option plan will be exercised in full, prior to the Record Date, in accordance with the terms of the option grant.

On the Distribution Date, each Formula shareholder will receive a cash amount, net of Israeli withholding tax at a rate of 20%, unless such holder has presented to Formula sufficient evidence of its exemption from withholding tax in accordance with the requirements of Israeli law.

The dividend to be distributed to holders of Formula ADSs will be released to Formula’s depositary, The Bank of New York, net of Israeli withholding tax as described above. As contemplated by the agreement among the Bank of New York, Formula and the holders of Formula ADSs, the Bank of New York will distribute the cash dividend (net of depositary fees) to the holders of Formula ADSs.

About Formula Systems

Formula Systems (1985) Ltd. (NASDAQ: FORTY) is a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based business solutions.

Statements made in this press release that are not historical facts are forward-looking statements. Such statements involve various risks that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to: market demand for the company’s products, dependence on strategic partners, integration of new business, successful implementation of Formula’s products, economic and competitive factors, international market conditions, management of growth, technological developments, the ability to finance operations and other factors which are detailed in Formula’s Securities and Exchange Commission filings, including its most recent report on Form 20-F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.

Contact:
Nir Feller, Formula Systems (1985) Ltd.
Tel. +972-3-5389487
Email. nir@formula.co.il

 
 
 

FORMULA SYSTEMS (1985) LTD.
(An Israeli corporation)
CONSOLIDATED BALANCE SHEETS

   
December 31,
2009
(Unaudited)
    
December 31,
2008
(Audited)
  
   
U.S. $
  
   
(in thousands)
  
CURRENT ASSETS:
            
Cash and cash equivalents
     100,205       107,847  
Short-term investments
     58,410       46,158  
Trade receivables
     130,236       136,353  
Other accounts receivable
     22,062       15,425  
Inventories
     2,439       2,772  
Total assets attributed to discontinued operations
     27       27,614  
      313,379       336,169  
LONG-TERM INVESTMENTS:
                
Long term investments
     9,922       15,844  
Investments in affiliates
     3,293       3,694  
      13,215       19,538  
                 
SEVERANCE PAY FUND
     44,131       38,105  
                 
FIXED ASSETS, NET
     9,989       15,009  
                 
OTHER ASSETS, NET
     185,725       187,801  
                 
      566,439       596,622  
CURRENT LIABILITIES:
                
Liabilities to banks
     9,845       8,481  
Trade payables
     43,776       39,475  
Other accounts payable
     91,134       75,252  
Dividend payable
     -       29,964  
Liability in respect of the acquisition of subsidiaries
     210       6,954  
Debentures
     14,639       5,157  
Total liabilities attributed to discontinued operation
     314       24,903  
      159,918       190,186  
                 
LONG-TERM LIABILITIES:
                
Debentures
     43,918       56,004  
Deferred taxes
     2,207       4,502  
Customer advances
     1,116       1,093  
Liabilities to banks
     8,556       16,640  
Liability in respect of the acquisition of activity
     1,517       1,010  
Accrued severance pay
     53,893       49,817  
      111,207       129,066  
                 
EQUITY
     295,314       277,370  
                 
      566,439       596,622  

 
 
 

FORMULA SYSTEMS (1985) LTD.
(An Israeli corporation)
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

   
Year months ended
December 31,
    
Three months ended
December 31,
  
   
2009
    
2008
    
2009
    
2008
  
   
U.S.$
    
U.S.$
  
   
(in thousands, except per share data)
  
                         
Revenues
     469,390       503,243       123,713       129,780  
Cost of revenues
     352,283       373,775       93,578       100,503  
Gross profit
     117,107       129,468       30,135       29,277  
Research and development costs, net
     4,430       6,564       1,469       2,080  
Selling, general and administrative expenses
     77,322       90,451       19,194       19,459  
Operating income
     35,355       32,453       9,472       7,738  
Financial expenses, net
     (231 )     (5,908 )     (1,404 )     (722 )
      35,124       26,545       8,068       7,016  
Gain (loss) on realization of investments
     -       (337 )     -       67  
Other income (expenses), net
     1,668       (580 )     1,729       (249 )
Income before taxes on income
     36,792       25,628       9,797       6,834  
Taxes on income
     8,305       3,279       2,159       1,779  
      28,487       22,349       7,638       5,055  
Share in gains (losses) of associated companies, net
     (335 )     (216 )     (205 )     80  
Net Income
     28,152       22,133       7,433       5,135  
Attributable to non-controlling interest
     13,954       10,819       3,711       2,797  
Net income attributable to Formula's common shareholders  from continuing operation
     14,198       11,314       3,722       2,338  
Net income from discontinued operation
     4,878       555       4,284       (630 )
Net income attributable to Formula's common shareholders
     19,076       11,869       8,006       1,708  
                                 
Earnings per share generated from continuing operation :
                                
Basic
     1.03       0.84       0.35       0.18  
Diluted
     1.00       0.84       0.33       0.18  
                                 
Earnings per share generated from discontinued operation :
                                
Basic
     0.37       0.04       0.32       (0.05 )
Diluted
     0.36       0.04       0.32       (0.05 )
                                 
Weighted average number of shares outstanding:
                                
Basic
     13,200       13,200       13,200       13,200  
Diluted
     13,564       13,200       13,573       13,200