Formula Systems (1985) Ltd. — Interim / Quarterly Report 2010

Aug 17, 2010

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 August 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 August 2010 and incorporated by reference herein is the Registrant's immediate report dated August 17, 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: August 17, 2010

PRESS RELEASE - FOR IMMEDIATE RELEASE

Formula Systems Reports Second Quarter Results; Revenues Increased by 19% Year-OverYear to reach $131.7 million and Operating Income Increased by 3 5 % to $11.3 million

Or-Yehuda, Israel – August 17, 2010 – Formula Systems (1985) Ltd. (NASDAQ: FORTY) a provider of information technology products, solutions and services, announced today its results for the Second quarter and six months period ended June 30, 2010.

Financial Highlights for the Second Quarter and for the Six Months Period Ended June 30, 2010

• Revenues increased by 19% to $131.7 million (Q2 2009: $111.0 million).

• Operating income increased by 35% to $11.3 million (Q2 2009: $8.4 million).

• Net income attributable to Formula shareholders reached $ 3.8 million (Q2 2009: $3.7 million).

• Formula’s consolidated cash and short term investments totaled approximately $133.5 million as at 30 June 2010.

Financial Highlights for the Six Months Period Ended June 30, 2010

• Revenues totaled $262.6 million compare to 227.9 in the same period last year.

• Operating income increased by 37% to $22.3 million up from $16.3 million in the same period last year.

• Net income attributable to Formula shareholders reached $8.6 million compare to $7.1 million in the same period in 2009.

Comments of Management

Guy Bernstein, Chief Executive Officer of Formula Systems, said: "I am pleased to report the constant improvement in Formula’s profitability, demonstrating the continuous demand for the products and services offered by the group’s subsidiaries, as well as the cost-saving measures implemented throughout the group. We will strive to maintain the growth momentum going forward."

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

CURRENT ASSETS:Cash and cash equivalents ....................................................................................Short-term investments .........................................................................................Trade receivables ..................................................................................................Other accounts receivable .....................................................................................Inventories ............................................................................................................Total assets attributed to discontinued operations…………………………....LONG-TERM INVESTMENTS:Long term investments .........................................................................................Investments in affiliates ........................................................................................SEVERANCE PAY FUND................................................................................PROPERTY, PLANTS AND EQUIPMENT, NET.........................................OTHER ASSETS AND GOODWILL, NET....................................................CURRENT LIABILITIES:Liabilities to banks ...............................................................................................Trade payables ......................................................................................................Deferred revenueEmployees and payroll accrualOther accounts payable .........................................................................................Dividend payable…………………………………………………………………Liability in respect of the business combination ...................................................Debentures ............................................................................................................Total liabilities attributed to discontinued operations…………………………....LONG-TERM LIABILITIES:Debentures ............................................................................................................Deferred taxes .......................................................................................................Deferred revenues .................................................................................................Liabilities to banks and others ..............................................................................Liability in respect of the acquisition of activity ..................................................Accrued severance pay .........................................................................................TOTAL EQUITY................................................................................................	June 30,2010(Unaudited)December 31,2009(Audited)U.S.$	June 30,2010(Unaudited)December 31,2009(Audited)U.S.$	December 31,2009(Audited)
		(in thousands)86,850100,20546,62158,009121,690130,23625,70522,4493,0702,439-27283,936313,3657,44610,3232,8613,29310,30713,61644,38744,13110,4749,989197,800185,338546,904566,4399,18710,05535,31543,77630,33125,20635,04132,02921,44526,995-6,6943,28721014,31614,639-314148,922159,91842,94743,9183,3862,2071,5941,1165,6188,5564,7531,51754,91553,893113,213111,207284,769295,314546,904566,439

FORMULA SYSTEMS (1985) LTD.

(An Israeli corporation)

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

Six months ended June 30,20102009U.S.$(in thousands, exceptRevenues ................................................................................262,566227,884Cost of revenues .....................................................................197,048170,764Gross profit ............................................................................65,51857,120Research and development costs, net .....................................2,5942,193Selling, general and administrative expenses .........................40,62438,653Operating income ...................................................................22,30016,274Financial income (expenses), net ...........................................(1,721)2,05620,57918,330Other income (expenses), net .................................................(153)61Income before taxes on income .............................................20,42618,391Taxes on income ....................................................................3,3714,89617,05513,495Equity in gains (losses) of affiliated companies, net ..............(378)(1)Income from continuing operation16,67713,494Net income from discontinued operation-341Net Income .............................................................................16,67713,835Net income attributable to non-controlling interests ..............8,0446,697Net income attributable to Formula shareholders ..................8,6337,138Amount attributable to Formula's shareholders:............Income from continuing operation .........................................8,6336,797Income from discontinued operation .....................................-3418,6337,138Earnings per share generated from continuedoperation :............................................................................Basic ......................................................................................0.650.51Diluted ...................................................................................0.630.50Earnings per share generated from discontinuedoperation :............................................................................Basic ......................................................................................-0.03Diluted ...................................................................................-0.03Total Earning per share:Basic0.650.54Diluted0.630.53Weighted average number of shares outstanding:Basic ......................................................................................13,34913,200Diluted ...................................................................................13,51813,403		Three months ended June 30,
		20102009
		U.S.$
		per share data)131,724110,99698,65082,18733,07428,8091,2111,05020,56819,37111,2958,388(2,243)2699,0528,657(146)2418,9068,8981,2131,9637,6936,935(140)(34)7,5536,901-2297,5537,1303,7203,4053,8333,7253,8333,496-2293,8333,7250.290.260.280.25-0.02-0.020.290.280.280.2713,36513,20013,52413,432