Formula Systems (FORTY) 6-K Formula Systems Reports Fourth Quarter and Full Year Results for 2015

Exhibit 99.1

PRESS RELEASE

Formula Systems Reports Fourth Quarter and Full Year Results for 2015

Or Yehuda, Israel, March 15, 2016 –Formula Systems (1985) Ltd. (NASDAQ: FORTY), a global information technology company engaged primarily, through its subsidiaries and affiliates, in providing software consulting services and computer-based business solutions and developing proprietary software products, today announced its results for the fourth quarter and full year ended December 31, 2015.

Financial Highlights for the Fourth Quarter of 2015

· Revenues for the fourth quarter ended December 31, 2015 increased 27.1% to $205.9 million, compared to $162.0 million in the same period last year. The increase of $43.9 million in revenues for the fourth quarter resulted primarily from an increase of approximately $48.7 million due to the consolidation of the results of operations of Sapiens (which were not consolidated during 2014), offset mainly by the negative impact of the devaluation of the New Israeli Shekel, Euro and British Pound against the U.S. Dollar by 1%, 12% and 4%, respectively, amounting to $3.8 million.

· Operating income for the fourth quarter ended December 31, 2015 increased 54.2% to $15.1 million compared to $9.8 million in the same period last year. Operating income for the fourth quarter increased by $6.4 million due to the consolidation of the results of operations of Sapiens, offset by $0.1 million due to the negative impact of the devaluation of the New Israeli Shekel and $0.9 million increase in amortization of intangible assets.

· Net income for the fourth quarter ended December 31, 2015 was $4.3 million, or $0.29 per fully diluted share, compared to $8.8 million, or $0.60 per fully diluted share, in the same period last year.Net income for the fourth quarter showed a year over year decrease mainly due to the gain recognized in the same period last year in the amount of $4.2 million in relation to Formula’s gaining control over Sapiens and the related re-measurement of the Company's investment in Sapiens shares to fair value and increase of $0.4 million recorded in financial expenses due to the issuance of two series of debentures by Formula in September 2015.

Financial Highlights for the Year Ended December 31, 2015

· Revenues for the year ended December 31, 2015 increased 25.5% to $798.8 million, compared to $636.4 million in 2014. The increase of $162.4 million in revenues for the year resulted primarily from an increase of approximately $185.6 million due to the consolidation of the results of operations of Sapiens, offset, in part, by $27.3 million that was included in 2014 due to the partial consolidation of Magic's results of operations in the first quarter of 2014, and which were not consolidated in 2015. Revenues for the period were also negatively impacted by the devaluation of the New Israeli Shekel, Euro and British Pound against the U.S. Dollar by 8%, 17% and 7%, respectively, amounting to $66.9 million.

· Operating income for the year ended December 31, 2015 increased 55.6% to $54.5 million compared to $35.0 million in 2014. Operating income for the year increased by $19.8 million due to the consolidation of the results of operations of Sapiens, offset, in part, by $4.0 million that were consolidated in 2014 due to the partial consolidation of Magic’s results of operations in the first quarter of 2014. Operating income for 2015 was also negatively impacted by the devaluation of the New Israeli Shekel against the U.S. Dollar, amounting to $3.3 million.

· Net income for the year ended December 31, 2015 was $19.3 million, or $1.31 per fully diluted share, compared to $80.8 million, or $5.59 per fully diluted share, in 2014. Net income for 2014 was positively impacted by a net gain of $67.2 million recorded in relation to Magic Software’s March 2014 public offering pursuant to which Formula's holdings in Magic were reduced below 50%, which in turn resulted in Formula's investment in Magic being accounted from March 2014 under the equity method of accounting and the related re-measurement to fair value of Formula’s investment in Magic.

· Consolidated cash and short-term deposits and short-term and long-term investments in marketable securities totaled approximately $237.6 million as of December 31, 2015.

· Total equity as of December 31, 2015 was $671.3 million (representing 55% of the total balance sheet).

· As of December 31, 2015, Formula was in compliance with all of its financial covenants.

FORMULA SYSTEMS (1985) LTD.

Comparative Information Relating to Subsidiaries and Affiliates

U.S. dollars in thousands

Matrix	2010			2011			2012			2013			2014			2015
Revenues		407,052			489,426			513,181			534,792			586,618			586,582
Operating Income		31,523			33,240			34,559			38,609			37,844			39,064
Consolidated cash, short-term deposits and short-term and long-term investments in marketable securities as of December 31,		72,636			65,038			55,137			60,632			57,318			64,493
Formula's Percentage of ownership as of December 31,		50.1	%		50.0	%		50.1	%		50.1	%		50.2	%		50.04	%

Magic Software	2010			2011			2012			2013			2014			2015
Revenues		88,578			113,328			126,380			144,958			164,304			176,030
Operating Income		9,338			14,717			16,408			19,127			20,726			21,434
Consolidated cash, short-term deposits and short-term and long-term investments in marketable securities as of December 31,		46,542			32,122			38,634			35,988			84,430			76,684
Formula's Percentage of ownership as of December 31,		51.7	%		51.1	%		52.3	%		51.6	%		45.1	%		46.40	%

Sapiens	2010			2011			2012			2013			2014			2015
Revenues		52,235			69,927			113,909			135,377			157,450			185,636
Operating Income		6,711			5,624			12,045			11,883			14,906			24,350
Consolidated cash, short-term deposits and short-term and long-term investments in marketable securities as of December 31,		16,182			21,460			29,050			70,313			80,498			94,002
Formula's Percentage of ownership as of December 31,		71.6	%		47.3	%		56.6	%		48.6	%		50.2	%		49.13	%

Comments of Management

Commenting on the results, Guy Bernstein, CEO of Formula Systems, said, “We are very pleased to report another quarter and full year of outstanding results across our entire portfolio. Sapiens has again delivered record-breaking revenues of $185.6 million and improved its profitability by 57% to $26.5 million (on a Non-GAAP basis). Sapiens is expanding its market leadership and is on-track to continue its record of top line double-digit growth in 2016 with its award-winning products and solid cash position with no debt. Sapiens is expecting 2016 full year revenues of between $207 and $211 million and Non-GAAP operating margins in the range of 15.0%-15.5%. Matrix reported record-breaking results across all its key indicators (when measured in local currency) - revenue, gross margin, operating income and net income, and is well-positioned to accelerate its profitable growth in 2016. As Israel’s leading IT service provider for eight consecutive years, Matrix continues to broaden its offerings by focusing on high-margin services, including digital, mobile, cloud computing, BI and analytics, along with expanding its footprint in the US market exemplified by 40% year over year growth in revenues in 2015. Magic’s annual revenues reached a record-breaking result of $176 million, exceeding expectations, and its Non-GAAP operating income for the year reached a record-breaking result of $27.2 million. Magic’s software solutions and services are becoming increasingly relevant as businesses accelerate their digital transformation initiatives. Magic is continuing to invest in its products to enable customers to innovate and increase competitiveness by mobilizing and optimizing business processes and modernizing existing business-critical applications. We are very excited about 2016, in which we will establish a new fourth leg to our portfolio in the form of our recently announced acquisition, together with Israel Aerospace Industries, of TSG –the military arm of Ness Technologies, engaged in the fields of command and control systems, intelligence, homeland security and Cyber security.”

About Formula

Formula Systems (1985) Ltd. 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.

For more information, visit www.formulasystems.com.

Press Contact:

Formula Systems (1985) Ltd.

+972-3-5389487

ir@formula.co.il

Except for any historical information contained herein, matters discussed in this press release might include forward-looking statements that involve a number of risks and uncertainties. Regarding any financial statements, actual results might 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 locally and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in Formula's most recent annual report and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share data)

	Three months ended					Year ended
	December 31,					December 31,
		2015	*	2014			2015	*	2014
		Unaudited					Unaudited
Revenues		205,935		162,048			798,798		636,417
Cost of revenues		159,574		137,015			630,147		530,083
Gross profit		46,361		25,033			168,651		106,334
Research and development costs, net		2,747		-			10,235		787
Selling, general and administrative expenses		28,515		15,240			103,900		70,517
Other income (expenses), net		-		1			(2	)	5
Operating income		15,099		9,794			54,514		35,035
Financial expenses, net		1,673		183			7,852		4,866
Income before taxes on income		13,426		9,611			46,662		30,169
Taxes on income		3,032		2,944			11,870		10,074
Income after taxes		10,394		6,667			34,792		20,095
Equity in gains of affiliated companies, net		377		5,427			5,973		74,590
Net income		10,771		12,094			40,765		94,685
Change in redeemable non-controlling interests		(279	)	(326	)		397		154
Net income attributable to non-controlling interests		6,728		3,610			21,051		13,698
Net income attributable to Formula's shareholders		4,322		8,810			19,317		80,833
Earnings per share (basic)		0.31		0.63			1.38		5.80
Earnings per share (diluted)		0.29		0.60			1.31		5.59
		.		.
Number of shares used in computing earnings per share (basic)		14,124,492		13,981,956			14,070,924		13,929,326
Number of shares used in computing earnings per share (diluted)		15,356,272		14,410,160			14,744,027		14,408,115

* Including consolidation of Insseco by Sapiens commencing December 31, 2014.

FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED CONDENSED BALANCE SHEETS

U.S. dollars in thousands

	December 31,		December 31,
	2015		2014*
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		186,953		107,416
Marketable securities		19,787		15,784
Short-term deposit		11		6,454
Trade receivables		205,489		195,287
Other accounts receivable and prepaid expenses		37,717		31,297
Inventories		4,610		2,259
Total current assets		454,567		358,497
LONG-TERM INVESTMENTS:
Marketable securities		30,875		33,748
Deferred Taxes		16,986		17,901
Prepaid expenses and other accounts receivable		10,418		10,287
Total  Long-Term Investments		58,279		61,936
INVESTMENTS IN AFFILIATED COMPANIES		172,351		169,143
SEVERANCE PAY FUND		60,182		65,322
PROPERTY, PLANTS AND EQUIPMENT, NET		19,805		20,126
NET INTANGIBLE ASSETS AND GOODWILL		452,848		450,100
TOTAL  ASSETS		1,218,032		1,125,124
CURRENT LIABILITIES:
Liabilities to banks and others		59,069		43,190
Debentures		213		-
Trade payables		61,907		52,693
Deferred revenues		35,603		34,556
Other accounts payable		98,951		88,279
Dividend payable		4		7,876
Total current liabilities		255,747		226,594
LONG-TERM LIABILITIES:
Liabilities to banks and others		102,845		108,203
Debentures		58,284		-
Deferred taxes		29,182		32,493
Deferred revenue		4,396		4,838
Other long-term payables		11,798		8,044
Accrued severance pay		74,072		77,975
Total long-term liabilities		280,577		231,553
REDEEMABLE NON-CONTROLING INTEREST		10,414		10,313
EQUITY
Formula shareholders' equity		396,276		389,708
Non-controlling interests		275,018		266,956
Total equity		671,294		656,664
TOTAL LIABILITIES AND EQUITY		1,218,032		1,125,124

* December 31, 2014 Balance Sheet was revised to reflect the acquisition of Insseco by Sapiens, in accordance with the pooling of interest method.

FORMULA SYSTEMS (1985) LTD.

STANDALONE FINANCIAL DATA HIGHLIGHTS

U.S. dollars in thousands

	December 31,
	2015
	(Unaudited)
Debentures		58,497
Other financial liabilities		52,623
Formula shareholders' equity		396,276
Cash, cash equivalents and short term marketable securities		78,436
Fair market value of equity holdings in publicly traded subsidiaries		532,697