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Katharine Hanley
Director, IR/PR
Magic Software Enterprises Ltd.
(949) 250-1718 ext. 220

Guy Bernstein
Vice President, Finance
Magic Software Enterprises Ltd.


OR YEHUDA, ISRAEL (April 5, 2001) - Magic Software Enterprises
(Nasdaq: MGIC), a leading provider of state-of-the-art application
development technology and business solutions, announced today its
revenue and earnings expectations for the calendar year ending
December 31, 2001.  Revenues for 2001 are expected to be in the range
of $90 million, while earnings before interest, taxes, depreciation
and amortization charges (EBITDA) are expected to come in around $8
million for the year.

These figures reflect anticipated quarter-to-quarter growth during
2001 in practically every area of the Company's business (software,
applications and maintenance) despite an expected continuing weakness
in the economic environment and the corresponding slowdown in
corporate IT-related spending.  They also factor in a drop in demand
and anticipated longer-than-usual sales cycles in North America, which
has become Magic's largest revenue producer in the recent past.

"Many companies worldwide, particularly in the United States, have
been postponing or cutting their expenditures on IT due to the current
economic situation.  Magic is just one more technology company being
adversely impacted by this slowdown," said Menachem Hasfari, chief
executive officer of Magic.

"However, we are encouraged by recent positive response to our latest
product offerings, particularly Magic eDeveloper(tm) and Magic
eContact(tm).  These products, which are designed to offer companies
rapid application implementation, improved operating efficiencies,
reduced costs and the ability to capitalize on new revenue
opportunities, remain key to customers looking for a quick return on
their software investment."

"Because we are confident in our technology and our positioning in the
market, we believe we will be able to at least match last year's
results -- despite what appears to be a prolonged economic slowdown,"
added Hasfari.

Magic also stated that it continues to work hard at every level to
further mitigate the effects of this difficult environment.  The
Company is moving forward aggressively with plans to transform its
operations and to explore other possible shareholder value-enhancing

In addition, Magic announced preliminary results for the first quarter
of 2001.  Magic now anticipates revenues of approximately $20 million
for the first quarter, with a corresponding EBITDA loss in the range
of $2.5 million.

Magic will host a conference call following release of its first
quarter earnings during the second week of May to discuss quarterly
results, as well as to elaborate further on its business model for

About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Group (Nasdaq:
FORTY), develops, markets and supports software development and
deployment technology that enables enterprises to accelerate the
process of building and deploying applications that can be rapidly
customized and integrated with existing systems.  Magic technology,
applications and professional services are available through a global
network of subsidiaries, distributors and Magic solutions partners in
approximately 50 countries.  The Company's North American subsidiary
is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone
(949) 250-1718, fax (949) 250-7404, http://www.magicsoftware.com.

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.

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.  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's most recent annual report and other filings with the
Securities and Exchange Commission.