 Operating income for the second quarter increased 24 year-over-year to a record breaking 40.7 million. Net income attributable to Formulas Shareholders for the second quarter increased 24 year-over-year to a record breaking 11.2 million.OR YEHUDA, Israel, Aug. 18, 2020 GLOBE NEWSWIRE -- Formula Systems 1985 Ltd. NASDAQ: FORTY, a global information technology holding company engaged, 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 second quarter and six months-period ended June 30, 2020. Financial Highlights for the Second Quarter Ended June 30, 2020 Consolidated revenues for the second quarter increased by 5.9 to 437.1 million. Revenues for the second quarter ended June 30, 2019 amounted to 412.6 million. Consolidated operating income for the second quarter increased by 24.4 to a record breaking 40.7 million, with growth recorded across Formulas entire investment portfolio. Consolidated operating income for the second quarter ended June 30, 2019 amounted to 32.7 million. Consolidated net income attributable to Formulas shareholders for the second quarter increased by 24.2 to a record breaking 11.2 million, or 0.73 per fully diluted share, compared to 9.0 million, or 0.59 per fully diluted share, for the second quarter ended June 30, 2019.Financial Highlights for the Six Months-Period Ended June 30, 2020 Consolidated revenues for the first half ended June 30, 2020 increased by 12.4 to 903.3 million, with growth recorded across Formulas entire investment portfolio. Revenues for the first half ended June 30, 2019 amounted to 803.9 million. Consolidated operating income for the first half ended June 30, 2020 increased by 23.5 to 79.5 million, with growth recorded across Formulas entire investment portfolio. Consolidated operating income for the first half ended June 30, 2019 amounted to 64.4 million. Consolidated net income attributable to Formulas shareholders for the first half ended June 30, 2020 was 22.3 million, or 1.44 per fully diluted share, compared to 19.1 million, or 1.17 per fully diluted share, in the same period last year, reflecting an increase of 16.6 year over year. As of June 30, 2020 Formula held 49.0, 47.7, 45.5, 100, 50, 90.09 and 80 of the outstanding ordinary shares of Matrix IT Ltd., Sapiens International Corporation N.V, Magic Software Enterprises Ltd., Michpal Micro Computers 1983 Ltd., TSG IT Advanced Systems Ltd., Insync Staffing Solutions, Inc., and Ofek Aerial Photography Ltd., respectively. Consolidated cash and cash equivalents, bank deposits and investments in marketable securities totaled approximately 472.8 million as of June 30, 2020, compared to 405.2 million as of December 31, 2019. Total equity as of June 30, 2020 was 914.6 million representing 42.2 of the total consolidated balance sheet, compared to 896.3 million representing 42.9 of the total consolidated balance sheet as of December 31, 2019. Declaration of Dividend for the First Half of 2020 Based on the Companys semi-annual results, the Companys board of directors declared a cash dividend in the amount of NIS 1.77 per share approximately 0.52 per share and in the aggregate amount of approximately NIS 27.1 million approximately 8.0 million. The dividend is payable on September 16, 2020 to all of the Companys shareholders of record at the close of trading on the NASDAQ Global Select Market or the Tel-Aviv Stock Exchange, as appropriate on September 3, 2020.In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 30 if the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10 or more of the Companys share capital or 25 for all other dividend recipients of the dividend amount payable to each shareholder of record, subject to applicable exemptions.The dividend will be paid in New Israeli Shekel with respect to the ordinary shares of Formula Systems 1985 Ltd that are traded on the Tel Aviv Stock Exchange and the American Depositary Receipts of Formula Systems that are traded on the NASDAQ Global Select Market.Debentures CovenantsAs of June 30, 2020, Formula was in compliance with all of its financial covenants under the debenture series issued by Formula, based on the following achievements:Covenant 1 Target equity attributable to Formulas shareholders excluding non-controlling interests: above 215 million. Actual equity attributable to Formulas shareholders is equal to 433.3 million.Covenant 2 Target ratio of net financial indebtedness to net capitalization in each case, as defined under the indenture for Formulas Series A and C Secured Debentures: below 65. Actual ratio of net financial indebtedness to net capitalization is equal to 9.0.Covenant 3 Target ratio of net financial indebtedness to EBITDA based on the accumulated calculation for the four recent quarters: below 5. Actual ratio of net financial indebtedness to EBITDA based on the accumulated calculation for the four recent quarters is equal to 0.38.Comments of ManagementCommenting on the results, Guy Bernstein, CEO of Formula Systems, said, We are very pleased to continue the strong momentum of 2020 during the second quarter which was entirely impacted by the COVID-19 pandemic, and in addition included a prolonged period of lockdown in Israel during April 2020 and Passover holiday. Despite these challenges, we witnessed strong financial results recorded across our entire portfolio companies which we were able to achieve due to the perseverance and cost saving actions taken by all management teams across our entire portfolio. Formula Group has managed to successfully face the crisis, thanks to, among others, its financial strength, high cash balances, low leverage, business diversification, quick response and flexibility to accommodate changes, and especially its experienced management teams .We take great pride in the recent addition of two of our subsidiaries, Matrix IT Ltd. and Sapiens International Corporation N.V., to Tel-Aviv-35 index together with four other companies whose core activity is technology and innovationthe engine that drives the Israeli economy.Matrix managed to deliver a double-digit growth in both net and operating income, overcoming the most challenging period of the last decade, while adapting to the new hybrid-work-environment model, combining office attendance with remote employment, increasing efficiencies and cost savings. Matrix is constantly working on preserving its business continuity and growth opportunities.Sapiens managed to increase its revenues by 17.0 year over year as a result of organic growth in North America and Europe. Non-GAAP operating income increased by 33.4, year over year increasing operating margin by 220 base points to a record of 18.0, primarily due to cost saving actions implemented in light of COVID-19. Despite the COVID-19 pandemic, Sapiens outlook has improved as a result of signing new deals and completing the acquisition of Delphi, positioning the company as a leader of the MLP market in North America. In addition, Sapiens has raised its 2020 revenue guidance from 368 - 377 million to the range of 376 - 381 million.Magics outlook for 2020 has also improved in spite of the COVID-19 pandemic due to an increased demand, from existing and new customers, for digital transformation projects, as COVID-19 pandemic forced organizations and their employees to adapt to the new forced reality and working environment. Magic plans to continue its efforts in maintaining and growing its strong financial position as a trusted advisor in the SMB market and a one-stop-shop for digital transformation, both organically and through acquisitions.Michpal continues to realize synergies and monetize on its busines model and on the market it operates in. Michpals revenues grew by 51 year over year fueled by the acquisition of Unique Software Enterprises Ltd. concluded in November 2019 and is well positioned to continue helping its customers to adjust to the ever-changing governmental labor guidelines which are introduced in light of the COVID-19 pandemic.In July 2020, Shikun Binui group won a tender published by the Israeli Ministry of Defense for establishing Kiryat HaModiin in the Israeli Negev. TSG IT Advanced Systems Ltd. will serve as the significant subcontractor of the projects ICT Information Communication and Technology contractor - Israel Aerospace Industries Ltd.As part of the project, TSG is expected to design, build, maintain and operate IT systems in Kiryat HaModiin. The duration of the engagement is approximately 26 years. The scope of TSG activities is estimated at NIS 1.5 billion for the entire duration of the contract. The win is not expected to significantly impact TSGs results of operations over the upcoming year.I am pleased to see that the steps taken across all our portfolio companies in order to endure the COVID-19 pandemic and emerge stronger and well positioned are paying off. We will continue to address the new market challenges and take all necessary steps in order to keep our employees safe and productive, implement cost savings and grow our business operations.Stand-Alone Financial MeasuresThis press release presents, further below, certain stand-alone financial measures to reflect Formulas stand-alone financial position in reference to its assets and liabilities as the parent company of the group. These financial measures are prepared consistent with the accounting principles applied in the consolidated financial statements of the group. 