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Formula Vision lost NIS 33.6 million in 2001

The reorganization that Formula Vision Technologies underwent in 2001 has resulted in a NIS 33.6 million loss. Loss for the fourth quarter came to NIS 10.7 million.

Formula Vision is part of the Formula Systems (Nasdaq:FORTY) group, and is controlled by Dan Goldstein.

The company underwent comprehensive restructuring in 2001. In the first quarter it dumped holdings in Magic Software Enterprises (Nasdaq:MGIC) and Sivan by distributing dividends in kind.

In the fourth quarter the company acquired holdings in several technology firms, T-Soft, SintecMedia, Polyglot, Idit Technologies, Babylon, and LetMeKnow.

These loss-generating companies did their thing to the tune of NIS 8.3 million in the fourth quarter.

Babylon, which develops software for translating from English into other languages, hurt Formula Vision by some NIS 4.7 million, generating a NIS 1.6 million loss in the fourth quarter.

Formula Vision's steep 2001 loss was materially affected by reorganization in Magic prior to the distribution of dividends in kind. The reorganization hurt Formula Vision by about NIS 14.1 million.

On December 31, Formula Vision exercised an option it received from Formula to acquire the latter's holdings in 14 companies and two venture capital funds for NIS 260 million. Formula's interest (23% capital shares) in Israel Television News Company hasn't yet been transferred to Formula Vision, and is conditioned on receipt of a number of approvals. Formula has loaned Formula Vision NIS 260 million for the purposes of the deal.

Revenue came to some NIS 101.7 million in 2001, about 77% less than in 2000. The comparison is currently irrelevant, because as of the second quarter of this year, and following the distribution of dividends in Magic and Sivan, Formula Vision has had no revenue, largely because of the nature of its holdings.

Formula Vision owns 10.2% in Paradigm Geophysical (Nasdaq:PGEO), after investing $2.45 million to acquire additional shares in 2001. At the end of 2001, Formula Vision listed its investment in Paradigm at NIS 13.5 million, while the market value came to some NIS 27.8 million, and today comes to about NIS 22.1 million.

As of December 31, 2001, Formula Vision's shareholders equity came to about NIS 37.7 million, 8% of the balance sheet. Cash reserves and short-term investments came to about NIS 97.3 million at the beginning of 2002.

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