HERZILIYA, Israel
Nov. 4, 1998

Crystal Systems Solutions Ltd. (NASDAQ:CRYS) today reported financial results for the third quarter and nine months ended September 30, 1998. Revenues for the third quarter of 1998 increased 66% to $11.6 million as compared to $7.0 million reported in the same period in 1997. Net income for the third quarter of 1998 was $2.4 million, or $0.22 per share, compared to $1.5 million, or $0.13 per share, for the corresponding period in 1997.

Revenues for the nine months ending September 30, 1998 grew 87% to $31.2 million as compared to $16.7 million reported in the same period in 1997. Net income for the nine months of 1998 increased 110% to $6.7 million, or $0.59 per share, compared with a net income of $3.2 million, or $0.29 per share for the comparable period in 1997.

Amiram Mel, Crystal Systems' Chief Executive Officer, stated, ``I am pleased to announce that our improving results are providing validation of our business strategy. We are leveraging the operational and process improvements derived from the enhanced efficiencies of our conversion tools and the increased experience of our people to drive increases in productivity and profitability. As a result we have been able to increase our gross margin to over 52 percent and also improved the time-to-solution for our conversion clients.'

Mr. Mel continued, ``Even more importantly, we are positioned to profitably handle the flow of work coming from ongoing conversion projects, including, but not limited to, Y2K and Euro. A recent market service publication stated that Y2K spending represented just 5 percent of IT budgets in 1997, 21 percent in 1998 and they predict it will rise to 44 percent of total IT budgets in 1999. We are leveraging customer relationships to build new business, but we are very well positioned to profit from the ever-increasing flow of work coming from Y2K and Euro conversion projects. We are also pursuing new initiatives, such as our soon-to-be launched COBOL to Java application conversion tool, JavaMaker.'

Significant events during the quarter include the extension of Crystal's working relationship with Ford Motor Company beyond Y2K conversion. Crystal is assisting Ford in a ``Realignment Re- Engineering' project, having very successfully completed a multitude of conversion projects for the company, including their year 2000 conversion and Verification Services. ``Our technology and its multitude of applications allows us to leverage existing client relationships for a wide variety of conversion projects, as well as attract new clients,' said Mr. Mel.

Crystal Systems Solutions Ltd. is a member of the Formula Group (NASDAQ:FORTY), which is the largest public information technology group in Israel. Crystal provides software tools and services that perform complex conversion projects for mainframe systems. Crystal's tools and conversion methodologies are designed for application changes such as Year 2000, Euro currency conversion, field expansion as well as technological changes such as platform migration or language upgrades.

"Safe Harbor' statement under the Private Securities Litigation Reform Act of 1995: Certain of the statements contained in this press release may be deemed forward-looking statements. Such statements, and other matters addressed in this press release, involve a number of risks and uncertainties. Among the factors that could cause actual plans to differ materially from these statements and other matters are marketing risks, risks of competition, technological obsolescence and the risks and other factors detailed, from time to time, in the Company's reports with the U.S. Securities and Exchange Commission.