Exhibit 99.1
For investor relations information, contact:
Halifax Corporation of Virginia
Robert Drennen (717)-506-4700 or rdrennen@hxcorp.com
Halifax Corporation of Virginia
Robert Drennen (717)-506-4700 or rdrennen@hxcorp.com
HALIFAX ANNOUNCES
THIRD QUARTER FINANCIAL RESULTS
THIRD QUARTER FINANCIAL RESULTS
ALEXANDRIA, VA — February 16, 2010 — Halifax Corporation of Virginia (HALX.PK OTC) today announced its financial results for the quarter December 31, 2009.
Revenues for the three months ended December 31, 2009 were $7.7 million compared to $8.1 million for the prior year. For the nine months ended December 31, 2009, revenues were $23.0 million compared to $26.0 million for the same period last year. The decrease in revenues for the quarter and the nine months ended December 31, 2009 was attributable to the termination of certain large nation-wide enterprise maintenance contracts and lengthening sales cycles as a result of continued economic uncertainties.
The Company reported operating income of $85,000 for the three months ended December 31, 2009, compared to operating income of $318,000 for the same period last year. For the nine months ended December 31, 2009, the Company reported operating income of $323,000 compared to $982,000 for the same nine month period of 2008. The reduction in operating income was due to lower revenues as well as transaction costs incurred during the three month period associated with the Company’s delisting of its common stock and other deal costs related to the Company’s pending merger transaction.
The Company reported net income of $26,000, or $.01 per basic and diluted share for the three months and $253,000, or $.08 per basic and diluted share for the nine months ended December 31, 2009.
Charles McNew, President and Chief Executive Officer, stated, “The current quarter revenues increased modestly over the second quarter of the current year, although profitability was down due to transaction costs of approximately $91,000 for the quarter. We are pleased to continue our string of profitable quarters and we continue to remain reasonably optimistic looking forward, given the pressures in the maintenance service marketplace and the economic environment in general.”
Founded in 1967, Halifax Corporation of Virginia is an enterprise logistics and maintenance solutions company providing a wide range of technology services to commercial and government customers throughout the United States. The Company’s principal products are enterprise logistics solutions and high availability hardware maintenance services. More information on Halifax can be found at www.hxcorp.com.
Certain statements made by the Company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to trends, management’s beliefs, views, expectations and opinions, which are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors described in the Risk Factors section in the Company’s Annual Report on Form 10-K that may cause actual results to differ materially from those in the forward-looking statements. For further information that could affect the Company’s financial statements, please refer to the Company’s reports filed with the Securities and Exchange Commission.
Halifax Corporation
Summary Financial Data
Summary Financial Data
(in 000’s except per share amounts)
| For the three months ended Dec 31, | For the nine months ended Dec 31, | |||||||||||||||
| Statements of operations | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Revenues | $ | 7,659 | $ | 8,120 | $ | 22,963 | $ | 26,043 | ||||||||
| Cost of services | 6,526 | 6,826 | 19,658 | 21,835 | ||||||||||||
| Gross profit | 1,133 | 1,294 | 3,305 | 4,208 | ||||||||||||
| Selling, marketing, general & administrative | 957 | 976 | 2,891 | 3,226 | ||||||||||||
| Transaction costs | 91 | — | 91 | — | ||||||||||||
| Operating income | 85 | 318 | 323 | 982 | ||||||||||||
| Other income | 1 | 1 | 154 | 2 | ||||||||||||
| Interest expense | (59 | ) | (80 | ) | (189 | ) | (256 | ) | ||||||||
| Income before income taxes | 27 | 239 | 288 | 728 | ||||||||||||
| Income tax expense | 1 | 7 | 35 | 66 | ||||||||||||
| Net income | $ | 26 | $ | 232 | $ | 253 | $ | 662 | ||||||||
| Earnings per common share-basic and diluted | $ | 0.01 | $ | 0.07 | $ | 0.08 | $ | 0.21 | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 3,175,206 | 3,175,206 | 3,175,206 | 3,175,206 | ||||||||||||
| Diluted | 3,182,643 | 3,175,206 | 3,183,732 | 3,176,166 | ||||||||||||
| Balance Sheets | At December 31, 2009 | At March 31, 2009 | ||||||
| Current assets | ||||||||
| Cash | $ | 187 | $ | 766 | ||||
| Trade accounts receivable, net | 5,936 | 6,794 | ||||||
| Inventory, net | 2,589 | 2,588 | ||||||
| Prepaid expenses and other current assets | 428 | 208 | ||||||
| Total current assets | 9,140 | 10,356 | ||||||
| Property and equipment, net | 664 | 727 | ||||||
| Goodwill and intangibles, net | 3,103 | 3,292 | ||||||
| Other assets | 38 | 56 | ||||||
| Total assets | $ | 12,945 | $ | 14,431 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 3,569 | $ | 4,546 | ||||
| Income tax payable | 41 | 67 | ||||||
| Deferred maintenance revenue | 2,330 | 2,072 | ||||||
| Bank debt | 1,715 | 2,545 | ||||||
| Current portion of long-term debt | 186 | 331 | ||||||
| Total current liabilities | 7,841 | 9,561 | ||||||
| Other long-term debt | 139 | 141 | ||||||
| Subordinated debt-affiliate | 1,000 | 1,000 | ||||||
| Deferred income | — | 40 | ||||||
| Total liabilities | 8,980 | 10,742 | ||||||
| Stockholders’ equity | 3,965 | 3,689 | ||||||
| Total liabilities and stockholders equity | $ | 12,945 | $ | 14,431 | ||||