EXHIBIT 99.1
HALIFAX ANNOUNCES FIRST QUARTER
FINANCIAL RESULTS
ALEXANDRIA, VA - August 7, 2003 - Halifax Corporation (AMEX:HX) today
announced its financial results for the first quarter ended June 30,
2003.
For the quarter ended June 30, 2003, revenues were $10.7 million versus
$14.0 million for the comparable period in 2002, a decrease of 24%.
The revenue decrease was primarily due to reductions in hardware orders
from government customers, reflecting the Company's strategy to
emphasize a services-oriented model. Revenues also were affected by a
temporary slowdown in orders associated with the Virginia Department of
Transportation (VDOT) seat management contract. The Company expects
that VDOT orders will increase during the remainder of the year.
Net income for the quarter ended June 30, 2003, was $51,000, or $0.02
per basic and diluted share, versus $143,000, or $0.07 per basic and
diluted share, for the comparable quarter of 2002. The net income for
the quarter ended June 30, 2003, included one-time charges of $90,000
associated with the elimination of redundant staff positions, as the
Company continued to refine its structure for cost-effective service
delivery.
Charles McNew, president and chief executive officer, noted, "We are
continuing our aggressive pursuit of services-only business, reducing
our emphasis on lower-margin hardware contracts. Although services
orders did not materialize quite as quickly as we'd hoped in the first
quarter, we believe we will begin to generate improved margins in the
near future."
McNew added, "We are optimistic about our prospects. Our backlog,
comprised entirely of services-oriented contracts, increased 15% over
the previous quarter, and we're starting to see a flow of new orders in
both the maintenance services and federal secure network business. Our
acquisition of an enterprise maintenance firm should be completed by
the end of this month, strengthening our services and customer base and
expanding our geographic network. We expect the acquisition to be
accretive, even factoring in the additional shares issued in
conjunction with our recently announced private placement. The
acquisition also should increase revenues by 15 to 20% in the second
half of the fiscal year.
"The fact that members of our board of directors and senior management
team have just increased their holdings in the Company reflects our
optimism," he continued. "We are investing in the future, and as we
stake our leadership position in Enterprise Maintenance Solutions, we
plan to grow our existing business, add new clients, increase our
government business, and add new partnership arrangements with large
global service providers."
McNew concluded, "Our goal is to generate gross margin improvement as
we expand our service delivery capabilities and broaden our geographic
coverage. Shareholder value is our priority, and we'll focus on
increasing revenues and profitability for the year, and we also may
consider additional strategic acquisition candidates."
The Company will host a conference call for investors at 11 a.m. EDT on
Thursday, August 7, 2003, to review the financial and operational
results for the quarter. The conference call phone number is 800-840-
6218 for U.S. callers and 212-346-6465 for international callers. The
conference call replay will be available from 1 p.m. EDT on Thursday,
August 7, 2003, to 1 p.m. EDT on Friday, August 8. The replay number
is 800-633-8284 for U.S. callers and 402-977-9140 for international
callers. The reservation number is 21157251.
Founded in 1967, Halifax Corporation is an enterprise 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 high availability hardware maintenance
services, technology deployment and integration services, and secure
network program 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 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
(In Thousands, except share and per share data)
Statement of operations For the three months ended
June 30,
2003 2002
Revenues $ 10,676 $ 14,015
Operating income 199 338
Other income 4 1
Interest expense (147) (181)
Income tax benefit (expense) (5) (15)
Net income $ 51 $ 143
Earning per common share - basic $ .02 $ .07
Earnings per common share - $ .02 $ .07
diluted
Weighted average number of common
shares outstanding
Basic 2,176,363 2,175,613
Diluted 2,187,431 2,192,906
Balance Sheets June 30, 2003 March 31, 2003
Current assets $ 13,396 $ 12,354
Non-current assets 4,324 4,415
Total assets $ 17,720 $ 16,769
Current liabilities $ 8,428 $ 7,262
Non-current liabilities 9,872 10,138
Total liabilities $ 18,300 $ 17,400
Stockholders' deficit (580) (631)
Total liabilities and $ 17,720 $ 16,769
stockholders' deficit