EXHIBIT 99.1
HALIFAX ANNOUNCES FOURTH QUARTER
AND FISCAL 2004 FINANCIAL RESULTS
Quarterly Revenues Up 18% Due to Strength of Enterprise Maintenance
Business;
Year Over Year Shareholders' Equity Increases $7.3 Million
ALEXANDRIA, VA - May 27, 2004 - Halifax Corporation (AMEX:HX) today
announced its financial results for the fourth quarter and fiscal year
ended March 31,
2004.
For the year, revenues were $49.5 million versus $50.4 for fiscal 2003.
The slight decline in revenues was due to reductions in hardware
revenue, although this was nearly offset by the continued growth of
enterprise maintenance services. The Company reported operating income
of $1.1 million for fiscal 2004 compared to $1.3 million for the
previous year. Net income for the current year was $4.2 million, or
$1.60 per basic and $1.54 per diluted share, compared to $648,000, or
$0.30 per basic and diluted share. The increase in net income was
principally related to the recognition of a non-recurring income tax
benefit of $3.8 million.
For the quarter ended March 31, 2004, revenues were $13.0 million
versus $11.0 million for the comparable period in 2003, an increase of
18%. The revenue increase was due to growth in the high-availability
enterprise maintenance business. The operating income was $205,000 for
the fourth quarter of 2004 versus $309,000 for the same quarter of last
year. Net income for the quarter ended March 31, 2004, was $3.8
million or $1.31 per basic and $1.25 per diluted share, versus
$164,000, or $0.07 per basic and diluted share for the comparable
quarter of fiscal 2003. The increase in net income was the result of
the recognition of an income tax benefit of $3.8 million.
Charles McNew, president and chief executive officer, stated, "Fiscal
2004 was our third consecutive profitable year, and the fourth quarter
represented our 12th straight quarter of profitability. In spite of a
competitive marketplace, we have continued to grow our Enterprise
Maintenance Solutions business and build wider recognition as an
innovative leader in this high-potential IT services niche. Our
balance sheet has significantly improved this past year, as evidenced
by a $7.3 million increase in equity."
He added, "We remain cautiously optimistic about our future prospects,
because we continue to build strong relationships with key global
service provider partners and general economic conditions appear to be
improving. The pipeline for our high-availability maintenance services
is at an all-time record level and includes multiple nationwide long-
term opportunities. We are beginning to book additional new technology
deployment and integration services on a national and regional basis,
and our secure network services horizon continues to be well funded and
active, especially within the intelligence community.
"For the coming year, our priority will be to add new enterprise
maintenance customers, and in particular to sign longer-term,
nationally recognized accounts," McNew continued. "We will continue to
cultivate additional strategic partner relationships. We believe our
service delivery model will allow us to scale our business, supporting
our goal of improved operating margins and increased profitability, and
ultimately the enhancement of shareholder value."
The Company will host a conference call for investors at 11 a.m. EDT on
Thursday, May 27, 2004, to review the financial and operational results
for the quarter and year. The conference call phone number is 888-391-
0063 for U.S. callers and 212-676-5404 for international callers. The
conference call replay will be available from 1 p.m. EDT on Thursday,
May 27, 2004, to 1 p.m. EDT on Friday, May 28, 2004. The replay number
is 800-633-8284 for U.S. callers and 402-977-9140 for international
callers. The reservation number is 21196644.
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 per share amounts)
Statement of operations For the three months For the years
ended March 31 ended March 31,
2004 2003 2004 2003
Revenues $13,020 $11,000 $49.537 $50,418
Operating income 205 309 1,054 1,337
Other income - 20 15 20
Interest expense (172) (150) (591) (649)
Income tax benefit (expense) 3,790 (15) 3,750 (60)
Net income $3,823 $164 $4,228 $648
Earnings per common share -
basic $1.31 $.07 $1.60 $.30
Earnings per common share -
diluted $1.25 $.07 $1.54 $.30
Weighted average number of
common shares outstanding
Basic 2,910 2,176 2,638 2,176
Diluted 3,065 2,245 2,787 2,212
Balance Sheets March 31, 2004 March 31, 2003
Current assets
Cash $430 $568
Trade accounts receivable, net 9,364 8,408
Inventory, net 5,845 4,323
Prepaid expenses and other current 599 267
assets
Deferred tax asset 1,204 -
Total current assets 17,442 13,566
Property and equipment, net 1,598 1,307
Goodwill and intangibles, net 4,606 2,966
Other assets 149 142
Defered tax asset 2,696 -
Total assets $26,491 $17,981
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $6,723 $6,097
Deferred maintenance revenue 2,543 2,268
Current portion of long-term debt 523 109
Total current liabilities 9,789 8,474
Long-term bank debt 7,246 5,741
Subordinated debt - affiliate 2,400 4,000
Deferred income 337 397
Total liabilities 19,772 18,612
Stockholders' equity (deficit) 6,719 (631)
Total liabilities and stockholders'
equity (deficit) $26,491 $17,981