Exhibit 99.1
HALIFAX ANNOUNCES SECOND QUARTER
FINANCIAL RESULTS
Revenues Increase 19% Due to New Contract Wins
ALEXANDRIA, VA - November 4, 2004 -Halifax Corporation (AMEX:HX) today
announced its financial results for the quarter ended September 30,
2004.
Revenues for the second quarter of fiscal 2005 were $14.8 million
versus $12.5 million for the same period in 2003, an increase of 19%.
The revenue growth was due primarily to the start of several new
contracts in both high-availability maintenance services and secure
network services. Operating income was $214,000, for the second
quarter of fiscal 2005 versus $303,000 for last year's comparable
quarter. Cost of services for the quarter were significantly higher
than normal due to initial start-up costs associated with the
commencement of a long-term nationwide contract and should return to
normal rates in the third quarter. The Company noted that operating
income was also reduced by a non-recurring charge of $179,000 relating
to the abandonment of certain facilities.
Net income for the quarter ended September 30, 2004, was $44,000, or
$0.02 per basic and $0.01 per diluted share, versus $152,000, or $0.06
per basic and diluted share, for the comparable quarter of last year.
Charles McNew, president and chief executive officer, noted, "We're
pleased with our continuing top-line growth. During the second
quarter, we made a sizable investment to launch a large nationwide
contract with a new customer."
"Now, with the recently completed acquisition of AlphaNational and with
most of our new contract start-up costs behind us, we believe we will
generate additional revenue growth and improved earnings for the
balance of the fiscal year."
For the six months ended September 30, 2004, revenues were $28.3
million compared to $23.1 million for the same period last year, an
increase of 22%. Operating income for the six months ended September
30, 2004, was $500,000 versus $502,000 for the same period in 2003.
Net income was $135,000, or $0.05 per basic and diluted share, for the
first six months of this year compared to $203,000, or $0.09 per basic
and $0.08 per diluted share, for the comparable period in 2003.
McNew added, "Our high-availability maintenance services and our secure
network services businesses are both growing at healthy rates. We are
successfully integrating AlphaNational into our organization, and we
remain bullish about our combined opportunities. In fact, our backlog
at September 30, 2004, was $78.5 million, up 64% compared to March 31,
2004."
He concluded, "We are well positioned to continue to grow while
improving profitability and building shareholder value."
The Company will host a conference call for investors at 11 a.m. EST on
Thursday, November 4, 2004, to review the financial and operational
results for the quarter. The conference call phone number is 800-670-
3536 for U.S. callers and 212-748-2803 for international callers. The
conference call replay will be available from 1 p.m. EST on Thursday,
November 4, 2004, to 1 p.m. EST on Friday, November 5, 2004. The
replay number is 800-633-8284 for U.S. callers and 402-977-9140 for
international callers. The reservation number is 21212860.
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 regarding Halifax can be
found at www.hxcorp.com. The information on the website listed above
is not and should not be considered part of this document and is not
incorporated by reference in this document. This website is and only
is intended to be an inactive textual reference.
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 000's except per share Three Months Ended Six Months Ended
amounts) September 30, September 30,
Statements of Operations 2004 2003 2004 2003
Revenues $14,809 $12,461 $28,250 $ 23,137
Cost of services 13,138 10,965 24,914 20,320
Selling, Marketing, General &
Administrative 1,278 1,193 2,657 2,315
Abandonment of facility 179 - 179 -
Operating income 214 303 500 502
Interest expense (158) (136) (297) (279)
Income before income taxes 56 167 203 223
Income tax expense (12) (15) (68) (20)
Net income $ 44 $ 152 $ 135 $ 203
Earnings per common share - basic: $ .02 $ .06 $ .05 $ .09
Earnings per common share - $ .01 $ .06 $ .05 $ .08
diluted:
Weighted average number of
common shares outstanding:
Basic 2,927 2,557 2,920 2,365
Diluted 2,970 2,627 2,971 2,400
Balance Sheets September 30, 2004 March 31, 2004
Current assets
Cash $ 18 $ 430
Trade accounts receivable, net 11,990 9,364
Inventory, net 5,935 5,845
Prepaid expense and other current
assets 768 599
Deferred tax asset 1,148 1,204
Total current assets 19,859 17,442
Property and equipment, net 1,806 1,598
Goodwill and intangibles, net 7,360 4,606
Other assets 146 149
Deferred tax asset 2,685 2,696
Total assets $ 31,856 $ 26491
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable and accrued
expenses $ 8,108 $ 6,723
Deferred maintenance revenue 3,990 2,543
Current portion of long-term dept 1,495 523
Total current liabilities 13,593 9,789
Long-Term bank debt 7,430 7,246
Subordinated debt-affiliate 2,400 2,400
Deferred income 308 337
Total liabilities 23,731 19,772
Stockholders' equity 8,125 6,719
Total liabilities and
stockholders' equity $ 31,856 $ 26,491