Exhibit 99.1
HALIFAX ANNOUNCES FIRST QUARTER FINANCIAL RESULTS
Company Reports Growth in Gross Profit Margin and Net Income
ALEXANDRIA, VA - August 15, 2007 - Halifax Corporation (AMEX: HX) today
announced its financial results for the quarter ended June 30, 2007.
The Company reported revenues of $12.5 million compared to $12.7 million
for the first quarter of fiscal 2007. The slight decrease in revenue was
primarily due to the elimination of certain under-performing contracts,
which was partially offset by newly awarded, and more profitable,
business.
Halifax reported a gross margin of $1.5 million, or 11.9%, for the
current quarter versus $1.5 million, or 11.6%, for the same period in the
prior year. According to the Company, margins are continuing to show
positive progress, reflecting the improvement in the mix of business.
Operating income was $321,000 for the first quarter of fiscal 2007
compared to $326,000 for the first quarter of fiscal 2007.
The Company reported net income of $135,000, or $ 0.04 per basic and
diluted share, for the current quarter compared to $84,000, or $ 0.03 per
basic and diluted share, for the first quarter of fiscal 2007.
According to Charles McNew, president and chief executive officer, "Our
profitability trend is encouraging. We are continuing to take aggressive
steps to grow the top line, and our cost containment and system
improvement actions are helping to generate the desired results. Despite
a competitive marketplace, we are encouraged by the present volume of
potential new deals on the horizon."
McNew added, "We are driving to enhance shareholder value and are
continuing to evaluate various strategic alternatives to further position
our Company for near and longer term growth opportunities."
The Company will host a conference call for investors at 11:00 a.m. EDT
on Wednesday, August 15, 2007, to review the financial and operational
results for the quarter. The conference call phone number is 800-266-
2145 for U.S. callers and 212-676-4904 for international callers. The
conference call replay will be available from 1 p.m. EDT on Wednesday,
August 15, 2007, to 1 p.m EDT on Thursday, August 16, 2007. The replay
number is 800-633-8284 for U.S. callers and 402-977-9140 for
international callers. The reservation number is 21346424.
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. 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
(In Thousands, except per share amounts)
Statement of operations For the three months
ended June 30
2007 2006
Revenues $12,461 $12,746
Cost of services 10,979 11,270
Gross margin 1,482 1,476
Selling, marketing, general &
administrative 1,161 1,150
Operating income 321 326
Other income 11 1
Interest expense (192) (163)
Income before income taxes 140 164
Income tax expense 5 80
Net income $ 135 $ 84
Earnings per common share - basic: $ 0.04 $ 0.03
Earnings per common share -
diluted: $ 0.04 $ 0.03
Weighted average number of
commonshares outstanding:
Basic 3,175 3,175
Diluted 3,181 3,180
Balance Sheets June 30, 2007 March 31, 2007
Current assets
Cash $ 55 $1,078
Restricted cash 681 673
Trade accounts receivable, net 10,502 11,345
Inventory, net 5,069 4,946
Prepaid expenses and other 864 584
current assets
Total current assets 17,171 18,626
Property and equipment, net 1,105 1,225
Goodwill and intangibles, net 3,799 3,865
Other assets 118 121
Total assets $22,193 $23,837
Liabilities and stockholders' equity
Current liabilities
Accounts payable and accrued $5,582 $6,375
expenses
Income tax payable 30 11
Deferred maintenance revenue 2,609 3,058
Bank debt 6,358 6,880
Auxillary line of credit 1,000 1,000
Current portion of long-term debt 35 31
Total current liabilities 15,614 17,355
Other long-term debt 111 120
Subordinated debt - affiliate 1,000 1,000
Deferred income 144 159
Total liabilities 16,869 18,634
Stockholders' equity 5,324 5,203
Total liabilities and stockholders' $22,193 $23,837
equity