Exhibit 99.1
HALIFAX ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
"Profitability Improves Significantly; Margins Improve to 13%
from 10.7 %"
ALEXANDRIA, VA - November 15, 2007 - Halifax Corporation (AMEX:HX)
today announced its financial results for the quarter ended September
30, 2007.
Revenues for the second quarter of fiscal 2008 were $11.9 million
versus $12.4 million for the same period in fiscal 2007. The revenue
decrease was due to the loss of certain low margin service contracts
and reductions in product sales.
The gross profit margin for this year's second quarter was $1.6
million, or 13% of revenues, versus $1.3 million or 10.7% of revenues,
for the same period a year ago. Operating income was $402,000 for the
quarter ended September 30, 2007, compared to $188,000 for the same
period the prior year.
The Company reported net income of $202,000, or $0.06 per basic and
diluted share, for the quarter ended September 30, 2007, compared to
net income of $22,000, or $0.01 per basic and diluted share, for the
same period the prior year.
Charles McNew, president and chief executive officer, stated, "The
improvement in our operating and net income is directly related to a
deliberate shift in our business mix toward higher-margin business.
Our fixed costs are continuing to decline as a result of new software
tools, which are being implemented to significantly reduce manual tasks
in the back office, field service and call management functions. We
are also very encouraged by the recent scale and volume of new business
bid activity."
For the six months ended September 30, 2007, revenues were $24.4
million compared to $25.1 million for the same period last year. The
gross profit margin was $3.0 million, or 12.5% of revenues, up from
$2.8 million, or 11.2% of revenues, for the first half of last year.
Operating income was $722,000 for the first half of fiscal 2008 versus
$514,000 for the same period a year ago. Net income for the first half
of this year was $337,000, or $0.11 per basic and diluted share, versus
$106,000, or $0.03 per basic and diluted share, for the first half of
the prior year.
The Company will host a conference call for investors at 11:00 a.m. EDT
on Thursday November 15, 2007, to review financial and operational
results for the quarter. The conference call phone number is 800-952-
6697 for U.S. callers and 212-231-2902 for international callers. The
conference replay will be available from 1 p.m. EDT on Thursday,
November 15, 2007, to 1 p.m. EDT on Friday, November 16, 2007. The
replay number is 800-633-8284 for U.S. callers and 402-977-9140 for
international callers. The reservation number is 21355210.
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 000's except per share Three Months Six Months Ended
amounts) Ended September 30,
September 30,
Statements of Operations 2007 2006 2007 2006
Revenues $11,925 $12,369 $24,386 $25,115
Cost of services 10,370 11,044 21,349 22,314
Gross Profit 1,555 1,325 3,037 2,801
Selling, marketing, general 1,153 1,137 2,315 2,287
& administrative
Operating income 402 188 722 514
Other income 8 13 19 14
Interest expense (188) (159) (379) (322)
Income before income taxes 222 42 362 206
Income tax expense 20 20 25 100
Net income $ 202 $ 22 $ 337 $ 106
Earnings per common share - $ .06 $ .01 $ .11 $ .03
basic:
Earnings per common share - $ .06 $ .01 $ .11 $ .03
diluted:
Weighted average number of
common shares outstanding:
Basic 3,175 3,175 3,175 3,175
Diluted 3,179 3,179 3,180 3,180
Balance Sheets September 30, March 31,
2007 2007
Current assets
Cash $ 934 $ 1,751
Trade accounts receivable, net 10,865 11,345
Inventory, net 5,114 4,946
Prepaid expense and other current
assets 806 584
Total current assets 17,719 18,626
Property and equipment, net 1,055 1,225
Goodwill and intangibles, net 3,723 3,865
Other assets 116 121
Total assets $ 22,613 $ 23,837
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 5,622 $ 6,375
Deferred maintenance revenue 2,195 3,058
Current portion of long-term debt 35 31
Bank debt 6,946 6,880
Auxilliary line of credit 1,000 1,000
Income tax payable 52 11
Total current liabilities 15,850 17,355
Other long-term debt 102 120
Subordinated debt-affiliate 1,000 1,000
Deferred income 129 159
Total liabilities 17,081 18,634
Stockholders' equity 5,532 5,203
Total liabilities and stockholders'
equity $ 22,613 $ 23,837