Exhibit 99.1
HALIFAX ANNOUNCES FISCAL 2008 FINANCIAL RESULTS
"The Company Forecasts Profitability for First Quarter"
ALEXANDRIA, VA - July 16, 2008 - Halifax Corporation (AMEX:HX) today
announced its financial results for the fiscal year ended March 31,
2008.
Revenues for fiscal year 2008 were $43.9 million compared to $50.7
million for the prior fiscal year. The decrease in revenues in 2008
was attributable to the termination of certain large nation-wide
enterprise maintenance contracts, including the loss of a large
aeronautic manufacturing customer.
The Company reported an operating loss of $1.8 million for fiscal 2008
as compared to a breakeven result for the prior fiscal year. The loss
in fiscal year 2008 was primarily as a result of the loss of certain
large nation-wide enterprise maintenance contracts, a charge to
increase our reserve for obsolete inventory, the settlement of
litigation and a charge for fees related to an acquisition transaction
that failed to close. The increase in the reserve for obsolete
inventory resulted from changes in the mix of the equipment that we
support, as a result of technology upgrades by our customers.
The Company reported a net loss of $2.5 million or ($0.77) per basic and
diluted share for fiscal year 2008. This compares to a net loss of
$2.4 million or ($0.76) per basic and diluted share for fiscal year
2007. The net loss for fiscal year 2008 was attributable to reduced
margins as a result of losses in revenue and increases in our reserve
for obsolete inventory and operating costs. The net loss for fiscal
year 2007 was principally the result of a loss on an equipment roll out
project in the fourth quarter, a charge to increase our reserve for
inventory obsolescence, and a charge to record a full valuation
allowance on our deferred tax asset.
It was also noted that the Company is once again profitable and cash
flow positive and we expect to report earnings for the quarter ended
June 30, 2008 of approximately $200,000 or $0.06 per basic and diluted
share.
Charles McNew, President and Chief Executive Officer, stated, "Fiscal
year 2008 was a transition year for the Company and we believe the
losses are now behind us. A significant portion of the losses were
comprised of one time charges. We have carefully managed our cash flow
and have been able to pay down a sizeable portion of our bank debt in
recent months. We have also secured new long-term financing which
combined with comprehensive restructuring actions has enabled us to
enhance our service model while dramatically reducing labor costs and
parts risk. We are confident that our new service model, which targets
the supply chain management marketplace is rapidly positioning us for a
return to market share expansion."
McNew added, "As we look forward to fiscal year 2009, we are
forecasting a solidly profitable first quarter and believe there is a
basis to view this as a sustainable environment. We are also
continuing to develop a robust pipeline of new business opportunities
for both Enterprise Logistics Services and Field Maintenance Solutions
opportunities."
For the quarter ended March 31, 2008, revenues were $9.0 million
compared to $13.0 million for the same period last year. The operating
loss for the quarter ended March 31, 2008 was $887,000 compared to an
operating loss of $822,000 for the same period last year. The Company
reported a net loss of $955,000 or ($0.30) per basic and diluted share
for the quarter ended March 31, 2008 compared to a restated net loss of
$2.6 million or ($0.81) per basic share for the quarter ended March 31,
2007.
The Company will host a conference call for investors at 11 a.m. EDT on
Wednesday, July 16, 2008, to review the financial and operational
results for the quarter. The conference call phone number is 800-908-
0783 for U.S. callers and 212-231-2904 for international callers. The
conference call replay will be available from 1 p.m. EDT on Wednesday,
July 16, 2008, to 1 p.m. EDT on Thursday, July 17, 2008. The replay
number is 800-633-8284 for U.S. callers and 402-977-9140 for
international callers. The reservation number is 21388610.
Founded in 1967, Halifax Corporation is an enterprise logistics and
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 enterprise logistics
solutions and high availability hardware maintenance 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 For the years
months ended ended March 31,
March 31,
2008 2007 2008 2007
Restated Restated
Revenues $8,993 $12,977 $43,873 $50,695
Operating costs and 8,714 12,752 40,259 46,268
expenses
Gross profit 279 225 3,614 4,427
Selling, marketing, general
& administrative expense 1,166 1,047 4,594 4,427
Litigation settlement costs - - 410 -
Acquisition costs - - 458 -
Operating loss (887) (822) (1,848) -
Other income 4 9 31 32
Interest expense (120) (181) (654) (673)
Loss before income taxes (1,003) (994) (2,471) (641)
Income tax (benefit) (48) 1,573 (18) 1,769
expense
Net loss $(955) $(2,567) $(2,453) $(2,410)
Loss per common share - $(.30) $(.81) $(.77) $(.76)
basic and diluted
Weighted average number of
common
shares outstanding
Basic and diluted 3,175 3,175 3,175 3,175
Balance Sheets March 31, March 31,
2008 2007
Current assets
Cash $232 $1,751
Trade accounts receivable, net 10,206 11,345
Inventory, net 3,240 4,946
Prepaid expenses and other current assets 220 584
Total current assets 13,898 18,626
Property and equipment, net 1,001 1,225
Goodwill and intangibles, net 3,580 3,865
Other assets 111 121
Total assets $18,590 $23,837
Liabilities and stockholders' equity
Current liabilities
Accounts payable and accrued expenses $5,280 $6,375
Deferred maintenance revenue 4,309 3,058
Current portion of long-term debt 276 31
Bank debt 4,448 6,880
Auxiliary line of credit 60 1,000
Income taxes payable 35 11
Total current liabilities 14,408 17,355
Other long-term debt 325 120
Subordinated debt - affiliate 1,000 1,000
Deferred income 99 159
Total liabilities 15,832 18,634
Stockholders' equity 2,758 5,203
Total liabilities and stockholders' equity $18,590 $23,837