0000720671-95-000002.txt : 19950825 0000720671-95-000002.hdr.sgml : 19950825 ACCESSION NUMBER: 0000720671-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALIFAX CORP CENTRAL INDEX KEY: 0000720671 STANDARD INDUSTRIAL CLASSIFICATION: 7370 IRS NUMBER: 540829246 STATE OF INCORPORATION: VA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08964 FILM NUMBER: 95562440 BUSINESS ADDRESS: STREET 1: 5250 CHEROKEE AVE CITY: ALEXANDRIA STATE: VA ZIP: 22312 BUSINESS PHONE: 7037502202 MAIL ADDRESS: STREET 1: 5250 CHEROKEE AVENUE CITY: ALEXANDRIA STATE: VA ZIP: 22312 FORMER COMPANY: FORMER CONFORMED NAME: HALIFAX ENGINEERING INC/VA DATE OF NAME CHANGE: 19911204 10-Q 1 HALIFAX CORPORATION FORM 10-Q JUNE 30, 1995 FORM 10Q -- QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (As last amended in Rel. No. 34-26589. eff. 4/12/89.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) (X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended June 30, 1995 ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to ______________ Commission file Number 1-8964 Halifax Corporation (Exact name of registrant as specified in its charter) Virginia 54-0829246 (State or other jurisdiction of incorporation of organization) (IRS Employer Identification No.) 5250 Cherokee Avenue, Alexandria, VA 22312 (Address of principal executive offices) Registrant's telephone number, including area code (703) 750-2202 N/A (former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (X)Yes ( )No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 1,168,229 HALIFAX CORPORATION CONTENTS PART I. FINANCIAL INFORMATION page Item 1. Financial Statements Condensed Consolidated Balance Sheets - June 30, 1995 (Unaudited) and March 31, 1995 3 Condensed Consolidated Statements of Income - Three Months Ended June 30, 1995 and 1994 (Unaudited) 4 Condensed Consolidated Statements of Stockholders' Equity - Three Months Ended June 30, 1995 and 1994 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows - Three Months Ended June 30, 1995 and 1994 (Unaudited) 6 Notes to Condensed Consolidated Financial Statements (Unaudited 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II OTHER INFORMATION Item 1. Legal Proceedings 9 Item 2. Changes in Securities 9 Item 3. Default Upon Senior Securities 9 Item 4. Submission of Matters for a Vote of Security Holders 9 item 5. Other Information 9 Item 6. Exhibits and Reports on Form 8-K 9 HALIFAX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 1995 AND MARCH 31, 1995 JUNE 30, 1995 MARCH 31, 1995* (Unaudited) (Audited) ASSETS CURRENT ASSETS Cash $ 432,000 $18,000 Trade accounts receivable 9,123,000 11,077,000 Inventory 3,120,000 3,480,000 Prepaid expenses and other current assets 636,000 781,000 TOTAL CURRENT ASSETS 13,311,000 15,356,000 PROPERTY AND EQUIPMENT, at cost less accumulated depreciation and amortization 4,669,000 4,717,000 INTANGIBLES AND OTHER ASSETS, net of accumulated amortization 1,993,000 2,034,000 TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $4,358,000 $5,916,000 Current portion of long-term debt 594,000 595,000 TOTAL CURRENT LIABILITIES 4,952,000 6,511,000 LONG-TERM DEBT 6,508,000 7,195,000 TOTAL LIABILITIES 1,460,000 13,706,000 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common Stock 518,000 518,000 Additional paid-in capital 3,401,000 3,401,000 Retained earnings 4,907,000 4,795,000 8,826,000 8,714,000 Less treasury stock - at cost 313,000 313,000 STOCKHOLDERS' EQUITY 8,513,000 8,401,000 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $19,973,000 $22,107,000 *Condensed from March 31, 1995 Audited Financial Statements See notes to financial statements.
HALIFAX CORPORATION CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE MONTHS ENDED JUNE 30, 1995, AND 1994 (unaudited)
Three Months Ended June 30 1995 1994 Revenues $ 8,946,000 14,071,000 Operating costs and expenses: Cost of services 7,717,000 12,765,000 Selling, general and administrative 812,000 827,000 Total operating costs and expenses 8,529,000 13,592,000 Operating income 417,000 479,000 Interest expense 108,000 175,000 Income before income taxes 309,000 304,000 Income taxes 121,000 117,000 Net income $ 188,000 $ 187,000 Net income per common share $.16 $ .16 Weighted average number of common shares outstanding 1,180,329 1,197,429 See notes to financial statements.
HALIFAX CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994 (unaudited)
Common Stock Additional Treasury Stock Paid-In Retained Shares Par Value Capital Earnings Shares Cost Total Balance April 1, 1995 1,480,015 $518,000 $3,401,000 $4,795,000 299,686 $(313,000) $8,401,000 Cash Dividends - - - ( 76,000) - - ( 76,000) Net Income - - - 188,000 - - 188,000 Balance June 30, 1995 1,480,015 $518,000 $3,401,000 $4,907,000 299,686 $(313,000) $8,513,000 Balance April 1, 199 41,480,015 $518,000 $3,401,000 $4,240,000 282,586 $(193,000) $7,966,000 Cash Dividends - - - ( 71,000) - - (71,000) Net Income - - - 187,000 - - 187,000 Balance June 30, 1994 1,480,015 $518,000 $3,401,000 $4,356,000 282,586 $(193,000) $8,082,000 See notes to financial statements.
HALIFAX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994 (unaudited)
Three Months Ended June 30 1995 1994 Cash flows from operating activities: Net income $188,000 $ 187,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 145,000 154,000 Decrease in accounts receivable 1,954,000 2,952,000 Decrease in inventory 360,000 228,000 Decrease (increase) in other assets 159,000 428,000 (Decrease) in accounts payable and accrued expenses (1,573,000) (2,931,000) Total adjustment 1,045,000 831,000 Net cash provided by operating activities 1,233,000 1,018,000 Cash flows from investing activities: Acquisition of property and equipment (56,000) (179,000) Net cash used in investing activities (56,000) (179,000) Cash flows from financing activities: Proceeds from borrowing of long-term debt 2,108,000 7,488,000 Retirement of long-term debt (2,795,000) (8,374,000) Cash dividends paid (76,000) ( 71,000) Net cash used by financing activities (763,000) (957,000) Net (decrease) increase in cash 414,000 (118,000) Cash beginning of period 18,000 509,000 Cash end of period $ 432,000 $ 391,000 See notes to financial statements.
Halifax Corporation Notes to Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Financial Statements Note A - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended June 30, 1995 are not necessarily indicative of the results that may be expected for the year ended March 31, 1996. For further information refer to the consolidated financial statements and footnotes thereto included in the Halifax Corporation annual report on Form 10-K for the year ended March 31, 1995. Note B - Contingent Matters The Company is a co-defendant or is defendant in various lawsuits. In one of these lawsuits the plaintiff seeks compensatory damages of $5,000,000 and punitive damages of $12,000,000. The Company provides for costs related to contingencies when a loss is probable and the amount is reasonably determinable. It is the opinion of management, based on advice of counsel, that the ultimate resolution of this contingency will not have a material adverse effect on the financial condition of the Company. Managements' Discussion and Analysis of Financial Conditions and Results of Operations Results of Operations Revenues for the first quarter of fiscal 1996 of $8,946,000 represent a decrease of approximately $5,100,000 or 36% over those in the first quarter of fiscal 1995. The reduction was due primarily to the termination of the Maritime Prepositioning Ship Contract (MPF). Costs of services, as a percentage of revenue, improved from 91% in the first quarter of 1995 to 86% in the first quarter of 1996 as a result of improved contract density and profitability. Improvement in this margin also resulted from the phase out of the low margin MPF contract. Selling, general and administrative expenses as a percentage of revenue increased from 6% in the first quarter of fiscal 1995 to 9% in the first quarter of fiscal 1996. However, selling, general and administrative costs in these periods decreased in amount from $827,000 in the first quarter of 1995 to $812,000 for the comparable period of 1996. Net income for the quarter of $188,000 represents a $1,000 increase over the first quarter in fiscal 1995. The comparable net income amounts for the two quarters were attained despite lower revenues in fiscal 1996 as a result of increased operating margins. Decreased interest expense reflects lower borrowings and lower interest rates. Liquidity and Sources of Capital Cash flows from operations were $1,233,000 for the first quarter of fiscal 1996 as compared with a $1,018,000 in the comparable period of fiscal 1995. Net income and decreases in working capital accounts in the first quarter of fiscal 1996 generated cash flows sufficient to repay long term debt by $687,000 and to pay normal dividend and purchase capital expenditures. The Company expects that cash generated from operations and the Company's line of credit will be sufficient to meet its normal operating requirements in the foreseeable future. Subsequent to June 30, 1995, the Company repurchased 12,100 shares of its own stock for $77,000 as part of a previously announced plan to reacquire up to 60,000 shares. To date, 29,200 shares have been reacquired under this plan. Contingent Matters The Company is a co-defendant or is defendant in various law suits. In one of these lawsuits, the plaintiff seeks compensatory damages of $5,000,000 and punitive damages of $12,000,000. The Company provides for costs related to contingencies when a loss is probable and the amount is reasonably determinable. It is the opinion of management, based on advice of counsel, that the ultimate resolution of this contingency will not have a material adverse effect on the financial condition of the Company, however they are expected to generate increased cost in legal service in the next few months. Part II. Other Information Item 1. Legal Proceedings - Not applicable Item 2. Changes in Securities - Not applicable Item 3. Defaults upon Senior Securities - Not applicable Item 4. Submission of Matters to a Vote of Security Holders - Not applicable Item 5. Other Information - Not applicable Item 6. Exhibits and Reports on Form 8-K The following exhibits and reports included herein: (a) Exhibits - Not applicable (b) Reports on Form 8-K - No reports on Form 8K were filed for the three months ended June 30, 1995 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 11, 1995 By: s/Howard C. Mills Howard C. Mills President Date: August 11, 1995 By: s/Richard J. Smithson Richard J. Smithson Vice President & Treasurer SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: By: Howard C. Mills President Date: By: Richard J. Smithson Vice President & Treasurer