-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Urdu/P0VW8BZN8JOw68G8mHiPl5nVX9WnvUsPU4jkgiisefueJi7KCc+zJ4immh2 eqbowQoGqo6gWFSouGsz9Q== 0000720671-95-000006.txt : 19951119 0000720671-95-000006.hdr.sgml : 19951119 ACCESSION NUMBER: 0000720671-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALIFAX CORP CENTRAL INDEX KEY: 0000720671 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [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: 95592785 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 SEPTEMBER 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 September 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 - September 30, 1995 (Unaudited) and March 31, 1995 3 Condensed Consolidated Statement of Income - Three and Six Months Ended September 30, 1995 and 1994 (Unaudit) 4 Condensed Consolidated Statement of Stockholders' Equity - Six Months Ended September 30, 1995 and 1994 (Unaudited) 5 Condensed Consolidated Statement of Cash Flows - Six Months EndedSeptember 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 10 Item 2. Changes in Securities 10 Item 3. Default Upon Senior Securities 10 Item 4. Submission of Matters for a Vote of Security Holders 10 item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 HALIFAX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1995 AND MARCH 31, 1995
SEPTEMBER 30, 1995 MARCH 31, 1995* (Unaudited) (Audited) ASSETS CURRENT ASSETS Cash $ 93,000 18,000 Trade accounts receivable 9,266,000 11,077,000 Inventory 3,170,000 3,480,000 Prepaid expenses and other current assets 627,000 781,000 TOTAL CURRENT ASSETS 13,156,000 15,356,000 PROPERTY AND EQUIPMENT, at cost less accumulated depreciation and amortization 4,597,000 4,717,000 INTANGIBLES AND OTHER ASSETS, net of accumulated amortization 2,150,000 2,034,000 TOTAL ASSETS $ 19,903,000 $ 22,107,000 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $4,801,000 $5,916,000 Current portion of long-term debt 583,000 595,000 TOTAL CURRENT LIABILITIES 5,384,000 6,511,000 LONG-TERM DEBT 6,130,000 7,195,000 TOTAL LIABILITIES 11,514,000 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 4,858,000 4,795,000 8,777,000 8,714,000 Less treasury stock - at cost 388,000 313,000 STOCKHOLDERS' EQUITY 8,389,000 8,401,000 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,903,000 $ 22,107,000 *Condensed from March 31, 1995 Audited Financial Statements See notes to condensed consolidated financial statements.
HALIFAX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME For The Three and Six Months Ended September 30, 1995 and 1994 (Unaudited)
Three Months Ended Six Months Ended September 30 September 30 1995 1994 1995 1994 Revenues $9,076,000 $10,638,000 $18,022,000 $24,709,000 Operating Costs and expenses: Cost of Services 7,831,000 9,471,000 15,548,000 22,245,000 Selling, general and administrative expenses 803,000 658,000 1,615,000 1,476,000 Total operating costs and expenses 8,634,000 10,129,000 17,163,000 23,721,000 Operating income 442,000 509,000 859,000 988,000 Litigation expense 260,000 - 260,000 - Interest expense 135,000 159,000 243,000 334,000 Income before income taxes 47,000 350,000 356,000 654,000 Income taxes 20,000 135,000 141,000 252,000 Net Income 27,000 $ 215,000 $ 215,000 $ 402,000 Net income per common share: $ .02 $ 0.18 $ .18 $ 0.34 Weighted average number of common shares outstanding 1,168,229 1,196,529 1,174,279 1,196,979 See notes to condensed consolidated financial statements.
HALIFAX CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
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 - - - (152,000) - - (152,000) Purchase of Treasury Stock 12,100 (75,000) (75,000) Net Income - - - 215,000 - - 215,000 Balance September 30, 1995 1,480,015 $ 518,000 $ 3,401,000 $ 4,858,000 311,786 $ (388,000) $ 8,389,000 Balance April 1, 1994 1,480,015 $ 518,000 $ 3,401,000 $ 4,240,000 282,586 $ (193,000) $ 7,966,000 Net Income - - - 402,000 - - 402,000 Cash Dividends - - - (149,000) - - (149,000) Purchase of Treasury Stock - - - - 2,700 $ (20,000) $ (20,000) Balance September 30, 1994 1,480,000 $ 518,000 $ 3,401,000 $ 4,493,000 285,286 $ (213,000) $ 8,199,000 See notes to condensed consolidated financial statements.
HALIFAX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Six Months Ended September 30 1995 1994 Cash flows from operating activities: Net income $ 215,000 $ 402,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 292,000 293,000 Decrease in accounts receivable 1,811,000 3,820,000 Decrease in inventory 310,000 511,000 Decrease (Increase) in other assets (45,000) 188,000 (Decrease) Increase in accounts payable and accrued expenses (1,115,000) (2,871,000) Total adjustment 1,253,000 1,941,000 Net cash provided (used) by operating activities 1,468,000 2,343,000 Cash flows from investing activities: Acquisition of property and equipment (92,000) (245,000) Proceeds from sale of property and equipment 3,000 (29,000) Net cash used in investing activities (89,000) (245,000) Cash flows from financing activities: Proceeds from borrowing of long-term debt 5,627,000 10,124,000 Retirement of long-term debt (6,704,000) (12,432,000) Cash dividends paid (152,000) (149,000) Purchase of treasury stock (75,000) (20,000) Net cash (used) provided by financing activities (1,304,000) (2,477,000) Net decrease in cash 75,000 (379,000) Cash beginning of period 18,000 509,000 Cash end of period $ 93,000 $ 130,000 See notes to condensed consolidated financial statements.
Halifax Corporation Notes to Condensed Consolidated Financial Statements (Unaudited) 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 and six month periods ended September 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 sought damages for alleged interference with its business. On October 27, 1995 a jury awarded $435,177 for compensatory damages plus interest from January 14, 1990, but a final judgement has not been entered by the court pending the outcome of post trial motions. The Company provides for costs related to contingencies when a loss is probable and the amount is reasonably determinable. In this situation, the Company believes that the evidence does not support any liability and has filed a motion with the court to set aside the verdict. It is therefore 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 Condition and Results of Operations Results of Operations Revenues for the second quarter and six months ended September 30, 1995 were $9.1 million and $18 million respectively. Comparable revenues for the same periods in the prior year were $10.6 million and $24.7 million. Substantially all of the revenue decrease in the six months ending September 30, 1995 was due to the termination of the very large USMC contract early in the first quarter of the prior year. Operating margin percentages for the second quarter and year to date through September 30, 1995 improved slightly over the same periods for the prior year because of increased efficiencies associated with communication contracts and termination of the low margin USMC contract. The ratio of costs of services and of general and administrative expenses to revenue, decreased and increased, respectively as a result of the change in business mix. Litigation expenses of $260,000 in the three and six month periods ending September 30, 1995 include legal costs associated with a trial of a lawsuit described below. Interest expense decreased $24,000 in the second quarter ending September 30, 1995 and $91,000 in the six months then ended from the comparable periods in the prior fiscal year due to a reduction in borrowings. Net income for the second quarter was $27,000 compared with $215,000 for the same quarter of the prior year. For the six months ending September 30, 1995, net income was $215,000 compared with $402,000 for the prior year. Operating income in the second quarter was largely offset by the legal costs associated with the trial. Liquidity and Sources of Capital The Company's financial position at September 30, 1995 remains strong. The Company had $7.9 million of working capital at September 30, 1995 and a current ratio of 2.44:1. The debt to equity ratio improved to 1.37:1 and the Company has almost $5 million of its $7 million credit facility available to finance growth. Cash flows from operations were $1,468,000 for the first six months of fiscal year 1996 as compared with $2,343,000 in the comparable period of 1995. The $215,000 in net income for the period combined with decreases in working capital accounts provided cash inflows sufficient to repay long term debt by approximately $875,000. 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. Contingent Matters The Company is a co-defendant or is defendant in various lawsuits. In one of these lawsuits the plaintiff sought damages for alleged interference with its business. On October 27, 1995 a jury awarded $435,177 for compensatory damages plus interest from January 14, 1990, but a final judgement has not been entered by the court pending the outcome of post trial motions. The Company provides for costs related to contingencies when a loss is probable and the amount is reasonably determinable. In this situation, the Company believes that the evidence does not support any liability and has filed a motion with the court to set aside the verdict. It is therefore 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. Part II. Other Information Item 1. Legal Proceedings Commercial Business Systems, Inc. v. Halifax Corporation, et al. Plaintiff's claim, which has been the subject of judicial proceedings since August of 1990 and was consolidated with a similar claim against BellSouth, went to trail on October 18, 1995, resulting in a jury verdict against Halifax, a former employee and a non-employee, for wrongful interference with a prospective business relationship. The jury award was $435,177 for compensatory damages plus interest from January 14, 1990, but a final judgement has not been entered by the court pending the outcome of post trial motions. 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 - EX-27 (b) Reports on Form 8-K - None 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. HALIFAX CORPORATION (Registrant) Date: November 10, 1995 By: s/Howard C. Mills Howard C. Mills President Date: November 10, 1995 By: s/Richard J. Smithson Richard J. Smithson Vice President Administration & 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. HALIFAX CORPORATION Date: By: Howard C. Mills President Date: By: Richard J. Smithson Vice President Administration & Treasurer EX-27 2 10Q-SEPTEMBER-1995
5 10Q-SEPTEMBER-1995 1 0 MAR-31-1996 APR-1-1995 SEP-30-1995 6-MOS 1 93,000 0 9,266,000 0 3,170,000 13,156,000 4,597,000 0 19,903,000 5,384,000 0 0 0 518,000 7,871,000 19,903,000 18,022,000 18,022,000 15,548,000 17,163,000 260,000 0 243,000 356,000 141,000 215,000 0 0 0 215,000 .18 .18
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