EX-99.1 2 ex991e.txt Exhibit 99.1 HALIFAX ANNOUNCES SECOND QUARTER FINANCIAL RESULTS Revenues Increase 19% Due to New Contract Wins ALEXANDRIA, VA - November 4, 2004 -Halifax Corporation (AMEX:HX) today announced its financial results for the quarter ended September 30, 2004. Revenues for the second quarter of fiscal 2005 were $14.8 million versus $12.5 million for the same period in 2003, an increase of 19%. The revenue growth was due primarily to the start of several new contracts in both high-availability maintenance services and secure network services. Operating income was $214,000, for the second quarter of fiscal 2005 versus $303,000 for last year's comparable quarter. Cost of services for the quarter were significantly higher than normal due to initial start-up costs associated with the commencement of a long-term nationwide contract and should return to normal rates in the third quarter. The Company noted that operating income was also reduced by a non-recurring charge of $179,000 relating to the abandonment of certain facilities. Net income for the quarter ended September 30, 2004, was $44,000, or $0.02 per basic and $0.01 per diluted share, versus $152,000, or $0.06 per basic and diluted share, for the comparable quarter of last year. Charles McNew, president and chief executive officer, noted, "We're pleased with our continuing top-line growth. During the second quarter, we made a sizable investment to launch a large nationwide contract with a new customer." "Now, with the recently completed acquisition of AlphaNational and with most of our new contract start-up costs behind us, we believe we will generate additional revenue growth and improved earnings for the balance of the fiscal year." For the six months ended September 30, 2004, revenues were $28.3 million compared to $23.1 million for the same period last year, an increase of 22%. Operating income for the six months ended September 30, 2004, was $500,000 versus $502,000 for the same period in 2003. Net income was $135,000, or $0.05 per basic and diluted share, for the first six months of this year compared to $203,000, or $0.09 per basic and $0.08 per diluted share, for the comparable period in 2003. McNew added, "Our high-availability maintenance services and our secure network services businesses are both growing at healthy rates. We are successfully integrating AlphaNational into our organization, and we remain bullish about our combined opportunities. In fact, our backlog at September 30, 2004, was $78.5 million, up 64% compared to March 31, 2004." He concluded, "We are well positioned to continue to grow while improving profitability and building shareholder value." The Company will host a conference call for investors at 11 a.m. EST on Thursday, November 4, 2004, to review the financial and operational results for the quarter. The conference call phone number is 800-670- 3536 for U.S. callers and 212-748-2803 for international callers. The conference call replay will be available from 1 p.m. EST on Thursday, November 4, 2004, to 1 p.m. EST on Friday, November 5, 2004. The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers. The reservation number is 21212860. 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, and secure network program services. More information regarding Halifax can be found at www.hxcorp.com. The information on the website listed above is not and should not be considered part of this document and is not incorporated by reference in this document. This website is and only is intended to be an inactive textual reference. 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 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 Ended Six Months Ended amounts) September 30, September 30, Statements of Operations 2004 2003 2004 2003 Revenues $14,809 $12,461 $28,250 $ 23,137 Cost of services 13,138 10,965 24,914 20,320 Selling, Marketing, General & Administrative 1,278 1,193 2,657 2,315 Abandonment of facility 179 - 179 - Operating income 214 303 500 502 Interest expense (158) (136) (297) (279) Income before income taxes 56 167 203 223 Income tax expense (12) (15) (68) (20) Net income $ 44 $ 152 $ 135 $ 203 Earnings per common share - basic: $ .02 $ .06 $ .05 $ .09 Earnings per common share - $ .01 $ .06 $ .05 $ .08 diluted: Weighted average number of common shares outstanding: Basic 2,927 2,557 2,920 2,365 Diluted 2,970 2,627 2,971 2,400
Balance Sheets September 30, 2004 March 31, 2004 Current assets Cash $ 18 $ 430 Trade accounts receivable, net 11,990 9,364 Inventory, net 5,935 5,845 Prepaid expense and other current assets 768 599 Deferred tax asset 1,148 1,204 Total current assets 19,859 17,442 Property and equipment, net 1,806 1,598 Goodwill and intangibles, net 7,360 4,606 Other assets 146 149 Deferred tax asset 2,685 2,696 Total assets $ 31,856 $ 26491 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued expenses $ 8,108 $ 6,723 Deferred maintenance revenue 3,990 2,543 Current portion of long-term dept 1,495 523 Total current liabilities 13,593 9,789 Long-Term bank debt 7,430 7,246 Subordinated debt-affiliate 2,400 2,400 Deferred income 308 337 Total liabilities 23,731 19,772 Stockholders' equity 8,125 6,719 Total liabilities and stockholders' equity $ 31,856 $ 26,491