HALIFAX PROJECTS LOSS
FOR
QUARTER ENDED DECEMBER 31, 2004
ALEXANDRIA, VA – January 18, 2005 – Halifax
Corporation (AMEX:HX) today announced that it expects to report
a net loss of approximately $850,000 for the quarter ended December
31, 2004.
The loss stems from higher-than-expected ramp-up and operating
costs associated with a new enterprise maintenance contract. Under
the contract, which began in the summer of 2004 and expanded significantly
in the fall, Halifax provides nationwide computer maintenance service
and support for a consumer products retail chain with over 5,000
locations. The initial contract, which runs through December 2005,
was valued at $6.7 million, with the estimated potential value estimated
at more than $20 million if the contract is extended through 2008.
According to Charles McNew, president and chief executive officer,
“The cost of an accelerated roll-out of service and certain
unanticipated service delivery costs have exceeded our expectations.
Consequently, we will record an operating loss associated with this
contract for the quarter ended December 31, 2004.
“We have taken corrective actions internally, and we also
are negotiating a revised plan tied to specific customer expectations
for equipment and support staff going forward,” he said. “As
a result of these actions, we expect this contract to return to
profitability for the long term.”
McNew added, “Although we’re extremely disappointed
to report a quarterly loss following our recent revenue growth and
sustained profitability, we are proud of our track record for building
solid, long-term customer relationships in both our federal and
commercial businesses.”
The Company plans to announce its financial results for the 2005
third quarter in the second week of February.
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.
For investor relations information, contact Qorvis Communications:
Karen Vahouny (703) 744-7809 or kvahouny@qorvis.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, 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.
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