HALIFAX ANNOUNCES THIRD QUARTER
FINANCIAL RESULTS

Revenues Increase 18%; Net Income Up 34%

ALEXANDRIA, VA – January 29, 2004 – Halifax Corporation (AMEX:HX) today announced its financial results for the quarter ended December 31, 2003.

Revenues were $13.4 million for the quarter ended December 31, 2003, versus $11.3 million for the same period of 2002, an increase of 18%. The revenue growth was primarily due to increases in high-availability maintenance services related to the Company’s recently completed acquisition of Microserv. In addition, the Company increased secure network services revenues from certain Department of Defense customers.

Net income for the quarter ended December 31, 2003, was $202,000, or $0.07 per basic and diluted share, versus $151,000 or $0.07 per basic and diluted share, for the comparable quarter of last year, an increase of 34%. The Company reported that its total weighted average shares outstanding on a diluted basis increased to 2,992,000 for the quarter ended December 31, 2003, versus 2,245,000 for the same period last year, due to the private placement in late July 2003 and the issuance of shares of common stock associated with the Microserv acquisition.

Charles McNew, president and chief executive officer, noted, “We are pleased to report the continued improvement in our financial performance. This marks the eleventh consecutive quarter of profitability for our Company.”

For the nine months ended December 31, 2003, revenues were $36.5 million compared to $39.4 million for the same period last year. Net income was $405,000, or $0.16 per basic and diluted share, for the first nine months of this year compared to $484,000, or $0.22 per basic and diluted share, for the same period of the prior year. The revenue and earnings decrease for the current nine month period is primarily related to reductions in non-recurring hardware orders from governmental customers and is reflective of the Company’s shift towards a model composed primarily of higher-margin services.

Mr. McNew noted, “The enterprise maintenance solutions marketplace continues to represent a strong growth opportunity for Halifax. Although competition is intense in certain sectors, our partnering strategy has generated improvement in our pipeline of opportunities and should continue to position the Company for ongoing improvement in shareholder value. In addition, our balance sheet is strong and our evaluation of accretive acquisition candidates is continuing.”

The Company will host a conference call for investors at 11 a.m. EST on Thursday, January 29, 2004, to review the financial and operational results for the quarter. The conference call phone number is 888-898-1327 for U.S. callers and 706-679-5341 for international callers. The conference call replay will be available from 1 p.m. EST on Thursday, January 29, 2004, to 1 p.m. EST on Friday, January 30, 2004. The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers. The reservation number is 21183740.

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 on Halifax can be found at www.hxcorp.com.