HALIFAX ANNOUNCES THIRD QUARTER FINANCIAL RESULTS

ALEXANDRIA, VA - January 30, 2003 - Halifax Corporation (AMEX:HX) today announced its financial results for the quarter ended December 31, 2002.
Revenues decreased 14% to $11.3 million from $13.2 million in the third quarter of last year. The decrease was principally due to reductions in low margin hardware orders, which the Company announced in December.

Net income increased to $151,000 or $0.07 per basic and diluted share, for the third quarter of fiscal 2003 compared to $109,000 or $0.05 per basic and diluted share, for the same quarter of fiscal 2002.

According to Charles McNew, president and CEO, “Our hardware marketplace has been characterized by intense competition, a declining rate of orders and thinner margins. Our recent decision to de-emphasize hardware sales and focus on our recurring revenue model for enterprise maintenance services should improve the potential for long-term growth in both revenue and profitability.”

He continued, “Our core services have continued to grow, and this has positively affected our margins. Operating margins have improved over 30% as compared to fiscal year 2002.”

For the nine months ended December 31, 2002, revenues increased 10% to $39.4 million from to $35.7 million for the same period in the previous year. Net income was $484,000, or $0.22 per basic and diluted share, for the first nine months of this year compared to $187,000, or $0.09 per basic and diluted share, for the same period of the prior year.

McNew noted, “We are focused on continuing to build our portfolio of long-term, higher-margin services contracts. The shift away from hardware revenue dependency is a positive development; our margins should continue to improve as we increase our services base. We remain confident in our view that the IT services strategy we’ve embraced will position the Company for long-term growth.”

The Company will host a conference call for investors at 11 a.m. EST on Thursday, January 30, 2003, to review the financial and operational results for the quarter. The conference call phone number is 888-214-7562 for U.S. callers and 415-537-1916 for international callers. The conference call replay will be available from 1 p.m. EST on Thursday, January 30, 2003 to 1 p.m. EST on Friday, January 31. The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers; the reservation number is 21117260.

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 maintenance services, seat management and deployment services, and secure network program services.