HALIFAX ANNOUNCES THIRD QUARTER
FINANCIAL RESULTS
Company Reports Revenue Increase of 6% and Positive Gross Margin

ALEXANDRIA, VA – February 14, 2006 – Halifax Corporation (AMEX:HX) today announced its financial results for the quarter ended December 31, 2005.

Revenues for the third quarter of fiscal 2006 were $13.4 million versus $12.6 million for the same period in fiscal 2005, an increase of 6%, primarily as a result of new enterprise maintenance contract business and growth within its existing contract base. The Company reported a gross margin of $314,000 in the 2006 third quarter versus a loss of $372,000 in the same quarter a year ago. Included in the cost of services for the 2006 third quarter was a significant charge related to the potential cessation of one of the Company’s large nationwide enterprise maintenance contracts.

The operating loss for the third quarter of 2006 was $4.3 million versus an operating loss of $1.8 million for the comparable quarter of last year. The operating loss for this year’s third quarter included non-recurring charges of $3.2 million for goodwill impairment and $144,000 for severance costs. The writedown of goodwill had no impact on cash flow or tangible net worth. Halifax also recognized a gain on the sale of discontinued operations for $5.4 million due to the sale of the Company's Secure Network Services business on June 30, 2005.

The net income for the third quarter of 2006 was $1.4 million, or $0.44 per share, compared to a net loss of $1.0 million, or $0.33 per share, for the comparable period in fiscal 2005.

According to Charles McNew, president and chief executive officer, “We are encouraged by our continued top line growth in a difficult marketplace, and the outlook for new enterprise maintenance business is very promising. We have a strong balance sheet and an excellent working capital position. We’re continuing to evaluate various strategic alternatives to further position our Company for near- and longer-term growth opportunities."

For the nine months ended December 31, 2005, revenues were $42.0 million, up 22% compared to $34.5 million for the same period last year. The operating loss for the nine months ended December 31, 2005, was $4.6 million versus an operating loss of $2.7 million for the same period last year. The net income for the nine months ended December 31, 2005, was $1.3 million, or $0.41 per share, versus a net loss of $900,000, or $0.30 per share, for the nine months ended December 31, 2004.

McNew noted, "We are working diligently to resolve the issues associated with the losses on one large nationwide enterprise maintenance account, and we will not allow the ongoing losses related to this contract to continue. We expect to have final resolution this quarter, and we believe we can return our Company to sustained profitability.”

The Company will host a conference call for investors at 9 a.m. EST on Wednesday, February 15, 2006, to review the financial and operational results for the quarter. The conference call phone number is 866-503-1968 for U.S. callers and 212-341-7080 for international callers. The conference call replay will be available from 11 a.m. EST on Wednesday, February 15, 2006, to 11 a.m. EST on Thursday, February 16, 2006. The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers. The reservation number is 21283722.

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