HALIFAX ANNOUNCES FOURTH QUARTER
AND FISCAL 2006 FINANCIAL RESULTS

Company Reports Gross Margin Increase for the Quarter and Year;
Annual Revenues Up 13%

ALEXANDRIA, VA – June 22, 2006 – Halifax Corporation (AMEX:HX) today announced its financial results for the fourth quarter and fiscal year ended March 31, 2006.

For the year, revenues were $54.9 million, up 13% compared to prior year revenues of $48.4 million. The revenue increase was the result of growth in both high-availability nationwide maintenance services and site-based managed services.

Halifax reported a gross margin of $3.7 million, or 7% of revenues, for the 2006 fiscal year versus $1.9 million, or 4% of revenues, for the previous year. As previously reported, fiscal year 2006 included costs related to the cessation of a large nationwide enterprise maintenance contract that had generated significant losses for the Company over the last two years. This contract was concluded in April 2006.

The operating loss for fiscal 2006 was $4.7 million versus an operating loss of $3.8 million for the prior year. The operating loss for fiscal year 2006 included non-recurring goodwill charges of $3.2 million and certain contract cessation costs. The writedown of goodwill had no impact on cash flow or tangible net worth. Halifax also recognized a gain of $5.7 million from the sale of its Secure Network Services business on June 30, 2005.

Net income for fiscal year 2006 was $1.5 million, or $0.48 per diluted share, compared to a net loss of $1.4 million, or $0.46 per share, a year ago.

According to Charles McNew, president and chief executive officer, “We are extremely pleased with our top line growth and our gross margin improvement. Our current backlog stands at a healthy $80 million and our pipeline for prospective new business is strong. We expect to return to sustainable profitability for the quarter ended June 30, 2006, and hope to have some exciting new revenue announcements in the near future. It’s also worth noting that our balance sheet continues to strengthen as working capital improves and debt is reduced.”

For the quarter ended March 31, 2006, revenues were $12.9 million compared to $13.9 million for the same period last year. The revenue drop was attributable to the expiration of several contracts. The gross margin was $1.1 million, or 8.6%, for the 2006 fourth quarter versus $339,000, or 2.4%, for the comparable quarter a year ago. The operating loss for the quarter ended March 31, 2006, was $74,000 versus an operating loss of $1.1 million for the same period last year. Net income for the three months ended March 31, 2006, was $233,000, or $0.07 per diluted share, versus a net loss of $511,000, or $0.16 per share, for the same period in 2005. The net income improvement for the fiscal 2006 fourth quarter was due to the strengthening margin and certain tax benefits recorded during the period.

McNew noted, “Our confidence in the long-term prospects for Halifax remains high, despite the challenging marketplace. As we approach our return to profitability, we’re looking forward to building our stature in the enterprise maintenance solutions and managed services marketplace. In addition, we’re continuing to evaluate various strategic alternatives to further position our Company for near and longer term growth opportunities.”

The Company will host a conference call for investors at 11:00 a.m. EDT on Thursday, June 22, 2006, to review the financial and operational results for the quarter. The conference call phone number is 800-847-8127 for U.S. callers and 212-676-5269 for international callers. The conference call replay will be available from 11 a.m. EDT on Thursday, June 22, 2006, to 11 a.m. EDT on Friday, June 23, 2006. The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers. The reservation number is 21296626.

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.