HALIFAX ANNOUNCES FOURTH
QUARTER
AND FISCAL 2005 FINANCIAL RESULTS
Revenues Up 25% From Prior Year
ALEXANDRIA, VA – July 11, 2005 – Halifax Corporation
(AMEX:HX) today announced its financial results for the fourth quarter
and fiscal year ended March 31,
2005.
For the year, revenues were $62.0 million versus $49.5 million
for fiscal 2004, an increase of 25%. The revenue increase is a result
of growth in both High Availability Maintenance and Secure Network
Services. The operating loss for fiscal 2005 was $1.5 million versus
operating income of $1.1 million the prior year. The net loss was
$1.4 million, or $0.46 per basic and diluted share, compared to
net income of $4.2 million, or $1.60 per basic and $1.54 per diluted
share for the previous year. The loss for the current year was due
to previously announced startup costs associated with a large enterprise
maintenance contract and a writedown of inventory. The net income
for fiscal 2004 had included a non-recurring income tax benefit
of $3.8 million.
For the quarter ended March 31, 2005, revenues were $18.2 million
versus $13.0 million for the comparable period in 2004, an increase
of 39%. The revenue increase is a result of significant growth in
both High Availability Maintenance and Secure Network Services.
The operating loss for the 2005 fourth quarter was $624,000 compared
to operating income of $205,000 for the same quarter of 2004. The
net loss was $511,000, or $0.16 per basic and diluted share, compared
to net income of $3.8 million or $1.31 per basic and $1.24 per diluted
share for the same quarter a year ago. The loss for the current
quarter is primarily the result of inventory writedowns and higher-than-planned
operating costs on the large contract. Net income for the fourth
quarter of the previous year included a non-recurring income tax
benefit of $3.8 million.
Charles McNew, president and chief executive officer, stated, "Although
we’re pleased with the revenue growth, particularly in our
high availability maintenance business, the enterprise maintenance
contract had a negative impact on earnings in the second half of
the year. On the positive side, the loss in the fourth quarter was
well below that of the prior quarter, and our team is working diligently
to drive down our service delivery costs and return the business
to profitability.”
He added, “The recently announced sale of our secure network
service business for $12.5 million has dramatically improved our
balance sheet. With this sale, our business model is now entirely
focused on enterprise maintenance solutions."
The Company will host a conference call for investors at 11 a.m.
EDT on Monday, July 11, 2005, to review the financial and operational
results for the quarter and year. The conference call phone number
is 888-343-7167 for U.S. callers and 415-537-1987 for international
callers. The conference call replay will be available from 1 p.m.
EDT on Monday, July 11, 2005, to 1 p.m. EDT on Tuesday, July 12,
2005. The replay number is 800-633-8284 for U.S. callers and 402-977-9140
for international callers. The reservation number is 21251631.
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.
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