HALIFAX ANNOUNCES FIRST QUARTER FINANCIAL RESULTS

Company Reports Revenue Growth of 26% and Net Income Growth of 78%;
Thirteenth Consecutive Quarter of Profitability

ALEXANDRIA, VA – August 11, 2004 –Halifax Corporation (AMEX:HX) today announced its financial results for the quarter ended June 30, 2004.

Revenues were $13.4 million for the quarter ended June 30, 2004, compared to $10.7 million for the same period in 2003, an increase of 26%.  The revenue growth primarily resulted from increases related to the start-up of several new contracts in both high availability maintenance services and secure network services.  Operating income was $286,000 for the 2004 first quarter versus $199,000 for last year’s comparable quarter, an increase of 43%.

Net income for the first quarter of 2004 rose 78% to $91,000, or $0.03 per basic and diluted share, versus $51,000 or $0.02 per basic and diluted share, for the comparable quarter of last year. 

Charles McNew, president and chief executive officer, noted, "We are pleased to deliver another quarter of improving financial results, and we have continued to strengthen the balance sheet and produce growth in shareholders’ equity.  We’re proud to report the 13th consecutive quarter of profitability for our Company.

“We are receiving increased visibility for the unique approach we have implemented in the Enterprise Maintenance Solutions marketplace, as we’ve carefully developed our partner model,” he added.  “This is continuing to stimulate meaningful growth opportunities in a market that has been characterized by intense competition.”

McNew concluded, “We are optimistic about our future prospects.  We have a strong pipeline of future business opportunities, an improving backlog and an extremely busy workforce.  We believe we are well positioned to grow our existing core business, while continuing to improve profitability and shareholder value.”

The Company will host a conference call for investors at 11 a.m. EDT on Wednesday, August 11, 2004, to review the financial and operational results for the quarter.  The conference call phone number is 888-214-7567 for U.S. callers and 414-537-1808 for international callers.  The conference call replay will be available from 1 p.m. EDT on Thursday, August 12, 2004, to 1 p.m. EDT on Friday, August 13, 2004.  The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers.  The reservation number is 21204868.

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.