HALIFAX ANNOUNCES SECOND QUARTER
FINANCIAL RESULTS

Revenues Increase 19% Due to New Contract Wins

ALEXANDRIA, VA – November 4, 2004 – Halifax Corporation (AMEX:HX) today announced its financial results for the quarter ended September 30, 2004.

Revenues for the second quarter of fiscal 2005 were $14.8 million versus $12.5 million for the same period in 2003, an increase of 19%. The revenue growth was due primarily to the start of several new contracts in both high-availability maintenance services and secure network services. Operating income was $214,000, for the second quarter of fiscal 2005 versus $303,000 for last year’s comparable quarter. Cost of services for the quarter were significantly higher than normal due to initial start-up costs associated with the commencement of a long-term nationwide contract and should return to normal rates in the third quarter. The Company noted that operating income was also reduced by a non-recurring charge of $179,000 relating to the abandonment of certain facilities.

Net income for the quarter ended September 30, 2004, was $44,000, or $0.02 per basic and $0.01 per diluted share, versus $152,000, or $0.06 per basic and diluted share, for the comparable quarter of last year.

Charles McNew, president and chief executive officer, noted, “We’re pleased with our continuing top-line growth. During the second quarter, we made a sizable investment to launch a large nationwide contract with a new customer.”

He continued, “Now, with the recently completed acquisition of AlphaNational and with most of our new contract start-up costs behind us, we believe we will generate additional revenue growth and improved earnings for the balance of the fiscal year.”

For the six months ended September 30, 2004, revenues were $28.3 million compared to $23.1 million for the same period last year, an increase of 22%. Operating income for the six months ended September 30, 2004, was $500,000 versus $502,000 for the same period in 2003. Net income was $135,000, or $0.05 per basic and diluted share, for the first six months of this year compared to $203,000, or $0.09 per basic and $0.08 per diluted share, for the comparable period in 2003.

McNew added, “Our high-availability maintenance services and our secure network services businesses are both growing at healthy rates. We are successfully integrating AlphaNational into our organization, and we remain bullish about our combined opportunities. In fact, our backlog at September 30, 2004, was $78.5 million, up 64% compared to March 31, 2004.”

He concluded, “We are well positioned to continue to grow while improving profitability and building shareholder value.”

The Company will host a conference call for investors at 11 a.m. EST on Thursday, November 4, 2004, to review the financial and operational results for the quarter. The conference call phone number is 800-670-3536 for U.S. callers and 212-748-2803 for international callers. The conference call replay will be available from 1 p.m. EST on Thursday, November 4, 2004, to 1 p.m. EST on Friday, November 5, 2004. The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers. The reservation number is 21212860.

Founded in 1967, Halifax Corporation is a managed services company providing a wide range of information technology services to commercial and government customers throughout the United States. The Company’s principal products are Enterprise Maintenance Solutions, Seat Management/IT Solutions, and Federal Communications Services.