ALEXANDRIA, Va., Jan. 18 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced that it expects to report a net loss of
approximately $850,000 for the quarter ended December 31, 2004.
The loss stems from higher-than-expected ramp-up and operating costs
associated with a new enterprise maintenance contract. Under the contract,
which began in the summer of 2004 and expanded significantly in the fall,
Halifax provides nationwide computer maintenance service and support for a
consumer products retail chain with over 5,000 locations. The initial
contract, which runs through December 2005, was valued at $6.7 million, with
the estimated potential value estimated at more than $20 million if the
contract is extended through 2008.
According to Charles McNew, president and chief executive officer, "The
cost of an accelerated roll-out of service and certain unanticipated service
delivery costs have exceeded our expectations. Consequently, we will record
an operating loss associated with this contract for the quarter ended December
31, 2004.
"We have taken corrective actions internally, and we also are negotiating
a revised plan tied to specific customer expectations for equipment and
support staff going forward," he said. "As a result of these actions, we
expect this contract to return to profitability for the long term."
McNew added, "Although we're extremely disappointed to report a quarterly
loss following our recent revenue growth and sustained profitability, we are
proud of our track record for building solid, long-term customer relationships
in both our federal and commercial businesses."
The Company plans to announce its financial results for the 2005 third
quarter in the second week of February.
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 regarding Halifax can be found at
http://www.hxcorp.com.
Certain statements made by the Company which are not historical facts may
be considered forward-looking statements, including, without limitation,
statements as to trends, management's beliefs, views, expectations and
opinions, which are based upon a number of assumptions concerning future
conditions that ultimately may prove to be inaccurate. Such forward-looking
statements are subject to risks and uncertainties and may be affected by
various factors that may cause actual results to differ materially from those
in the forward-looking statements. For further information that could affect
the Company's financial statements, please refer to the Company's reports
filed with the Securities and Exchange Commission.
SOURCE Halifax Corporation
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Related links:
http://www.hxcorp.com
Company News On-Call:
http://www.prnewswire.com/comp/391950.html
CONTACT:
Investor Relations Information: Karen
Vahouny of Qorvis Communications, +1-703-744-7809, or
kvahouny@qorvis.com, for Halifax Corporation
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