ALEXANDRIA, Va., Feb. 10 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced its financial results for the quarter ended
December 31, 2004.
The Company reported a 17% revenue increase, with fiscal 2005 third
quarter revenues of $15.6 million compared to nearly $13.4 million for the
same period a year ago. The revenue growth was due primarily to the start of
several new contracts in both high-availability maintenance services and
secure network services. The Company reported an operating loss of $1.4
million for the third quarter of fiscal 2005 versus operating income of
$352,000 for last year's comparable quarter. As the Company reported in
January 2005, the loss for the quarter was attributable to higher-than-
expected ramp-up costs, operating costs and product failure rates associated
with an enterprise maintenance contract, which was signed in the summer of
2004 and significantly expanded during the quarter ended December 31, 2004.
The net loss for the quarter ended December 31, 2004, was $1.0 million, or
$0.33 per basic and diluted share, versus net income of $202,000, or $0.07 per
basic and diluted share, for the comparable quarter of last year. As a result
of further evaluation of contract performance, the net loss is $185,000
greater than forecasted in a Company release issued on January 18, 2005.
According to Charles McNew, president and chief executive officer, "The
loss was a major disappointment, particularly given the previous 14 quarters
of profitability we'd reported and continued balance sheet improvement. We
have taken cost reduction actions and negotiated a revised pricing plan tied
to specific customer expectations for equipment and support staff. As a
result of these actions, we expect this contract to return to profitability
for the long term."
He noted, "We are proud of our track record for building solid, long-term
customer relationships in both our federal and commercial businesses."
For the nine months ended December 31, 2004, revenues were $43.8 million
compared to $36.5 million for the same period last year, an increase of 20%.
The operating loss for the nine months ended December 31, 2004 was $917,000
versus operating income of $864,000 for the same period last year. The net
loss was $900,000 for the nine months ended December 31, 2004, or $0.30 per
basic and diluted share, compared to net income of $405,000, or $0.16 per
basic and diluted share, for the same period of last year.
The Company will host a conference call for investors at 11 a.m. EST on
Thursday, February 10, 2005, to review the financial and operational results
for the quarter. The conference call phone number is 800-443-7135 for U.S.
callers and 212-676-5391 for international callers. The conference call
replay will be available from 1 p.m. EST on Thursday, February 10, 2005, to 1
p.m. EST on Friday, February 11, 2005. The replay number is 800-633-8284 for
U.S. callers and 402-977-9140 for international callers. The reservation
number is 21231827.
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. The information on the website listed above is not and
should not be considered part of this document. This website is intended to
be an inactive textual reference.
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.
Halifax Corporation
Summary Financial Data
(in 000's except per share amounts)
For the three months For the nine months
Statements of operations ended December 31, ended December 31,
2004 2003 2004 2003
Revenues $15,605 $13,380 $43,847 $36,517
Cost of services 15,641 11,802 40,547 32,122
Selling, Marketing,
General & administrative 1,383 1,226 4,038 3,531
Abandonment of facility - - 179 -
Operating (loss) income (1,419) 352 (917) 864
Interest expense (163) (130) (462) (419)
(Loss) income before income taxes (1,582) 222 (1,379) 445
Income tax expense (benefit) (547) 20 (479) 40
Net (loss) income $(1,035) $202 $(900) $405
Earnings (loss) per common
share -- basic: $(.33) $.07 $(.30) $.16
Earnings (loss) per common
share -- diluted: $(.33) $.07 $(.30) $.16
Weighted average number of
common shares outstanding:
Basic 3,167 2,910 2,982 2,548
Diluted 3,238 2,992 3,032 2,598
Balance Sheets December 31, 2004 March 31, 2004
Current assets
Cash $100 $430
Trade accounts receivable, net 11,747 9,364
Inventory, net 5,872 5,845
Prepaid expenses and other
current assets 834 599
Deferred tax asset 1,148 1,204
Total current assets 19,701 17,442
Property and equipment, net 1,624 1,598
Goodwill and intangibles, net 7,235 4,606
Other assets 144 149
Deferred tax asset 3,231 2,696
Total assets $31,935 $26,491
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued
expenses $8,137 $6,723
Deferred maintenance revenue 3,796 2,543
Current portion of long-term debt 517 523
Total current liabilities 12,450 9,789
Long-Term bank debt 9,698 7,227
Other long-term debt 172 19
Subordinated debt -- affiliate 2,400 2,400
Deferred income 293 337
Total liabilities 25,013 19,772
Stockholders' equity 6,922 6,719
Total liabilities and stockholders'
equity $31,935 $26,491
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:
Karen Vahouny of Qorvis Communications,
+1-703-744-7809, or kvahouny@qorvis.com, for Halifax Corporation
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