Halifax Closes New Line of Credit

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Halifax Closes New Line of Credit
           Announces Loss for FY 2008, Profitable for Q1 FY 2009

    ALEXANDRIA, Va., July 1 /PRNewswire-FirstCall/ -- Halifax Corporation
of Virginia (Amex: HX) today announced that it has closed on a new three
year line of credit for $4,000,000 with a new lending source, which is
intended to replace the Company's expiring line of credit. The transaction
is closed in escrow pending the satisfaction of certain escrow conditions.
Terms of this new financing will be disclosed in more detail in the
Company's Current Report on Form 8K, which will be filed once the escrow
conditions are satisfied.

    In addition, the Company reported that it has delayed the filing of
it's Form 10-K until July 14, 2008 to allow for proper disclosure of the
new loan and security agreement. The Company will report a loss for FY 2009
of approximately $2,450,000 primarily due to inventory adjustments, legal
settlement, transaction expenses, and severance costs related to our recent
restructuring. It was also noted that the Company is once again profitable
and cash flow positive and expects to report earnings for the quarter ended
June 30, 2008 of approximately $200,000 or $0.06 per share.

    Charles McNew, President and Chief Executive Officer stated, "FY 2008
was a transition year for the Company and we believe the losses are now
behind us. A significant portion of the losses were comprised of one time
charges. We were also able to pay down a sizeable portion of our bank debt
in the prior fiscal year. As a result of comprehensive restructuring
actions, we have revised our service model and have dramatically reduced
labor costs and parts risk which we believe will position us for a return
to market share expansion."

    McNew added, "As we look forward to FY 2009, we are forecasting a
solidly profitable first quarter and believe that there is a basis to view
this as a sustainable environment. We are also continuing to develop a
robust pipeline of new business opportunities for both Enterprise Logistics
Solutions and Field Maintenance Services opportunities."

    Founded in 1967, Halifax Corporation is an enterprise logistics and
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 enterprise logistics solutions and high
availability hardware maintenance services. More information on 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 described in the Risk Factors Section in
the Company's Annual Report on Form 10-K 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 of Virginia
http://www.hxcorp.com
http://www.prnewswire.com/comp/391950.html/
CONTACT:
Investor Relations, Tammy Erwin of Halifax
Corporation, +1-703-658-2422, terwin@hxcorp.com