Revenues Up 25% From Prior Year
ALEXANDRIA, Va., July 11 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced its financial results for the fourth quarter and
fiscal year ended March 31, 2005.
For the year, revenues were $62.0 million versus $49.5 million for fiscal
2004, an increase of 25%. The revenue increase is a result of growth in both
High Availability Maintenance and Secure Network Services. The operating loss
for fiscal 2005 was $1.5 million versus operating income of $1.1 million the
prior year. The net loss was $1.4 million, or $0.46 per basic and diluted
share, compared to net income of $4.2 million, or $1.60 per basic and $1.54
per diluted share for the previous year. The loss for the current year was
due to previously announced startup costs associated with a large enterprise
maintenance contract and a writedown of inventory. The net income for fiscal
2004 had included a non-recurring income tax benefit of $3.8 million.
For the quarter ended March 31, 2005, revenues were $18.2 million versus
$13.0 million for the comparable period in 2004, an increase of 39%. The
revenue increase is a result of significant growth in both High Availability
Maintenance and Secure Network Services. The operating loss for the 2005
fourth quarter was $624,000 compared to operating income of $205,000 for the
same quarter of 2004. The net loss was $511,000, or $0.16 per basic and
diluted share, compared to net income of $3.8 million or $1.31 per basic and
$1.24 per diluted share for the same quarter a year ago. The loss for the
current quarter is primarily the result of inventory writedowns and higher-
than-planned operating costs on the large contract. Net income for the fourth
quarter of the previous year included a non-recurring income tax benefit of
$3.8 million.
Charles McNew, president and chief executive officer, stated, "Although
we're pleased with the revenue growth, particularly in our high availability
maintenance business, the enterprise maintenance contract had a negative
impact on earnings in the second half of the year. On the positive side, the
loss in the fourth quarter was well below that of the prior quarter, and our
team is working diligently to drive down our service delivery costs and return
the business to profitability."
He added, "The recently announced sale of our secure network service
business for $12.5 million has dramatically improved our balance sheet. With
this sale, our business model is now entirely focused on enterprise
maintenance solutions."
The Company will host a conference call for investors at 11 a.m. EDT on
Monday, July 11, 2005, to review the financial and operational results for the
quarter and year. The conference call phone number is 888-343-7167 for U.S.
callers and 415-537-1987 for international callers. The conference call
replay will be available from 1 p.m. EDT on Monday, July 11, 2005, to 1 p.m.
EDT on Tuesday, July 12, 2005. The replay number is 800-633-8284 for U.S.
callers and 402-977-9140 for international callers. The reservation number is
21251631.
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. 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.
Halifax Corporation
Summary Financial Data
(in 000's except per share amounts)
For the three months For the years ended
Statements of operations ended March 31, March 31,
2005 2004 2005 2004
Revenues $18,151 $13,020 $62,006 $49,537
Cost of services 17,317 11,487 57,872 43,609
Selling, marketing, general
& administrative 1,458 1,328 5,496 4,859
Abandonment of facility - - 179 -
Operating (loss) income (624) 205 (1,541) 1,069
Interest expense (201) (172) (663) (591)
(Loss) income before income taxes (825) 33 (2,204) 478
Income tax expense (benefit) (314) (3,790) (793) (3,750)
Net (loss) income $ (511) $ 3,823 $(1,411) $ 4,228
Earnings (loss) per common
share - basic: $ (.16) $ 1.31 $ (.46) $ 1.60
Earnings (loss) per common
share - diluted: $ (.16) $ 1.24 $ (.46) $ 1.54
Weighted average number of
common shares outstanding:
Basic 3,168 2,910 3,043 2,638
Diluted 3,227 3,094 3,095 2,787
Balance Sheets March 31, 2005 March 31, 2004
Current assets
Cash $ 1,264 $ 430
Trade accounts receivable, net 12,468 9,364
Inventory, net 5,600 5,845
Prepaid expenses and other
current assets 487 599
Deferred tax asset 3,814 1,204
Total current assets 23,633 17,442
Property and equipment, net 1,608 1,598
Goodwill and intangibles, net 7,438 4,606
Other assets 141 149
Deferred tax asset 930 2,696
Total assets $ 33,750 $ 26,491
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 10,731 $ 6,723
Deferred maintenance revenue 3,776 2,543
Current portion of long-term debt 679 523
Total current liabilities 15,186 9,789
Long-term bank debt 9,463 7,227
Other long-term debt 3 19
Subordinated debt - affiliate 2,400 2,400
Deferred income 278 337
Total liabilities 27,330 19,772
Stockholders' equity 6,420 6,719
Total liabilities and stockholders' equity $ 33,750 $ 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:
For investor relations information: Karen
Vahouny of Qorvis Communications, +1-703-744-7809 or
kvahouny@qorvis.com, for Halifax Corporation
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