'The Company Forecasts Profitability for First Quarter'
ALEXANDRIA, Va., July 16 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced its financial results for the fiscal year ended
March 31, 2008.
Revenues for fiscal year 2008 were $43.9 million compared to $50.7
million for the prior fiscal year. The decrease in revenues in 2008 was
attributable to the termination of certain large nation-wide enterprise
maintenance contracts, including the loss of a large aeronautic
manufacturing customer.
The Company reported an operating loss of $1.8 million for fiscal 2008
as compared to a breakeven result for the prior fiscal year. The loss in
fiscal year 2008 was primarily as a result of the loss of certain large
nation-wide enterprise maintenance contracts, a charge to increase our
reserve for obsolete inventory, the settlement of litigation and a charge
for fees related to an acquisition transaction that failed to close. The
increase in the reserve for obsolete inventory resulted from changes in the
mix of the equipment that we support, as a result of technology upgrades by
our customers.
The Company reported a net loss of $2.5 million or ($0.77) per basic
and diluted share for fiscal year 2008. This compares to a net loss of $2.4
million or ($0.76) per basic and diluted share for fiscal year 2007. The
net loss for fiscal year 2008 was attributable to reduced margins as a
result of losses in revenue and increases in our reserve for obsolete
inventory and operating costs. The net loss for fiscal year 2007 was
principally the result of a loss on an equipment roll out project in the
fourth quarter, a charge to increase our reserve for inventory
obsolescence, and a charge to record a full valuation allowance on our
deferred tax asset.
It was also noted that the Company is once again profitable and cash
flow positive and we expect to report earnings for the quarter ended June
30, 2008 of approximately $200,000 or $0.06 per basic and diluted share.
Charles McNew, President and Chief Executive Officer, stated, "Fiscal
year 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 have carefully managed our cash flow and have been
able to pay down a sizeable portion of our bank debt in recent months. We
have also secured new long-term financing which combined with comprehensive
restructuring actions has enabled us to enhance our service model while
dramatically reducing labor costs and parts risk. We are confident that our
new service model, which targets the supply chain management marketplace is
rapidly positioning us for a return to market share expansion."
McNew added, "As we look forward to fiscal year 2009, we are
forecasting a solidly profitable first quarter and believe 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 Services and Field Maintenance Solutions opportunities."
For the quarter ended March 31, 2008, revenues were $9.0 million
compared to $13.0 million for the same period last year. The operating loss
for the quarter ended March 31, 2008 was $887,000 compared to an operating
loss of $822,000 for the same period last year. The Company reported a net
loss of $955,000 or ($0.30) per basic and diluted share for the quarter
ended March 31, 2008 compared to a restated net loss of $2.6 million or
($0.81) per basic share for the quarter ended March 31, 2007.
The Company will host a conference call for investors at 11 a.m. EDT on
Wednesday, July 16, 2008, to review the financial and operational results
for the quarter. The conference call phone number is 800-908-0783 for U.S.
callers and 212-231-2904 for international callers. The conference call
replay will be available from 1 p.m. EDT on Wednesday, July 16, 2008, to 1
p.m. EDT on Thursday, July 17, 2008. The replay number is 800-633-8284 for
U.S. callers and 402-977-9140 for international callers. The reservation
number is 21388610.
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.
Halifax Corporation
Summary Financial Data
(in 000's except per share amounts)
For the three months For the year ended
Statements of operations ended March 31, March 31,
2008 2007 2008 2007
Restated Restated
Revenues $8,993 $12,977 $43,873 $50,695
Operating costs and expenses 8,714 12,752 40,259 46,268
Gross profit 279 225 3,614 4,427
Selling, marketing, general &
administrative expense 1,166 1,047 4,594 4,427
Litigation settlement costs - - 410 -
Acquisition costs - - 458 -
Operating loss (887) (822) (1,848) -
Other income 4 9 31 32
Interest expense (120) (181) (654) (673)
Loss before income taxes (1,003) (994) (2,471) (641)
Income tax (benefit) expense (48) 1,573 (18) 1,769
Net loss $(955) $(2,567) $(2,453) $(2,410)
Loss per common share - basic and
diluted $(.30) $(.81) $(.77) $(.76)
Weighted average number of common
shares outstanding:
Basic and diluted 3,175 3,175 3,175 3,175
Balance Sheets
March 31, 2008 March 31, 2007
Current assets Restated
Cash $232 $1,751
Trade accounts receivable, net 10,206 11,345
Inventory, net 3,240 4,946
Prepaid expenses and other current assets 220 584
Total current assets 13,898 18,626
Property and equipment, net 1,001 1,225
Goodwill and intangibles, net 3,580 3,865
Other assets 111 121
Total assets $18,590 $23,837
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $5,280 $6,375
Deferred maintenance revenue 4,309 3,058
Current portion of long-term debt 276 31
Bank debt 4,448 6,880
Auxiliary line of credit 60 1,000
Income taxes payable 35 11
Total current liabilities 14,408 17,355
Other long-term debt 325 120
Subordinated debt - affiliate 1,000 1,000
Deferred income 99 159
Total liabilities 15,832 18,634
Stockholders' equity 2,758 5,203
Total liabilities and stockholders' equity $18,590 $23,837
SOURCE Halifax Corporation
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Related links:
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
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