ALEXANDRIA, Va., Aug. 7 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced its financial results for the first quarter ended
June 30, 2003.
For the quarter ended June 30, 2003, revenues were $10.7 million versus
$14.0 million for the comparable period in 2002, a decrease of 24%. The
revenue decrease was primarily due to reductions in hardware orders from
government customers, reflecting the Company's strategy to emphasize a
services-oriented model. Revenues also were affected by a temporary slowdown
in orders associated with the Virginia Department of Transportation (VDOT)
seat management contract. The Company expects that VDOT orders will increase
during the remainder of the year.
Net income for the quarter ended June 30, 2003, was $51,000, or $0.02 per
basic and diluted share, versus $143,000, or $0.07 per basic and diluted
share, for the comparable quarter of 2002. The net income for the quarter
ended June 30, 2003, included one-time charges of $90,000 associated with the
elimination of redundant staff positions, as the Company continued to refine
its structure for cost-effective service delivery.
Charles McNew, president and chief executive officer, noted, "We are
continuing our aggressive pursuit of services-only business, reducing our
emphasis on lower-margin hardware contracts. Although services orders did not
materialize quite as quickly as we'd hoped in the first quarter, we believe we
will begin to generate improved margins in the near future."
McNew added, "We are optimistic about our prospects. Our backlog,
comprised entirely of services-oriented contracts, increased 15% over the
previous quarter, and we're starting to see a flow of new orders in both the
maintenance services and federal secure network business. Our acquisition of
an enterprise maintenance firm should be completed by the end of this month,
strengthening our services and customer base and expanding our geographic
network. We expect the acquisition to be accretive, even factoring in the
additional shares issued in conjunction with our recently announced private
placement. The acquisition also should increase revenues by 15 to 20% in the
second half of the fiscal year.
"The fact that members of our board of directors and senior management
team have just increased their holdings in the Company reflects our optimism,"
he continued. "We are investing in the future, and as we stake our leadership
position in Enterprise Maintenance Solutions, we plan to grow our existing
business, add new clients, increase our government business, and add new
partnership arrangements with large global service providers."
McNew concluded, "Our goal is to generate gross margin improvement as we
expand our service delivery capabilities and broaden our geographic coverage.
Shareholder value is our priority, and we'll focus on increasing revenues and
profitability for the year, and we also may consider additional strategic
acquisition candidates."
The Company will host a conference call for investors at 11 a.m. EDT on
Thursday, August 7, 2003, to review the financial and operational results for
the quarter. The conference call phone number is 800-840-6218 for U.S.
callers and 212-346-6465 for international callers. The conference call replay
will be available from 1 p.m. EDT on Thursday, August 7, 2003, to 1 p.m. EDT
on Friday, August 8. The replay number is 800-633-8284 for U.S. callers and
402-977-9140 for international callers. The reservation number is 21157251.
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 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 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 thousands, except share and per share amounts)
Statements of operations For the three months ended June 30,
2003 2002
Revenues $10,676 $14,015
Operating income 199 338
Other income 4 1
Interest expense (147) (181)
Income tax benefit (expense) (5) (15)
Net income $51 $143
Earnings per common share - basic: $.02 $.07
Earnings per common share - diluted: $.02 $.07
Weighted average number of common
shares outstanding:
Basic 2,176,363 2,175,613
Diluted 2,187,431 2,192,906
Balance Sheets June 30, 2003 March 31,2003
Current assets $13,396 $12,354
Non-current assets 4,324 4,415
Total assets $17,720 $16,769
Current liabilities $8,428 $7,262
Non-current liabilities 9,872 10,138
Total liabilities $18,300 $17,400
Stockholders' equity (deficit) (580) (631)
Total liabilities and stockholders'
equity (deficit) $17,720 $16,769
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: Karen Vahouny of Qorvis
Communications, +1-703-744-7809, or kvahouny@qorvis.com, for
Halifax Corporation
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