Achieves 38% Revenue Growth Over Prior Year's First Quarter
ALEXANDRIA, Va., Aug. 15 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced its financial results for the quarter ended June
30, 2005.
For the quarter just ended, the Company reported revenues from continuing
operations of $14.7 million compared to $10.7 million for the same period a
year ago, an increase of 38%. The revenue growth resulted primarily from
growth within existing contracts and the inclusion of the AlphaNational
acquisition, which closed September 30, 2004, in the current quarter results.
For the quarter ended June 30, 2005, the Company reported an operating
loss of $143,000 as compared to an operating loss of $285,000 for the quarter
ended June 30, 2004. The Company reported a loss from continuing operations
of $234,000 for the quarter ended June 30, 2005 compared to a loss from
continuing operations of $276,000 for the first quarter of the prior year.
The Company has implemented a major cost containment program and also has
significantly reduced interest expense on a going forward basis. These steps
are designed to return the Company to profitability on a near term basis.
Income from discontinued operations was $310,000 for the quarter ended
June 30, 2005 as compared to $367,000 for the quarter ended June 30, 2004.
The Company announced the sale of its Secure Network Services business on June
30, 2005 for $12.5 million and accordingly the financial performance of this
business area is being classified, for accounting purposes, as a discontinued
operation.
The net gain on the sale of approximately $5.8 million will be deferred
until certain contract novation contingencies are resolved.
For the quarter ended June 30, 2005, the Company reported a net income of
$76,000 or $0.02 per basic and diluted share as compared to $91,000 or $0.03
per basic and diluted share for the same quarter last year.
Charles McNew, president and chief executive officer, stated, "The cash
infusion from the sale of our Secure Network Services business has
significantly improved our financial position by allowing us to substantially
reduce our bank debt and high interest subordinated debt. It also improves
our ability to grow in the high availability maintenance marketplace.
"We are proud of our growth record and have worked diligently with our
partners to make this happen. With revenues up 38% year on year from
continuing operations, we are one of the fastest growing players in our
industry.
"Our marketplace, characterized by pricing pressure and enhanced service
requirements, remains highly competitive. We have made some difficult cost
containment decisions and we continue to evaluate various strategic
alternatives to further position our Company for near-term and long-term
growth and profitability," McNew concluded.
The Company will host a conference call for investors at 10 a.m. EDT on
Monday, August 15, 2005, to review the financial and operational results for
the quarter. The conference call phone number is 888-753-6315 for U.S.
callers and 415-247-8537 for international callers. The conference call
replay will be available from 12 p.m. EDT on Monday, August 15, 2005, to 12
p.m. EDT on Tuesday, August 16, 2005. The replay number is 800-633-8284 for
U.S. callers and 402-977-9140 for international callers. The reservation
number is 21257476.
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)
Statements of operations For the three months ended June 30,
2005 2004
Revenues $14,679 $10,668
Cost of services 13,497 9,574
Selling, Marketing, General & administrative 1,325 1,379
Operating (loss) (143) (285)
Interest expense (217) (139)
(Loss) before income taxes (360) (424)
Income tax expense (benefit) (126) (148)
(Loss) from continuing operations (234) (276)
Income from discontinued operations (net) 310 367
Net income $76 $91
Earnings (loss) per common share - basic:
Continuing operations $(.07) $(.09)
Discontinued operations .09 .12
.02 .03
Earnings (loss) per common share - diluted:
Continuing operations $(.07) $(.09)
Discontinued operations .09 .12
.02 .03
Weighted average number of common
shares outstanding:
Basic 3,171 2,913
Diluted 3,192 2,958
Balance Sheets June 30, 2005 March 31, 2005
Current assets
Cash $491 $1,264
Trade accounts receivable, net 10,456 12,468
Accounts receivable-other 13,093 -
Inventory, net 5,848 5,600
Prepaid expenses and other current assets 243 487
Deferred tax asset 778 3,814
Total current assets 30,909 23,633
Property and equipment, net 1,424 1,608
Goodwill and intangibles, net 7,359 7,438
Other assets 139 141
Deferred tax asset 956 930
Total assets $40,787 $33,750
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $11,173 $10,731
Deferred gain on sale 5,810 -
Deferred maintenance revenue 3,856 3,776
Current portion of long-term debt 180 679
Total current liabilities 21,019 15,186
Long-Term bank debt 10,605 9,463
Other long-term debt 1 3
Subordinated debt - affiliate 2,400 2,400
Deferred income 263 278
Total liabilities 34,288 27,330
Stockholders' equity 6,499 6,420
Total liabilities and stockholders' equity $40,787 $33,750
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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