Revenues Up 25% Compared to Prior Year's Second Quarter
ALEXANDRIA, Va., Nov. 14 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced its financial results for the quarter ended
September 30, 2005.
Revenues for the second quarter of fiscal 2006 were $14.0 million versus
$11.2 million for the same period in fiscal 2005, an increase of 25%. The
revenue increase resulted from growth within existing contracts and the
inclusion of the AlphaNational acquisition, which closed in September of 2004.
The operating loss for the second quarter of 2006 was $170,000 versus an
operating loss of $623,000 for the comparable quarter of last year. Revenue
growth and a fixed cost containment program are facilitating the reduction in
operating losses. Income from discontinued operations was $540,000 for the
quarter ended September 30, 2004, compared to $0 for the current quarter.
With the sale of its Secure Network Services business on June 30, 2005, for
$12.5 million, 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 $5.6 million is being deferred until certain
contract novation contingencies are resolved.
For the quarter ended September 30, 2005, the Company reported a net loss
of $172,000, or $0.05 per share, compared to net income of $44,000, or $0.02
per basic and $0.01 per diluted share, for the same quarter last year.
According to Charles McNew, president and chief executive officer, "The
cash infusion from the previously announced sale of our Secure Network
Services business has significantly improved our financial position. We have
reduced long-term debt and enhanced working capital flexibility. As soon as
our contract novation process is completed, we will be able to recognize the
$5.6 million gain on the sale of the Secure Network Services business, further
strengthening our balance sheet."
He added, "The combination of our continued solid revenue growth with an
aggressive fixed cost containment program puts us in a strong position for a
return to profitability. Our singular focus on the enterprise maintenance
business is paying off, improving our position for performance on long-term
growth opportunities."
For the six months ended September 30, 2005, revenues were $28.6 million
compared to $21.9 million for the same period last year, an increase of 31%.
The operating loss for the six months ended September 30, 2005, was $313,000
versus $908,000 for the same period last year. Income from discontinued
operations for the six months ended September 30, 2005, was $310,000, compared
to $907,000 for the comparable period of the prior year. The net loss for the
six months ended September 30, 2005, was $96,000, or $0.03 per share, versus
net income of $135,000, or $0.05 per basic and diluted share, for the six
months ended September 30, 2004.
McNew added, "Our marketplace is characterized by competitive pricing
pressures and enhanced service requirements. Our innovative approach to
service delivery has enabled us to grow in a market that continues to undergo
a consolidation. We are evaluating various strategic alternatives to further
position our Company for near- and long-term growth and profitability."
The Company will host a conference call for investors at 11 a.m. EST on
Monday, November 14, 2005, to review the financial and operational results for
the quarter. The conference call phone number is 888-343-7144 for U.S.
callers and 415-537-1962 for international callers. The conference call
replay will be available from 12 p.m. EST on Monday, November 14, 2005, to 12
p.m. EST on Tuesday, November 15, 2005. The replay number is 800-633-8284 for
U.S. callers and 402-977-9141 for international callers. The reservation
number is 21268601.
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 three months For the six months
Statements of operations ended September 30, ended September 30,
2005 2004 2005 2004
Revenues $13,958 $11,198 $28,637 $21,866
Cost of services 12,864 10,363 26,361 19,938
Selling, marketing,
general & administrative 1,264 1,279 2,589 2,657
Abandonment of facilities - 179 - 179
14,128 11,821 28,950 22,774
Operating (loss) (170) (623) (313) (908)
Other income 5 3 5 3
Interest expense (105) (160) (322) (299)
(Loss) before income taxes (270) (780) (630) (1,204)
Income tax expense (benefit) (98) (284) (224) (432)
(Loss) from continuing
operations (172) (496) (406) (772)
Income from discontinued
operations (net) - 540 310 907
Net income $(172) $44 $(96) $135
Earnings (loss) per
common share - basic:
Continuing operations $(.05) $(.17) $(.13) $(.26)
Discontinued operations .00 .19 .10 .31
(.05) .02 (.03) .05
Earnings (loss) per
common share - diluted:
Continuing operations $(.05) $(.17) $(.13) $(.26)
Discontinued operations .00 .18 .10 .31
(.05) .01 (.03) .05
Weighted average number
of common shares
outstanding:
Basic 3,172 2,927 3,172 2,920
Diluted 3,191 2,970 3,192 2,971
Balance Sheets
September 30, March 31,
2005 2005
Current assets
Cash $2,520 $1,264
Trade accounts receivable, net 10,064 12,468
Inventory, net 5,870 5,600
Prepaid expenses and other current
assets 337 487
Deferred tax asset 864 3,814
Total current assets 19,655 23,633
Property and equipment, net 1,289 1,608
Goodwill and intangibles, net 7,276 7,438
Other assets 136 141
Deferred tax asset 930 930
Total assets $29,286 $33,750
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $6,799 $10,731
Deferred gain on sale 5,611 -
Deferred maintenance revenue 2,866 3,776
Income taxes payable 627 -
Current portion of long-term debt 175 679
Total current liabilities 16,078 15,186
Long-Term bank debt 5,630 9,463
Other long-term debt - 3
Subordinated debt - affiliate 1,000 2,400
Deferred income 248 278
Total liabilities 22,956 27,330
Stockholders' equity 6,330 6,420
Total liabilities and
stockholders' equity $29,286 $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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