Profitability Improves Significantly; Margins Improve to 13% from 10.7%
ALEXANDRIA, Va., Nov. 15 /PRNewswire-FirstCall/ -- Halifax Corporation
(Amex: HX) today announced its financial results for the quarter ended
September 30, 2007.
Revenues for the second quarter of fiscal 2008 were $11.9 million
versus $12.4 million for the same period in fiscal 2007. The revenue
decrease was due to the loss of certain low margin service contracts and
reductions in product sales.
The gross profit margin for this year's second quarter was $1.6
million, or 13% of revenues, versus $1.3 million or 10.7% of revenues, for
the same period a year ago. Operating income was $402,000 for the quarter
ended September 30, 2007, compared to $188,000 for the same period the
prior year.
The Company reported net income of $202,000, or $0.06 per basic and
diluted share, for the quarter ended September 30, 2007, compared to net
income of $22,000, or $0.01 per basic and diluted share, for the same
period the prior year.
Charles McNew, president and chief executive officer, stated, "The
improvement in our operating and net income is directly related to a
deliberate shift in our business mix toward higher-margin business. Our
fixed costs are continuing to decline as a result of new software tools,
which are being implemented to significantly reduce manual tasks in the
back office, field service and call management functions. We are also very
encouraged by the recent scale and volume of new business bid activity."
For the six months ended September 30, 2007, revenues were $24.4
million compared to $25.1 million for the same period last year. The gross
profit margin was $3.0 million, or 12.5% of revenues, up from $2.8 million,
or 11.2% of revenues, for the first half of last year. Operating income was
$722,000 for the first half of fiscal 2008 versus $514,000 for the same
period a year ago. Net income for the first half of this year was $337,000,
or $0.11 per basic and diluted share, versus $106,000, or $0.03 per basic
and diluted share, for the first half of the prior year.
The Company will host a conference call for investors at 11:00 a.m. EDT
on Thursday November 15, 2007, to review financial and operational results
for the quarter. The conference call phone number is 800-952-6697 for U.S.
callers and 212-231-2902 for international callers. The conference replay
will be available from 1 p.m. EDT on Thursday, November 15, 2007, to 1 p.m.
EDT on Friday, November 16, 2007. The replay number is 800-633-8284 for
U.S. callers and 402-977-9140 for international callers. The reservation
number is 21355210.
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 six months
Statements of operations ended September 30, ended September 30,
2007 2006 2007 2006
Revenues $11,925 $12,369 $24,386 $25,115
Cost of services 10,370 11,044 21,349 22,314
Gross profit 1,555 1,325 3,037 2,801
Selling, marketing, general &
administrative 1,153 1,137 2,315 2,287
Operating income 402 188 722 514
Other income 8 13 19 14
Interest expense (188) (159) (379) (322)
Income before income taxes 222 42 362 206
Income tax expense 20 20 25 100
Net income $202 $22 $337 $106
Earnings per common share --
basic: $.06 $.01 $.11 $.03
Earnings per common share --
diluted: $.06 $.01 $.11 $.03
Weighted average number of common
shares outstanding:
Basic 3,175 3,175 3,175 3,175
Diluted 3,179 3,179 3,180 3,180
Balance Sheets
September March 31,
30, 2007 2007
Current assets
Cash $934 $1,751
Trade accounts receivable, net 10,865 11,345
Inventory, net 5,114 4,946
Prepaid expenses and other
current assets 806 584
Total current assets 17,719 18,626
Property and equipment, net 1,055 1,225
Goodwill and intangibles, net 3,723 3,865
Other assets 116 121
Total assets $22,613 $23,837
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable and accrued
expenses $5,622 $6,375
Deferred maintenance revenue 2,195 3,058
Current portion of long-term
debt 35 31
Bank debt 6,946 6,880
Auxiliary line of credit 1,000 1,000
Income taxes payable 52 11
Total current liabilities 15,850 17,355
Other long-term debt 102 120
Subordinated debt -- affiliate 1,000 1,000
Deferred income 129 159
Total liabilities 17,081 18,634
Stockholders' equity 5,532 5,203
Total liabilities and
stockholders' equity $22,613 $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, Karen Vahouny of Qorvis
Communications, +1-703-744-7809, or kvahouny@qorvis.com, for
Halifax Corporation
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