Company Reports Growth in Gross Profit Margin and Net Income
ALEXANDRIA, Va., Aug. 15 /PRNewswire-FirstCall/ -- Halifax Corporation (AMEX:HX) today announced its financial results for the quarter ended June 30, 2007.
The Company reported revenues of $12.5 million compared to $12.7 million for the first quarter of fiscal 2007. The slight decrease in revenue was primarily due to the elimination of certain under-performing contracts, which was partially offset by newly awarded, and more profitable, business.
Halifax reported a gross margin of $1.5 million, or 11.9%, for the current quarter versus $1.5 million, or 11.6%, for the same period in the prior year. According to the Company, margins are continuing to show positive progress, reflecting the improvement in the mix of business.
Operating income was $321,000 for the first quarter of fiscal 2007 compared to $326,000 for the first quarter of fiscal 2007.
The Company reported net income of $135,000, or $ 0.04 per basic and diluted share, for the current quarter compared to $84,000, or $ 0.03 per basic and diluted share, for the first quarter of fiscal 2007.
According to Charles McNew, president and chief executive officer, "Our profitability trend is encouraging. We are continuing to take aggressive steps to grow the top line, and our cost containment and system improvement actions are helping to generate the desired results. Despite a competitive marketplace, we are encouraged by the present volume of potential new deals on the horizon." McNew added, "We are driving to enhance shareholder value and are continuing to evaluate various strategic alternatives to further position our Company for near and longer term growth opportunities." The Company will host a conference call for investors at 11:00 a.m. EDT on Wednesday, August 15, 2007, to review the financial and operational results for the quarter. The conference call phone number is 800-266-2145 for U.S. callers and 212-676-4904 for international callers. The conference call replay will be available from 1 p.m. EDT on Wednesday, August 15, 2007, to 1 p.m. EDT on Thursday, August 16, 2007. The replay number is 800-633-8284 for U.S. callers and 402-977-9140 for international callers. The reservation number is 21346424.
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,
2007 2006 Revenues $ 12,461 $ 12,746 Cost of services 10,979 11,270 Gross margin 1,482 1,476 Selling, marketing, general &
administrative 1,161 1,150 Operating income 321 326 Other income 11 1
Interest expense (192) (163) Income before income taxes 140 164 Income tax expense 5 80 Net income $ 135 $ 84
Earnings per common share - basic: $ 0.04 $ 0.03
Earnings per common share - diluted: $ 0.04 $ 0.03 Weighted average number of common shares
outstanding:
Basic 3,175 3,175
Diluted 3,181 3,180
Balance Sheets June 30, 2007 March 31, 2007 Current assets
Cash $ 55 $ 1,078
Restricted cash 681 673
Trade accounts receivable, net 10,502 11,345
Inventory, net 5,069 4,946
Prepaid expenses and other current
assets 864 584 Total current assets 17,171 18,626 Property and equipment, net 1,105 1,225
Goodwill and intangibles, net 3,799 3,865
Other assets 118 121 Total assets $ 22,193 $ 23,837 Liabilities and stockholders' equity Current liabilities
Accounts payable and accrued expenses $ 5,582 $ 6,375
Income tax payable 30 11
Deferred maintenance revenue 2,609 3,058
Bank debt 6,358 6,880
Auxiliary line of credit 1,000 1,000
Current portion of long-term debt 35 31 Total current liabilities 15,614 17,355 Other long-term debt 111 120
Subordinated debt - affiliate 1,000 1,000
Deferred income 144 159 Total liabilities 16,869 18,634 Stockholders' equity 5,324 5,203 Total liabilities and stockholders'
equity $ 22,193 $ 23,837
DATASOURCE: Halifax Corporation CONTACT: Karen Vahouny of Qorvis Communications, +1-703-744-7809, or , for Halifax Corporation Web site: http://www.hxcorp.com/
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