Sentry Technology Reports Fourth Quarter Results

RONKONKOMA, N.Y. , April 15 /PRNewswire-FirstCall/ -- Sentry Technology Corporation (OTC Bulletin Board: SKVY) today reported financial results for the Company's fourth quarter and year ended December 31, 2007 .

Revenues for the fourth quarter of 2007 were $4,341,000, compared to revenues of $3,752,000 reported in the fourth quarter of the prior year. The net loss was $1,888,000, or $(0.02) per share, in the fourth quarter of 2007 as compared to a net loss of $293,000, or $(0.00) per share, in the fourth quarter of 2006. The fourth quarter loss included a non-cash $1,564,000 write-off of goodwill.

For the year ended December 31, 2007 , revenues were $13,498,000 compared to $12,135,000 reported in 2006. The increase is primarily related to the successful introduction of OperationalVideo(TM), a new solution to manage business operations as well as safety and security using the SentryVision(R) SmartTrack(TM) traveling camera system. The net loss was $3,678,000, or $(0.03) per share in 2007, compared to $2,304,000, or $(0.02) per share in 2006. In addition to the $1,564,000 goodwill write-off, the 2007 results include a $607,000 foreign exchange loss related to the decline in the U.S. dollar relative to the Company's Canadian bank line and accounts receivable.

"Sales in 2007 increased 11% while our operating loss, excluding foreign exchange, was reduced by 58%," said Peter L. Murdoch , President and CEO of Sentry Technology Corporation. "We also reduced fixed expenses and successfully introduced OperationalVideo(TM) in two key national accounts. OperationalVideo dramatically increases the addressable market for SmartTrack, our core video product. We believe the Company will continue to grow both the library and video business segments in 2008."

Sentry Technology Corporation designs, manufactures, sells and installs a complete line of Closed Circuit Television (CCTV) solutions, Electro-Magnetic (EM) and RFID based Library Management systems as well as Radio Frequency (RF) and Electro-Magnetic (EM) EAS systems. The CCTV product line features SentryVision(R), SmartTrack, a proprietary, patented traveling Surveillance System. The Company's products are used by libraries to secure inventory and improve operating efficiency, by retailers to deter shoplifting and internal theft and by industrial and institutional customers to protect assets and people. For further information, please visit our website at www.sentrytechnology.com.

This press release may include information that could constitute forward- looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the Company's Securities and Exchange Commission filings.

SENTRY TECHNOLOGY CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) December 31, December 31, 2007 2006 ASSETS CURRENT ASSETS Cash and cash equivalents $ 256 $ 360 Short-term investments 202 259 Accounts receivable, less allowance for doubtful accounts of $209 and $160, respectively 3,014 2,251 Inventory 3,299 3,005 Prepaid expenses and other current assets 858 306 Total current assets 7,629 6,181 PROPERTY AND EQUIPMENT, net 634 609 GOODWILL - 1,564 OTHER ASSETS 269 480 $ 8,532 $ 8,834 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES Bank indebtedness, demand loan and revolving line of credit $ 4,551 $ 3,030 Accounts payable 1,223 609 Accrued liabilities 1,539 1,078 Obligations under capital leases - current portion 2 3 Deferred income 145 185 Total current liabilities 7,460 4,905 OBLIGATIONS UNDER CAPITAL LEASES - less current portion 7 8 DEFERRED TAX LIABILITY 117 91 CONVERTIBLE DEBENTURE 1,986 1,945 Total liabilities 9,570 6,949 MINORITY INTEREST 1,200 1,237 STOCKHOLDERS' (DEFICIT) EQUITY Common stock 121 121 Additional paid-in capital 49,420 49,037 Accumulated deficit (52,390) (48,712) Accumulated other comprehensive income 611 202 Total stockholders' (deficit) equity (2,238) 648 $ 8,532 $ 8,834 SENTRY TECHNOLOGY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 REVENUES Sales $ 3,509 $ 3,170 $ 11,051 $ 10,212 Service, installation & other revenues 832 582 2,447 1,923 4,341 3,752 13,498 12,135 COST OF SALES AND EXPENSES: Cost of sales 2,040 1,599 6,215 5,374 Customer service expenses 842 608 2,474 2,209 Selling, general and administrative expenses 1,399 1,332 5,394 5,296 Research and development 132 224 688 838 4,413 3,763 14,771 13,717 OPERATING LOSS (72) (11) (1,273) (1,582) GOODWILL IMPAIRMENT (1,564) - 1,564 - INTEREST AND FINANCING EXPENSE, net 291 164 918 473 LOSS BEFORE INCOME TAXES AND MINORITY INTEREST (1,927) (175) (3,755) (2,055) INCOME TAX (BENEFIT) EXPENSE (40) 75 (40) 145 LOSS BEFORE MINORITY INTEREST (1,887) (250) (3,715) (2,200) MINORITY INTEREST (1) (43) 37 (104) NET LOSS $(1,888) $ (293) $(3,678) $(2,304) LOSS PER SHARE Basic and diluted $ (0.02) $(0.00) $ (0.03) $ (0.02) WEIGHTED AVERAGE SHARES Basic and diluted 120,744 120,744 120,744 120,716

SOURCE Sentry Technology Corporation

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