Sentry Technology Corporation Reports Third Quarter Results

RONKONKOMA, N.Y. , Nov. 14 /PRNewswire-FirstCall/ -- Sentry Technology Corporation (OTC Bulletin Board: SKVY) today reported financial results for the Company's third quarter ended September 30, 2008 .

Revenues for the third quarter were $3,573,000, compared to revenues of $4,061,000 reported in the third quarter of the prior year. Sentry had an operating profit of $124,000 and a net loss in the third quarter of 2008 of $204,000, or $(0.00) per share, compared to a $2,000 operating profit and a net loss of $168,000, or $(0.00) per share, in the third quarter of last year. The net loss in both periods includes a non-cash amortization expense related to financing of $172,000 and $89,000, respectively. The results in the third quarter also include a foreign exchange gain of $141,000 in 2008 and a loss of $255,000 in 2007.

For the first nine months ended September 30, 2008 , revenues were $9,644,000, compared to $9,157,000 reported in the previous year. Sentry had a net loss of $1,083,000, or $(0.01) per share, in the first nine months of 2008 compared to a net loss of $1,790,000, or $(0.01) per share, in the first nine months of 2007. The net loss in both periods includes a non-cash amortization expense related to financing of $460,000 and $243,000, respectively. The results in the third quarter also include a foreign exchange gain of $217,000 in 2008 and a loss of $592,000 in 2007.

"We are pleased to report a year to date sales increase of 5.3%," said Peter L. Murdoch , President and CEO of Sentry Technology Corporation. "Efforts to reduce costs and manage cash have resulted in a net loss improvement over the first nine months of this year compared to 2007. We continue to see opportunities for our products both domestically and internationally in an uncertain environment."

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 including QuickCheck(TM) patron self-service kiosks. 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 manage operations, deter shoplifting and internal theft and by industrial and institutional customers to protect assets and people. Recently the Company launched OVportal(TM), a video information portal over the internet offering retailers an OperationalVideo(TM) solution to manage security, merchandising, sign placement and procedure compliance. OVportal(TM) uses the SmartTrack(TM) traveling CCTV system and the Company's real-time video server to provide remote viewing and control of retail operations. OperationalVideo(TM) is the next major trend in online video and OVportal(TM) is a leading, cost effective, market proven solution. 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.

CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December 31, 2008 2007 (Unaudited) (Audited) ASSETS Current Assets: Cash and cash equivalents $215 $256 Short-term investments 289 202 Accounts receivable, less allowance for doubtful accounts of $175 in 2008 and $209 in 2007, respectively 1,784 3,014 Inventory, net 2,997 3,299 Prepaid expenses and other assets 582 858 Total current assets 5,867 7,629 PROPERTY AND EQUIPMENT, net 525 634 OTHER ASSETS 244 269 TOTAL ASSETS $6,636 $8,532 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Bank indebtedness, demand loan and revolving line of credit $3,986 $4,551 Accounts payable 780 1,223 Accrued liabilities 1,299 1,539 Obligations under capital leases - current portion 2 2 Deferred income 240 145 Convertible debenture 2,000 1,986 Total current liabilities 8,307 9,446 OBLIGATIONS UNDER CAPITAL LEASES - less current portion 5 7 DEFERRED TAX LIABILITY 109 117 Total liabilities 8,421 9,570 MINORITY INTEREST 1,213 1,200 STOCKHOLDERS' DEFICIT (2,998) (2,238) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $6,636 $8,532 CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 (Unaudited) (Unaudited) REVENUES Sales $3,101 $3,222 $8,215 $7,542 Service, installation and other revenues 472 839 1,429 1,615 3,573 4,061 9,644 9,157 COST OF SALES AND EXPENSES: Cost of sales 1,818 1,799 4,721 4,175 Customer service expenses 522 692 1,627 1,632 Selling, general and administrative expenses 967 1,403 3,041 3,995 Research and development 142 165 435 556 3,449 4,059 9,824 10,358 INCOME (LOSS) FROM OPERATIONS 124 2 (180) (1,201) INTEREST EXPENSE, net 139 132 415 384 NON-CASH AMORTIZATION COSTS RELATED TO FINANCING 172 89 460 243 LOSS BEFORE INCOME TAXES AND MINORITY INTEREST (187) (219) (1,055) (1,828) INCOME TAX EXPENSE (RECOVERY) 9 (7) 15 --- LOSS BEFORE MINORITY INTEREST (196) (212) (1,070) (1,828) MINORITY INTEREST 8 (44) 13 (38) NET LOSS $(204) $(168) $(1,083) $(1,790) LOSS PER SHARE Basic and diluted $(0.00) $(0.00) $(0.01) $(0.01) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic and diluted 120,744 120,744 120,744 120,744

SOURCE Sentry Technology Corporation

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