Sentry Technology Reports Fourth Quarter Results

RONKONKOMA, N.Y., March 19  /PRNewswire-FirstCall/ -- Sentry Technology Corporation (OTC:SKVY) (BULLETIN BOARD: SKVY)  today reported financial results for the Company's fourth quarter and year ended December 31, 2008.

Revenues for the fourth quarter of 2008 were $3,064,000, compared to revenues of $4,341,000 reported in the fourth quarter of the prior year. The net loss was $55,000, or $(0.00) per share, in the fourth quarter of 2008 as compared to a net loss of $1,888,000, or $(0.02) per share, in the fourth quarter of 2007 which included a non-cash goodwill write-off of $1,564,000.

For the year ended December 31, 2008, revenues were $12,708,000 compared to $13,498,000 reported in 2007. The net loss was $1,138,000, or $(0.01) per share in 2008, compared to $3,678,000, or $(0.03) per share in 2007.

"We were able to produce a small operating profit in 2008 in part as a result of a foreign exchange gain," said Peter L. Murdoch, President and CEO of Sentry Technology Corporation. "However the future is uncertain due to the economic outlook for our core customers in the retail sector."

Sentry Technology Corporation designs, manufactures, sells and installs a complete line of Video Surveillance System (VSS) solutions, Electro-Magnetic (EM) and RFID based Library Management systems as well as Radio Frequency (RF) and Electro-Magnetic (EM) EAS systems.  The VSS product line features SentryVision, 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 http://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,
                                                   2008              2007

  ASSETS
  CURRENT ASSETS
    Cash and cash equivalents                   $   643           $   256
    Short-term investments                          264               202
    Accounts receivable, less allowance
     for doubtful accounts of $179 in
     2008 and $209 in 2007                          971             3,014
    Inventory, net                                2,739             3,299
    Prepaid expenses and other current assets       682               858
  Total current assets                            5,299             7,629

  PROPERTY AND EQUIPMENT, net                       439               634
  OTHER ASSETS                                      232               269

                                                $ 5,970           $ 8,532

  LIABILITIES AND STOCKHOLDERS' DEFICIT
  CURRENT LIABILITIES
    Bank indebtedness, demand loan and
     revolving line of credit                   $ 3,418           $ 4,551
    Accounts payable                                830             1,223
    Accrued liabilities                           1,211             1,539
    Obligations under capital leases -
     current portion                                  2                 2
    Deferred income                                 175               145
    Convertible debenture                         2,000             1,986
  Total current liabilities                       7,636             9,446
  Long-term debt - less current portion:
    Obligations under capital leases                  4                 7
    Deferred tax liabilities                         90               117
  Total long-term liabilities                        94               124
  Total liabilities                               7,730             9,570

  MINORITY INTEREST                               1,311             1,200

  STOCKHOLDERS' DEFICIT
    Common stock                                    121               121
    Additional paid-in capital                   50,196            49,420
    Accumulated deficit                         (53,528)          (52,390)
    Accumulated other comprehensive income          140               611
                Total stockholders' deficit      (3,071)           (2,238)
                                                $ 5,970           $ 8,532


  SENTRY TECHNOLOGY CORPORATION
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  (In thousands, except per share data)

                                 Three Months Ended     Twelve Months Ended
                                     December 31,            December 31,
                                  2008        2007       2008         2007

  REVENUES
    Sales                      $ 2,644     $ 3,509   $ 10,859     $ 11,051
    Service, installation &
     maintenance revenues          420         832      1,849        2,447
                                 3,064       4,341     12,708       13,498

  COST OF SALES AND EXPENSES:
    Cost of sales                1,540       2,040      6,261        6,215
    Customer service expenses      488         842      2,115        2,474
    Selling, general and
     administrative expenses     1,081       1,384      4,339        4,787
    Research and development       127         132        562          688
    Foreign exchange (gain) loss  (600)         15       (817)         607

                                 2,636       4,413     12,460       14,771

  INCOME (LOSS) FROM OPERATIONS    428         (72)       248       (1,273)

  GOODWILL IMPAIRMENT              ---       1,564        ---        1,564

  INTEREST EXPENSE, net            130         162        545          546

  NON-CASH AMORTIZATION COSTS
   RELATED TO FINANCING            176         129        636          372

  LOSS BEFORE INCOME TAXES AND
    MINORITY INTEREST              122      (1,927)      (933)      (3,755)

  INCOME TAX EXPENSE (RECOVERY)     79         (40)        94          (40)

  LOSS BEFORE MINORITY INTEREST     43      (1,887)    (1,027)      (3,715)

  MINORITY INTEREST EXPENSE
   (INCOME)                         98           1        111          (37)

  NET LOSS                      $  (55)    $(1,888)   $(1,138)     $(3,678)

  LOSS PER SHARE
    Basic and diluted           $(0.00)    $ (0.02)   $ (0.01)     $ (0.03)

  WEIGHTED AVERAGE SHARES
    Basic and diluted          120,744     120,744    120,744      120,744


DATASOURCE: Sentry Technology Corporation



CONTACT:  Peter L. Murdoch, President & CEO of Sentry Technology

Corporation, [phone]



Web Site:  http://www.sentrytechnology.com/ 

Copyright