Sentry Technology Reports Fourth Quarter Results

RONKONKOMA, N.Y., April 15 /PRNewswire-FirstCall/ -- Sentry Technology Corporation OTCBulletinBoard: 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

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