Sentry Technology Reports Year End Results

RONKONKOMA, NY--(Marketwired - Mar 28, 2014) - Sentry Technology Corporation (OTC Pink: SKVY) (PINKSHEETS: SKVY) today reported financial results for the Company's year ended December 31, 2013. 

Revenues for the year ended December 31, 2013 were $6,575,000 compared to $7,171,000 reported in 2012. Net loss on operations was $286,000 in 2013, compared to a net loss of $530,000 in 2012. The net loss for the year was $689,000, or $(0.00) per share in 2013, compared to a net income of $1,510,000, or $0.01 per share in 2012. The net income in 2012 was a result of a $2,628,000 extraordinary gain resulting from the purchase of a debenture by the company.

Revenue for the quarter ended December 31, 2013 was $1,647,000 compared to $1,988,000 reported in 2012. EBITDA for the fourth quarter was a positive $13,000 in 2013 compared to a negative EBITDA of ($199,000) in the fourth quarter of 2012.

"Despite a reduction in revenue, we had improved results on operations in 2013 compared with 2012 which resulted in an EBITDA gain in the fourth quarter," said Peter Murdoch, President and CEO of Sentry Technology. "This is largely due to continued cost cutting as we focus efforts to promote VideoRailway™, our new HD/IP traveling camera system. VideoRailway™ reference sites have now been established with several large retailers. In particular systems have been installed in multiple store locations of one of the world's largest companies. We expect to take advantage of references from premier accounts as we continue to introduce the product in 2014."

Sentry Technology Corporation designs, manufactures, sells and installs Closed Circuit Television (CCTV) solutions, Electro-Magnetic (EM) and RFID based Library security and self-service systems. Our CCTV product line features VideoRailway™ and SmartTrack™, a proprietary, traveling camera technology. Our OperationalVideo™, OVportal™ software application assists retailers with on-line management of safety and security, merchandising audits and employee procedure compliance. Products are used by libraries to secure inventory and improve operating efficiency, by retailers to deter theft and enhance productivity, and by industrial/institutional customers to protect assets and people. More information can be found 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.

Adjusted EBITDA

Sentry Technology Corporation uses Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adding back to net income (loss) interest, income taxes, non-cash amortization costs related to financing, depreciation and amortization expense, net (loss) income attributable to the noncontrolling interest and gain from exinguishment of debt. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing Sentry Technology Corporation's financial results with other companies that also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as non-cash amortization costs related to financing, depreciation and amortization, as well as non-operating charges for interest and income taxes, net (loss) income attributable to the noncontrolling interest and gain from exinguishment of debt, investors can evaluate the Company's operations and can compare its results on a more consistent basis to the results of other companies. In addition, Adjusted EBITDA is one of the primary measures management uses to monitor and evaluate financial and operating results.

Sentry Technology Corporation considers Adjusted EBITDA to be an indicator of the Company's operational strength and performance of its business and a useful measure of the Company's operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes interest income and expense, non-cash amortization costs related to financing, net (loss) income attributable to the noncontrolling interest and gain from exinguishment of debt, all of which impact the Company's profitability, as well as depreciation and amortization related to the use of long term assets which benefit multiple periods. Sentry Technology Corporation believes that these limitations are compensated by providing Adjusted EBITDA only with GAAP net income (loss) and clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss) presented in accordance with GAAP. Adjusted EBITDA as defined by the Company may not be comparable with similarly named measures provided by other entities. A reconciliation of Adjusted EBITDA to GAAP net income or loss is included in the schedule below.

SENTRY TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Par Value Amounts)
(Unaudited)
December 31, December 31,
2013 2012
ASSETS
Current Assets:
Cash $ 72 $ 278
Short-term investments 253 205
Accounts receivable, net of allowance for doubtful accounts of $79 in 2013 and $81 in 2012 477 724
Inventory, net 1,433 1,495
Prepaid expenses and other current assets 174 222
Total current assets 2,409 2,924
PROPERTY AND EQUIPMENT, net 283 346
OTHER ASSETS 145 159
TOTAL ASSETS $ 2,837 $ 3,429
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Amount due to related parties $ 4,266 $ 3,954
Bank indebtedness and revolving line of credit 1,236 1,174
Accounts payable 1,084 1,038
Accrued liabilities 597 803
Deferred income 221 234
Promissory notes payable - short-term 38 38
Total current liabilities 7,442 7,241
Amount due to related parties - long-term - 151
Promissory notes payable - long-term - 37
Deferred tax liabilities 42 50
Total long-term liabilities 42 238
Total liabilities 7,484 7,479
STOCKHOLDERS' DEFICIT
Sentry Technology Corporation stockholders' deficit:
Preferred stock, $0.001 par value; authorized 10,000 (2012 - 10,000) shares; none issued and outstanding
Common stock, $0.001 par value; authorized 300,000 (2012 - 300,000) shares; issued and outstanding 196,405 (2012 - 196,405) shares 196 196
Additional paid-in capital 51,755 51,748
Accumulated deficit (58,069 ) (57,380 )
Accumulated other comprehensive loss (8 ) (192 )
Total stockholders' deficit (6,126 ) (5,628 )
Noncontrolling interest in subsidiary 1,479 1,578
Total deficit (4,647 ) (4,050 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 2,837 $ 3,429
SENTRY TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
2013 2012 2013 2012
REVENUES
Sales $ 1,456 $ 1,828 $ 5,793 $ 6,392
Service, installation & maintenance revenues 191 160 782 779
1,647 1,988 6,575 7,171
COST OF SALES AND EXPENSES:
Cost of sales 893 1,147 3,549 3,720
Customer service expenses 157 174 679 747
Selling, general and administrative expenses 573 716 2,383 2,859
Research and development 82 86 339 332
Foreign exchange (gain) loss (50 ) (12 ) (89 ) 43
1,655 2,111 6,861 7,701
LOSS FROM OPERATIONS (8 ) (123 ) (286 ) (530 )
INTEREST EXPENSE, net 98 154 392 596
NON-CASH AMORTIZATION COSTS RELATED TO FINANCING - - 2 9
LOSS BEFORE INCOME TAXES, NONCONTROLLING INTEREST AND EXTRAORDINARY ITEM (106 ) (277 ) (680 ) (1,135 )
INCOME TAX EXPENSE (BENEFIT) 6 (22 ) 6 (15 )
LOSS BEFORE NONCONTROLLING INTEREST AND EXTRAORDINARY ITEM (112 ) (255 ) (686 ) (1,120 )
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO THE NONCONTROLLING INTEREST 21 (8 ) 3 (2 )
LOSS BEFORE EXTRAORDINARY ITEM (133 ) (247 ) (689 ) (1,118 )
EXTRAORDINARY ITEM:
Gain from exinguishment of debt, net of tax - (2,628 ) - (2,628 )
NET (LOSS) INCOME $ (133 ) $ 2,381 $ (689 ) $ 1,510
LOSS PER SHARE BEFORE EXTINGUISHMENT OF DEBT - Basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 )
EXTINGUISHMENT OF DEBT PER SHARE - Basic and diluted - 0.01 - 0.01
NET (LOSS) INCOME PER SHARE - Basic and diluted $ (0.00 ) $ 0.01 $ (0.00 ) $ 0.01
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUSTANDING
Basic and diluted 196,405 196,405 196,405 196,405
RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
(In thousands)
Three Months Ended Years Ended
December 31, December 31,
2013 2012 2013 2012
Net (loss) income $ (133 ) $ 2,381 $ (689 ) $ $ 1,510
Reconciling items:
Interest expense, net 98 154 392 596
Non-cash amortization costs related to financing - - 2 9
Income tax expense (benefit) 6 (22 ) 6 (15 )
Depreciation and amortization 21 28 87 99
Net income (loss) attributable to the noncontrolling interest 21 (8 ) 3 (2 )
Gain from extinguishments of debt, net of tax - (2,628 ) - (2,628 )
Adjusted EBITDA $ 13 $ (95 ) $ (199 ) $ (431 )

* Additional financial statements are available on the Company's website at http://www.sentrytechnology.com/.

]]> CONTACT:
Peter L. Murdoch
President & CEO
(631) 739-2000 ]]>
 

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