SOURCE: Sentry Technology Corporation

August 20, 2014 15:24 ET

Sentry Technology Reports First Quarter Results

RONKONKOMA, NY--(Marketwired - Aug 20, 2014) - Sentry Technology Corporation (OTC Pink: SKVY) (PINKSHEETS: SKVY) today reported financial results for the Company's first quarter ended March 31, 2014. 

Revenues for the first quarter of 2014 were $1,207,000 compared to revenues of $1,355,000 reported in the first quarter of the prior year. The operating loss was $179,000, or $(0.00) per share, in the first quarter of 2014 as compared to an operating loss of $214,000 or $(0.00) per share, in the first quarter of 2013. EBITDA for the first quarter was a negative ($162,000) in 2014 compared to a negative EBITDA of ($192,000) in the first quarter of 2013.

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™, 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, depreciation and amortization expense and net (loss) income attributable to the noncontrolling interest. 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 depreciation and amortization, as well as non-operating charges for interest and income taxes and net (loss) income attributable to the noncontrolling interest, 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, income taxes, and net (loss) income attributable to the noncontrolling interest, 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)          
           
           
  March 31,     December 31,  
  2014     2013  
               
ASSETS              
Current Assets:              
  Cash $ 51     $ 72  
  Short-term investments   246       253  
  Accounts receivable, net of allowance for doubtful accounts of $74 in 2014 and $79 in 2013   374       477  
  Inventory, net   1,408       1,433  
  Prepaid expenses and other current assets   160       174  
Total current assets   2,239       2,409  
PROPERTY AND EQUIPMENT, net   261       283  
OTHER ASSETS   141       145  
TOTAL ASSETS $ 2,641     $ 2,837  
               
LIABILITIES AND STOCKHOLDERS' DEFICIT              
Current Liabilities:              
  Amount due to related parties $ 4,240     $ 4,266  
  Bank indebtedness and revolving line of credit   1,224       1,236  
  Accounts payable   1,130       1,084  
  Accrued liabilities   612       597  
  Deferred income   236       221  
  Promissory notes payable   38       38  
Total current liabilities   7,480       7,442  
               
Deferred tax liabilities   41       42  
Total long-term liabilities   41       42  
Total liabilities   7,521       7,484  
               
STOCKHOLDERS' DEFICIT              
  Sentry Technology Corporation stockholders' deficit:              
    Preferred stock, $0.001 par value; authorized 10,000 (2013 - 10,000) shares; none issued and outstanding              
    Common stock, $0.001 par value; authorized 300,000 (2013 - 300,000) shares; issued and outstanding 196,405 (2013 - 196,405) shares   196       196  
    Additional paid-in capital   51,759       51,755  
    Accumulated deficit   (58,367 )     (58,069 )
    Accumulated other comprehensive loss   97       (8 )
Total stockholders' deficit   (6,315 )     (6,126 )
Noncontrolling interest in subsidiary   1,435       1,479  
Total deficit   (4,880 )     (4,647 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 2,641     $ 2,837  
               
               
               
SENTRY TECHNOLOGY CORPORATION AND SUBSIDIARIES          
CONSOLIDATED STATEMENTS OF OPERATIONS          
(In Thousands, Except Per Share Amounts)          
(Unaudited)          
           
           
  Three Months Ended  
  March 31,  
  2014     2013  
               
               
REVENUES:              
  Sales $ 1,075     $ 1,185  
  Service, installation and maintenance revenues   132       170  
    1,207       1,355  
COST OF SALES AND EXPENSES:              
  Cost of sales   655       749  
  Customer service expenses   151       183  
  Selling, general and administrative expenses   565       580  
  Research and development   73       85  
  Foreign exchange gain   (58 )     (28 )
    1,386       1,569  
LOSS FROM OPERATIONS   (179 )     (214 )
INTEREST EXPENSE, net   96       94  
LOSS BEFORE INCOME TAXES AND NONCONTROLLING INTEREST   (275 )     (308 )
INCOME TAX EXPENSE   12       6  
LOSS BEFORE NONCONTROLLING INTEREST   (287 )     (314 )
LESS: NET INCOME ATTRIBUTABLE TO THE NONCONTROLLING INTEREST   11       5  
NET LOSS   (298 )     (319 )
               
NET LOSS PER SHARE - Basic and diluted $ (0.00 )   $ (0.00 )
               
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING              
    Basic and diluted   196,405       196,405  
               
               
RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS              
(In thousands)              
  Three Months Ended  
  March 31,  
  2014     2013  
               
Net loss $ (298 )   $ (319 )
Reconciling items:              
Interest expense, net   96       94  
Income tax expense   12       6  
Depreciation and amortization   17       22  
Net income attributable to the noncontrolling interest   11       5  
               
Adjusted EBITDA $ (162 )   $ (192 )
               

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

Contact Information

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