SOURCE: Sentry Technology Corporation

Sentry Technology Reports Year End Results

RONKONKOMA, NY – March 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

 

SOURCE: Sentry Technology Corporation