SOURCE: Sentry Technology Corporation

Sentry Technology Reports First Quarter Results

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:

Peter L. Murdoch

President & CEO

(631) 739-2000

 

 

SOURCE: Sentry Technology Corporation