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Sentry Technology Corporation Reports Third Quarter Operating Profit
Nov 13, 2007 (12:11 PM EST)

RONKONKOMA, N.Y., Nov. 13 /PRNewswire-FirstCall/ -- Sentry Technology Corporation today reported financial results for the Company's third quarter ended September 30, 2007.

Revenues for the third quarter increased by 48% to $4,061,000, compared to revenues of $2,743,000 reported in the third quarter of the prior year. Sentry had a small operating profit and a net loss in the third quarter of 2007 of $168,000, or $(0.00) per share, compared to a net loss of $683,000, or (0.01) per share, in the third quarter of last year. The net loss was a result of a third quarter 2007 foreign exchange loss of $255,000 and $592,000 year to date caused by an increase in the value of the Canadian dollar. Excluding the foreign exchange loss, the Company had a net profit of $87,000, or $(0.00) per share.

For the first nine months ended September 30, 2007, revenues were $9,157,000, compared to $8,383,000 reported in the previous year. The increase in revenues is principally attributable to strong third quarter revenue across all product lines and the successful introduction of the Company's OperationalVideo(TM) solution using SmartTrack(TM) to deliver real- time images over the internet to help retailers control safety and security as well as remote viewing of store operations, merchandising, signage, displays, pricing and employee procedure compliance. Sentry had a net loss of $1,790,000, or $(0.01) per diluted share, in the first nine months of 2007 compared to a net loss of $2,011,000, or $(0.02) per diluted share, in the first nine months of 2006.

"We are very pleased with the third quarter revenue increase," said Peter L. Murdoch, President and CEO of Sentry Technology Corporation. "Except for the foreign exchange adjustment Sentry achieved a net profit. This result is a substantial improvement over previous periods. We anticipate that this is the beginning of a trend that will continue in the fourth quarter and throughout 2008."

Sentry designs, manufactures, sells and installs a complete line of Closed Circuit Television (CCTV) solutions, Electro-Magnetic (EM) and RFID based Library Management systems including QuickCheck(TM) patron self-service kiosks. 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. The CCTV product line features SentryVision(R), SmartTrack(TM), a proprietary, patented traveling camera system. OperationalVideo(TM), a Sentry innovation, uses SmartTrack(TM) to deliver real-time images over the internet to help retailers control safety and security as well as remote viewing of store operations, merchandising, signage, displays, pricing and employee procedure compliance. For further information, please visit our website at .

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.

CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December 31, 2007 2006 (Unaudited) (Audited) ASSETS Current Assets: Cash and cash equivalents $361 $360 Short-term investments 200 259 Accounts receivable, less allowance for doubtful accounts of $199 and $160, respectively 2,662 2,251 Inventory 3,114 3,005 Prepaid expenses and other current assets 805 306 Total current assets 7,142 6,181 PROPERTY AND EQUIPMENT, net 638 609 GOODWILL 1,564 1,564 OTHER ASSETS 302 480 TOTAL ASSETS $9,646 $8,834 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Current Liabilities: Bank indebtedness, demand loan and revolving line of credit $3,796 $3,030 Accounts payable 1,289 609 Accrued liabilities 1,478 1,078 Obligations under capital leases - current portion 2 3 Deferred income 183 185 Total current liabilities 6,748 4,905 OBLIGATIONS UNDER CAPITAL LEASES - less current portion 8 8 DEFERRED TAX LIABILITY 106 91 CONVERTIBLE DEBENTURE 1,976 1,945 Total liabilities 8,838 6,949 MINORITY INTEREST 1,199 1,237 STOCKHOLDERS' (DEFICIT) EQUITY (391) 648 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $9,646 $8,834 CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2007 2006 2007 2006 (Unaudited) (Unaudited) REVENUES Sales $3,222 $2,252 $7,542 $7,042 Service, installation and other revenues 839 491 1,615 1,341 4,061 2,743 9,157 8,383 COST OF SALES AND EXPENSES: Cost of sales 1,799 1,217 4,175 3,775 Customer service expenses 692 520 1,632 1,601 Selling, general and administrative expenses 1,403 1,287 3,995 3,964 Research and development 165 210 556 614 4,059 3,234 10,358 9,954 OPERATING INCOME (LOSS) 2 (491) (1,201) (1,571) INTEREST AND FINANCING EXPENSE, net 221 141 627 309 LOSS BEFORE INCOME TAXES AND MINORITY INTEREST (219) (632) (1,828) (1,880) INCOME TAX (RECOVERY) EXPENSE (7) 30 --- 70 LOSS BEFORE MINORITY INTEREST (212) (662) (1,828) (1,950) MINORITY INTEREST 44 (21) 38 (61) NET LOSS $(168) $(683) $(1,790) $(2,011) LOSS PER SHARE Basic and diluted $(0.00) $(0.01) $(0.01) $(0.02) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic and diluted 120,744 120,744 120,744 120,707

CONTACT: Peter L. Murdoch, President & CEO of Sentry TechnologyCorporation, +1-631-739-2000

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