RONKONKOMA, N.Y., Nov. 11 /PRNewswire-FirstCall/ -- Sentry Technology
Corporation (OTC Bulletin Board: SKVY) today reported financial results for
the Company's third quarter ended September 30, 2005.
Revenues for the third quarter were $3,861,000, compared to revenues of
$4,644,000 reported in the third quarter of the prior year. The decrease in
revenues is attributable to a reduction in Lowe's revenues by approximately
$1.3 million on a comparable basis. Non-Lowe's revenues increased 15% in the
third quarter of 2005. The net loss in the third quarter of 2005 was
$296,000, or $(0.00) per share, compared to a net profit of $40,000, or 0.00
per share, in the third quarter of last year. Included in the current period
loss was a foreign exchange loss of $115,000 related to the strengthening of
the Canadian dollar. The Company has not engaged in currency hedging
activities in the past but is pursuing various alternatives with its lender
related to the Canadian currency operating line of credit. In addition, the
Company incurred $46,000 in legal expenses related to reestablishing its
distribution rights in Brazil.
For the first nine months ended September 30, 2005, revenues were
$10,621,000, compared to $11,897,000 reported in the previous year. EAS
revenues continued to increase due to the acquisition of ID Systems in April
of 2004. The decrease in revenues is attributable to a reduction in Lowe's
revenues by approximately $3 million on a comparable basis. Non-Lowe's
revenues increased by 23% in the first nine months of 2005. Principally as a
result of lower revenue levels, Sentry had a net loss of $1,086,000, or
$(0.01) per diluted share, in the first nine months of 2005 compared to a net
loss of $141,000, or $(0.00) per diluted share, in the first nine months of
2004.
"We have made great strides towards diversifying our customer base and
replacing the lost Lowe's business which has historically represented over 30%
of our total revenues," said Peter L. Murdoch, President and CEO of Sentry
Technology Corporation. "Strategic investments have been made in sales and
marketing including the hiring of four new sales professionals with
substantial industry experience, the partnering with Civitas Group to promote
SentryVision(R) to the Homeland Security market and the appointment of a new
distributor in Brazil. These efforts have resulted in large sales
opportunities with public transportation organizations, libraries and major
retailers. In addition, our expanded, high caliber sales team has been
successful in leveraging references from satisfied customers to develop
opportunities in new and existing markets. Typical of our recent experience,
SmartTrack was sold to a national department store chain where many additional
installations are expected. We anticipate that the increasing number of
ongoing sales cycles will have a positive impact on future revenues."
Sentry Technology Corporation designs, manufactures, sells and installs a
complete line of Radio Frequency (RF) and Electro-Magnetic (EM) EAS systems
and Closed Circuit Television (CCTV) solutions. The CCTV product line
features the SentryVision(R) SmartTrack system, a proprietary, patented
traveling Surveillance System. The Company's products are used by retailers to
deter shoplifting and internal theft and by industrial and institutional
customers to protect assets and people. The recent acquisition of ID Systems
expands the Company's product offering to include proximity Access Control and
Radio Frequency Identification (RFID) solutions. For further information,
please visit our Web site at http://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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2005 2004
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $978 $1,965
Accounts receivable, less allowance for doubtful
accounts of $137 and $338, respectively 2,954 3,500
Inventories 2,953 3,314
Prepaid expenses and other current assets 451 525
Total current assets 7,336 9,304
PROPERTY, PLANT AND EQUIPMENT, net 641 689
GOODWILL 1,564 1,564
OTHER ASSETS 601 690
$10,142 $12,247
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Revolving line of credit and term loan $1,876 $2,640
Accounts payable 815 799
Accrued liabilities 974 1,146
Obligations under capital leases
- current portion 6 5
Deferred income 103 169
Total current liabilities 3,774 4,759
NOTES PAYABLE --- 189
OBLIGATIONS UNDER CAPITAL LEASES -
non-current portion 3 8
DEFERRED INCOME TAXES 34 39
CONVERTIBLE DEBENTURES 1,894 1,862
MINORITY INTEREST 1,129 1,045
Total liabilities 6,834 7,902
SHAREHOLDERS' EQUITY 3,308 4,345
$10,142 $12,247
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
(Unaudited) (Unaudited)
REVENUES
Sales $3,343 $3,498 $8,718 $8,532
Service, installation
and other 518 1,146 1,903 2,219
3,861 4,644 10,621 11,897
COSTS AND EXPENSES:
Cost of sales 1,793 1,915 4,688 4,538
Customer service
expenses 587 1,100 2,038 3,220
Selling, general and
administrative
expenses 1,479 1,131 4,017 3,248
Research and development 191 266 638 606
4,050 4,412 11,381 11,612
OPERATING INCOME (LOSS) (189) 232 (760) 285
INTEREST AND FINANCING
EXPENSES 80 105 249 309
INCOME (LOSS) BEFORE INCOME
TAXES AND MINORITY
INTEREST (269) 127 (1,009) (24)
INCOME TAX EXPENSE 9 62 29 77
INCOME (LOSS) BEFORE
MINORITY INTEREST (278) 65 (1,038) (101)
MINORITY INTEREST (18) (25) (48) (40)
NET INCOME (LOSS) $(296) $40 $(1,086) $(141)
NET INCOME (LOSS) PER SHARE
Basic and diluted $(0.00) $0.00 $(0.01) $(0.00)
WEIGHTED AVERAGE SHARES
Basic and diluted 120,629 115,753 120,582 102,457
SOURCE Sentry Technology Corporation
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http://www.sentrytechnology.com
Company News On-Call:
http://www.prnewswire.com/comp/494538.html
CONTACT:
Peter J. Mundy, Vice President - CFO of
Sentry Technology Corporation, +1-631-739-2000
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