News Release
FOR IMMEDIATE RELEASE CONTACT: Peter J. Mundy
Vice
President – CFO
(631)
739-2000
SENTRY TECHNOLOGY CORPORATION REPORTS FIRST QUARTER RESULTS
RONKONKOMA, New York, May
13, 2005, -- Sentry Technology Corporation (OTC Bulletin Board: SKVY) today
reported financial results for the Company’s first quarter ended March 31,
2005.
Revenues for the first
quarter were $2,493,000, compared to revenues of $2,974,000 reported in the
first quarter of the prior year. While
EAS revenues increased due to the acquisition of ID Systems in April of 2004,
the reduction in total revenues was attributable to lower sales of conventional
CCTV products and the Company’s proprietary SmartTrack traveling camera systems
to domestic customers. In addition,
total revenues from Lowe’s Home Centers were $0.6 million lower in the first
quarter of 2005 as compared to the first quarter of 2004. As previously disclosed, Lowe’s decided not
to renew its maintenance contract for 2005, which also resulted in reduced
product sales during the quarter. As a
result of lower revenue levels and the added costs associated with the ID
Systems merger, Sentry had a net loss of $760,000, or $(0.01) per share in the
first quarter of 2005, compared to a net loss of $192,000, or $(0.00) per
share, in the first quarter of 2004.
“We were disappointed with the results of the first quarter,” said
Peter Murdoch, President and CEO of Sentry Technology Corporation. “This setback comes following three
consecutive profitable quarters and we expect to return to profitability as a
result of an increase in orders and additional cost cutting.”
Mr. Murdoch continued, “We
are encouraged that our backlog of orders has increased from $2.2 million at
year end to $2.9 million as of the end of March. Sales reps and international distributors have been added to the
sales group plus new print ads and trade show attendance will assist in improving
our sales results. Repeat orders have
been booked recently from Wal-Mart in the UK, Target and the U.S. Navy in the
United States and ADT in Latin America.
The reorder trend for our flagship SmartTrack traveling camera system is
critical to our success.”
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 proprietary SentryVisionâ SmartTrack 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 Company’s 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 website 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.
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share data)
|
|
Three Months Ended March 31, |
|
|||
|
|
|
2005 |
|
2004 |
|
|
REVENUES: |
|
|
|
|
|
|
Sales |
|
$ 1,913 |
|
$ 1,846 |
|
|
Service,
installation and other revenues |
|
580 |
|
1,128 |
|
|
|
|
2,493 |
|
2,974 |
|
|
COST AND EXPENSES: |
|
|
|
|
|
|
Cost of
sales |
|
980 |
|
941 |
|
|
Customer service expenses |
|
749 |
|
1,015 |
|
|
Selling,
general and administrative expenses |
|
1,221 |
|
925 |
|
|
Research and development |
|
233 |
|
160 |
|
|
|
|
3,183 |
|
3,041 |
|
|
OPERATING LOSS |
|
(690) |
|
(67) |
|
|
INTEREST AND FINANCING EXPENSE, net |
|
91 |
|
125 |
|
|
LOSS BEFORE INCOME TAXES AND MINORITY INTEREST |
|
(781) |
|
(192) |
|
|
INCOME TAX (BENEFIT) |
|
(8) |
|
- |
|
|
LOSS BEFORE MINORITY INTEREST |
|
(764) |
|
(192) |
|
|
MINORITY INTEREST |
|
(4) |
|
--- |
|
|
NET LOSS |
|
$
(760) |
|
$ (192) |
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE |
|
|
|
|
|
|
Basic and diluted |
|
$ (0.01) |
|
$ (0.00) |
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES |
|
|
|
|
|
|
Basic and diluted |
|
120,551 |
|
85,756 |
|
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2005 2004
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,211 $ 1,965
Accounts receivable, less allowance for doubtful
accounts of $200 and
$338, respectively 2,018 3,500
Inventories 3,736 3,314
Prepaid expenses and other current assets 489 525
Total current assets 7,454 9,304
PROPERTY, PLANT AND
EQUIPMENT, net 659 689
GOODWILL 1,564 1,564
OTHER ASSETS 646 690
$ 10,323 $ 12,247
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES
Revolving line of credit and term loan $ 1,875 $ 2,640
Accounts payable 629 799
Accrued liabilities 1,177 1,146
Obligations under capital leases - current portion 6 5
Deferred income 85 169
Total current liabilities 3,772 4,759
NOTES PAYABLE 36 189
OBLIGATIONS UNDER CAPITAL
LEASES -
non-current portion 6 8
DEFERRED INCOME TAXES 33 39
CONVERTIBLE DEBENTURES 1,873 1,862
MINORITY INTEREST 1,031 1,045
Total liabilities 6,751 7,902
SHAREHOLDERS’ EQUITY 3,572 4,345
$ 10,323 $ 12,247