News Release

FOR IMMEDIATE RELEASE CONTACT: Peter J. Mundy

Vice President – CFO

(631) 739-2000

SENTRY TECHNOLOGY REPORTS THIRD QUARTER RESULTS

RONKONKOMA, New York, November 15, 2006, -- Sentry Technology Corporation (OTC Bulletin Board: SKVY) today reported financial results for the Company’s third quarter ended September 30, 2006.

Revenues for the third quarter were $2,743,000, compared to revenues of $3,861,000 reported in the third quarter of the prior year. There was a decrease in revenues across all product lines during the quarter. Principally as a result of lower revenue levels, Sentry had a net loss in the third quarter of 2006 was $683,000, or $(0.01) per share, compared to a net loss of $296,000, or (0.00) per share, in the third quarter of last year.

For the first nine months ended September 30, 2006, revenues were $8,383,000, compared to $10,621,000 reported in the previous year. The decrease in revenues is principally attributable to a reduction in Lowe’s revenues by approximately $1 million on a comparable basis. Sentry had a net loss of $2,011,000, or $(0.02) per diluted share, in the first nine months of 2006 compared to a net loss of $1,086,000, or $(0.01) per diluted share, in the first nine months of 2005.

“Despite the third quarter loss, we are pleased to see our backlog increase to $2.8 million as of September 30, 2006, a 75% increase over the third quarter of 2005,” said Peter L. Murdoch, President and CEO of Sentry Technology Corporation. “With current orders holding the trend and planned fix cost reductions, we expect to return to profitability in 2007.”

Sentry Technology Corporation designs, manufactures, sells and installs a complete line of Closed Circuit Television (CCTV) solutions, Electro-Magnetic (EM) and RFID based Library Management systems as well as Radio Frequency (RF) and Electro-Magnetic (EM) EAS systems. The CCTV product line features SentryVisionâ, SmartTrack, a proprietary, patented traveling Surveillance System. 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. 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

September 30, December 31,

2006 2005

(Unaudited) (Audited)

ASSETS

CURRENT ASSETS

Cash and cash equivalents $ 397 $ 842

Accounts receivable, less allowance for doubtful

accounts of $135 and $141, respectively 2,122 2,762

Inventories 3,277 2,709

Prepaid expenses and other current assets 472 318

Total current assets 6,268 6,631

PROPERTY, PLANT AND EQUIPMENT, net 623 637

GOODWILL 1,564 1,564

OTHER ASSETS 410 563

$ 8,865 $ 9,395

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Revolving line of credit $ 2,416 $ 2,039

Accounts payable 703 489

Accrued liabilities 1516 925

Obligations under capital leases - current portion 5 6

Deferred income 105 99

Total current liabilities 4,745 3,558

OBLIGATIONS UNDER CAPITAL LEASES -

non-current portion 9 1

DEFERRED TAX LIABILITY 60 58

CONVERTIBLE DEBENTURES 1,935 1,904

MINORITY INTEREST 1,247 1,140

OTHER LIABILITIES 63 36

Total liabilities 8,059 6,697

SHAREHOLDERS’ EQUITY 806 2,698

$ 8,865 $ 9,395

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2006 2005 2006 2005

(Unaudited) (Unaudited)

REVENUES

Sales $ 2,252 $ 3,343 $ 7,063 $ 8,718

Service, installation and other 491 518 1,320 1,903

2,743 3,861 8,383 10,621

COSTS AND EXPENSES:

Cost of sales 1,217 1,793 3,775 4,688

Customer service expenses 520 587 1,601 2,038

Selling, general and administrative expenses 1,287 1,479 3,964 4,017

Research and development 210 191 614 638

3,234 4,050 9,954 11,381

OPERATING LOSS (491) (189) (1,571) (760)

INTEREST AND FINANCING EXPENSES 141 80 309 249

LOSS BEFORE INCOME TAXES AND

MINORITY INTEREST (632) (269) (1,880) (1,009)

INCOME TAX EXPENSE 30 9 70 29

LOSS BEFORE MINORITY INTEREST (662) (278) (1,950) (1,038)

MINORITY INTEREST (21) (18) (61) (48)

NET LOSS $ (683) $ (296) $ (2,011) $ (1,086)

NET LOSS PER SHARE

Basic and diluted $ (0.01) $ (0.00) $ (0.02) $ (0.01)

WEIGHTED AVERAGE SHARES

Basic and diluted 120,744 120,629 120,707 120,582