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Sentry Technology Reports Year End Results

RONKONKOMA, NY -- (Marketwired) -- 03/28/14 -- Sentry Technology Corporation (OTC Pink: SKVY) (PINKSHEETS: SKVY) today reported financial results for the Company's year ended December 31, 2013.

Revenues for the year ended December 31, 2013 were $6,575,000 compared to $7,171,000 reported in 2012. Net loss on operations was $286,000 in 2013, compared to a net loss of $530,000 in 2012. The net loss for the year was $689,000, or $(0.00) per share in 2013, compared to a net income of $1,510,000, or $0.01 per share in 2012. The net income in 2012 was a result of a $2,628,000 extraordinary gain resulting from the purchase of a debenture by the company.

Revenue for the quarter ended December 31, 2013 was $1,647,000 compared to $1,988,000 reported in 2012. EBITDA for the fourth quarter was a positive $13,000 in 2013 compared to a negative EBITDA of ($199,000) in the fourth quarter of 2012.

"Despite a reduction in revenue, we had improved results on operations in 2013 compared with 2012 which resulted in an EBITDA gain in the fourth quarter," said Peter Murdoch, President and CEO of Sentry Technology. "This is largely due to continued cost cutting as we focus efforts to promote VideoRailway™, our new HD/IP traveling camera system. VideoRailway™ reference sites have now been established with several large retailers. In particular systems have been installed in multiple store locations of one of the world's largest companies. We expect to take advantage of references from premier accounts as we continue to introduce the product in 2014."

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™, a 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, non-cash amortization costs related to financing, depreciation and amortization expense, net (loss) income attributable to the noncontrolling interest and gain from exinguishment of debt. 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 non-cash amortization costs related to financing, depreciation and amortization, as well as non-operating charges for interest and income taxes, net (loss) income attributable to the noncontrolling interest and gain from exinguishment of debt, 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, non-cash amortization costs related to financing, net (loss) income attributable to the noncontrolling interest and gain from exinguishment of debt, 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)


                                                 December 31,  December 31,
                                                     2013          2012
                                                 ------------  ------------

                      ASSETS
Current Assets:
  Cash                                           $         72  $        278
  Short-term investments                                  253           205
  Accounts receivable, net of allowance for
   doubtful accounts of $79 in 2013 and $81 in
   2012                                                   477           724
  Inventory, net                                        1,433         1,495
  Prepaid expenses and other current assets               174           222
                                                 ------------  ------------
Total current assets                                    2,409         2,924
PROPERTY AND EQUIPMENT, net                               283           346
OTHER ASSETS                                              145           159
                                                 ------------  ------------
TOTAL ASSETS                                     $      2,837  $      3,429
                                                 ============  ============

      LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
  Amount due to related parties                  $      4,266  $      3,954
  Bank indebtedness and revolving line of credit        1,236         1,174
  Accounts payable                                      1,084         1,038
  Accrued liabilities                                     597           803
  Deferred income                                         221           234
  Promissory notes payable - short-term                    38            38
                                                 ------------  ------------
Total current liabilities                               7,442         7,241

Amount due to related parties - long-term                   -           151
Promissory notes payable - long-term                        -            37
Deferred tax liabilities                                   42            50
                                                 ------------  ------------
Total long-term liabilities                                42           238

Total liabilities                                       7,484         7,479

STOCKHOLDERS' DEFICIT
  Sentry Technology Corporation stockholders'
   deficit:
    Preferred stock, $0.001 par value; authorized
     10,000 (2012 - 10,000) shares; none issued
     and outstanding
    Common stock, $0.001 par value; authorized
     300,000 (2012 - 300,000) shares; issued and
     outstanding 196,405 (2012 - 196,405) shares          196           196
    Additional paid-in capital                         51,755        51,748
    Accumulated deficit                               (58,069)      (57,380)
    Accumulated other comprehensive loss                   (8)         (192)
                                                 ------------  ------------
Total stockholders' deficit                            (6,126)       (5,628)
Noncontrolling interest in subsidiary                   1,479         1,578
                                                 ------------  ------------
Total deficit                                          (4,647)       (4,050)
                                                 ------------  ------------
     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $      2,837  $      3,429
                                                 ============  ============



SENTRY TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share
 Amounts)
(Unaudited)
                               Three Months Ended          Years Ended
                             ----------------------  ----------------------
                                  December 31,            December 31,
                             ----------------------  ----------------------
                                2013        2012        2013        2012
                             ----------  ----------  ----------  ----------

REVENUES
  Sales                      $    1,456  $    1,828  $    5,793  $    6,392
  Service, installation &
   maintenance revenues             191         160         782         779
                             ----------  ----------  ----------  ----------
                                  1,647       1,988       6,575       7,171
                             ----------  ----------  ----------  ----------

COST OF SALES AND EXPENSES:
  Cost of sales                     893       1,147       3,549       3,720
  Customer service expenses         157         174         679         747
  Selling, general and
   administrative expenses          573         716       2,383       2,859
  Research and development           82          86         339         332
  Foreign exchange (gain)
   loss                             (50)        (12)        (89)         43
                             ----------  ----------  ----------  ----------
                                  1,655       2,111       6,861       7,701
                             ----------  ----------  ----------  ----------
LOSS FROM OPERATIONS                 (8)       (123)       (286)       (530)
INTEREST EXPENSE, net                98         154         392         596
NON-CASH AMORTIZATION COSTS
 RELATED TO FINANCING                 -           -           2           9
                             ----------  ----------  ----------  ----------
LOSS BEFORE INCOME TAXES,
 NONCONTROLLING INTEREST AND
 EXTRAORDINARY ITEM                (106)       (277)       (680)     (1,135)
INCOME TAX EXPENSE (BENEFIT)          6         (22)          6         (15)
                             ----------  ----------  ----------  ----------
LOSS BEFORE NONCONTROLLING
 INTEREST AND EXTRAORDINARY
 ITEM                              (112)       (255)       (686)     (1,120)
LESS: NET INCOME (LOSS)
 ATTRIBUTABLE TO THE
 NONCONTROLLING INTEREST             21          (8)          3          (2)
                             ----------  ----------  ----------  ----------
LOSS BEFORE EXTRAORDINARY
 ITEM                              (133)       (247)       (689)     (1,118)

EXTRAORDINARY ITEM:
  Gain from exinguishment of
   debt, net of tax                   -      (2,628)          -      (2,628)
                             ----------  ----------  ----------  ----------
NET (LOSS) INCOME            $     (133) $    2,381  $     (689) $    1,510
                             ==========  ==========  ==========  ==========

LOSS PER SHARE BEFORE
 EXTINGUISHMENT OF DEBT -
 Basic and diluted           $    (0.00) $    (0.00) $    (0.00) $    (0.01)
EXTINGUISHMENT OF DEBT PER
 SHARE - Basic and diluted            -        0.01           -        0.01
                             ----------  ----------  ----------  ----------
NET (LOSS) INCOME PER SHARE -
 Basic and diluted           $    (0.00) $     0.01  $    (0.00) $     0.01
                             ==========  ==========  ==========  ==========

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUSTANDING
  Basic and diluted             196,405     196,405     196,405     196,405
                             ==========  ==========  ==========  ==========


RECONCILIATION OF ADJUSTED
 EBITDA TO NET LOSS
(In thousands)
                               Three Months Ended          Years Ended
                             ----------------------  ----------------------
                                  December 31,            December 31,
                             ----------------------  ----------------------
                                2013        2012        2013        2012
                             ----------  ----------  ----------  ----------

Net (loss) income            $     (133) $    2,381  $     (689) $  $ 1,510
Reconciling items:
Interest expense, net                98         154         392         596
Non-cash amortization costs
 related to financing                 -           -           2           9
Income tax expense (benefit)          6         (22)          6         (15)
Depreciation and amortization        21          28          87          99
Net income (loss)
 attributable to the
 noncontrolling interest             21          (8)          3          (2)
Gain from extinguishments of
 debt, net of tax                     -      (2,628)          -      (2,628)
                             ----------  ----------  ----------  ----------

Adjusted EBITDA              $       13  $      (95) $     (199) $     (431)
                             ==========  ==========  ==========  ==========


* Additional financial statements are available on the Company's website at http://www.sentrytechnology.com/.

CONTACT:
Peter L. Murdoch
President & CEO
(631) 739-2000

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