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Sentry Technology Reports First Quarter Results

RONKONKOMA, NY -- (Marketwired) -- 08/20/14 -- Sentry Technology Corporation (OTC Pink: SKVY) (PINKSHEETS: SKVY) today reported financial results for the Company's first quarter ended March 31, 2014.

Revenues for the first quarter of 2014 were $1,207,000 compared to revenues of $1,355,000 reported in the first quarter of the prior year. The operating loss was $179,000, or $(0.00) per share, in the first quarter of 2014 as compared to an operating loss of $214,000 or $(0.00) per share, in the first quarter of 2013. EBITDA for the first quarter was a negative ($162,000) in 2014 compared to a negative EBITDA of ($192,000) in the first quarter of 2013.

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™, 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, depreciation and amortization expense and net (loss) income attributable to the noncontrolling interest. 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 depreciation and amortization, as well as non-operating charges for interest and income taxes and net (loss) income attributable to the noncontrolling interest, 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, income taxes, and net (loss) income attributable to the noncontrolling interest, 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)


                                                   March 31,   December 31,
                                                     2014          2013
                                                 ------------  ------------

                      ASSETS
Current Assets:
  Cash                                           $         51  $         72
  Short-term investments                                  246           253
  Accounts receivable, net of allowance for
   doubtful accounts of $74 in 2014 and $79 in
   2013                                                   374           477
  Inventory, net                                        1,408         1,433
  Prepaid expenses and other current assets               160           174
                                                 ------------  ------------
Total current assets                                    2,239         2,409
PROPERTY AND EQUIPMENT, net                               261           283
OTHER ASSETS                                              141           145
                                                 ------------  ------------
TOTAL ASSETS                                     $      2,641  $      2,837
                                                 ============  ============

      LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
  Amount due to related parties                  $      4,240  $      4,266
  Bank indebtedness and revolving line of credit        1,224         1,236
  Accounts payable                                      1,130         1,084
  Accrued liabilities                                     612           597
  Deferred income                                         236           221
  Promissory notes payable                                 38            38
                                                 ------------  ------------
Total current liabilities                               7,480         7,442

Deferred tax liabilities                                   41            42
                                                 ------------  ------------
Total long-term liabilities                                41            42
Total liabilities                                       7,521         7,484

STOCKHOLDERS' DEFICIT
  Sentry Technology Corporation stockholders'
   deficit:
    Preferred stock, $0.001 par value; authorized
     10,000 (2013 - 10,000) shares; none issued
     and outstanding
    Common stock, $0.001 par value; authorized
     300,000 (2013 - 300,000) shares; issued and
     outstanding 196,405 (2013 - 196,405) shares          196           196
    Additional paid-in capital                         51,759        51,755
    Accumulated deficit                               (58,367)      (58,069)
    Accumulated other comprehensive loss                   97            (8)
                                                 ------------  ------------
Total stockholders' deficit                            (6,315)       (6,126)
Noncontrolling interest in subsidiary                   1,435         1,479
                                                 ------------  ------------
Total deficit                                          (4,880)       (4,647)
                                                 ------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT      $      2,641  $      2,837
                                                 ============  ============



SENTRY TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)


                                                     Three Months Ended
                                                 --------------------------
                                                          March 31,
                                                 --------------------------
                                                     2014          2013
                                                 ------------  ------------


REVENUES:
  Sales                                          $      1,075  $      1,185
  Service, installation and maintenance revenues          132           170
                                                 ------------  ------------
                                                        1,207         1,355
COST OF SALES AND EXPENSES:
  Cost of sales                                           655           749
  Customer service expenses                               151           183
  Selling, general and administrative expenses            565           580
  Research and development                                 73            85
  Foreign exchange gain                                   (58)          (28)
                                                 ------------  ------------
                                                        1,386         1,569
                                                 ------------  ------------
LOSS FROM OPERATIONS                                     (179)         (214)
INTEREST EXPENSE, net                                      96            94
                                                 ------------  ------------
LOSS BEFORE INCOME TAXES AND NONCONTROLLING
 INTEREST                                                (275)         (308)
INCOME TAX EXPENSE                                         12             6
                                                 ------------  ------------
LOSS BEFORE NONCONTROLLING INTEREST                      (287)         (314)
LESS: NET INCOME ATTRIBUTABLE TO THE
 NONCONTROLLING INTEREST                                   11             5
                                                 ------------  ------------
NET LOSS                                                 (298)         (319)
                                                 ============  ============

NET LOSS PER SHARE - Basic and diluted           $      (0.00) $      (0.00)
                                                 ============  ============

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


RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
(In thousands)
                                                     Three Months Ended
                                                 --------------------------
                                                          March 31,
                                                 --------------------------
                                                     2014          2013
                                                 ------------  ------------

Net loss                                         $       (298) $       (319)
Reconciling items:
Interest expense, net                                      96            94
Income tax expense                                         12             6
Depreciation and amortization                              17            22
Net income attributable to the noncontrolling
 interest                                                  11             5
                                                 ------------  ------------

Adjusted EBITDA                                  $       (162) $       (192)
                                                 ============  ============

* 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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