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Sentry Technology Corporation Reports Second Quarter Profit.

RONKONKOMA, N.Y., Aug. 12 /PRNewswire-FirstCall/ -- Sentry Technology Corporation (BULLETIN BOARD: SKVY) today reported financial results for the Company's second quarter ended June 30, 2008.

Revenues increased 66% on a comparative basis from $2,428,000 in the second quarter of 2007 to $4,029,000 in the second quarter of 2008. The Company achieved an operating profit of $349,000 and a net income of $8,000 in the second quarter this year compared to a net loss of $898,000, in the second quarter last year. The net profit includes a foreign exchange loss of $65,000 in the second quarter of 2008 as a result of the U.S. dollar valuation of the Company's Canadian dollar bank loan as well as receivables denominated in U.S. dollars.

For the first six months ended June 30, 2008, revenues were $6,071,000 compared to revenues of $5,096,000 reported in the first six months of the prior year. Sentry had a net loss of $879,000 in the first half of 2008, compared to a net loss of $1,622,000 in the first half of 2007.

"We are very pleased to report our first quarterly net profit since the fourth quarter of 2004. At the beginning of 2005 we lost a major customer that represented approximately 30% of our total revenue causing a significant financial challenge for Sentry," said Peter L. Murdoch, President and CEO of Sentry Technology Corporation. "Our dedicated team of employees has battled to regain the lost revenue while introducing important new products like OperationalVideo(TM). We are also benefiting from strong international SmartTrack(TM) sales and the implementation of cost reduction measures. The combination of sales and cost control initiatives has resulted in the substantial improvement reported in the second quarter."

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 including QuickCheck(TM) patron self-service kiosks. The CCTV product line features SentryVision(R), 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 manage operations, deter shoplifting and internal theft and by industrial and institutional customers to protect assets and people. Recently the Company launched OVportal(TM), a video information portal over the internet offering retailers an OperationalVideo(TM) solution to manage security, merchandising, sign placement and procedure compliance. OVportal(TM) uses the SmartTrack(TM) traveling CCTV system and the Company's real-time video server to provide remote viewing and control of retail operations. OperationalVideo(TM) is the next major trend in online video and OVportal(TM) is a leading, cost effective, market proven solution. For further information, please visit our website 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.
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 (In thousands, except per share data)

 Three Months Ended Six Months Ended
 June 30, June 30,
 2008 2007 2008 2007
 (Unaudited) (Unaudited)
 REVENUES
 Sales $ 3,402 $ 1,991 $5,114 $4,320
 Service, installation
 and other revenues 627 437 957 776
 4,029 2,428 6,071 5,096

 COST OF SALES AND
 EXPENSES:
 Cost of sales 1,884 1,106 2,903 2,376
 Customer service
 expenses 555 485 1,105 940
 Selling, general and
 administrative expenses 1,095 1,395 2,074 2,592
 Research and development 146 185 293 391
 3,680 3,171 6,375 6,299
 INCOME (LOSS) FROM
 OPERATIONS 349 (743) (304) (1,203)
 INTEREST AND FINANCING
 EXPENSE, net 327 193 564 406
 INCOME (LOSS) BEFORE
 INCOME TAXES AND
 MINORITY INTEREST 22 (936) (868) (1,609)
 INCOME TAX EXPENSE
 (RECOVERY) 6 (20) 6 7
 INCOME (LOSS) BEFORE
 MINORITY INTEREST 16 (916) (874) (1,616)
 MINORITY INTEREST
 EXPENSE (INCOME) 8 (18) 5 6
 NET INCOME (LOSS) $8 $(898) $(879) $(1,622)

 EARNINGS (LOSS)
 PER SHARE
 Basic and diluted $0.00 $(0.01) $(0.01) $(0.01)

 WEIGHTED AVERAGE
 NUMBER OF COMMON
 SHARES OUTSTANDING
 Basic and diluted 120,744 120,744 120,744 120,744



 CONSOLIDATED BALANCE SHEETS (Unaudited)
 (In thousands)

 June 30, December 31,
 2008 2007
 (Unaudited) (Audited)
 ASSETS
 Current Assets:
 Cash and cash equivalents $1,389 $256
 Short-term investments 199 202
 Accounts receivable, less
 allowance for doubtful accounts of $149
 in 2008 and $209 in 2007, respectively 845 3,014
 Inventory, net 3,124 3,299
 Prepaid expenses and other assets 899 858
 Total current assets 6,456 7,629


 PROPERTY AND EQUIPMENT, net 556 634
 OTHER ASSETS 266 269
 TOTAL ASSETS $7,278 $8,532


 LIABILITIES AND STOCKHOLDERS' DEFICIT
 Current Liabilities:
 Bank indebtedness, demand loan and
 revolving line of credit $4,120 $4,551
 Accounts payable 612 1,223
 Accrued liabilities 1,667 1,539
 Obligations under capital leases
 - current portion 2 2
 Deferred income 265 145
 Convertible debenture 2,000 1,986
 Total current liabilities 8,666 9,446

 OBLIGATIONS UNDER CAPITAL LEASES -
 less current portion 6 7
 DEFERRED TAX LIABILITY 114 117
 Total liabilities 8,786 9,570

 MINORITY INTEREST 1,205 1,200

 STOCKHOLDERS' DEFICIT (2,713) (2,238)

 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $7,278 $8,532



CONTACT: Peter L. Murdoch, President & CEO of Sentry Technology Corporation, +1-631-739-2000

Web site: http://www.sentrytechnology.com/

Company News On-Call: http://www.prnewswire.com/comp/494538.html
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