UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
March 31, 2005
Date of Report (Date of earliest reported event)
Sentry Technology Corporation
(Exact name of registrant as specified in its chapter)
Delaware 1-12727 96-11-3349733
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) number)
1881 Lakeland Avenue, Ronkonkoma, New York 11779
(Address of principal executive offices) (Zip Code)
631-739-2000
Registrant's telephone number, including area code
None
(Former name or former address, if changed since last report )
INFORMATION TO BE INCLUDED IN THE REPORT
Item 8.01 Other Events.
On March 31, 2005, Sentry Technology Corporation ("Sentry" or the "Company")
announced its financial results for the fourth quarter and year ended December
31, 2004. A copy of the Company's News Release issued on March 31, 2005 is filed
as an exhibit to this report and is incorporated in this report by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1 Company News Release dated March 31, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Sentry Technology Corporation
Date: 3/31/05 /s/ Peter J. Mundy
- -------------- --------------------------------
Peter J. Mundy, VP and CFO
EXHIBIT INDEX
99.1 Company News Release dated March 31, 2005.
EXHIBIT 99.1
[GRAPHIC OMITED]
[GRAPHIC OMITED]
News Release
FOR IMMEDIATE RELEASE CONTACT: Peter J. Mundy
- ----------------------- Vice President - CFO
(631) 739-2000
SENTRY TECHNOLOGY REPORTS FOURTH QUARTER PROFIT
RONKONKOMA, New York, March 31, 2005, -- Sentry Technology Corporation (OTC
Bulletin Board: SKVY) today reported financial results for the Company's fourth
quarter and year ended December 31, 2004.
Revenues for the fourth quarter of 2004 were $4,901,000, compared to
revenues of $3,353,000 reported in the fourth quarter of the prior year. The
Company generated operating income for the current quarter of $380,000 as
compared to $47,000 for the same period of 2003. Net income was $172,000, or
$0.00 per share, in the fourth quarter of 2004 as compared to a net loss of
$109,000, or $(0.00) per share, in the fourth quarter of 2003.
For the year ended December 31, 2004, revenues were $16,665,000, compared
to $13,126,000 reported in the previous year. The increase in revenues is
primarily related to higher sales of EAS products principally as a result of the
ID Systems acquisition as well as an increase in sales of the Company's
proprietary SmartTrack traveling camera systems. There was operating income of
$665,000 in 2004, compared to an operating loss of $378,000 in 2003. Net income
was $31,000, or $0.00 per share in 2004, compared to $181,000, or $0.00 per
share in 2003. Included in the net income for 2003 were extraordinary gains of
$738,000, or $0.01 per share, related to the settlement with trade creditors of
past due debt and the termination of its long-term lease with its prior landlord
for the Hauppauge, New York facility.
"We are pleased to report growth in revenues and our third consecutive quarterly
profit since the acquisition of ID Systems in May 2004," said Peter L. Murdoch,
President and CEO of Sentry Technology Corporation. "However, we are
disappointed that Lowe's Home Center, our largest customer, decided not to renew
its annual maintenance agreement for 2005. This contract represented $0.9
million of our revenues in 2004 and contributed towards the selection of Sentry
as a vendor for replacement and add-on CCTV business in existing and new Lowe's
locations. We anticipate that this decision will result in a substantial
decrease in future revenues from Lowe's on a comparative basis. Customer
service and administrative expense reductions have been made to compensate for
this expected loss in business. At the same time, we have increased funding of
sales and marketing programs, which we expect will continue to increase our
business with new and existing customers. Recently we have installed our
SentryVision Video Server along with wireless hand held controls for SmartTrack
in two major accounts. We believe this application of our proprietary products
will open new growth opportunities for Sentry."
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 SentryVision 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.
SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2004 2003
------------ ------------
ASSETS
- ------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents. . . . . . . . . . . . . . $ 1,965 $ 210
Accounts receivable, less allowance for doubtful
accounts of $338 and $304, respectively . . . . . 3,500 1,482
Inventories. . . . . . . . . . . . . . . . . . . . . 3,314 1,855
Prepaid expenses and other current assets. . . . . . 525 126
-------------- ---------
Total current assets . . . . . . . . . . . . . . . 9,304 3,673
PROPERTY, PLANT AND EQUIPMENT, net . . . . . . . . . . 689 209
GOODWILL 1,564 ---
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . 690 211
-------------- ---------
$ 12,247 $ 4,093
============== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------------------------
CURRENT LIABILITIES
Revolving line of credit and term loan . . . . . . . $ 2,640 $ 1,515
Accounts payable . . . . . . . . . . . . . . . . . . 799 566
Accrued liabilities. . . . . . . . . . . . . . . . . 1,146 1,601
Obligations under capital leases - current portion . 5 5
Deferred income. . . . . . . . . . . . . . . . . . . 169 271
-------------- ---------
Total current liabilities. . . . . . . . . . . . . 4,759 3,958
NOTES PAYABLE. . . . . . . . . . . . . . . . . . . . . 189 247
OBLIGATIONS UNDER CAPITAL LEASES -
non-current portion. . . . . . . . . . . . . . . . . 8 13
DEFERRED INCOME TAXES 39 ---
CONVERTIBLE DEBENTURES 1,862 ---
MINORITY INTEREST 1,045 ---
-------------- ---------
Total liabilities. . . . . . . . . . . . . . . . . 7,902 4,218
SHAREHOLDERS' EQUITY
Common stock . . . . . . . . . . . . . . . . . . . . 121 86
Additional paid-in capital . . . . . . . . . . . . . 48,779 44,658
Accumulated deficit. . . . . . . . . . . . . . . . . (44,718) (44,749)
Note receivable from shareholder --- (120)
Equity adjustment from foreign currency translation 163 ---
-------------- ---------
Total shareholders' equity (deficit) . . . . . . . 4,345 (125)
-------------- ---------
$ 12,247 $ 4,093
============== =========
SENTRY TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------------------------------
2004 2003 2004 2003
------------------------------------------------------
REVENUES. . . . . . . . . . . . . . . . . . . . $ 4,901 $ 3,353 $ 16,665 $ 13,126
COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . . . . . . . 1,813 1,200 6,351 5,179
Customer service expenses . . . . . . . . . . 955 1,065 4,175 3,977
Selling, general and administrative expenses. 1,527 877 4,642 3,692
Research and development. . . . . . . . . . . 226 164 832 656
---------------------------- -----------------------
4,521 3,306 16,000 13,504
---------------------------- -----------------------
OPERATING INCOME (LOSS) . . . . . . . . . . . . 380 47 665 (378)
INTEREST AND FINANCING EXPENSES . . . . . . . . 103 158 412 671
---------------------------- ------------------------
INCOME (LOSS) BEFORE INCOME TAXES . . . . . . . 277 (111) 253 (1,049)
INCOME TAX EXPENSE (BENEFIT). . . . . . . . . . 63 (1) 140 (492)
---------------------------- ------------------------
INCOME (LOSS) BEFORE MINORITY INTEREST
AND EXTRAORDINARY ITEM . . . . . . . . . . 214 (110) 113 (557)
MINORITY INTEREST (42) --- (82) --
---------------------------- ------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM . . . . 172 (110) (110) 31
EXTRAORDINARY ITEM - Gain on extinguishment
of debt, net of $1 and $492 income taxes --- 1 -- 738
---------------------------- ------------------------
NET INCOME (LOSS) . . . . . . . . . . . . . . . $ 172 $ (109) 31 181
============================ ========================
NET INCOME (LOSS) PER SHARE
Income (loss) before extraordinary item . . . . $ 0.00 $ (0.00) $0.00 $(0.01)
Extraordinary item. . . . . . . . . . . . . . . 0.00 0.00 0.00 $ 0.01
---------------------------- ------------------------
Basic and diluted . . . . . . . . . . . . . . $ 0.00 $ (0.00) 0.00 $ 0.00
============================ ========================
WEIGHTED AVERAGE SHARES
Basic and diluted . . . . . . . . . . . . . . 118,757 85,754 106,532 84,153