SKVY Sentry Technology Corp (CE)

Revenues for the year ended December 31, 2010 were $9,914,000 compared to $9,665,000 reported in 2009. The net loss was $1,531,000, or $(0.01) per share in 2010, compared to $1,850,000, or $(0.02) per share in 2009.

"We made good progress during 2010 resulting in an adjusted EBITDA profit for the year of $36,000 excluding a foreign exchange expense of $80,000 caused by an increase in the value of the Canadian dollar relative to U.S. currency," said Peter Murdoch, President and CEO of Sentry Technology Corporation. "This is a significant improvement over 2009 and results from an increase of 3% in sales and a reduction in expenses of approximately 11%.

"Several new products were developed during the year including GateKeeper™, a software program to manage RFID systems in libraries; an upgrade to our QuickCheck™ library self-service systems to open CD/DVD cases; and a program to allow the payment of fines and fees using QuickCheck. Our OperationalVideo™ software as a service platform has been upgraded to include several new features and we are in the process of completing a prototype of an entirely new travelling camera system."

Mr. Murdoch goes on to say, "Sentry's international customer base for SmartTrack™, our traveling video system, grew in 2010 partly as a result of an OEM agreement with one of the world's largest security companies. Our new customer purchased more than 100 systems in 2010, primarily in the second half of the year. We expect sales of SmartTrack will more than double in 2011.

"We have cut costs, increased sales and refocused our business around a strong product set that serves our exceptional library, retail and security dealer customers. Additional information about products and customers is available on our new website at www.sentrytechnology.com. Based on recent results, we expect a successful 2011."

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 SentryVision®, SmartTrack™, a proprietary, patented traveling Surveillance System. 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 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 non-cash amortization costs related to financing, 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, non-cash amortization costs related to financing 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

                                                      Twelve Months Ended
                                                          December 31,
                                                     ---------------------
                                                       2010         2009
                                                     --------     --------

Revenues                                             $  9,914     $  9,665
Cost of sales                                           5,018        4,754
Operating expenses                                      5,090        5,705
                                                     --------     --------
Loss from operations                                     (194)        (794)
Interest expense, net                                     589          495
Non-cash amortization costs related to financing          769          511
                                                     --------     --------
Loss before income taxes and noncontrolling interest   (1,552)      (1,800)
Income tax (benefit) expense                               (7)           2
                                                     --------     --------
Net loss before noncontrolling interest                (1,545)      (1,802)
Less: net (loss) income attributable to the
 noncontrolling interest                                  (14)          48
                                                     --------     --------
Net loss                                             $ (1,531)    $ (1,850)
                                                     ========     ========
Loss per share
        Basic and diluted                            $  (0.01)    $  (0.02)
                                                     ========     ========
Weighted average number of common shares outstanding
        Basic and diluted                             124,038      120,744
                                                     ========     ========


RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
(In thousands)

                                                      Twelve Months Ended
                                                          December 31,
                                                       2010         2009
                                                     --------     --------
                                                          (unaudited)

Net loss                                             $ (1,531)    $ (1,850)
Reconciling items:
Interest expense, net                                     589          495
Non-cash amortization costs related to financing          769          511
Income tax (benefit) expense                               (7)           2
Depreciation and amortization                             150          130
Net (loss) income attributable to the noncontrolling
 interest                                                 (14)          48
                                                     --------     --------

Adjusted EBITDA                                      $    (44)    $   (664)
                                                     ========     ========


    -- Full financial statements are available on the Company's website at
       www.sentrytechnology.com.

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

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