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STEN Corp. Reports 2008 Second-Quarter Revenue of $4.3 Million and Improved Results From Operations
Date:5/14/2008

MINNEAPOLIS, May 14 /PRNewswire-FirstCall/ -- STEN Corporation (Nasdaq: STEN), a Minneapolis-based diversified business, today reported results for its second fiscal quarter comprised of the thirteen week period ended March 30, 2008. The Company reported a net after-tax loss of $502,273 or $(.20) per diluted share for the second quarter period ended March 30, 2008. Revenues from continuing operations for the thirteen week period ended March 30, 2008 were $4,298,816, an increase of approximately 340 percent, or $3,343,120 from $955,696 for comparable period one year ago. The second quarter loss per share represented an improvement of $.15 per share from the first quarter of fiscal 2008. The Company's Stencor business accounted for $629,289, or 14.5%, of total revenue and the STEN Financial unit, including retail vehicle sales, contributed $3,669,527 in revenue for the period ended March 30, 2008. The Company reported a net loss of $1,303,857 or $(.61) per diluted share for the twenty-six weeks ended March 30, 2008. The loss in the second quarter of fiscal 2008 represented financial performance below the Company's previously disclosed plan. The short-fall from our plan resulted from a greater than anticipated number of loan defaults and repossessions from third-party dealer finance contracts and the impact of a delay in shipping certain product at Stencor. The Company has adjusted the approach to its business in the finance area to place a greater emphasis on financing sales from its own locations where it has a greater control of the underwriting process, and in addition it has reduced the level of purchases of finance contracts from third-party auto-dealers where credit performance has been below expectations.

Commenting on the second quarter results and the current outlook, Kenneth Brimmer, CEO, noted, "We are disappointed that we did not achieve our profitability goal in the second quarter and we see this mainly the result of reserves and write-offs related to third-party dealer customers that we no longer are doing business with and where we concluded we needed to recognize additional allowances for credit losses at the end of the period. We continue to make progress in all areas of our businesses. The increased emphasis on our company-initiated financing contracts will be a positive factor in our performance. Building on our recent initiatives, and considering the current trends, we now see revenue in the second half of fiscal 2008 ending September 30, exceeding $10 million and are forecasting after-tax earnings per share from continuing operations for the six month period to be in the range of $.20 per share. As we look ahead to fiscal 2009, we believe that we have improved on our basic business model and see total revenue for the year exceeding $25 million and are forecasting earnings of $.50-$.60 per share."

STEN Corporation and Subsidiaries, headquartered in Minnesota, is a diversified business, primarily focused on its financing business and buy-here pay-here retail vehicle sales business through STEN Financial Corporation. The Company's Stencor business is a contract manufacturing business and distribution business. In addition to manufacturing medical and industrial products, the company manufactures and distributes ZERO BUG ZONE(TM) an environmentally-friendly pest-eliminator and Stencor also distributes Liquid Filter(TM) a unique product which enhances indoor air quality. These products are available at http://www.gozbiz.com.

STEN Corporation common stock is traded on the Nasdaq Capital Market under the symbol STEN. More information about STEN Corporation is available at the Company's website: http://www.stencorporation.com. Except for historical information contained herein, the disclosures in this news release are forward-looking statements that could be affected by certain risks and uncertainties, and actual results may differ materially, depending on a variety of factors. These risks are described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no duty or obligation to update any of the forward-looking statements after the date of this release.

STEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

For the For the For the For the

thirteen thirteen twenty-six twenty-six

weeks ended weeks ended weeks ended weeks ended

March 30, April 1, March 30, April 1,

2008 2007 2008 2007

REVENUES

Stencor sales $629,289 $363,365 $957,355 $647,448

Vehicle sales,

interest, and other 3,669,527 592,331 5,396,002 952,937

TOTAL REVENUES 4,298,816 955,696 6,353,357 1,600,385

COST AND EXPENSES

Costs of goods sold

related to Stencor 537,174 393,906 923,859 753,608

Expenses related to

STEN Financial

Cost of autos sold 2,003,526 61,907 2,830,724 62,300

Salaries and benefits 441,764 282,978 859,149 456,305

Occupancy and

operation expenses 246,311 177,238 521,982 360,408

Depreciation and

amortization 98,415 95,013 197,574 150,631

Provision for credit

losses 778,123 58,819 1,288,755 92,520

Interest expense 615,582 118,351 1,218,853 125,095

Selling, general and

administrative 374,593 237,315 590,618 455,096

TOTAL COST AND EXPENSES 5,095,489 1,425,527 8,432,514 2,455,963

Loss from Continuing

Operations Before

Income Taxes (796,673) (469,831) (2,079,157) (855,578)

BENEFIT FROM INCOME TAXES 294,400 172,140 775,300 318,668

NET LOSS FROM CONTINUING

OPERATIONS (502,273) (297,691) (1,303,857) (536,910)

Loss from Discontinued

Operations 0 (105,646) 0 (129,686)

Benefit from income

taxes from Discontinued

Operations 0 41,961 0 48,632

Loss from discontinued

operations 0 (63,685) 0 (81,054)

NET LOSS $(502,273) $(361,376) $(1,303,857) $(617,964)

NET LOSS PER SHARE FROM

CONTINUING OPERATIONS:

Basic $(0.20) $(0.15) $(0.61) $(0.27)

Diluted $(0.20) $(0.15) $(0.61) $(0.27)

NET LOSS PER SHARE FROM

DISCONTINUED OPERATIONS:

Basic $0.00 $(0.03) $0.00 $(0.04)

Diluted $0.00 $(0.03) $0.00 $(0.04)

NET LOSS PER SHARE:

Basic $(0.20) $(0.18) $(0.61) $(0.31)

Diluted $(0.20) $(0.18) $(0.61) $(0.31)

WEIGHTED AVERAGE COMMON AND

COMMON EQUIVALENT SHARES

OUTSTANDING

Basic 2,528,751 1,987,066 2,131,030 1,988,982

Diluted 2,528,751 1,987,066 2,131,030 1,988,982

STEN CORPORATION AND SUBSIDIARIES

CONDENSED BALANCE SHEETS

ASSETS

March 30, September 30,

2008 2007

(unaudited) (audited)

CURRENT ASSETS

Cash, cash equivalents $458,632 $366,118

Current portion of loans receivable, net 3,024,928 2,851,529

Other current assets 4,556,251 3,337,519

Total Current Assets 8,039,811 6,555,166

PROPERTY AND EQUIPMENT, NET 1,232,500 1,293,618

OTHER ASSETS

Intangible assets, net 1,605,078 1,750,042

Loan receivable, net of current portion 4,502,357 4,487,466

Other Assets 3,627,818 3,226,387

Total Other Assets 9,735,253 9,463,895

TOTAL ASSETS $19,007,564 $17,312,679

LIABILITIES AND STOCKHOLDERS' EQUITY

TOTAL CURRENT LIABILITIES

Line of credit, bank $0 680,000

Current portion of long term debt 4,544,796 2,886,265

Other current liabilities 2,669,759 2,791,762

Total Current Liabilities 7,214,555 6,358,027

LONG-TERM LIABILITIES

Dealer reserves 66,038 1,076,707

Long-term debt, net of current portion 6,446,225 4,457,458

TOTAL LIABILITIES 13,726,818 11,892,192

TOTAL STOCKHOLDERS' EQUITY 5,280,746 5,420,487

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $19,007,564 $17,312,679

NET BOOK VALUE PER SHARE $2.08 $2.72


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SOURCE STEN Corporation
Copyright©2008 PR Newswire.
All rights reserved

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