paragon AG: Significant Increase in Earnings Continues in First Three Quarters

paragon AG / Quarter Results

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· EBIT rises by 9.0%, net income for the period climbs by 71.0%
· Growth in sales with own products develops as expected
· Orders on hand increase by 26.0%

Delbrück, November 8, 2007 – In the third quarter of 2007, paragon AG (ISIN
DE0005558696) was able to increase its earnings at an above-average rate.
Net income for the period increased significantly to €1.7 million from the
prior year (€1.0 million).

paragon, a direct supplier to the automotive industry, improved Group sales
by 4.1% to €81.3 million in the first nine months of 2007 (Q1-Q3 2006:
€78.1 million). The currency-adjusted growth in sales was 4.7%. The third
quarter remained at the same level as in the prior year at €27.2 million
due to seasonal customer plant closedowns. This means that paragon is on
target for fiscal 2007, especially since the fourth quarter is expected to
be the strongest of the year based on past experience. The orders on hand
suggest that paragon has further potential for growth. As of the September
30 closing date, the company had 26.0% more scheduled orders in 2007 than
in the year before.

Earnings before interest, taxes, depreciation, and amortization (EBITDA)
increased at an above-average rate of 7.4% in proportion to sales to €14.1
million (Q1-Q3 2006: € 13.2 million). In addition to the favorable
performance of business, the reduction of the ratio of the cost of
materials to total output from 61.7% to 57.4% also played a role in this
development. Accordingly, the EBITDA margin improved to 17.4% (Q1-Q3 2006:
16.8%).

Earnings before interest and taxes (EBIT) grew at a pronounced rate. The
operating result increased by 9.0% to €5.5 million (Q1-Q3 2006: €5.0
million). As a consequence, the EBIT margin rose by 6.8% (Q1-Q3 2006:
6.5%). Despite special effects related to shifts in financing in the second
quarter, paragon increased its period result by 71.0% to €1.7 million
(Q1-Q3 2006: €1.0 million). This growth was not only a result of measures
to boost efficiency, but was also supported by the proceeds from the
dissolution of deferred taxes. At the end of the first nine months, the
earnings per share were €0.40 (Q1-Q3 2006: €0.23).

The projected growth in sales for 2007 of 5 to 10% compared to the year
before includes revenue targets for the company’s own products (€110
million to 112 million, up from €106.6 million in 2006) and for trading
goods (€7 million to €10 million, up from €4.2 million in 2006). The
Managing Board is considering canceling most of the trading goods business
originally planned for the holiday shopping season for the purpose of risk
avoidance. It will be possible to realize sales of the company’s own
products in line with the projection. The above-average growth in earnings
should continue in the same range as in the first three quarters in the
fourth quarter of 2007.

It is conceivable that paragon could sell all or part of the Electronic
Solutions business as early as the first quarter of 2008; there are already
several serious prospective buyers. The company plans to use the proceeds
from the sale to continue to reduce its gearing ratio.

On the whole, the principal focus in 2008 will be on the automotive
business. In order to catapult paragon to the ranks of recognized Tier 1
suppliers of state-of-the-art interior systems, the company is looking at
potential opportunities for additional acquisitions. But even if an
acquisition should be made, the gearing ratio should not increase again;
alternative forms of financing are being reviewed.


paragon AG
Schwalbenweg 29
33129 Delbrück
Tel.: +49 (0) 52 50 - 97 62-0
Fax: +49 (0) 52 50 - 97 62-60
Internet: www.paragon-online.de
E-Mail: info@paragon-online.de

Leitung Unternehmenskommunikation
Matthias Hack
Tel.: +49 (0) 52 50 - 97 62-141
Fax: +49 (0) 52 50 - 97 62-60
E-Mail: matthias.hack@paragon-online.de

Investor Relations
Haubrok Investor Relations GmbH
Christine Schulte-Beckhausen
Tel.: +49 (0) 2 11 - 3 01 26-0
Fax: +49 (0) 2 11 - 3 01 26-5111
E-Mail: c.schulte-beckhausen@haubrok.de



08.11.2007  Financial News transmitted by DGAP
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Language:     English
Issuer:       paragon AG
              Schwalbenweg 29
              33129 Delbrück
              Deutschland
Phone:        +49 (0)5250 97 62 - 0
Fax:          +49 (0)5250 97 62 - 60
E-mail:       investor@paragon-online.de
Internet:     www.paragon-online.de
ISIN:         DE0005558696
WKN:          555869
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, München, Hamburg, Düsseldorf, Stuttgart
 
End of News                                     DGAP News-Service
 
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