paragon AG / Final Results

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paragon Starts Fiscal 2008 with New Strength
· Automotive products post 6.7% growth in sales in 2007
· Net income up 11.7% in 2007
· Cash flow from operating activities increases 47.2%
· Positive start to fiscal year 2008

Delbrück, April 1, 2008 – In the year recently ended, the Automotive
business segment was once again the growth driver in the paragon Group.
Among other performance indicators, the direct supplier to the automotive
industry increased its sales of own products by 6.7% to €88.5 million.
'We’ve grown at a faster rate than the European automotive industry. This
is clear proof of our innovative strength and the quality of our products,'
says CEO Klaus Dieter Frers.

Due to robust growth in the Automotive business segment (80% share of
sales), the company was nearly able to compensate for the fact that it
refrained from merchandise sales. Total sales in 2007 remained at the level
of the prior year at €108.9 million. Currency-adjusted gross Group sales
amounted to €110.4 million and met the Managing Board’s expectations for
2007. paragon took advantage of fiscal 2007 to invest in the future.
Research and development expenditures were roughly as high as in the prior
year at €10.7 million and represented 9.8% of sales. Earnings were also
impacted by the replacement of high-interest profit-sharing rights with
profit-sharing rights with a lower interest rate in 2007. However, interest
payments will be significantly lower in the future as a consequence.

Due to the fact that other operating expenditures were 12.5% higher on the
whole, earnings before interest and taxes (EBIT) dropped from €8.4 million
to €6.8 million. Net income, on the other hand, grew significantly. As a
result of tax effects, it rose 11.7% to €2.5 million (2006: €2.2 million).
Earnings per share are now €0.60, up from €0.54 in the previous year.
paragon’s financial power remains strong. Cash flow from operating
activities increased 47.2% to €6.2 million (2006: €4.2 million) and
substantially improved the company’s internal financing strength. The
Supervisory Board and Managing Board intend to propose a dividend of €0.10
per share for fiscal 2007 at the Annual General Meeting on May 14, 2008
(2006: €0.30).

The Electronic Solutions business segment recorded an 8.8% rise in sales in
Europe. 'The current business trend at paragon firstronic GmbH in Germany
is very encouraging. So for moment we will continue to observe the market
and will not make a final decision on selling the Electronic Solutions
business until the time appears right,' explained Frers. In 2007, the
company had reported that it would review all options in connection with
this core business segment.

In the USA the consolidation of the Electronic Solutions business was
successfully continued. The streamlining of the product portfolio,
follow-up contracts that will not start in the immediate future, and the
change in the dollar exchange rate led to a significant reduction in
revenues in the USA. But the measures implemented greatly minimized the
negative contribution to earnings. paragon expects to reach a break-even
point in this market in 2008.

In the past fiscal year, paragon made important advances in moving up the
supply chain and positioning itself as a system supplier. The company will
resolutely continue to pursue this trend in 2008 by increasing its focus on
the growing cockpit systems market to take advantage of additional sales
and margin potential. In only two to three years, suppliers will be
generating 75% of the added value of a vehicle; paragon is ideally
positioned and prepared for this trend, not least due to the Artega
project. In 2006, paragon had initiated the construction of the new German
sports car Artega GT to have a platform for its cockpit systems. The first
successes in using Artega interior components in mass production are
already apparent. The Artega project was also instrumental in the 15.3%
increase in orders scheduled for completion by December 31, 2007.

In the current fiscal year, the Managing Board anticipates a 5.0 to 10.0%
rise in sales along with disproportionately high growth in the operating
result. The good start in 2008 confirms this projection. As early as
mid-March, paragon had increased its order level to €314.9 million. Of this
total, some €104 million relate to orders placed for 2008; this means
nearly the entire projected sales of the current year have already been
covered. The company also reported a major order for Media Device Interface
(MDI), a technology that can be used to operate MP3 players like CD
changers. The volume of orders for MDI technology alone is more than €25
million for the next three years. 'MDI gives us a clear competitive
advantage,' says Frers. 'We are confident that the cost-intensive measures
we implemented in 2007 have created a solid base for future growth and
strengthened shareholder value.'

About paragon:

paragon AG, a company listed in the Prime Standard segment of the Stock
Exchange in Frankfurt, Germany, develops, produces, and distributes
cutting-edge system solutions in its business segments Automotive (Climate
Systems/Car Media Systems/Instrumentation and Control Systems) and
Electronic Solutions (including Building Technology). The product portfolio
of this direct supplier to the automotive industry includes the clear
market leader in air quality sensors (AQS), hands-free systems, and display
instruments. In addition to its headquarters in Delbrück, North Rhine
Westphalia, the company maintains facilities in Suhl, Thuringia
(production), Cadolzburg, Bavaria (Car Media Systems), St. Georgen, Baden
Württemberg (Instrumentation Systems), and Heidenheim, Baden-Württemberg
(Electronic Solutions sales), all in Germany. Internationally, the paragon
Group is represented by wholly owned subsidiaries in Grand Rapids,
Michigan, USA (development, production, and sales) and Osaka, Japan
(application, sales) and sales offices in Paris, France, and Turin, Italy.
In fiscal year 2007, the paragon Group generated sales totaling €108.9
million with 594 employees.

paragon AG
Schwalbenweg 29
33129 Delbrück
Tel.: +49 (0) 52 50 - 97 62-0
Fax: +49 (0) 52 50 - 97 62-60

Leitung Unternehmenskommunikation
Matthias Hack
Tel.: +49 (0) 52 50 - 97 62-141
Fax: +49 (0) 52 50 - 97 62-60

Investor Relations
Haubrok Investor Relations GmbH
Thomas Vormann
Tel.: +49 (0) 52 50 - 97 62-140

01.04.2008  Financial News transmitted by DGAP
Language:     English
Issuer:       paragon AG
              Schwalbenweg 29
              33129 Delbrück
Phone:        +49 (0)5250 97 62 - 0
Fax:          +49 (0)5250 97 62 - 60
ISIN:         DE0005558696
WKN:          555869
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, München, Hamburg, Düsseldorf, Stuttgart
End of News                                     DGAP News-Service