paragon AG / Quarter Results

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Dynamic start to anniversary year
· Sales revenue from Automotive business up 20.6 percent
· Car Media Systems driving sales growth with 40.4 percent increase
· Strong growth in operating cash flow to €2.4 million
· Orders on hand up 55 percent year on year

Delbrück, May 6, 2008 – paragon has made an exceptionally good start to its
20th year, setting the course for 2008. In the first three months of the
year, total sales were up by around 15 percent to €29.4 million, while
orders on hand reached a record level. In the dominant Automotive segment,
which accounts for 83 percent of sales, the Car Media Systems business unit
performed particularly well, raising sales by 40.4 percent.

'With 11.6 percent growth in EBIT to €2.1 million and 20.6 percent growth
in sales to €24.3 million, the performance of our core segment automotive
business was particularly pleasing', noted CEO Klaus Dieter Frers, who set
the company up 20 years ago. In the Electronic Solutions segment, sales
fell slightly from €5.4 million to €5.1 million, primarily as a result of
shifts in exchange rates. As a result of the earnings growth of paragon
firstronic in Germany, EBIT remained virtually unchanged at €222 thousand
(Q1 2007: €268 thousand).

Overall, paragon was able to significantly improve its profit from
operations. While earnings before interest, tax, depreciation and
amortization (EBITDA) increased by 13.7 percent from €4.9 million to €5.6
million, EBIT rose by 8.0 percent to €2.3 million. At 8.0 percent of sales,
the EBIT margin is higher than the 6.2 percent margin achieved for 2007 as
a whole. The extraordinary charges resulting from the exchange of
profit-sharing rights resulted in a drop in profit for the first quarter of
2008 to €241 thousand (Q1 2007: €565 thousand), as had been anticipated.
However, this also means that the company will benefit from significantly
lower interest payments in future. Earnings per share amounted to €0.06 (Q1
2007: €0.14). The level of operating cash flow is evidence of the company's
strong earnings power; during the period under review, paragon reported a
significantly higher net cash inflow of €2.4 million.

'Our business is growing strongly and we are clearly succeeding in
establishing ourselves as a systems supplier,' enthused Klaus Dieter Frers
in view of the more than 55 percent year-on-year increase in orders on
hand. As previously reported by paragon in February, one German automotive
manufacturer is fitting the Media Device Interface (MDI) in virtually its
entire range of models. This has enabled paragon to more than treble its
order volume for this product in comparison with 2007.

Internally, paragon is also preparing itself for the next surge in growth.
The Climate Systems, Car Media Systems and Instrumentation & Control
Systems business units are being merged into the Cockpit Systems and
Sensory Systems/Actuating Systems divisions that are producing the
technology of the future. The research, development and project management
functions of the respective divisions will then work on new products and
systems on a company-wide basis. At the same time, paragon has also brought
its sales and marketing function closer to its customers through its recent
introduction of a key-account structure.

'The first quarter has met our expectations in full. We anticipate
continuing sales growth of between 5 and 10 percent during the current
financial year and even stronger earnings growth for all categories of
earnings', was Frers' extremely upbeat assessment of the strategic and
operational performance of paragon.

About paragon
paragon AG is a direct supplier to the automotive industry and is listed on
the Deutsche Börse Prime Standard index in Frankfurt/Main, Germany. The
Company develops, manufactures, and markets innovative solutions in its
Automotive (Car Media Systems/Climate Systems/Instrumentation and Control
Systems), Electronic Solutions, and Building Technology divisions. Its
product portfolio includes the world’s leading AQS air quality sensor by
far as well as hands-free speaking equipment and instrumentation systems.
In addition to its headquarters in Delbrück, North Rhine-Westphalia,
paragon also operates locations in Suhl, Thuringia (production),
Cadolzburg, Bavaria (car media systems), St. Georgen, Baden-Württemberg
(instrumentation systems) and Heidenheim, Baden-Württemberg (Electronic
Solutions sales). In the international arena, the paragon Group is
represented by wholly-owned subsidiaries in Grand Rapids, Michigan, USA
(development, production, and sales) and Osaka, Japan (applications and
sales) as well as sales offices in Paris, France and Turin, Italy. In
fiscal 2007, the paragon Group generated sales totaling €108.9 million with
a workforce of 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

06.05.2008  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