paragon AG: Dynamic start to anniversary year

paragon AG / Quarter Results Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. ---------------------------------------------------------------------- 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 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 Thomas Vormann Tel.: +49 (0) 52 50 - 97 62-140 E-Mail: t.vormann@haubrok.de 06.05.2008 Financial News transmitted by DGAP ---------------------------------------------------------------------- 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 ---------------------------------------------------------------------------