paragon AG: Excellent business development confirms forecast for the year

paragon AG / Quarter Results Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- Excellent business development confirms forecast for the year • Sales rise 11.0% to €90.2 million • EBITDA up 16.2%, EBIT up 27.3% • Operating cash flow up sharply to €11.2 million • Positive outlook for 2009 Delbrück, November 4, 2008 – paragon AG continued the very good development of the first half in the third quarter of the current fiscal year with a significant further increase in earnings. In the first nine months of 2008, the company generated Group sales of €90.2 million, reflecting a gain of 11.0% over the first nine months of 2007. The main growth driver was again the Automotive segment with a very strong increase in sales of 15.4%. Within this segment, Car Media Systems in particular established itself as the strongest growing product line with a gain of more than 40%. Specifically, sales of the Media Device Interface and the rSAP-Cradle grew significantly. In the Electronic Solutions segment (including Building Technology), sales declined slightly as in the previous quarter; nonetheless, earnings improved significantly. With a margin of 6.7%, EBIT in this segment came to €1.0 million (prior-year period: €0.6 million). In the first nine months, earnings before interest, taxes, depreciation and amortization (EBITDA) of paragon AG rose by 16.2% from €14.1 million to €16.4 million, thus exceeding the rise in sales. Consequently, the Company increased its EBITDA margin from 17.3% to 18.1%. EBIT also improved significantly from €5.4 million to €6.9 million, reflecting a year on year increase of 27.3%. Accordingly, the EBIT margin improved from 6.7% to 7.7%. The operating cash flow also developed positively with paragon generating cash inflows of €11.2 million in the period under review, approximately €9.0 million of that amount in the third quarter alone. paragon AG confirms the forecast sales growth of 5 – 10% with even higher earnings growth for the current fiscal year. For 2009, the Management Board expects that the worsening market conditions will impact the Company to only a slight degree due to the positioning paragon AG has achieved, and that the Company will continue to develop positively. The full 2008 report on the first nine months of the year is available for download at the Investor Relations section of the Company's website: http://www.paragon-online.de. 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 (Sensors/Actuators and Cockpit Systems) and Electronic Solutions 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 (sales and development), St. Georgen, Baden-Württemberg (production) 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 Head of Corporate Communications 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 Stefan Didyk Tel.: +49 (0) 52 50 - 97 62-140 E-Mail: s.didyk@haubrok.de 04.11.2008 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 Düsseldorf, Hamburg, München, Berlin, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------