paragon AG: Slump in sales leads to disappointing 4th quarter 2008

paragon AG / Preliminary 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. ---------------------------------------------------------------------- Slump in sales leads to disappointing 4th quarter 2008 - General situation in the industry prevented another record year - Managing Board expects loss before taxes for 2008 - Highly promising discussions with new investors Delbrück, March 17, 2009 - Until the fourth quarter paragon AG was able to elude the negative effects of the crisis in the automotive industry. After the third quarter of 2008, the company still reported growth in sales of 15.4% in the dominant Automotive business division, giving rise to expectations of another record year. However, the general situation in the industry has now made itself felt at paragon as well. No orders have been cancelled but a number of customers have postponed requisitions. Like almost all automotive suppliers, paragon experienced a loss in the fourth quarter. Nonetheless, preliminary figures showed that total sales in fiscal 2008 rose by 3.4% to EUR112.6 million compared to EUR108.9 million in fiscal 2007. Despite pleasing EBITDA and positive EBIT, current calculations lead the Managing Board to expect a loss before taxes for fiscal year 2008 due to the fourth quarter losses and higher interest payments. For the time being, no improvement is within sight for the first quarter of 2009 as well. Based on paragon's broad portfolio of customers and products, the Managing Board sees it as highly likely that the company will emerge from the crisis in the automotive industry stronger than before. In addition to the high share in sales to the Volkswagen Group (approximately 50% of paragon's Automotive sales), which so far has been best able to weather the crisis, this expectation is also shored up by the orders received in the last few weeks valued at more than EUR35 million. The company expects to receive almost EUR50 million in additional new orders in the next few months. The Managing Board is working together with the attendant banks on refinancing, for which there are positive signals. At the same time, many promising discussions are ongoing with very interested parties who would like to invest in the company. Furthermore under the leadership of CEO Klaus Dieter Frers a comprehensive package of measures is intended to make it possible to operate profitably even with lower sales. The previous CFO Volker Brinkmann retired from his position with immediate effect. His responsibilities will be assumed by a new CFO who is equipped with a special expertise for the current business situation. paragon AG Schwalbenweg 29 33129 Delbrück Phone: +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 Phone: +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 Michael Müller Phone: +49 (0) 52 50 - 97 62-140 E-mail: m.mueller@haubrok.de 17.03.2009 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 ---------------------------------------------------------------------------