Exhibit 99.1
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PARAGON
TECHNOLOGIES News
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FOR: PARAGON TECHNOLOGIES, INC.
CONTACTS: Len Yurkovic, President and CEO
610-252-3205
610-252-3102 (Fax)
www.ptgamex.com
PARAGON TECHNOLOGIES REPORTS
PROFITABLE FIRST QUARTER RESULTS
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EASTON, PA -- May 12, 2004 -- Paragon Technologies, Inc. (AMEX:PTG), a leading
supplier of "smart" material handling solutions, including systems,
technologies, products and services, today announced results for the first
quarter ended March 31, 2004.
First Quarter Results
Sales for the first quarter of 2004 rose 23% to approximately $10.6 million
compared to sales of approximately $8.6 million in the first quarter of 2003.
Net earnings for the first quarter of 2004 were $341,000 or $.08 basic earnings
per share, compared to net earnings of $1,011,000 or $.24 basic earnings per
share in the first quarter of 2003. The first quarter 2003 net earnings were
$71,000 or $.02 basic earnings per share, excluding the gain on the sale of the
Company's Easton, Pennsylvania facility, the restructuring credit from the
settlement of pension obligations, equity in income and royalty income from the
Company's former SI/BAKER joint venture, and interest expense. Earnings before
interest, taxes, depreciation, and amortization ("EBITDA") for the first quarter
of 2004 were approximately $682,000 compared to $2.0 million for the first
quarter of 2003.
Contributing to pre-tax earnings for the first quarter of 2003 was a gain of
$1,363,000 on the sale of the Company's Easton, Pennsylvania facility for cash
proceeds of $2,925,000 and leaseback of 25,000 square feet of office space, a
restructuring credit of $170,000 pertaining to the final settlement of remaining
pension obligations associated with the Company's terminated pension plan,
equity in income of the SI/BAKER joint venture of $162,000, and royalty income
from the SI/BAKER joint venture of $83,000, which the Company sold in September
2003. Partially offsetting the favorable impact of the aforementioned items was
interest expense of $218,000 on senior and subordinated debt, which was repaid
in September 2003.
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PARAGON TECHNOLOGIES, INC. o 600 Kuebler Road o Easton, PA 18040-9295
o 610.252.3205 o Fax 610.252.3102
www.ptgamex.com
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PARAGON
TECHNOLOGIES Page 2
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During the first quarter of 2004, the Company received orders totaling
approximately $8.5 million, and finished the quarter with a backlog of orders of
approximately $8.4 million, versus a $10.5 million backlog of orders at the end
of the fourth quarter of 2003.
The Company continues to maintain a strong Balance Sheet. The current ratio
remains strong at 1.67, while working capital approximates $5.5 million.
Len Yurkovic, Paragon's President and Chief Executive Officer, commented, "The
operating results for the first quarter of 2004 are very gratifying. We are
pleased with our ongoing financial strength as evidenced by our strong,
debt-free balance sheet. We continue to target active sectors of the
marketplace. Our quoting activity remains strong, and our sales force is seeing
positive customer interest in new projects. We continue to make technological
advancements that significantly optimize the productivity of our customers'
operations. We are also actively exploring strategic alternatives available to
the Company."
The Company will host a conference call to discuss these results on Wednesday,
May 12, 2004 at 11:00 a.m. ET. To participate in the call, please dial
800-862-9098 and ask for the Paragon Technologies teleconference. Simultaneous
with the conference call, an audio webcast of the call will be available via a
link on the Paragon website, www.ptgamex.com.
About Paragon Technologies
Paragon Technologies is a leader in integrating material handling systems and
creating automated solutions for material flow applications. Ermanco's branded
conveyor technologies and material handling solutions address the needs of the
distribution, assembly, and manufacturing marketplace. SI Systems' branded
technologies and material handling solutions address unit assembly handling and
order fulfillment applications. One of the top material handling systems
suppliers worldwide, Paragon's leading clients have included the United States
Postal Service, General Motors, IBM, BMG, DaimlerChrysler, Johnson & Johnson,
Ford, Peterbilt, Harley-Davidson, Walgreens, and Clark Equipment.
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Cautionary Statement. Certain statements contained herein are not based on
historical fact and are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and the Securities and Exchange
Commission rules, regulations and releases. Paragon intends that such
forward-looking statements be subject to the safe harbors created hereby. Among
other things, the forward-looking statements regard Paragon's earnings,
liquidity, financial condition, review of strategic alternatives, and other
matters. Words or phrases denoting the anticipated results of future events,
such as "anticipate," "does not anticipate," "should help to," "believe,"
"estimate," "is positioned," "expects," "may," "will," "is expected," "should,"
"continue," and similar expressions that denote uncertainty, are intended to
identify such forward-looking statements. Paragon's actual results, performance,
or achievements could differ materially from the results expressed in, or
implied by, such "forward-looking statements:" (1) as a result of factors over
which Paragon has no control, including the strength of domestic and foreign
economies, sales growth, competition, and certain cost increases; and (2) if the
factors on which Paragon's conclusions are based do not conform to its
expectations.
This press release and prior releases are available at www.ptgamex.com.
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PARAGON
TECHNOLOGIES Page 3
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Paragon Technologies, Inc.
Consolidated Balance Sheets
Selected Financial Data
(In Thousands, Except Ratio Information)
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March 31, 2004 December 31, 2003
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Cash and cash equivalents ............................... $ 5,371 5,591
Trade receivables, net .................................. $ 4,753 5,277
Inventories ............................................. $ 1,489 1,191
Current assets .......................................... $13,776 14,691
Current liabilities ..................................... 8,256 9,646
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Working capital ....................................... $ 5,520 5,045
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Current ratio ........................................... 1.67 1.52
Total assets ............................................ $32,815 33,774
Total stockholders' equity .............................. $22,310 21,969
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Paragon Technologies, Inc.
Consolidated Statements of Operations
Selected Financial Data
(In Thousands, Except Per Share Information)
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First Quarter Ended
March 31,
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2004 2003
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Net sales ................... $10,576 8,564
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Pre-tax earnings (See Note 1) $ 572 1,678
Income tax expense .......... 231 667
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Net earnings ................ $ 341 1,011
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Basic earnings per share .... $ .08 .24
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Diluted earnings per share .. $ .08 .23
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Paragon Technologies, Inc.
Supplemental Financial Information
Reconciliation of Net Earnings to EBITDA
(In Thousands)
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First Quarter Ended
March 31,
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2004 2003
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Net earnings........................... $ 341 1,011
Add: Income tax expense.............. 231 667
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Earnings before income taxes........... 572 1,678
Add: Interest expense................ - 218
Add: Depreciation and amortization
expense....................... 110 147
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EBITDA ................................ $ 682 2,043
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PARAGON
TECHNOLOGIES Page 4
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Note 1: The following table depicts selected financial data that impacted net
earnings for the periods indicated (dollars in thousands, except per
share information):
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First Quarter Ended
March 31,
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2004 2003
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Pre-tax earnings .................................. $572 1,678
Selected financial data impacting
pre-tax earnings:
Gain on the sale of Easton,
PA facility ..................................... -- 1,363
Restructuring credit from settlement
of pension obligations .......................... -- 170
Equity in income of joint venture ................. -- 162
Royalty income from joint venture ................. -- 83
Interest expense .................................. -- (218)
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Total of selected financial data
impacting pre-tax earnings ..................... -- 1,560
Pre-tax earnings adjusted
for the impact of the selected
financial data .................................. 572 118
Income tax expense ................................ 231 47
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Net earnings adjusted ............................. $341 71
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Basic earnings per share--
adjusted ........................................ $.08 .02
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Diluted earnings per share--
adjusted ........................................ $.08 .02
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