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PARAGON TECHNOLOGIES' REPORTS 2001 THIRD QUARTER AND NINE MONTHS RESULTS

EASTON, PA - November 12, 2001 -- Paragon Technologies, Inc. (AMEX: PTG), a leading deliverer of "smart" materials handling solutions, including systems, technologies, products and services, today announced results for the third quarter and nine months ended September 30, 2001.

Despite the effects of continued economic sluggishness, net earnings for the third quarter of 2001 totaled $469,000, or $0.11 basic earnings per share, compared to net earnings of $848,000, or $0.20 basic earnings per share, in the third quarter of 2000. EBITDA for the third quarter of 2001 was approximately $1.47 million. Sales for the third quarter of 2001 were approximately $12.8 million compared to sales of approximately $13.5 million in the third quarter of 2000. Order backlog, which was impacted by the soft economy and delays associated with the tragic events of September 11, 2001, was approximately $16.5 million at the end of the third quarter of 2001.

Excluding restructuring and special charges of $1.87 million taken during the second quarter of 2001, EBITDA for the first nine months of 2001 was approximately $3.40 million, pre-tax earnings totaled $1.50 million, and basic earnings per share were approximately $0.21.

Net loss for the first nine months of 2001 totaled $212,000, or $0.05 basic loss per share, compared with net earnings of approximately $2.4 million, or $0.57 basic earnings per share for the first nine months of 2000. Sales for the first nine months of 2001 were approximately $38.9 million compared to sales of approximately $48.5 million for the first nine months of 2000.

Bill Johnson, Paragon's Chief Executive Officer, commented, "Paragon's profitable third quarter results reflect important steps taken during the second quarter to consolidate the Company and improve our cost structure. While we are disappointed with the continued weakness of the economy and its impact on our customers' ability to place orders for materials handling systems, there have been no major cancellations to date and we have been successful in expanding our existing client base into related industries. In fact, we have gained market share in our SI Systems and Ermanco brands. We are confident that Paragon is well positioned to achieve enhanced and sustained profitability when economic conditions recover. We continue to invest in marketing and product development to find new applications and innovations for our industry-leading technologies and remain focused on executing our strategy to increase profitability and enhance value for all shareholders."

As previously announced on August 10, 2001, Paragon's board of directors is in the process of reincorporating the Company from Pennsylvania to Delaware. A Special Meeting of Paragon's shareholders has been scheduled for December 6, 2001 to vote on the reincorporation.

The Company will host a conference call to discuss these results on Monday, November 12, 2001 at 12:00 noon EST. To participate in the call, please dial 800-263-9150 and ask for the Paragon Technologies teleconference. International participants should dial 212-676-5395. Simultaneous with the conference call, an audio web cast 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 materials 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. Paragon Technologies' Quality Management System at its Easton, Pennsylvania location is certified to the ISO 9001 standard. The scope of the Quality Management System governs the design, manufacture, assembly, installation, and servicing of automated materials handling and distribution systems. One of the top materials handling systems suppliers worldwide, Paragon's leading clients include the United States Postal Service, General Motors, IBM, BMG, Daimler Chrysler, Johnson & Johnson, Ford, Peterbilt, Harley-Davidson, Walgreens, and Clark Equipment.


Certain statements contained herein are not based on historical fact and are to be viewed as "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words or phrases used in this News Release denoting the anticipated results of future events, such as " believe," "affords us," "grow," "will be," "will spur additional opportunities," and similar expressions that denote optimism and uncertainty, are intended to identify such forward-looking statements. SI Handling's actual results, performance, or achievements could differ materially from the results expressed in, or implied by, such "forward-looking statements" if the factors on which their conclusions are based do not conform to their expectations.