PARAGON TECHNOLOGIES REPORTS PROFITABLE 2002 FOURTH QUARTER AND FISCAL YEAR RESULTS
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Paragon Continues to Reduce Bank Debt and Strengthen Its Balance Sheet

EASTON, PA — March 20, 2003 -- Paragon Technologies, Inc. (AMEX: PTG), a leading supplier of "smart" material handling solutions, including systems, technologies, products and services, today announced results for the fourth quarter and year ended December 31, 2002.

Net earnings for the fourth quarter of 2002 totaled $599,000 or $.14 basic earnings per share, compared to net earnings of $151,000 or $.04 basic earnings per share in the fourth quarter of 2001. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the fourth quarter of 2002 were approximately $1.24 million compared to $620,000 for the fourth quarter of 2001. Sales for the fourth quarter of 2002 were approximately $8.6 million compared to sales of approximately $11.8 million in the fourth quarter of 2001. The backlog of orders was approximately $6.9 million at the end of the fourth quarter of 2002, versus $9.8 million at the end of the third quarter of 2002.

Net earnings for fiscal 2002 totaled $663,000 or $.16 basic earnings per share, compared with a net loss of approximately $62,000 or $.01 basic loss per share for fiscal 2001. EBITDA for fiscal 2002 was approximately $2.64 million compared to $2.15 million for fiscal 2001. Sales for fiscal 2002 were approximately $38.2 million compared to sales of approximately $50.8 million for fiscal 2001.

Contributing to pre-tax earnings for fiscal 2002 was other income from the licensing of real property during the first half of 2002 of $300,000 and a gain on the sale of excess fixed assets, primarily during the first quarter of 2002 of $91,000, a restructuring credit during the fourth quarter of 2002 of $859,000 pertaining to the partial settlement of pension obligations associated with the Company's terminated pension plan, and the application of a recent accounting pronouncement, whereby goodwill is no longer amortized, thereby resulting in an increase to pre-tax earnings of $468,000. Partially offsetting the favorable impact of the aforementioned items were severance charges of $154,000. Contributing to the pre-tax loss for fiscal 2001 were restructuring charges of $1,538,000, severance charges of $259,000, and $310,000 of charges related to a strategic transaction that was not completed.

The Company continues to strengthen its Balance Sheet. During the fourth quarter of 2002, the Company's bank debt was reduced to $5,700,000, and the cash balance was bolstered by a $400,000 cash dividend received from the SI/BAKER joint venture.

Bill Johnson, Paragon's President and Chief Executive Officer, commented, "Paragon Technologies is positioned well to achieve profitable growth when the economy recovers strength. While our customers experienced continued delays in placing orders in the fourth quarter, bookings have strengthened since year-end. We continue to make investments in product development, sales, and marketing. Our objective is to maximize shareholder value."

The Company will host a conference call to discuss these results on Thursday, March 20, 2003 at 11:00 a.m. EST. To participate in the call, please dial 800-903-0247 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.paragontechnologiesinc.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.

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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.

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Paragon Technologies, Inc.

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