DGAP-News: paragon increases revenue and profit DGAP-News:

DGAP-News: paragon AG / Key word(s): Half Year Results paragon increases revenue and profit 21.08.2013 / 08:23 --------------------------------------------------------------------- Revenue up by 16.2% compared to Q1/2013 Significant earnings improvement in Q2/2013 Placement of bond in difficult financial market Delbrück, August 21, 2013 - In the first six months of 2013, paragon AG reported revenue of EUR 35.7 million (H1 2012: EUR 37.6 million) and is thus meeting its targets. The exchange-listed direct supplier to the automotive industry was able to confirm its upward trend in the second quarter of 2013 in which the Company's revenue of EUR 19.2 million surpassed that of the second quarter of 2012 (EUR 18.7 million). Although European sales are also lower for the customers of paragon, the Delbrück-based firm was able to continue its growth path. 'A steady improvement has been evident since the fourth quarter of 2012. We have clearly regained ground and have not been infected by the crisis rumors of many market observers. The Company's development in the first six months of 2013 has confirmed our predictions in full,' said CEO Klaus Dieter Frers. Compared to the first quarter of this year, paragon increased sales in the months April to June by 16.2%. In the Annual General Meeting on May 15, 2013, the Managing Board had predicted growth of more than 15%. Through active cost management, the Company succeeded in achieving better-than- expected earnings figures overall in the first six months of 2013. Compared to the first quarter of 2013, in the second quarter of 2013 paragon recorded a significant upswing in EBIT (to EUR 2.0 million, up from EUR 0.9 million) and in EBITDA (to EUR 3.1 million, up from EUR 2.0 million). In the first six months of 2013, the Company reported EBIT of EUR 2.9 million (H1 2012: EUR 5.0 million) and EBITDA of EUR 5.1 million (H1 2012: EUR 7.2 million). The EBIT margin in the first six months of 2013 came to 8.3% (H1 2012: 13.2%); the EBITDA margin was 14.3% (H1 2012: 19.2%). paragon once again improved its equity position. As of June 30, 2013, the equity-to-assets ratio rose to 31.7% (June 30, 2012: 31.4%). Free cash flow on the reporting date June 30, 2013 was EUR 5.5 million (June 30, 2012: EUR 10.8 million), primarily due to the distributions for 2011 and 2012, higher tax payments that also impacted prior years as well as capital expenditure. For the same reasons, net debt came to EUR 8.9 million (June 30, 2012: EUR 2.5 million). Interest-bearing liabilities came to EUR 14.4 million (June 30, 2012: EUR 13.4 million). paragon managed to achieve a turnaround with regard to operating cash flow in the second quarter of 2013. Following a still negative result in the first quarter of 2013 (EUR -1.1 million), the Company in Q2 2013 generated a positive cash flow from operating activities amounting to EUR 0.7 million. In the first six months of 2013, the operating cash flow reached a value of EUR -0.4 million (H1 2012: EUR 4.1 million) in response to an increase in tax payments of EUR 0.5 million as compared to H1 2012 as well as an increase in trade receivables of EUR 0.8 million and a reduction in current liabilities of EUR 1.1 million. For the period January 1 to June 30, 2013, paragon recorded net income in accordance with IFRS of EUR 1.8 million (H1 2012: EUR 3.6 million). This resulted in earnings per share of EUR 0.43 (H1 2012: EUR 0.88). On a positive note, the second quarter accounted for the major portion of the net income (EUR 1.3 million), which confirms the planned upward trend throughout the year. As of June 30, 2013 paragon AG employed 377 staff and 46 temporary staff in Germany. Compared to the prior-year reporting date (June 30, 2012: 378 including 60 temporary staff), the total number of employees decreased slightly, due in particular to the reduction in temporary staff. Compared to the prior-year quarter (March 31, 2013: 382 employees including 43 temporary staff), the total number of employees remained nearly constant. The locations accounted for the following figures (staff/temporary staff) as of June 30, 2013: Delbrück (94/1), Suhl (202/44), Nuremberg (28/1), and St. Georgen (53/0). In June 2013 paragon issued a corporate bond with a fixed annual interest rate of 7.25% and a term of five years. In light of the extremely difficult market conditions in the financial markets on the date of issue, the Managing Board evaluated the placement volume of EUR 10.0 million as satisfactory, even if only half of the originally planned volume could be placed. The lower-than-expected proceeds raised will have an impact on the number and size of the acquisitions to be financed with these proceeds. The Managing Board is in discussion with various companies that would fit well with the current business segments of paragon. There is the prospect that individual acquisition projects may be successfully concluded by year-end 2013. The lower-than-expected proceeds of the bond issue do not have an impact on other future projects, since the bond was not intended as an instrument to be used for current business. To strengthen the Body Works Kinematics business segment, paragon exercised the call option to acquire KarTec GmbH, Forchheim (3 own workers and 2 temporary staff members) on July 29, 2013. No other liquid assets were used for this acquisition. The significant double-digit growth in sales and the positive trend of the earnings figures in the second quarter leads the Managing Board to reaffirm its forecast for fiscal 2013. Overall, the Company's management expects 5% growth in revenue as in 2012 as well as a stable EBIT margin. CEO Klaus Dieter Frers sees the further development in 2013 as positive: 'Due to the plant holidays of the manufacturers, we expect, as planned, a slight decline in sales in the third quarter of this year compared to the previous quarter. From the end of the third quarter, the start of several new products - including some in the newer business segments of Body Works Kinematics and Electromobility - will lead to further increases in sales.' Portrait Listed in the Prime Standard segment of the German Stock Exchange in Frankfurt, paragon AG develops, produces and markets innovative solutions in the field of automotive electronics. The portfolio of the direct supplier to the automotive industry includes products in the business segments sensors, acoustics, cockpit, electromobility and body works kinematics. An outstanding product is the air quality sensor AQS which is by far the world market leader. In addition to its headquarters in Delbrück (North Rhine-Westfalia), paragon maintains branches in Suhl (Thuringia), Nuremberg (Bavaria) and St. Georgen (Baden-Württemberg) and a sales office in Shanghai (China). Contact 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.ag E-Mail: info@paragon.ag Contact for local press Matthias Hack Tel.: +49 (0) 52 50 - 97 62-141 Mobile: +49 (0) 162 1010724 Fax: +49 (0) 52 50 - 97 62-60 E-Mail: matthias.hack@paragon.ag Contact for financial press / investor relations Stockheim Media GmbH Michael Knecht Tel.: +49 (0) 89 - 200 315 73 Fax: +49 (0) 89 - 813 030 23 E-Mail: mk@stockheim-media.com End of Corporate News --------------------------------------------------------------------- 21.08.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: paragon AG Schwalbenweg 29 33129 Delbrück Germany Phone: +49 (0)5250 97 62 - 0 Fax: +49 (0)5250 97 62 - 60 E-mail: investor@paragon.ag Internet: www.paragon.ag ISIN: DE0005558696, DE000A1TND93 WKN: 555869, A1TND9 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 226755 21.08.2013