Packaging

Paragon Technologies Reports 2008 Fourth Quarter and Year-End Results

Wednesday 18. March 2009 - Paragon Technologies, Inc. (NYSE Alternext US: PTG), a leading supplier of "smart" material handling systems and "software-driven" warehouse and distribution center solutions, today announced results for the fourth quarter and year ended December 31, 2008.

During the fourth quarter ended December 31, 2008, the Company had a net loss of $83,000 or $.04 loss per share on sales of $3.8 million, compared to a net loss of $58,000 or $.02 loss per share on sales of $4.5 million during the fourth quarter ended December 31, 2007.

During the year ended December 31, 2008, the Company had a net loss of $687,000 or $.28 loss per share on sales of $16.7 million, compared to net income of $341,000 or $.12 earnings per share on sales of $21.4 million during the year ended December 31, 2007.

The net loss for the year ended December 31, 2008 was primarily the result of a decline in sales attributable to the economic slowdown along with the establishment of a valuation allowance applied against net deferred tax assets, a provision related to an allowance for doubtful accounts associated with a possible uncollectible receivable, and severance costs pertaining to the reduction of employees.

During the year ended December 31, 2008, the Company repurchased 980,463 shares of common stock at a weighted average cost, including brokerage fees, of $4.66 per share. As of December 31, 2008, $3,316,668 remained available for repurchases from the $22,000,000 stock repurchase program.

Len Yurkovic, Acting CEO of Paragon Technologies, commented, “We are disappointed in our fourth quarter and year-end results as the sluggish economy continues to impact our business and cause our customers to delay projects. Despite the decline in sales, we continue to maintain a strong focus on improving gross profit margins and reducing expenses. With this in mind, as part of a cost-reduction initiative, we recently reduced our workforce by approximately 10%. We expect to be on track once economic conditions improve.”

Paragon’s SI Systems’ branded technologies drive productivity at Fortune 1000 companies and the United States Government.