-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QxDDjJ+xq3F49BtHeAAVrM6nkV1miPlNSx7Jce1ptfI1G43I2F7aSLmdaB6mIxJD ERi4J1cnYc4xmB2tY2V+7g== 0000090045-03-000030.txt : 20031113 0000090045-03-000030.hdr.sgml : 20031113 20031113094344 ACCESSION NUMBER: 0000090045-03-000030 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030930 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARAGON TECHNOLOGIES INC CENTRAL INDEX KEY: 0000090045 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION, MINING & MATERIALS HANDLING MACHINERY & EQUIP [3530] IRS NUMBER: 221643428 STATE OF INCORPORATION: PA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15729 FILM NUMBER: 03995958 BUSINESS ADDRESS: STREET 1: 600 KUEBLER ROAD CITY: EASTON STATE: PA ZIP: 18040 -929 BUSINESS PHONE: 6102523205 MAIL ADDRESS: STREET 1: 600 KUEBLER RD CITY: EASTON STATE: PA ZIP: 18040-9295 FORMER COMPANY: FORMER CONFORMED NAME: SI HANDLING SYSTEMS INC DATE OF NAME CHANGE: 19920703 8-K 1 f8-k.txt FORM 8-K - EARNINGS RELEASE - SEPTEMBER 2003 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 13, 2003 PARAGON TECHNOLOGIES, INC. (Exact name of issuer as specified in charter) DELAWARE 1-15729 22-1643428 State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation or File Identification Organization) Number) Number) 600 KUEBLER ROAD EASTON, PENNSYLVANIA 18040 (Address of principal executive offices) (610) 252-3205 (Registrant's telephone number, including area code) Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit Number Description 99.1 Press Release dated November 13, 2003 announcing financial results for the third quarter and nine months ended September 30, 2003. Item 12. Results of Operations and Financial Condition. The information under this caption is furnished by Paragon Technologies, Inc. (the "Company") in accordance with Securities Exchange Commission Release No. 33-8216. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. On November 13, 2003, the Company issued a press release announcing its financial results for its third quarter and nine months ended September 30, 2003. A copy of the press release is filed herewith as Exhibit 99.1 and incorporated herein by reference. The press release contains a reference to EBITDA and provides a reconciliation of EBITDA to Net earnings on the face of the consolidated statements of operations. EBITDA is used by investors and analysts as an alternative to GAAP measures when evaluating the Company's performance in comparison to other companies. In order to fully assess our financial operating results, management believes that EBITDA is an appropriate measure of evaluating our operating performance, because it eliminates the effects of financing and accounting decisions. This measure is also significant to institutional lenders, and is considered an important internal benchmark of performance by the Company. EBITDA, which is earnings before interest, taxes, depreciation, and amortization, is computed by adding back interest expense, income tax expense, depreciation expense, and amortization expense to net earnings as reported. EBITDA should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the United States. EBITDA, as defined above, may not be comparable to similarly titled measures reported by other companies. Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. PARAGON TECHNOLOGIES, INC. Date: November 13, 2003 By: /s/ Leonard S. Yurkovic -------------------------------- Leonard S. Yurkovic President and CEO Exhibit Index Exhibit Number Description 99.1 Press Release dated November 13, 2003 announcing financial results for the third quarter and nine months ended September 30, 2003. EX-99 3 ex99-1.txt EXHIBIT 99.1 - EARNINGS RELEASE Exhibit 99.1 ------------ [PARAGON LETTERHEAD] News FOR: PARAGON TECHNOLOGIES, INC. CONTACTS: Len Yurkovic, President and CEO 610-252-3205 610-252-3102 (Fax) www.paragontechnologiesinc.com PARAGON TECHNOLOGIES REPORTS PROFITABLE 2003 THIRD QUARTER AND NINE MONTHS RESULTS - - - - - Paragon Eliminates Long-Term Debt and Strengthens Its Balance Sheet as It Marks Its Fourth Consecutive Quarter of Profitability EASTON, PA -- November 13, 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 third quarter and nine months ended September 30, 2003. Net earnings for the third quarter of 2003 rose to $2,412,000 or $.56 basic earnings per share, compared to a net loss of $(402,000) or $(.09) basic loss per share in the third quarter of 2002. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the third quarter of 2003 were approximately $4.4 million compared to $(236,000) for the third quarter of 2002. Sales for the third quarter of 2003 were approximately $8.7 million compared to sales of approximately $9.0 million in the third quarter of 2002. Sales for the first nine months of 2003 were $28.3 million compared to $29.7 million in the first nine months of 2002. Net earnings for the first nine months of 2003 were $4,041,000 or $.95 basic earnings per share, compared to net earnings of $64,000 or $.02 basic earnings per share for the first nine months of 2002. EBITDA for the first nine months of 2003 was $7.7 million compared to $1.4 million for the first nine months of 2002. During the first nine months of 2003, the Company received orders totaling approximately $29.5 million, and finished the third quarter ended September 30, 2003 with a backlog of orders of -- MORE -- - -------------------------------------------------------------------------------- 600 Kuebler Road o Easton, PA 18040-9295 Tel: 610-252-3205 o Fax: 610-252-3102 info@paragontechnologiesinc.com PARAGON TECHNOLOGIES Page 2 - -------------------------------------------------------------------------------- approximately $8.2 million, versus a $6.9 million backlog of orders at the end of the fourth quarter of 2002. Contributing to pre-tax earnings for the first nine months of 2003 was other income of $4,919,000 from the sale of the Company's ownership interest in the SI/BAKER joint venture for $5,600,000, other income of $1,363,000 from the sale of the Company's Easton, Pennsylvania facility for $2,925,000 and leaseback of 25,000 square feet of office space, and a restructuring credit of $170,000 pertaining to the final settlement of remaining pension obligations associated with the Company's terminated pension plan. Partially offsetting the favorable impact of the aforementioned items was the accrual of $1,020,000 for potential defense costs to vigorously defend the charges asserted by a competitor relating to the Company's intellectual property. Contributing to pre-tax earnings for the first nine months of 2002 was other income from the short-term licensing of real property of $300,000 and a gain on the sale of excess fixed assets of $94,000. Partially offsetting the favorable impact of the aforementioned items during 2002 were severance charges of $170,000. The Company continues to strengthen its Balance Sheet. During the third quarter of 2003, the Company prepaid $1.7 million of its bank debt and $2.0 million of its subordinated debt, thereby eliminating the Company's outstanding long-term debt. The current ratio remains strong at 1.53, while working capital approximates $5.3 million. The Company's tangible net worth rose to $4.6 million, versus tangible net worth of $172,000 at the end of the fourth quarter of 2002. Len Yurkovic, Paragon's President and Chief Executive Officer, commented, "Our profitable third quarter results mark the fourth consecutive quarter of profitability. The results for the nine months of the year and the third quarter are very gratifying. We are pleased with the increase in the level of orders at $29.5 million received during the first nine months of 2003 as compared to $26.2 million of orders received during the first nine months of 2002. We continue to target active sectors of the marketplace. Our quoting activity remains strong and maintaining an aggressive selling focus is a prime objective. We continue to make investments in our business as we explore all strategic alternatives available to the Company, with a primary objective of enhancement of shareholder value." The Company will host a conference call to discuss these results on Thursday, November 13, 2003 at 11:00 a.m. ET. To participate in the call, please dial 800-362-0574 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. PARAGON TECHNOLOGIES Page 3 - -------------------------------------------------------------------------------- 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 include the United States Postal Service, General Motors, IBM, BMG, DaimlerChrysler, Johnson & Johnson, Ford, Peterbilt, Harley-Davidson, Walgreens, and Clark Equipment. * * * - -------------------------- 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, and certain operational 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; (2) the amount of defense costs and the results of pending litigation related to Paragon's intellectual property; and (3) 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.paragontechnologiesinc.com. PARAGON TECHNOLOGIES Page 4 - -------------------------------------------------------------------------------- Paragon Technologies, Inc. Consolidated Balance Sheets Selected Financial Data (In Thousands)
- ----------------------------------------------------------------------------------------------------- September 30, 2003 December 31, 2002 - ----------------------------------------------------------------------------------------------------- Cash and cash equivalents............................... $ 7,145 5,385 Restricted cash......................................... - 865 ------ ------ Total cash and cash equivalents and restricted cash... $ 7,145 6,250 ------ ------ Trade receivables, net.................................. $ 4,569 4,285 Inventories............................................. $ 1,073 1,375 Current assets.......................................... $ 15,135 15,444 Current liabilities..................................... 9,871 9,472 ------ ------ Working capital....................................... $ 5,264 5,972 ------ ------ Total assets............................................ $ 34,228 36,703 Total long-term debt.................................... $ - 7,263 Total stockholders' equity.............................. $ 22,225 17,829 Less: Goodwill......................................... 17,657 17,657 ------ ------ Tangible Net Worth.................................... $ 4,568 172 ------ ------ - ----------------------------------------------------------------------------------------------------
Paragon Technologies, Inc. Consolidated Statements of Operations Selected Financial Data (In Thousands, Except Per Share Information)
- ------------------------------------------------------------------------------------------------------------------------ Third Quarter Ended Nine Months Ended September 30, September 30, - ------------------------------------------------------------------------------------------------------------------------ 2003 2002 2003 2002 --------------------------------- --------------------------------- Net sales.............................. $ 8,742 9,010 28,289 29,670 ======= ======= ====== ====== Pre-tax earnings (loss) (See Note 1)... $ 3,912 (669) 6,586 105 Income tax expense (benefit)........... 1,500 (267) 2,545 41 ------- ------- ------ ------ Net earnings (loss).................... $ 2,412 (402) 4,041 64 ======= ======= ====== ====== Basic earnings (loss) per share........ $ .56 (.09) .95 .02 ======= ======= ====== ====== Diluted earnings (loss) per share...... $ .55 (.09) .93 .01 ======= ======= ====== ====== - ------------------------------------------------------------------------------------------------------------------------
Paragon Technologies, Inc. Supplemental Financial Information Reconciliation of Net Earnings (Loss) to EBITDA (In Thousands)
- ------------------------------------------------------------------------------------------------------------------------ Third Quarter Ended Nine Months Ended September 30, September 30, - ------------------------------------------------------------------------------------------------------------------------ 2003 2002 2003 2002 --------------------------------- --------------------------------- Net earnings (loss).................... $ 2,412 (402) 4,041 64 Add: Income tax expense (benefit).... 1,500 (267) 2,545 41 ------ ------ ------ ------ Earnings (loss) before income taxes.... 3,912 (669) 6,586 105 Add: Interest expense................ 306 265 675 803 Add: Depreciation and amortization expense....................... 132 168 415 488 ------ ------ ------ ------ EBITDA $ 4,350 (236) 7,676 1,396 ====== ====== ====== ====== - ------------------------------------------------------------------------------------------------------------------------
PARAGON TECHNOLOGIES Page 5 - -------------------------------------------------------------------------------- Note 1: The following table depicts selected financial data that contributed to pre-tax earnings (loss) for the periods indicated (dollars in thousands):
- ------------------------------------------------------------------------------------------------------------------------ Third Quarter Ended Nine Months Ended September 30, September 30, - ------------------------------------------------------------------------------------------------------------------------ 2003 2002 2003 2002 --------------------------------- --------------------------------- Gain on the sale of SI/BAKER........... $ 4,919 - 4,919 - Gain on the sale of Easton, PA facility.......................... - - 1,363 - Restructuring credit from settlement of pension obligations............... - - 170 - Accrual for potential defense costs to vigorously defend charges asserted by a competitor relating to the Company's intellectual property................ (1,020) - (1,020) - Other income from the short-term licensing of real property........... - - - 300 Gain on the sale of excess fixed assets......................... - - - 94 Severance charges...................... - (170) - (170) ----- ----- ----- ----- Total of selected financial data impacting pre-tax earnings (loss)... $ 3,899 (170) 5,432 224 ===== ===== ===== ===== - ------------------------------------------------------------------------------------------------------------------------
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