-----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, NpMvp0M6I1dftRn9TTXHZDpgS6TiknD9ZB+5u94/ndSy2KFkuZy5JpdXrEk6Amij ugZENj1f5JyS6Nl71P8Pmw== 0000090045-04-000011.txt : 20040329 0000090045-04-000011.hdr.sgml : 20040329 20040329171538 ACCESSION NUMBER: 0000090045-04-000011 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040317 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040329 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: 04697110 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 - MARCH 2004 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): March 17, 2004 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 March 17, 2004 announcing financial results for the fourth quarter and year ended December 31, 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 March 17, 2004, the Company issued a press release announcing its financial results for its fourth quarter and year ended December 31, 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: March 29, 2004 By: /s/ Leonard S. Yurkovic ------------------------------------------------- Leonard S. Yurkovic President and CEO Exhibit Index Exhibit Number Description 99.1 Press Release dated March 17, 2004 announcing financial results for the fourth quarter and year ended December 31, 2003. EX-99 3 ex99-1.txt EXHIBIT NUMBER 99.1 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 FOURTH QUARTER AND YEAR-END RESULTS TOGETHER WITH IMPROVED BALANCE SHEET AND STRONGER BACKLOG OF ORDERS - - - - - EASTON, PA -- March 17, 2004 -- 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, 2003. Fourth Quarter Results - ---------------------- Sales for the fourth quarter of 2003 were approximately $9.0 million compared to sales of approximately $8.6 million in the fourth quarter of 2002. Net loss for the fourth quarter of 2003 was $(256,000) or $(.06) basic loss per share, compared to net earnings of $599,000 or $.14 basic earnings per share in the fourth quarter of 2002. Primarily excluding settlement and legal costs and severance charges, net of the restructuring credit, the Company posted net earnings of $196,000 or $.05 basic earnings per share. Primarily excluding the restructuring credit from the settlement of pension obligations, the fourth quarter 2002 net loss was $(36,000) or $(.01) basic loss per share. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the fourth quarter of 2003 were approximately $(319,000) compared to $1.2 million for the fourth quarter of 2002. Contributing to the pre-tax loss for the fourth quarter of 2003 were severance charges of $293,000, net of a $94,000 restructuring credit, and settlement and legal costs of $355,000 associated with an action against the Company by a competitor relating to the Company's intellectual property. Contributing to pre-tax earnings for the fourth quarter of 2002 was a restructuring credit of $859,000 pertaining to the partial settlement of pension obligations associated with the Company's terminated pension plan. -- MORE -- - -------------------------------------------------------------------------------- 600 Kuebler Road o Easton, PA 18040-9295 Tel: 610-252-3205 o Fax: 610-252-3102 www.paragontechnologiesinc.com PARAGON TECHNOLOGIES Page 2 - -------------------------------------------------------------------------------- Full Year Results - ----------------- Sales for fiscal 2003 were $37.3 million compared to $38.2 million for fiscal 2002. Net earnings for fiscal 2003 were $3,785,000 or $.89 basic earnings per share, compared to net earnings of $663,000 or $.16 basic earnings per share for fiscal 2002. Excluding the gain on the sale of SI/BAKER, the gain on the sale of the Easton, PA facility, settlement and legal costs, and severance charges, net of restructuring credits, the Company posted net earnings for 2003 of $880,000 or $.21 basic earnings per share. Excluding the restructuring credit from the settlement of pension obligations, severance charges, and short-term rental income, 2002 net loss was $(53,000) or $(.01) basic loss per share. EBITDA for fiscal 2003 was $7.4 million compared to $2.6 million for fiscal 2002. Contributing to pre-tax earnings for fiscal 2003 was income of $4,901,000 from the sale of the Company's ownership interest in the SI/BAKER joint venture for $5,600,000, 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 restructuring credits of $264,000 pertaining to the final settlement of remaining pension obligations associated with the Company's terminated pension plan and the reversal of a previously established severance accrual that was no longer required. Partially offsetting the favorable impact of the aforementioned items were severance charges of $387,000, and settlement and legal costs of $1,375,000 associated with an action against the Company by a competitor relating to the Company's intellectual property. Contributing to pre-tax earnings for fiscal 2002 was a restructuring credit of $859,000 pertaining to the partial settlement of pension obligations associated with the Company's terminated pension plan, and other income of $300,000 from the short-term rental of certain real property. Partially offsetting the favorable impact of the aforementioned items were severance charges of $154,000. During fiscal 2003, the Company received orders totaling approximately $40.9 million, and finished the year ended December 31, 2003 with a backlog of orders of approximately $10.5 million, versus a $6.9 million backlog of orders at the end of the fourth quarter of 2002. The Company ended the year with a much stronger Balance Sheet. During fiscal 2003, the Company repaid $5.7 million of its bank debt and $3.0 million of its subordinated debt, thereby eliminating the Company's outstanding long-term debt. The current ratio remains strong at 1.52 while working capital approximates $5.0 million. Len Yurkovic, Paragon's President and Chief Executive Officer, commented, "The results for fiscal 2003 are very gratifying. We are pleased with our strong, debt-free balance sheet. The swift conclusion of the Company's intellectual property litigation removes the uncertainty of PARAGON TECHNOLOGIES Page 3 - -------------------------------------------------------------------------------- litigation outcome and its possible adverse effects on future performance, and it also eliminates the time, inconvenience, and distraction of protracted litigation. We are also pleased with the increase in the level of orders at $40.9 million received during fiscal 2003 as compared to $31.8 million of orders received during fiscal 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. Aggressive internal development and close monitoring of technology changes in our industry are in place as is the exploration of all strategic alternatives available to the Company, with a primary objective of enhancement of shareholder value." In other news, Gilman Hallenbeck resigned as a Director of the Company. Len Yurkovic expressed the Company's appreciation for his contributions to the Company. The Company will host a conference call to discuss these results on Wednesday, March 17, 2004 at 11:00 a.m. ET. To participate in the call, please dial 800-894-5910 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 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; and (2) 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)
- ----------------------------------------------------------------------------------------------------- December 31, 2003 December 31, 2002 - ----------------------------------------------------------------------------------------------------- Cash and cash equivalents............................... $ 5,591 5,385 Restricted cash......................................... - 865 ------ ------ Total cash and cash equivalents and restricted cash... $ 5,591 6,250 ------ ------ Trade receivables, net.................................. $ 5,277 4,285 Inventories............................................. $ 1,191 1,375 Current assets.......................................... $ 14,691 15,444 Current liabilities..................................... 9,646 9,472 ------ ------ Working capital....................................... $ 5,045 5,972 ------ ------ Total assets............................................ $ 33,774 36,703 Total long-term debt.................................... $ - 7,263 Total stockholders' equity.............................. $ 21,969 17,829 - -----------------------------------------------------------------------------------------------------
Paragon Technologies, Inc. Consolidated Statements of Operations Selected Financial Data (In Thousands, Except Per Share Information)
- ------------------------------------------------------------------------------------------------------------------------ Fourth Quarter Ended Year Ended December 31, December 31, - ------------------------------------------------------------------------------------------------------------------------ 2003 2002 2003 2002 --------------------------------- --------------------------------- Net sales.............................. $ 9,006 8,554 37,295 38,224 ====== ====== ====== ====== Pre-tax earnings (loss) (See Note 1)... $ (377) 825 6,209 930 Income tax expense (benefit)........... (121) 226 2,424 267 ------ ------ ------ ------ Net earnings (loss).................... $ (256) 599 3,785 663 ====== ====== ====== ====== Basic earnings (loss) per share........ $ (.06) .14 .89 .16 ====== ====== ====== ====== Diluted earnings (loss) per share...... $ (.06) .13 .87 .15 ====== ====== ====== ====== - ------------------------------------------------------------------------------------------------------------------------
Paragon Technologies, Inc. Supplemental Financial Information Reconciliation of Net Earnings (Loss) to EBITDA (In Thousands) - ------------------------------------------------------------------------------------------------------------------------ Fourth Quarter Ended Year Ended December 31, December 31, - ------------------------------------------------------------------------------------------------------------------------ 2003 2002 2003 2002 --------------------------------- --------------------------------- Net earnings (loss).................... $ (256) 599 3,785 663 Add: Income tax expense (benefit).... (121) 226 2,424 267 ------ ------ ------ ------ Earnings (loss) before income taxes.... (377) 825 6,209 930 Add: Interest expense................ 1 243 676 1,046 Add: Depreciation and amortization expense....................... 57 173 472 661 ------ ------ ------ ------ EBITDA $ (319) 1,241 7,357 2,637 ====== ====== ====== ====== - -------------------------------------------------------------------------------------------------------------------------
PARAGON TECHNOLOGIES Page 5 - -------------------------------------------------------------------------------- Note 1: The following table depicts selected financial data that impacted net earnings (loss) for the periods indicated (dollars in thousands):
- ------------------------------------------------------------------------------------------------------------------------ Fourth Quarter Ended Year Ended December 31, December 31, - ------------------------------------------------------------------------------------------------------------------------ 2003 2002 2003 2002 --------------------------------- --------------------------------- Pre-tax earnings (loss)................ $ (377) 825 6,209 930 Selected financial data impacting pre-tax earnings (loss): Gain (loss) on the sale of SI/BAKER............................. (18) - 4,901 - Gain on the sale of Easton, PA facility.......................... - - 1,363 - Restructuring credits from settlement of pension obligations and reversal of previously established severance accrual.................... 94 859 264 859 Settlement and legal costs associated with an action against the Company by a competitor relating to the Company's intellectual property...... (355) - (1,375) - Other income from the short-term rental of real property.............. - - - 300 Severance credits (charges)............ (387) 16 (387) (154) ----- ----- ------ ----- Total of selected financial data impacting pre-tax earnings (loss)... (666) 875 4,766 1,005 ----- ----- ----- ----- Pre-tax earnings (loss) adjusted for the impact of the selected financial data....................... 289 (50) 1,443 (75) Income tax expense (benefit)........... 93 (14) 563 (22) ----- ----- ------ ----- Net earnings (loss) adjusted........... $ 196 (36) 880 (53) ===== ===== ====== ===== Basic earnings (loss) per share-- adjusted............................. $ .05 (.01) .21 (.01) ===== ===== ====== ===== Diluted earnings (loss) per share-- adjusted............................. $ .04 (.01) .20 (.01) ===== ===== ====== ===== - ------------------------------------------------------------------------------------------------------------------------
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