-----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, PTzEYIdkdX1Dc6nbNkNX3FzxXQM0rixEMPl3sv7GreiavCeSrtnNBdpFLdG0t4/s oCiODWg/nir78GLzAdPoAA== 0000090045-05-000018.txt : 20050811 0000090045-05-000018.hdr.sgml : 20050811 20050811120709 ACCESSION NUMBER: 0000090045-05-000018 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050811 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050811 DATE AS OF CHANGE: 20050811 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: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15729 FILM NUMBER: 051015752 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 - 2Q05 EARNINGS RELEASE 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): August 11, 2005 PARAGON TECHNOLOGIES, INC. (Exact name of issuer as specified in charter) DELAWARE 1-15729 22-1643428 (State or Other (Commission (I.R.S. Employer Jurisdiction file Identification of Incorporation or number) Number) Organization) 600 KUEBLER ROAD EASTON, PENNSYLVANIA 18040 (Address of principal executive offices) (610) 252-3205 (Registrant's telephone number, including area code) Item 2.02. 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 August 11, 2005, the Company issued a press release announcing its financial results for its second quarter ended June 30, 2005. 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 U.S. generally accepted accounting principles. EBITDA, as defined above, may not be comparable to similarly titled measures reported by other companies. Item 9.01. Financial Statements and Exhibits (c) Exhibits Exhibit Number Description 99.1 Press Release dated August 11, 2005 announcing financial results for the second quarter ended June 30, 2005. 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: August 11, 2005 By: /s/ Leonard S. Yurkovic -------------------------------------------- Leonard S. Yurkovic President and CEO Exhibit Index Exhibit Number Description 99.1 Press Release dated August 11, 2005 announcing financial results for the second quarter ended June 30, 2005. EX-99 2 ex99-1.txt EXHIBIT 99.1 - EARNINGS RELEASE - 2Q05 Exhibit 99.1 ------------ [PARAGON LETTERHEAD] News FOR: PARAGON TECHNOLOGIES, INC. CONTACTS: Len Yurkovic, President and CEO 610-252-3205 610-252-3102 (Fax) www.ptgamex.com PARAGON TECHNOLOGIES REPORTS PROFITABLE SECOND QUARTER AND SIX MONTH RESULTS - - - - - Paragon Marks Its Sixth Consecutive Quarter of Profitability EASTON, PA -- August 11, 2005 -- Paragon Technologies, Inc. (AMEX:PTG), a leading supplier of "smart" material handling solutions, including systems, technologies, products and services, today announced results for the second quarter and six months ended June 30, 2005. Second Quarter Results - ---------------------- During the second quarter of 2005, the Company received orders totaling approximately $26.2 million, and finished the second quarter of 2005 with a backlog of orders of approximately $24.6 million, versus a $17.1 million backlog of orders at the end of the first quarter of 2005. Sales for the second quarter of 2005 were approximately $18.7 million compared to sales of approximately $9.6 million in the second quarter of 2004. Net earnings for the second quarter of 2005 were $709,000 or $.17 basic earnings per share, compared to net earnings of $129,000 or $.03 basic earnings per share in the second quarter of 2004. Earnings before interest expense, income taxes, depreciation and amortization expense ("EBITDA") for the second quarter of 2005 were approximately $1.2 million compared to $324,000 for the second quarter of 2004. The increase in net earnings was due to an increase in sales and gross profit on sales of $9,049,000 and $1,975,000, respectively, for the second quarter of 2005, primarily attributable to sales related to customers in the technology sector, when compared to the second quarter of 2004. Partially offsetting the favorable impact of the aforementioned increase in sales and gross profit on sales was an increase of $692,000 in selling, general and administrative expenses, -- MORE -- - -------------------------------------------------------------------------------- 600 Kuebler Road o Easton, PA 18040-9295 Tel: 610-252-3205 o Fax: 610-252-3102 www.ptgamex.com [LOGO] PARAGON TECHNOLOGIES Page 2 - -------------------------------------------------------------------------------- primarily attributable to the addition of resources aimed at expanding the customer base and an increase in salaries and fringe benefits, an increase in expenses related to revenue and profit performance, and bad debt expense for accounts receivable recognized as potentially uncollectible. Also, unfavorably impacting net earnings for the second quarter of 2005 were Ermanco subsidiary divestiture costs of $527,000 which represented transaction expenses associated with professional fees incurred in connection with the sale of substantially all of the assets and liabilities of Ermanco. First Half Results - ------------------ During the first half of 2005, the Company received orders totaling approximately $42.4 million. Sales for the first half of 2005 rose to $29.0 million compared to sales of $20.2 million in the first half of 2004. Net earnings for the first half of 2005 were $903,000 or $.21 basic earnings per share, compared to net earnings of $470,000 or $.11 basic earnings per share in the first half of 2004. Earnings before interest expense, income taxes, depreciation and amortization expense ("EBITDA") for the first half of 2005 were approximately $1.6 million compared to approximately $1.0 million for the first half of 2004. The increase in net earnings was due to an increase in sales and gross profit on sales of $8,781,000 and $1,957,000, respectively, for the first half of 2005, primarily attributable to sales related to customers in the technology sector, when compared to the first half of 2004. Partially offsetting the favorable impact of the aforementioned increase in sales and gross profit on sales was an increase of $978,000 in selling, general and administrative expenses, primarily attributable to the addition of resources aimed at expanding the customer base and an increase in salaries and fringe benefits, an increase in expenses related to revenue and profit performance, and bad debt expense for accounts receivable recognized as potentially uncollectible. Also, unfavorably impacting net earnings for the second quarter of 2005 were Ermanco subsidiary divestiture costs of $527,000 which represented transaction expenses associated with professional fees incurred in connection with the sale of substantially all of the assets and liabilities of Ermanco. The Company ended the second quarter with a strong balance sheet. As of June 30, 2005, the current ratio remains strong at 1.63, while working capital approximates $8.0 million. As previously reported, upon receiving stockholder approval at a Special Meeting of Stockholders held on August 3, 2005, the closing of the sale of substantially all of the assets and liabilities of Ermanco occurred on August 5, 2005. Per the terms of the Asset Purchase Agreement, the buyer paid the Company cash in the amount of approximately $23 million (subject to a working capital adjustment) and assumed certain liabilities of Ermanco, as more fully described in the Asset Purchase Agreement, a copy of which was filed with the Securities and Exchange Commission on July 1, 2005. The Committee on Strategic Alternatives of the Board of Directors will continue to pursue strategies intended to maximize stockholder value. [LOGO] PARAGON TECHNOLOGIES Page 3 - -------------------------------------------------------------------------------- Len Yurkovic, Paragon's President and Chief Executive Officer, commented, "The results for the second quarter of 2005 mark the sixth consecutive quarter of profitability for Paragon. We are extremely proud to be reporting higher sales and earnings and also a strong balance sheet. By utilizing our broad applications expertise and unique capabilities, we continue to provide "smart" automation to meet the needs of our clients. In addition, we continually strive to utilize our sophisticated technologies to provide creative solutions to improve productivity, safety, and accuracy for our customers in the material handling marketplace." The Company will host a conference call to discuss these results on Thursday, August 11, 2005 at 11:00 a.m. EDT. To participate in the call, please dial 800-862-9098 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.ptgamex.com. About Paragon Technologies Paragon Technologies is a leader in integrating material handling systems and creating automated solutions for material flow applications. SI Systems' Production & Assembly and Order Fulfillment branded technologies and material handling solutions address unit assembly handling and order fulfillment applications. One of the top material handling systems suppliers worldwide, SI Systems leading clients have included the United States Postal Service, General Motors, BMG, Ford, Peterbilt, Harley-Davidson, and Walgreens. * * * - ------------------------------- 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, review of strategic alternatives, and other 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.ptgamex.com. [LOGO] PARAGON TECHNOLOGIES Page 4 - -------------------------------------------------------------------------------- Paragon Technologies, Inc. Consolidated Balance Sheets Selected Financial Data (In Thousands, Except Ratio Information)
- ----------------------------------------------------------------------------------------------------------- June 30, 2005 December 31, 2004 - ----------------------------------------------------------------------------------------------------------- Cash and cash equivalents................. $ 4,626 3,602 Trade receivables, net.................... $ 11,510 5,756 Inventories............................... $ 2,628 1,616 Current assets............................ $ 20,871 13,802 Current liabilities....................... 12,830 6,908 ---------------------- --------------------- Working capital...................... $ 8,041 6,894 ---------------------- --------------------- Current ratio............................. 1.63 2.00 Total assets.............................. $ 39,860 32,705 Total stockholders' equity................ $ 24,380 23,308 - -----------------------------------------------------------------------------------------------------------
Paragon Technologies, Inc. Consolidated Statements of Operations Selected Financial Data (In Thousands, Except Per Share Information)
- ----------------------------------------------------------------------------------------------------------- Second Quarter Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 2005 2004 2005 2004 ------------- ------------- ------------- ------------- Net sales........................... $ 18,687 9,638 28,995 20,214 ============= ============= ============= ============= Pre-tax earnings.................... $ 1,098 220 1,405 792 Income tax expense.................. $ 389 91 502 322 ------------- ------------- ------------- ------------- Net earnings........................ $ 709 129 903 470 ============= ============= ============= ============= Basic earnings per share............ $ .17 .03 .21 .11 ============= ============= ============= ============= Diluted earnings per share.......... $ .16 .03 .21 .11 ============= ============= ============= ============= - -----------------------------------------------------------------------------------------------------------
Paragon Technologies, Inc. Supplemental Financial Information Reconciliation of Net Earnings to EBITDA (In Thousands)
- ----------------------------------------------------------------------------------------------------------- Second Quarter Ended Six Months Ended, June 30, June 30, ------------------------------ ------------------------------ 2005 2004 2005 2004 ------------- ------------- ------------- ------------- Net earnings......................... $ 709 129 903 470 Add: Income tax expense............ 389 91 502 322 ------------- ------------- ------------- ------------- Earnings before income taxes......... 1,098 220 1,405 792 Add: Interest expense.............. - - 1 - Add: Depreciation and amortization expense.......... 121 104 234 214 ------------- ------------- ------------- ------------- EBITDA $ 1,219 324 1,640 1,006 ============= ============= ============= ============= - -----------------------------------------------------------------------------------------------------------
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