paragon on the up: renewed vigor, powerful ideas
- Forecast for 2010: €58 million in revenue , €7.5 million operating EBITDA
- Product innovations: opportunities for new drive systems
- Deferred financial reports and shareholders' meeting by the autumn
'Renewed vigor, powerful ideas', that is the motto under which paragon AG is getting ready for its postinsolvency phase. Expanding its established portfolio, the company plans to exploit and shape the trend towards new automotive drive systems using research carried out during its period of crisis. Chief Executive Officer Klaus Dieter Frers predicts positive financial results for 2010: revenue of €58 million and a positive operating free cashflow in the millions. paragon AG expects earnings adjusted by restructuring costs and costs of the insolvency proceeding (operating EBITDA) in the amount of €7.5 million. Taking into consideration the extraordinary expenses, positive EBIT/EBT figures are likely to be possible in 2010, according to Board statement.
The company got into difficulties at the end of 2008, in the wake of the worldwide crisis in the financial and automotive industries. After extensive restructuring, paragon was generating an operating profit again from the second quarter of 2009, but the company was still unable to reach an agreement with the banks. Consequently, the Board of Directors deliberately initiated an insolvency plan procedure on October 5, 2009. As positive developments continued at paragon over the following months, an overwhelming majority of the creditors finally approved the insolvency plan on April 16, 2010. After the current technical phase to complete the procedure, the company looks set to emerge from insolvency on June 1, 2010.
In future, paragon will be concentrating fully on its successful role as an innovative supplier to the automotive industry. The company is active in seven product areas: air quality, drive systems, acoustics and cockpit systems, stepper motors, media interfaces and control systems. Production will remain in Suhl (Thuringia) and St. Georgen (Baden-Württemberg). In addition, paragon will focus on electronic solutions for new drive systems: the company will be launching its first products for hybrid vehicles and emobility in the first half of this year.
Overall, paragon currently employs 321 people at its four sites in Germany: 56 in Delbrück, 189 in Suhl, 50 in St. Georgen and 26 in Nuremberg. Due to a significant increase in demand from automotive manufacturers, the company has already started to recruit new staff at its sites in Delbrück (financial control, development) and Nuremberg (development, production).
"The most important message to our shareholders is that paragon shares have retained their intrinsic value due to the successful insolvency plan procedure", stresses Frers. The company aims to consolidate its position in Deutsche Börse's Prime Standard segment with positive results in 2010. The deferred financial reports for 2008 and 2009 will be provided in several stages. The company will be reporting on both of those years and on the short financial year for the period when insolvency proceedings opened at a financial statements press conference in August and at a General Shareholders' Meeting in the autumn. The company will return to the standard reporting period (calendar year) on January 1, 2011.
About paragon AG
Listed in the Prime Standard segment of Deutsche Börse in Frankfurt am Main, paragon AG develops, produces and distributes pioneering automotive electronics solutions. The portfolio of this direct supplier to the automotive industry includes products in the segments of air quality, drive systems, acoustics, cockpit systems, stepper motors, media interfaces and control systems. One of its standout products is the AQS air quality sensor, the clear global market leader. With headquarters in Delbrück (North Rhine-Westphalia), the company also has sites in Suhl (Thuringia), Nuremberg (Bavaria) and St. Georgen (Baden-Württemberg). In the 2010 financial year paragon aims to generate revenue in excess of €58 million with more than 300 employees.