Paragon Technologies News Release

Rhea-AI Summary

Paragon Technologies (PGNT) reported nine-month results showing improved automation margins but lower distribution net income amid higher expenses. Automation gross margin reached 40.1% for the nine months ended September 30, 2026, versus 19.9% a year earlier and 30.6% for the first six months of 2026. Automation revenue grew 5.5% year over year, while backlog was approximately $2 million versus approximately $2.4 million a year earlier.

Distribution revenue was flat year-to-date, and gross profit rose 13%, partly benefiting from a $1.3 million foreign exchange gain on imported products. Selling, general and administrative expenses increased $1.4 million, or 33%, to $5.75 million. Distribution net income fell 22.4% to $1.2 million from $1.53 million in the comparable nine-month period. Paragon plans targeted marketing for SI in 2027 and remains focused on diversifying its operations and revenue base.

7 points · 0 major

PositiveiHow this balance works

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0 major · 4 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointAutomation gross margin reached 40.1% over nine months versus 19.9% a year earlier and 30.6% over first-half 2026.
• Moderate pointAutomation revenue grew 5.5% year over year.
• Moderate pointSI secured an approximately $670,000 booking during the fourth quarter. 8.8% of market cap
• Moderate pointDistribution gross profit increased 13% year-to-date on improved margins.
• Moderate pointForeign exchange on imported products provided a $1.3 million gain to distribution. 17% of market cap

2 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.Paragon plans targeted marketing initiatives in 2027 to increase awareness of SI products.
• Minor point. Forward-looking: it has not happened yet and may not happen.Paragon continues to pursue diversification of operations and revenue as its primary objective.

Negative

• Moderate pointDistribution net income declined 22.4% to $1.2 million from $1.53 million in the comparable nine-month period.
• Moderate pointDistribution administrative and selling expenses rose $1.4 million, or 33%, to $5.75 million.
• Minor pointAutomation backlog fell to approximately $2 million from approximately $2.4 million a year earlier.
• Minor pointSI legacy products face an expanding range of alternative solutions, according to Paragon.

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EASTON, PA / ACCESS Newswire / November 13, 2026 / Paragon Technologies, Inc. (OTC Pink:PGNT) ("Paragon" or the "Company"), a diversified holding company, reported its results for the three and nine months ended September 30, 2026.

Paragon Technologies, Inc.'s Consolidated Statement of Operations for the three and nine months ended September 30, 2026 and 2025 are summarized below. For further details on our results, shareholders should carefully review our quarterly report, which can be found at www.pgntgroup.com.

Analysis of Results and General Business Commentary:

Operating results reflect continued improvement in our automation gross margins, driven by disciplined expense management and improved pricing discipline. Automation gross margins increased to 40.1% for the nine months ending September 30, 2026, compared to 30.6% for the first six months of 2026 and 19.9% in the comparable year-ago period.

Despite year-over-year revenue growth of 5.5%, automation revenue remains below desired levels, and our backlog stands at approximately $2 million, compared to approximately $2.4 million in the comparable year-ago period. SI secured a notable booking of approximately $670,000 during the fourth quarter; however, project completions more than offset the new booking, contributing to the decline in backlog. While Paragon's overall performance has benefited significantly from the margin improvements at SI, revenue growth remains an area of focus. Looking ahead to 2027, our priority is to increase market awareness of SI's products through measured and targeted marketing initiatives.

"As we have discussed in greater detail in previous annual shareholder letters, SI's products serve a valuable, albeit specialized, segment of the broader and growing automation industry. Historically, SI operated with a clear understanding of its position in this market, which allowed the business to be a significant producer of cash for several years. SI has considerable operating leverage, meaning incremental revenue has the potential to translate into a disproportionate increase in profitability. However, the competitive landscape continues to evolve, with SI's legacy products facing an expanding range of alternative solutions. Increasing awareness of SI's products, investing smartly in our software capabilities and better communicating the value of our offerings should help strengthen SI's competitive position and create opportunities for renewed growth," noted Sham Gad, CEO of Paragon Technologies.

Our distribution business generated flat revenue year-to-date, while gross profit increased 13% on improved margins, benefiting in part from a $1.3 million foreign exchange gain on imported products. This benefit was more than offset by a $1.4 million, or 33%, increase in SG&A to $5.75 million.

Approximately $1.0 million of the SG&A increase was attributable to foreign exchange movements resulting from a stronger Colombian peso, which increased the U.S. dollar cost of local operating expenses (average exchange rate of COP 3,501 compared to COP 4,130 in the prior-year period). The remaining $0.4 million primarily reflected salary increases, the addition of a new Vice President position, and higher financing costs as borrowings remained elevated for much of the year to support inventory purchases.

As a result, distribution net income, as reported in U.S. dollars, declined 22.4% to $1.2 million from $1.53 million in the comparable nine-month period last year.

Additional financial details regarding each of the Company's business divisions can be found in our quarterly report.

Paragon's primary objective remains the continued diversification of its operations and revenue base.

"The Board is acutely aware that, despite the continued improvement in Paragon's operating performance, our market valuation has remained largely stagnant. There are several factors contributing to this, some of which are beyond our control. What is within our control is the continued growth of intrinsic value and the further diversification of our revenue base. No one is more eager to accelerate that process than I am. However, pursuing new opportunities in a disciplined and accretive manner must remain our priority. Diversification will take time, but we remain intensely focused on achieving that objective," stated Sham Gad, CEO of Paragon Technologies.

Paragon's investment gains or losses reflect realized gains or losses in the company's investment portfolio.

Paragon utilizes pre-tax operating income, a non-GAAP financial measure, in its analysis of financial results. Paragon Technologies defines pre-tax operating earnings outside of the investment gains/losses of the Company.

About Paragon Technologies

Paragon Technologies, Inc. is a holding company owning subsidiaries that engage in diverse business activities, including supply chain automation, distribution, real estate and investments.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern the Company's operations, financial condition and performance and are based largely on the Company's beliefs and expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others, those related to: general economic conditions, including those in the markets in which the Company operates; the Company's ability to expand its revenue streams; technological changes in the Company's industry; the continued acceptance of the Company's distribution channel by vendors and customers; decreased demand for the Company's products and services and the Company's ability to retain or replace its significant customers; factors affecting the capital markets and share prices generally; economic and political risks of selling products in foreign countries, including risks of non-compliance with U.S. and foreign laws and regulations; cybersecurity risks and risks of damage and interruptions of information technology systems; and the Company's ability to complete acquisitions, strategic investments, divestitures, mergers or other transactions on acceptable terms or at all. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can management assess the impact of all such factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All statements in this press release other than statements that are purely historical are forward-looking statements. The Company does not intend and assumes no obligation to update any forward-looking statements made in this press release. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release.

For further information, contact the company at ir@pgntgroup.com

SOURCE: Paragon Technologies Inc.

View the original press release on ACCESS Newswire

FAQ

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How did Paragon Technologies' automation gross margin change in 2026?

Automation gross margin reached 40.1% for the nine months ended September 30, 2026, compared with 19.9% in the comparable year-earlier period. It was 30.6% for the first six months of 2026.

Why did Paragon Technologies' distribution expenses increase in 2026?

Approximately $1.0 million of the distribution expense increase came from foreign exchange movements as a stronger Colombian peso increased the U.S. dollar cost of local expenses. The remaining $0.4 million primarily reflected salary increases, a new Vice President position and higher financing costs, with borrowings elevated for much of the year to support inventory purchases.

Why did Paragon Technologies' automation backlog decline despite a new SI booking?

Project completions more than offset SI's approximately $670,000 fourth-quarter booking, contributing to the backlog decline. Backlog stood at approximately $2 million, compared with approximately $2.4 million in the comparable year-earlier period.