Nov. 16, 2012
To the Shareholders of Paragon Technologies:
When I first joined the Board of Directors in the second half of 2010, I was very clear in my objectives for Paragon. The first immediate objective was cost reduction: in
, Paragon's expenses were little changed from 2007 when the Company was generating over
in sales, more than double the sales figure in 2010. We reduced costs and as a result, Paragon reported a profit in 2011 compared with a loss of over
In March of 2012, I was unanimously appointed Chairman of the Board. Two new directors,
joined me on the Board replacing the outgoing four Board members. Both Sam and Jack are highly accomplished businessmen, but more importantly, both are exceptional people both inside and outside the board room.
Reinvigorated with a completely new Board, we quickly and carefully conducted a comprehensive review of the business, evaluated management and associates, and began a vigorous process of eradicating a culture defined by entitlement and creating a culture motivated by performance. As a direct result of those efforts we are now in a position to steer Paragon in a new direction with a singular focus: increasing the per share intrinsic value of the Company. This letter will outline our business principles that we will employ to run Paragon.
A successful value-creating business, in our view, is one ingrained with a culture of performance. For such a corporate culture to flourish, a business should have (a) a strong and ethical management team; (b) a low cost structure; (c) a consistently strong balance sheet; (d) an intense focus on maximizing intrinsic value per share; and (e) the passion to execute on that focus.