Paragon Technologies Awarded a $575,000 Contract From the Nation's Leading Drug Store Chain

EASTON, Pa., March 7 -- Paragon Technologies, Inc. (AMEX:PTG) , a leading supplier of "smart" material handling systems and "software-driven" warehouse and distribution center solutions, announced today that its SI Systems' Order Fulfillment brand received an order totaling $575,000 to upgrade and enhance an existing SI Systems' proprietary DISPEN-SI- MATIC(R) Order Fulfillment system to speed delivery and increase order accuracy at three different distribution centers for the nation's leading drug store chain. Detailed terms of the contract were not disclosed.

Joel Hoffner, President and CEO of Paragon Technologies, commented, "We are particularly pleased that prominent corporations with multiple distribution facilities continue to select SI Systems as their business partner for automation. Recognition of our demonstrated capabilities to address material handling requirements with our leading-edge and proprietary technology in high volume environments is growing. The demand for the Company's proprietary technologies, as evidenced by recent orders, indicates a desire by sophisticated customers for the Company to satisfy their distribution needs. We continue to build on the strength of our customer relationships and are encouraged by the demand for our cadre of products. We look forward to continued success from our SI Systems' Order Fulfillment brand."

Paragon's SI Systems' Order Fulfillment and Production & Assembly technologies drive productivity at Fortune 1000 companies and the United States Government.

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, BMG, Peterbilt, Honda, CVS Pharmacy, Maybelline, 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. Furthermore, achievement of the objectives of the Company following the sale of Ermanco is subject to risks associated with business disruption resulting from the announcement of the sale and other risks outlined in Paragon's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2004 and the most recent quarterly report on Form 10-Q for the quarter ended September 30, 2005.

This press release and prior releases are available at www.ptgamex.com.