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Exhibit 99.1
FOR RELEASE: Immediately
Contact:
Richard K. Arter Investor Relations 941-362-1200
Richard J. Dobbyn Chief Financial Officer 941-362-1200
SUN HYDRAULICS CORPORATION REPORTS 3RD QUARTER EPS
OF $0.16 ON SALES OF $20 MILLION
SARASOTA, FLA, November 6, 2000 - Sun Hydraulics Corporation (NASDAQ: SNHY)
today announced net sales for the quarter ended September 30, 2000 were $20.0
million, representing an increase of 13.0% compared to the third quarter of
1999. For the nine months ended September 30, 2000, net sales increased 19.0%,
or $9.9 million, compared to the first nine months of 1999. Net income for the
quarter ended September 30, 2000 was $1.0 million, an increase of 74.0% compared
to the third quarter of 1999. Both basic and diluted earnings per share for the
third quarter of 2000 were $0.16.
"As we stated last quarter, we expected third quarter shipments to be lower than
our record second quarter levels," said Allen Carlson, Sun Hydraulics president.
"We were very pleased with the $20.0 million in shipments. The weakening in
demand that we began to see at the end of the second quarter continued in the
third quarter, the majority of it in our North American markets. Our earnings
for the quarter were what we expected, given the shipment volumes.
"Looking forward, we continue to see soft markets in the United States, which we
attribute to a general slowdown in manufacturing activity," Carlson commented.
"However, we have seen our domestic orders pick up slightly in October and
expect this will continue. International business is up year over year and
continues to hold up as we enter the fourth quarter.
"At the current incoming order rate, we expect fourth quarter shipments will be
approximately 15% below third quarter levels and diluted earnings per share are
estimated to be approximately $0.08 for the fourth quarter and $0.58 for the
year. We do not anticipate the slowdown we have seen in the United States to be
either severe or long term and our recently completed capacity expansion makes
us well prepared for future growth."
Sun Hydraulics Corporation, with manufacturing and distribution facilities in
Sarasota and Manatee County, Florida, Coventry, England, Erkelenz, Germany and
Inchon, Korea, is a leading designer and manufacturer of high performance
screw-in hydraulic cartridge valves and manifolds for worldwide industrial and
mobile markets.
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FORWARD-LOOKING INFORMATION
Certain oral statements made by management from time to time and
certain statements contained herein that are not historical facts are
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934 and, because such statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Forward-looking statements,
including those in Management's Discussion and Analysis of Financial Condition
and Results of Operations are statements regarding the intent, belief or current
expectations, estimates or projections of the Company, its Directors or its
Officers about the Company and the industry in which it operates, and
assumptions made by management, and include among other items, (i) the Company's
strategies regarding growth, including its intention to develop new products;
(ii) the Company's financing plans; (iii) trends affecting the Company's
financial condition or results of operations; (iv) the Company's ability to
continue to control costs and to meet its liquidity and other financing needs;
(v) the declaration and payment of dividends; and (vi) the Company's ability to
respond to changes in customer demand domestically and internationally,
including as a result of standardization. Although the Company believes that its
expectations are based on reasonable assumptions, it can give no assurance that
the anticipated results will occur.
Important factors that could cause the actual results to differ
materially from those in the forward-looking statements include, among other
items, (i) the economic cyclicality of the capital goods industry in general and
the hydraulic valve and manifold industry in particular, which directly affect
customer orders, lead times and sales volume; (ii) conditions in the capital
markets, including the interest rate environment and the availability of
capital; (iii) changes in the competitive marketplace that could affect the
Company's revenue and/or cost bases, such as increased competition, lack of
qualified engineering, marketing, management or other personnel, and increased
labor and raw materials costs; (iv) changes in technology or customer
requirements, such as standardization of the cavity into which screw-in
cartridge valves must fit, which could render the Company's products or
technologies noncompetitive or obsolete; (v) new product introductions, product
sales mix and the geographic mix of sales nationally and internationally; and
(vi) changes relating to the Company's international sales, including changes in
regulatory requirements or tariffs, trade or currency restrictions, fluctuations
in exchange rates, and tax and collection issues. Further information relating
to factors that could cause actual results to differ from those anticipated is
included but not limited to information under the heading "Business" and
particularly under the subheading, "Business Risk Factors" in the Company's Form
10-K for the year ended January 1, 2000 and "Management's Discussion and
Analysis of Financial Condition and Results of Operation" in the Company's Form
10Q for the quarter ended September 30, 2000. The Company disclaims any
intention or obligation to update or revise forward-looking statements, whether
as a result of new information, future events or otherwise.
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SUN HYDRAULICS CORPORATION - SEPTEMBER 30, 2000
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
Three Months Ended
September 30, October 2,
2000 1999
----------- -----------
(unaudited) (unaudited)
Net sales $ 19,973 $ 17,664
Cost of sales 14,465 13,174
Gross profit 5,508 4,490
Selling, engineering and
administrative expenses 3,621 3,157
Operating income (loss) 1,887 1,333
Interest expense 293 264
Miscellaneous expense (income) 44 178
Income (loss) before income taxes 1,550 891
Income tax provision (benefit) 528 303
Net income (loss) $ 1,022 $ 588
Basic net income (loss)
per common share $ 0.16 $ 0.09
Basic weighted average
shares outstanding 6,385 6,384
Diluted net income (loss)
per common share $ 0.16 $ 0.09
Diluted weighted average
shares outstanding 6,540 6,536
SUN HYDRAULICS CORPORATION - SEPTEMBER 30, 2000
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
Nine Months Ended
September 30, October 2,
2000 1999
------------ -----------
(unaudited) (unaudited)
Net sales $ 61,938 $ 52,050
Cost of sales 45,127 40,100
Gross profit 16,811 11,950
Selling, engineering and
administrative expenses 10,831 9,317
Operating income 5,980 2,633
Interest expense 896 693
Miscellaneous expense (income) 184 312
Income before income taxes 4,900 1,628
Income tax provision 1,645 532
Net income $ 3,255 $ 1,096
Basic net income
per common share $ 0.51 $ 0.17
Basic weighted average
shares outstanding 6,385 6,378
Diluted net income
per common share $ 0.50 $ 0.17
Diluted weighted average
shares outstanding 6,539 6,531
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CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, January 1,
2000 2000
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 2,150 $ 1,122
Accounts receivable, net of allowance for
doubtful accounts of $156 and $196 7,113 6,260
Inventories 8,873 8,131
Taxes Receivable 0 455
Other current assets 426 591
Total current assets 18,562 16,559
Property, plant and equipment, net 45,546 46,529
Other assets 1,041 986
Total assets $ 65,149 $ 64,074
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 2,005 $ 2,712
Accrued expenses and other liabilities 2,289 1,464
Long-term debt due within one year 1,795 3,033
Notes payable to related parties due within one year 135 378
Dividends payable 255 255
Income taxes payable 148 --
Total current liabilities 6,627 7,842
Long-term debt due after one year 10,372 10,830
Notes payable to related parties due after one year 66 101
Deferred income taxes 4,101 4,125
Other n/c liabilities 490 --
Total liabilities 21,656 22,898
Shareholders' equity:
Preferred stock -- --
Common stock 6 6
Capital in excess of par value 24,486 24,486
Retained earnings 18,661 16,173
Equity adjustment for foreign currency translation 340 511
Total shareholders' equity 43,493 41,176
Total liabilities and shareholders' equity $ 65,149 $ 64,074
</TABLE>
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