<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest
Event Reported): April 28, 2000
SUN HYDRAULICS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 0-21835 59-2754337
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1500 West University Parkway
Sarasota, Florida 34243
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 941-362-1200
<PAGE> 2
ITEM 5. OTHER EVENTS.
(a) DIVIDEND
On April 15, 2000, the Company paid a $0.04 per share dividend on its
common stock to shareholders of record on March 31, 2000.
(b) PRESS RELEASES
On April 28, 2000, the Registrant issued the press release attached
hereto as Exhibit 99.1 announcing expected management changes.
On May 4, 2000, the Registrant issued the press release attached hereto
as Exhibit 99.2 announcing results for the quarter ended April 1, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
Exhibit
Number Exhibit Description
------- -------------------
99.1 Press Release of the Registrant dated April 28, 2000.
99.2 Press Release of the Registrant dated May 4, 2000.
- 2 -
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
SUN HYDRAULICS CORPORATION
By: /s/ Richard J. Dobbyn
----------------------------------
Richard J. Dobbyn
Chief Financial Officer (Principal
Financial and Accounting Officer)
Dated: May 4, 2000
- 3 -
<PAGE> 4
EXHIBIT INDEX
Exhibit
Number Exhibit Description
------- -------------------
99.1 Press Release of the Registrant dated April 28, 2000.
99.2 Press Release of the Registrant dated May 4, 2000.
- 4 -
<PAGE> 1
Exhibit 99.1
FOR RELEASE: Immediately
Contact:
Richard K. Arter Investor Relations 941-362-1200
SUN HYDRAULICS EXPECTS CARLSON TO BE APPOINTED PRESIDENT, CEO
NIXON EXPECTED TO BE APPOINTED CHAIRMAN
SARASOTA, FLA, April 28, 2000 - Sun Hydraulics Corporation announced today it
anticipates the Board of Directors, at its May 12th meeting, will elect Clyde
Nixon and Allen Carlson to new executive positions. It is also expected that Bob
Koski, co-founder and current Chairman of the Board of Sun Hydraulics, will be
named Chairman Emeritus and nominated for reelection to the Company's Board.
It is expected that the Board of Directors will elect Clyde Nixon to the
position of Chairman of the Board. Nixon, 64 years old and a Director of the
Company, has been president and CEO of Sun since 1988. Recently, Nixon completed
a term as Chairman of the Board of the National Fluid Power Association, the
fluid power industry's trade association in the United States.
It is further anticipated that the Company's Board of Directors will elect Allen
Carlson, 49 years old, president and CEO at the May 12th Board meeting. Carlson,
who is also nominated to become a Director of the Company, joined Sun in 1996
and was appointed Vice-President in 1999. Prior to joining Sun, Carlson served
in various engineering, marketing and management positions in the hydraulics
industry since 1972.
"At different points in a company's evolution, different skills are required to
continue to grow," said Bob Koski. "When Clyde joined Sun in 1988, I felt the
Company needed someone with experience that neither I nor anyone else in the
Company had at that time. After sharing the office with me for about a year,
Clyde was officially named President. Sun continued to grow and prosper.
"Allen brings new skills and experience that will help Sun continue to grow,"
Koski continued. "Clyde has informally been sharing his office and duties with
Allen for the past year. During that time, I have been sharing my duties as
Chairman with Clyde. We are required to make formal announcements, using formal
titles, about changes like these, but I doubt anyone will notice anything
different at Sun," Koski concluded.
The Company's annual meeting of shareholders is scheduled for Saturday, May 13,
2000. In addition to the nomination of Messrs. Carlson and Koski as directors,
John Kahler has been nominated for re-election and Christine L. Koski, daughter
of Bob Koski, has been nominated to fill a new position on the Company's
expanded eight person Board.
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 mobile and
industrial markets.
<PAGE> 1
Exhibit 99.2
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 RECORD 1ST QUARTER ORDERS AND SALES
SALES $20.1 MILLION, $0.13 EPS
SARASOTA, FLA, May 4, 2000 - Sun Hydraulics Corporation (NASDAQ: SNHY) today
announced net sales were a record $20.1 million for the quarter ended April 1,
2000, representing an 8.7% increase compared to first quarter 1999 net sales.
Net income rose to $0.9 million for the first quarter of 2000, an increase of
18.5% compared to the first quarter of 1999. Both basic and diluted earnings
per share for the first quarter of 2000 were $0.13.
"The improving business conditions we began to see in the fourth quarter last
year are continuing," said Sun Hydraulics President Clyde Nixon. "We believe
the fluid power industry recovery is evident in all major markets served by
Sun." First quarter orders were $21.7 million, an increase of 8.7% compared to
the record fourth quarter, and 24.7% compared to the first quarter of 1999.
"Net income increased 18.5% this quarter over the same period last year despite
higher selling and administrative expenses," Nixon continued. "We increased
promotional efforts and incurred software costs in connection with the new
systems in the U.S. and U.K. operations. Promotional efforts to stimulate new
product sales will continue in the second quarter and additional software
expenditures will be incurred as we fine tune our manufacturing systems.
"Worldwide shipments should continue to increase in the second quarter. We are
hiring personnel to support our capital investments and expect productivity to
increase throughout the year. At this time, we do not see any signs of demand
slowing down. Our focus continues to be on increasing shipments to meet market
demand," Nixon concluded.
Sun Hydraulics Corporation, with manufacturing and distribution facilities in
Sarasota and Manatee County, Florida, Coventry, England, Erkelenz, Germany and
Incheon, Korea, is a leading designer and manufacturer of high performance
screw-in hydraulic cartridge valves and manifolds for worldwide industrial and
mobile markets.
<PAGE> 2
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 April 1, 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.
-2-
<PAGE> 3
SUN HYDRAULICS CORPORATION - APRIL 1, 2000
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
April 1, April 3,
2000 1999
----------- ----------
(unaudited) (unaudited)
<S> <C> <C>
Net sales .................................................. $ 20,069 $18,465
Cost of sales .............................................. 14,964 13,945
Gross profit ............................................... 5,105 4,520
Selling, engineering and
administrative expenses ................................... 3,666 3,092
Operating income ........................................... 1,439 1,428
Interest expense ........................................... 290 253
Miscellaneous expense (income) ............................. (53) 97
Income before income taxes ................................. 1,202 1,078
Income tax provision ....................................... 345 355
Net income ................................................. $ 857 $ 723
Basic net income
per common share ...................................... .13 .11
Basic weighted average
shares outstanding .................................... 6,385 6,367
Diluted net income
per common share ...................................... .13 .11
Diluted weighted average
shares outstanding .................................... 6,589 6,520
CONSOLIDATED BALANCE SHEETS
(in thousands)
April 1, January 1,
2000 2000
----------- ----------
(unaudited)
Assets
Current assets:
Cash and cash equivalents ............................. $ 1,068 $ 1,122
Accounts receivable, net of allowance for
doubtful accounts of $202 and $169 ................ 7,443 6,260
Inventories ........................................... 8,169 8,131
Taxes Receivable ...................................... 141 455
Other current assets .................................. 534 591
Total current assets .......................... 17,355 16,559
Property, plant and equipment, net ......................... 46,576 46,529
Other assets ............................................... 1,090 986
Total assets ............................................... $ 65,021 $ 64,074
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ .................................... 2,245 $ 2,712
Accrued expenses and other liabilities ................ 1,617 1,464
Long-term debt due within one year .................... 3,913 3,033
Notes payable to related parties due within one year .. 300 378
Dividends payable ..................................... 255 255
Income taxes payable .................................. -- --
Total current liabilities ..................... 8,330 7,842
Long-term debt due after one year .......................... 10,562 10,830
Notes payable to related parties due after one year ........ 90 101
Deferred income taxes ...................................... 4,122 4,125
Other non-current liabilities .............................. 200 --
Total liabilities ............................. 23,304 22,898
Shareholders' equity:
Preferred stock ....................................... -- --
Common stock .......................................... 6 6
Capital in excess of par value ........................ 24,486 24,486
Retained earnings ..................................... 16,775 16,173
Equity adjustment for foreign currency translation .... 450 511
Total shareholders' equity .................... 41,717 41,176
Total liabilities and shareholders' equity ................. $ 65,021 $ 64,074
</TABLE>
-3-
