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 2000 YEAR END RESULTS,
EPS OF $0.60 ON SALES OF $80 MILLION, AND
DECLARES DIVIDEND OF $0.04 FOR 1ST QUARTER OF 2001
SARASOTA, FLA, March 7, 2001 - Sun Hydraulics Corporation (NASDAQ: SNHY) today
announced net sales for the year ended December 30, 2000, were $80.0 million, an
increase of 13.6% compared to net sales of $70.4 million for the year ended
January 1, 2000. Net income for 2000 was $3.9 million, or 4.9% of net sales,
compared to $1.8 million, or 2.6% of net sales for 1999. Basic and diluted
earnings per share for the year ended December 30, 2000, were $0.61 and $0.60,
respectively, compared to $0.29 and $0.28 for the year ended January 1, 2000.
Sun's shipments for the year continued to outperform the industry as a whole
based on United States National Fluid Power Association statistics which
reported a 3.8% growth in total hydraulic shipments in 2000 compared to 1999.
Net sales for the quarter ended December 30, 2000, were $17.5 million,
essentially the same as the fourth quarter of 1999. Net income for the quarter
ended December 30, 2000, was $0.7 million, equal to the fourth quarter of 1999.
Both basic and diluted earnings per share for the fourth quarter of 2000 were
$0.10.
"We are especially pleased that despite the fourth quarter's lower shipment
levels, our gross profit as a percentage of sales for the quarter held up
favorably," said Allen Carlson, Sun Hydraulics president. "Sun's production
personnel did a great job of keeping product costs in line given the lower
volume of shipments, while at the same time continuing to improve customer
service levels.
"The order slowdown that started at the end of the second quarter continued
through the fourth quarter," Carlson said. "The majority of the decrease in
demand was in North American markets and is related to the general slowdown in
the manufacturing sector. However, year to date orders through February 2001 are
at a run rate that is more than 20% higher than last quarter. Shipments for the
first quarter of 2001 are projected to be about 9% higher than last quarter.
"The capacity expansion investments that Sun has made over the last three years
began to produce favorable results during 2000. Product delivery performance
improved dramatically and productivity increased," Carlson stated. "Sun is
poised to capitalize on a future rebound in the manufacturing sector and can
react quickly to an increase in demand. We will continue to invest and add
capacity to meet future growth."
Sun Hydraulics Corporation declared a $0.04 per share dividend on its common
stock. The dividend is payable on April 15, 2001, to shareholders of record as
of March 31, 2001.
Sun Hydraulics Corporation is a leading designer and manufacturer of high
performance screw-in hydraulic cartridge valves and manifolds for worldwide
industrial and mobile markets. For more information about Sun, please visit our
website at www.sunhydraulics.com.
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Sun Hydraulics Corporation will broadcast its 4th quarter and 2000 year end
financial results conference call with analysts live over the Internet at 2:30
P.M. E.S.T., today, March 7, 2001. To listen go to
http://investor.sunhydraulics.com/medialist.cfm.
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 "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Company's Form 10-Q for the quarter ended September, 30, 2000, and 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. 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 - DECEMBER 30, 2000
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
Three Months Ended Twelve Months Ended
December 30, January 1, December 30, January 1,
2000 2000 2000 2000
------- ------- ------- -------
Net sales $17,537 $17,801 $79,967 $70,449
Cost of sales 12,816 13,239 58,502 54,034
Gross profit 4,721 4,562 21,465 16,415
Selling, engineering and
administrative expenses 3,344 3,158 14,109 12,378
Operating income 1,377 1,404 7,356 4,037
Interest expense 218 261 1,114 954
Miscellaneous expense 138 108 323 420
Income before income taxes 1,021 1,035 5,919 2,663
Income tax provision 354 300 1,998 833
Net income 667 735 $ 3,921 $ 1,830
Basic net income
per common share 0.10 0.12 0.61 0.29
Basic weighted average
shares outstanding 6,385 6,385 6,385 6,380
Diluted net income
per common share 0.10 0.11 0.60 0.28
Diluted weighted average
shares outstanding 6,570 6,571 6,574 6,569
Note: 1999 numbers have been adjusted to properly classify freight revenue and
costs in accordance with Emerging Issues Task Force (EITF) Issue No. 00-10,
"Accounting For Shipping and Handling Fees and Costs."
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 30, January 1,
2000 2000
------- -------
Assets
Current assets:
Cash and cash equivalents $ 2,698 $ 1,122
Accounts receivable, net of allowance for
doubtful accounts of $163 and $196 6,112 6,260
Inventories 9,033 8,131
Taxes Receivable -- 455
Other current assets 536 591
Total current assets 18,379 16,559
Property, plant and equipment, net 44,984 46,529
Other assets 1,011 986
Total assets $64,374 $64,074
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,787 $ 2,712
Accrued expenses and other liabilities 1,585 1,464
Long-term debt due after one year 1,731 3,033
Notes payable to related parties due within one year 48 378
Dividends payable 255 255
Income taxes payable 315 --
Total current liabilities 5,721 7,842
Long-term debt due after one year 10,180 10,830
Notes payable to related parties due after one year 53 101
Deferred income taxes 4,106 4,125
Deferred royalties 478 --
Total liabilities 20,538 22,898
Shareholders' equity:
Preferred stock -- --
Common stock 6 6
Capital in excess of par value 24,486 24,486
Retained earnings 19,073 16,173
Equity adjustment for foreign currency translation 271 511
Total shareholders' equity 43,836 41,176
Total liabilities and shareholders' equity $64,374 $64,074
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