UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001 Commission file number 0-21835
SUN HYDRAULICS CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registration as Specified in its Charter)
FLORIDA 59-2754337
--------------- -----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1500 WEST UNIVERSITY PARKWAY
SARASOTA, FLORIDA 34243
------------------------------------------- -------------
(Address of Principal Executive Offices) (Zip Code)
941/362-1200
-----------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The Registrant had 6,384,948 shares of common stock, par value $.001,
outstanding as of May 1, 2001.
Sun Hydraulics Corporation
INDEX
For the quarter ended March 31, 2001
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2001 (unaudited)
and December 30, 2000 3
Consolidated Statements of Operations for the
Three Months Ended March 31, 2001 (unaudited) and April 1, 2000 (unaudited) 4
Consolidated Statement of Changes in Shareholders' Equity and Comprehensive
Income for the Three Months Ended March 31, 2001 (unaudited)
and the Year Ended December 30, 2000 5
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2001 (unaudited) and April 1, 2000 (unaudited) 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Forward Looking Information 13
PART II. OTHER INFORMATION 14
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
2
PART I: FINANCIAL INFORMATION
Item 1.
SUN HYDRAULICS CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 31, 2001 DECEMBER 30, 2000
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 2,856 $ 2,698
Accounts receivable, net of allowance for
doubtful accounts of $174 and $163 7,442 6,112
Inventories 8,983 9,033
Other current assets 663 536
-------- --------
Total current assets 19,944 18,379
Property, plant and equipment, net 44,596 44,984
Other assets 975 1,011
-------- --------
TOTAL ASSETS $ 65,515 $ 64,374
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,838 $ 1,787
Accrued expenses and other liabilities 1,811 1,585
Long-term debt due within one year 1,848 1,779
Dividends payable 255 255
Taxes payable 593 315
-------- --------
Total current liabilities 6,345 5,721
Long-term debt due after one year 10,131 10,233
Deferred income taxes 4,096 4,106
Other noncurrent liabilities 465 478
-------- --------
Total liabilities 21,037 20,538
Shareholders' equity:
Preferred stock -- --
Common stock 6 6
Capital in excess of par value 24,486 24,486
Retained earnings 19,852 19,073
Accumulated other comprehensive income 134 271
-------- --------
Total shareholders' equity 44,478 43,836
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 65,515 $ 64,374
======== ========
3
SUN HYDRAULICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31, 2001 APRIL 1, 2000
(UNAUDITED) (UNAUDITED)
NET SALES $ 18,979 $ 20,233
Cost of sales 13,663 15,150
-------- --------
GROSS PROFIT 5,316 5,083
Selling, engineering and
administrative expenses 3,457 3,644
-------- --------
OPERATING INCOME 1,859 1,439
Interest expense 270 290
Miscellaneous expense (income) 3 (53)
-------- --------
INCOME BEFORE INCOME TAXES 1,586 1,202
Income tax provision 552 345
-------- --------
NET INCOME $ 1,034 $ 857
======== ========
BASIC NET INCOME PER COMMON SHARE $ 0.16 $ 0.13
WEIGHTED AVERAGE SHARES OUTSTANDING 6,385 6,385
DILUTED NET INCOME PER COMMON SHARE $ 0.16 $ 0.13
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 6,585 6,589
4
SUN HYDRAULICS CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE
INCOME
(IN THOUSANDS)
ACCUMULATED
CAPITAL IN OTHER
COMMON EXCESS OF RETAINED COMPREHENSIVE
SHARES STOCK PAR VALUE EARNINGS INCOME TOTAL
Balance, December 30, 2000 6,385 $ 6 $24,486 $19,073 $271 $43,836
Dividends declared (255) (255)
Comprehensive income:
Net income 1,034 1,034
Foreign currency translation adjustments (137) (137)
-------
Comprehensive income 897
------ ------- ------- ------- ---- -------
Balance, March 31, 2001 (unaudited) 6,385 $ 6 $24,486 $19,852 $134 $44,478
====== ======= ======= ======= ==== =======
The accompanying Notes to the Consolidated Financial Statements are an integral
part of these financial statements.
5
SUN HYDRAULICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
THREE MONTHS ENDED
MARCH 31, 2001 APRIL 1, 2000
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,034 $ 857
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,409 1,378
(Gain)/Loss on disposal of assets -- (20)
Provision for deferred income taxes (10) (3)
(Increase) decrease in:
Accounts receivable (1,341) (1,183)
Allowance for doubtful accounts 11 --
Inventories 50 (38)
Income tax receivable, net -- 314
Other current assets (127) 57
Other assets 22 (18)
Increase (decrease) in:
Accounts payable 51 (467)
Accrued expenses and other liabilities 226 153
Income taxes payable, net 278 --
Other liabilities (13) 200
------- -------
Net cash provided by operating activities 1,590 1,230
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in acquisition and joint venture -- (100)
Capital expenditures (1,013) (1,428)
Proceeds from dispositions of equipment 6 37
------- -------
Net cash used in investing activities (1,007) (1,491)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 359 1,369
Repayment of debt (392) (846)
Dividends to shareholders (255) (255)
------- -------
Net cash provided by (used in) financing activities (288) 268
Effect of exchange rate changes on cash and
cash equivalents (137) (61)
Net increase (decrease) in cash and cash equivalents 158 (54)
Cash and cash equivalents, beginning of period 2,698 1,122
------- -------
Cash and cash equivalents, end of period $ 2,856 $ 1,068
======= =======
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 270 $ 290
Income taxes $ 284 $ 34
The accompanying Notes to the Consolidated Financial Statements are an integral
part of these financial statements.
6
SUN HYDRAULICS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except per share data)
1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission for reporting on Form 10-Q. Accordingly, certain information
and footnotes required by generally accepted accounting principles for complete
financial statements are not included herein. The financial statements are
prepared on a consistent basis (including normal recurring adjustments) and
should be read in conjunction with the consolidated financial statements and
related notes contained in the Annual Report on Form 10-K for the fiscal year
ended December 30, 2000, filed by Sun Hydraulics Corporation (the "Company")
with the Securities and Exchange Commission on March 12, 2001. In Management's
opinion, all adjustments necessary for a fair presentation of the Company's
financial statements are reflected in the interim periods presented.
2. BUSINESS
Sun Hydraulics Corporation and its wholly-owned subsidiaries (the
"Company") design, manufacture and sell screw-in cartridge valves and manifolds
used in hydraulic systems. The Company has facilities in the United States, the
United Kingdom, Germany, Korea, and China. Sun Hydraulics Corporation ("Sun
Hydraulics"), with its main offices located in Sarasota, Florida, designs,
manufactures and sells through independent distributors in the United States.
Sun Hydraulik Holdings Limited ("Sun Holdings"), a wholly-owned subsidiary of
Sun Hydraulics, was formed to provide a holding company for the European market
operations; its wholly-owned subsidiaries are Sun Hydraulics Limited (a British
corporation, "Sun Ltd.") and Sun Hydraulik GmbH (a German corporation, "Sun
GmbH"). Sun Ltd. operates a manufacturing and distribution facility located in
Coventry, England, and Sun GmbH, operates a manufacturing and distribution
facility located in Erkelenz, Germany. Sun Hydraulics Korea Corporation ("Sun
Korea"), a wholly-owned subsidiary of Sun Hydraulics, located in Inchon, South
Korea, operates a manufacturing and distribution facility. Sun Hydraulics
Systems (Shanghai) Co., Ltd. ("Sun China"), a 50/50 joint venture between Sun
Hydraulics and Links Lin, the owner of Sun Hydraulics' Taiwanese distributor, is
located in Shanghai, China, and operates a manufacturing and distribution
facility.
3. INVENTORY
March 31, 2001 December 30, 2000
-------------- -----------------
Raw materials $3,064 $3,300
Work in process 3,309 3,145
Finished goods 2,610 2,588
------ ------
Total $8,983 $9,033
====== ======
7
4. LONG-TERM DEBT (in thousands)
March 31, 2001 December 30, 2000
-------------- -----------------
$5,677 four year, note, secured by U.S. equipment, interest
at yield on four-year U. S. Treasury securities plus 1.75%
(7.99% at March 31, 2001), due July 23, 2004 $ 4,852 $ 5,167
$6,187 10-year mortgage note with 15-year amortization
schedule on the U.S. Manatee County facility, fixed interest
rate of 7.375%, due July 1, 2006 4,534 4,575
$2,400 12-year mortgage note on the German facility, fixed
interest rate of 6.05%, due September 30, 2008 1,183 1,118
10-year notes, fixed interest rates ranging from of 3.5-5.1%,
secured by equipment in Germany, due between 2009 and
2011 1,098 811
Notes, fixed and variable interest ranging from 3-10.2%,
secured by equipment in Korea 211 240
Other 101 101
-------- --------
$ 11,979 $ 12,012
Less amounts due within one year (1,848) (1,779)
-------- --------
Total $ 10,131 $ 10,233
-------- --------
The Company has three revolving lines of credit totaling approximately
$9,570 with various banks. Interest rates on these credit facilities are
variable based on the prime rate in the U.S. and the equivalent rate in the U.K.
and Germany, respectively. All lines of credit expire in 2002. None of these
arrangements contain pre-payment penalties. The total outstanding on these
credit facilities was $0 at both March 31, 2001 and December 30, 2000.
Certain of these debt instruments are subject to covenants including
consolidated net working capital not less than $2,000,000 and a current ratio
not less than 1.2:1.0 at all times during the term of the loan.
5. SEGMENT REPORTING
The Company has adopted Statement of Accounting Standards No. 131,
"Disclosures about Segments of Enterprise and Related Information" ("SFAS 131").
This approach designates the internal organization that is used by management
for making operational decisions and addressing performance as the source of
determining the Company's reportable segments. Management bases its financial
decisions by the geographical location of its operations.
The individual subsidiaries comprising the Company operate
predominantly in a single industry as manufacturers and distributors of
hydraulic components. The subsidiaries are multinational with operations in the
United States, the United Kingdom, Germany, and Korea. In computing operating
profit for the foreign subsidiaries, no allocations of general corporate
expenses have been made.
8
Identifiable assets of the foreign subsidiaries are those assets
related to the operation of those companies. United States assets consist of all
other operating assets of the Company.
Segment information is as follows:
United United
States Korea Germany Kingdom Elimination Consolidated
THREE MONTHS
ENDED MARCH 31, 2001
Sales to unaffiliated customers $12,644 $1,128 $1,911 $3,296 -- $18,979
Intercompany sales 3,625 -- -- 433 (4,058) --
Operating profit 1,380 3 24 488 (36) 1,859
Depreciation and amortization 1,077 56 77 199 -- 1,409
Capital expenditures 340 26 518 129 -- 1,013
THREE MONTHS
ENDED APRIL 1, 2000
Sales to unaffiliated $13,723 $1,447 $1,533 $3,366 -- $20,069
Intercompany sales 2,825 -- 8 528 (3,361) --
Operating profit 940 140 55 406 (102) 1,439
Depreciation and amortization 1,049 33 63 233 -- 1,378
Capital expenditures 1,113 169 84 62 -- 1,428
Operating profit is total sales and other operating income less
operating expenses. In computing segment operating profit, interest expense and
net miscellaneous income (expense) have not been deducted (added).
Included in U.S. sales to unaffiliated customers were export sales,
principally to Canada and Asia, of $1,547 and $1,502 during the three months
ended March 31, 2001, and April 1, 2000, respectively.
9
Item
2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Sun Hydraulics Corporation is a leading designer and manufacturer of
high-performance screw-in hydraulic cartridge valves and manifolds, which
control force, speed and motion as integral components in fluid power systems.
The Company sells its products globally, primarily though independent
distributors. Approximately 66% of product sales are used by the mobile market,
characterized by applications where the equipment is not fixed in place, the
operating environment is often unpredictable, and duty cycles are generally
moderate to low. The remaining 34% of sales are used by industrial markets,
which are characterized by equipment that is fixed in place, typically in a
controlled environment, with higher pressures and duty cycles. The Company sells
to both markets with a single product line. In 2000 the Company generated
approximately 40% of its net sales outside of the United States.
Orders for the three months ended March 31, 2001, were $19.8 million.
This was a $1.9 million, or 8.8%, decrease from the three months ended April 1,
2000, and a $2.9 million, or 17.2%, increase compared to the previous quarter
ended December 30, 2000. The 17.2% increase from the previous quarter included
an 11.6% increase in domestic orders and a 24.6% increase in international
orders. The Company's order rates continued to outperform the hydraulics
industry as the United States National Fluid Power Association's preliminary
report indicates total orders for hydraulics products for the first quarter of
2001 increased 2.4% from the previous quarter.
The Company's net sales increased $1.5 million, or 8.2%, to $19.0
million for the three months ended March 31, 2001, compared to net sales of
$17.5 for the quarter ended December 30, 2000. The 8.2% increase included a 4.0%
increase in domestic sales and a 14.2% increase in international sales.
Net income for the three months ended March 31, 2001 was $1.0 million,
an increase of $0.2 million, or 20.7%, compared to the same period last year
despite a net sales decrease of 6.2%. Compared to the quarter ended December 30,
2000, net income increased 57.0%, or $0.4 million.
Outlook
Orders for the first quarter of 2001 were up 17.0% over the last
quarter of 2000; however, the order rates for the months of March and April
indicate that the net sales for the second quarter ending June 30, 2001, are
likely to decrease 10 to 15%. Management believes the decrease in orders is the
result of a broad based decline in business throughout the United States
manufacturing sector.
The Company plans to break ground in the third quarter of this year to
build an addition to its plant in the United Kingdom that will double the
manufacturing space. The project is expected to cost
10
$2.2 million. This investment is key to the growth of the Company in Europe and
will improve productivity in the United Kingdom operation.
COMPARISON OF THREE MONTHS ENDED MARCH 31, 2001 AND APRIL 1, 2000
Net sales decreased $1.3 million, or 6.2%, to $19.0 million for the
quarter ended March 31, 2001, compared to the quarter ended April 1, 2000. This
decrease was due to a general slowdown in the United States manufacturing
sector.
Gross profit increased $0.2 million, or 4.6%, to $5.3 million for the
quarter ended March 31, 2001, compared to the quarter ended April 1, 2000. Gross
profit as a percentage of net sales increased to 28.0% compared to 25.1% for the
first quarter of 2000. The 2.9% increase in gross profit as a percent of net
sales was primarily due to a decrease in prime manufacturing costs, particularly
the cost of purchased parts.
Selling, engineering and administrative expenses decreased 5.1%, or
$0.2 million, to $3.5 million in the quarter ended March 31, 2001, compared to
$3.6 million in the quarter ended April 1, 2000. This decrease is due to lower
spending in many expense categories in the United States operation offset by
moderate increases in the foreign operations.
The provision for income taxes for the quarter ended March 31, 2001,
was 34.8% of pretax income, compared to 28.7% of pretax income for the quarter
ended April 1, 2000. This increase is due to Korean tax provision requirements
that were not previously believed to be applicable. In both years, tax savings
were realized in the United States from the Sun Hydraulics Foreign Sales
Corporation.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company's primary source of capital has been cash
generated from operations, although fluctuations in working capital requirements
have been met through borrowings under revolving lines of credit. The Company's
principal uses of cash have been to pay operating expenses, make capital
expenditures, pay dividends to shareholders and service debt.
Cash from operations for the three months ended March 31, 2001, was
$1.6 million. This compares with $1.2 million for the three months ended April
1, 2000. The $0.4 million increase was due to a $0.2 million increase in net
income and $0.2 million increase in working capital. Days sales outstanding was
36 and 33 at March 31, 2001, and April 1, 2000, respectively. Inventory turns
were 6.1 and 7.4 at March 31, 2001, and April 1, 2000, respectively.
Capital expenditures, consisting primarily of purchases of machinery
and equipment, were $1.0 million for the quarter ended March 31, 2001, compared
to $1.4 million for the quarter ended April 1, 2000.
The Company plans to break ground in the third quarter of this year to
build an addition to its plant in the United Kingdom that will double the
manufacturing space. The project is expected to cost $2.2 million.
11
The Company believes that cash generated from operations and its
borrowing availability under its revolving lines of credit will be sufficient to
satisfy its operating expenses and capital expenditures for the foreseeable
future.
The Company declared a quarterly dividend of $0.04 per share to
shareholders of record on March 31, 2001, which was paid on April 15, 2001.
SEASONALITY AND INFLATION
The Company generally has experienced reduced activity during the
fourth quarter of the year, largely as a result of fewer working days due to
holiday shutdowns. The Company does not believe that inflation had a material
effect on its operations for the periods ended March 31, 2001, and April 1,
2000. There can be no assurance, however, that the Company's business will not
be affected by inflation in the future.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest rates on
borrowed funds, which could affect its results of operations and financial
condition. At March 31, 2001, the Company had approximately $5.0 million in
variable-rate debt outstanding and, as such, the market risk is immaterial based
upon a 10% increase or decrease in interest rates. The Company manages this risk
by selecting debt financing that is based on the prime rate or Treasury
securities rate in the U.S., or the equivalent rate in the U.K., Germany, and
Korea, respectively.
12
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 headings "Business" (including
under the subheading "Business Risk Factors") in the Company's Form 10-K for the
year ended December 30, 2000, and "Management's Discussion and Analysis of
Financial Conditions and Results of Operations" in this Form 10-Q for the
quarter ended March 31, 2001. 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.
13
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
3.1 Amended and Restated Articles of Incorporation of the Company
(previously filed as Exhibit 3.1 in the Pre-Effective Amendment
No. 4 to the Company's Registration Statement on Form S-1 filed
on December 19, 1996 (File No. 333-14183) and incorporated
herein by reference).
3.2 Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.2 in the Pre-Effective Amendment No. 4 to the
Company's Registration Statement on Form S-1 filed on December
19, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.5 Mortgage and Security Agreement, dated January 9, 1992, between
Suninco, Inc., Sun Hydraulics Corporation, and Northern Trust
Bank of Florida, N.A. (previously filed as Exhibit 4.5 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.6 Loan Agreement, dated March 29, 1996, between Suninco, Inc.,
Sun Hydraulics Corporation, and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.6 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
14
4.7 Security Agreement, dated March 29, 1996, between Suninco, Inc.,
Sun Hydraulics Corporation, and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.7 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.8 Modification and Additional Advance Agreement, dated March 29,
1996, between Suninco, Inc. and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.8 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.9 Consolidated Note, dated March 29, 1996, in the amount of
$2,475,000.00, given by Suninco, Inc. to Northern Trust Bank
of Florida, N.A. (previously filed as Exhibit 4.9 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.10 Loan Agreement, dated May 20, 1996, between Sun Hydraulics
Corporation and Northern Trust Bank of Florida, N.A.
(previously filed as Exhibit 4.10 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.11 Security Agreement, dated May 20, 1996, between Sun Hydraulics
Corporation and Northern Trust Bank of Florida, N.A.
(previously filed as Exhibit 4.11 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.12 Consolidated Note, dated May 20, 1996, in the amount of
$3,063,157.00, given by Sun Hydraulics Corporation to Northern
Trust Bank of Florida, N.A. (previously filed as Exhibit 4.12
in the Company's Registration Statement on Form S-1 filed on
October 15, 1996 (File No. 333-14183) and incorporated herein
by reference).
4.13 Loan Agreement, dated June 14, 1996, between Sun Hydraulics
Corporation, Suninco Inc., and Northern Trust Bank of Florida,
N.A. (previously filed as Exhibit 4.13 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.14 Mortgage, dated June 14, 1996, between Sun Hydraulics
Corporation, Suninco Inc., and Northern Trust Bank of Florida,
N.A. (previously filed as Exhibit 4.14 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
15
4.15 Security Agreement, dated June 14, 1996, between Sun Hydraulics
Corporation and Northern Trust Bank of Florida, N.A.
(previously filed as Exhibit 4.15 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.16 Promissory Note, dated June 14, 1996, in the amount of $6,187,000.00,
given by Sun Hydraulics Corporation and Suninco, Inc. to
Northern Trust Bank of Florida, N.A. (previously filed as
Exhibit 4.16 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
4.17 Revolving Loan Facility letter agreement, dated July 30, 1996,
in the amount of(pound)800,000, between Sun Hydraulics Ltd.
and Lloyds Bank Plc. (previously filed as Exhibit 4.17 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.18 Overdraft and Other Facilities letter agreement, dated June 7,
1996, in an amount not to exceed(pound)250,000, between Sun
Hydraulics Ltd. and Lloyds Bank Plc. (previously filed as
Exhibit 4.18 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
4.19 Mortgage, dated April 11, 1996, between Sun Hydraulik GmbH and
Dresdner Bank (previously filed as Exhibit 4.19 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.20 Amendment to Recommended Offer by Sun Hydraulics Corporation to
acquire the whole of the issued share capital of Sun Hydraulik
Holdings Limited, dated December 17, 1996 (previously filed as
Exhibit 2.1 in the Pre-Effective Amendment No. 4 to the
Company's Registration Statement on Form S-1 filed on December
19, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.21 Master Note, dated February 3, 1997, in the amount of
$10,000,000.00, made by the Company to evidence a line of
credit granted to the Company by Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.21 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by reference).
4.22 Renewal Master Note, dated February 3, 1998, in the amount of
$10,000,000.00, made by the Company to evidence a line of
credit granted to the Company by Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.22 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 and incorporated herein by reference).
16
4.23 Modification Agreement, dated March 1, 1998, between the
Company and Northern Trust Bank of Florida, N.A. (previously
filed as Exhibit 4.23 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1998 and incorporated
herein by reference).
4.24 Renewal Master Note, dated as of February 3, 1998, in the
amount of $4,965,524.51, between the Company and Northern Trust
Bank of Florida, N.A. (previously filed as Exhibit 4.24 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 and incorporated herein by reference).
4.25 Renewal Master Note, dated of February 3, 1999, in the amount
of $4,965,524.51, between the Company and Northern Trust Bank
of Florida, N.A. (previously filed as Exhibit 4.25 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
April 3, 1999 and incorporated herein by reference).
4.26 Renewal Master Note, dated July 23, 1999, in the amount of
$5,000,000.00 between the Company and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.26 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 and incorporated herein by reference).
4.27 Loan Agreement, dated July 23, 1999, in the amount of
$7,500,000.00, between the Company and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.27 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 and incorporated herein by reference).
4.28 Security Agreement, dated July 23, 1999, between the Company
and Northern Trust Bank of Florida, N.A. (previously filed as
Exhibit 4.28 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 3, 1999 and incorporated herein by
reference).
4.29 Promissory Note, dated July 23, 1999, in the amount of
$7,500,000.00, between the Company and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.29 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 and incorporated herein by reference).
4.30 Loan Agreement, dated July 23, 2000, by and among Northern
Trust Bank of Florida, N.A. as Lender, Sun Hydraulics
Corporation as Borrower, and Sun Hydraulik Holdings Limited,
Sun Hydraulics Limited and Sun Hydraulik GmbH as Guarantors
(previously filed as Exhibit 4.30 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000
and incorporated herein by reference).
17
4.31 First Amendment to Security Agreement, dated July 23, 2000, by
and among Northern Trust Bank of Florida, N.A. and Sun
Hydraulics Corporation. (previously filed as Exhibit 4.31 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2000 and incorporated herein by
reference).
4.32 Master Note, dated July 23, 2000, in the amount of
$7,500,000.00, made by Sun Hydraulics Corporation in favor of
Northern Trust Bank of Florida, N.A. (previously filed as
Exhibit 4.32 to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 2000 and incorporated herein by
reference).
4.33 Amended and restated Loan Agreement by and among Northern Trust
Bank of Florida, N.A., Sun Hydraulics Corporation, Sun
Hydraulik Holdings Limited, Sun Hydraulics Limited and Sun
Hydraulik GmbH dated November 1, 2000 (previously filed as
Exhibit 4.33 to the Company's Annual Report on Form 10-K for
the year ended December 30, 2000 and incorporated herein by
reference.)
10.1 Form of Distributor Agreement (Domestic) (previously filed as
Exhibit 10.1 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
10.2 Form of Distributor Agreement (International) (previously filed
as Exhibit 10.2 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
10.3+ 1996 Sun Hydraulics Corporation Stock Option Plan (previously
filed as Exhibit 10.3 in the Pre-Effective Amendment No. 4 to
the Company's Registration Statement on Form S-1 filed on
December 19, 1996 (File No. 333-14183) and incorporated herein
by reference).
10.4+ Amendment No. 1 to 1996 Stock Option Plan (previously filed as
Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997 and incorporated herein by
reference).
10.5+ Form of Indemnification Agreement (previously filed as Exhibit
10.4 in the Pre-Effective Amendment No. 4 to the Company's
Registration Statement on Form S-1 filed on December 19, 1996
(File No. 333-14183) and incorporated herein by reference).
10.6+ Sun Hydraulics Corporation Employee Stock Award Program
(previously filed as Exhibit 4 to the Company's registration
statement on Form S-8 filed on July 20, 1999 (file No.
333-83269), and incorporated herein by reference.)
18
+ Executive management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K.
Report on Form 8-K (dated March 7, 2001) filed March 8, 2001,
announcing year-end 2000, fourth quarter financial results, and
quarterly dividend.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Sarasota, State of Florida on May 9, 2001.
SUN HYDRAULICS CORPORATION
By:/s/ Richard J. Dobbyn
-----------------------------------
Richard J. Dobbyn
Chief Financial Officer (Principal
Financial and Accounting Officer)
19
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
3.1 Amended and Restated Articles of Incorporation of the Company
(previously filed as Exhibit 3.1 in the Pre-Effective Amendment
No. 4 to the Company's Registration Statement on Form S-1 filed
on December 19, 1996 (File No. 333-14183) and incorporated
herein by reference).
3.2 Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.2 in the Pre-Effective Amendment No. 4 to the
Company's Registration Statement on Form S-1 filed on December
19, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.5 Mortgage and Security Agreement, dated January 9, 1992, between
Suninco, Inc., Sun Hydraulics Corporation, and Northern Trust
Bank of Florida, N.A. (previously filed as Exhibit 4.5 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.6 Loan Agreement, dated March 29, 1996, between Suninco, Inc.,
Sun Hydraulics Corporation, and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.6 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.7 Security Agreement, dated March 29, 1996, between Suninco, Inc.,
Sun Hydraulics Corporation, and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.7 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.8 Modification and Additional Advance Agreement, dated March 29,
1996, between Suninco, Inc. and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.8 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.9 Consolidated Note, dated March 29, 1996, in the amount of
$2,475,000.00, given by Suninco, Inc. to Northern Trust Bank
of Florida, N.A. (previously filed as Exhibit 4.9 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.10 Loan Agreement, dated May 20, 1996, between Sun Hydraulics
Corporation and Northern Trust Bank of Florida, N.A.
(previously filed as Exhibit 4.10 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
20
4.11 Security Agreement, dated May 20, 1996, between Sun Hydraulics
Corporation and Northern Trust Bank of Florida, N.A.
(previously filed as Exhibit 4.11 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.12 Consolidated Note, dated May 20, 1996, in the amount of
$3,063,157.00, given by Sun Hydraulics Corporation to Northern
Trust Bank of Florida, N.A. (previously filed as Exhibit 4.12
in the Company's Registration Statement on Form S-1 filed on
October 15, 1996 (File No. 333-14183) and incorporated herein
by reference).
4.13 Loan Agreement, dated June 14, 1996, between Sun Hydraulics
Corporation, Suninco Inc., and Northern Trust Bank of Florida,
N.A. (previously filed as Exhibit 4.13 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.14 Mortgage, dated June 14, 1996, between Sun Hydraulics
Corporation, Suninco Inc., and Northern Trust Bank of Florida,
N.A. (previously filed as Exhibit 4.14 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.15 Security Agreement, dated June 14, 1996, between Sun Hydraulics
Corporation and Northern Trust Bank of Florida, N.A.
(previously filed as Exhibit 4.15 in the Company's
Registration Statement on Form S-1 filed on October 15, 1996
(File No. 333-14183) and incorporated herein by reference).
4.16 Promissory Note, dated June 14, 1996, in the amount of $6,187,000.00,
given by Sun Hydraulics Corporation and Suninco, Inc. to
Northern Trust Bank of Florida, N.A. (previously filed as
Exhibit 4.16 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
4.17 Revolving Loan Facility letter agreement, dated July 30, 1996, in
the amount of(pound)800,000, between Sun Hydraulics Ltd. and
Lloyds Bank Plc. (previously filed as Exhibit 4.17 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.18 Overdraft and Other Facilities letter agreement, dated June 7,
1996, in an amount not to exceed(pound)250,000, between Sun
Hydraulics Ltd. and Lloyds Bank Plc. (previously filed as
Exhibit 4.18 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
21
4.19 Mortgage, dated April 11, 1996, between Sun Hydraulik GmbH and
Dresdner Bank (previously filed as Exhibit 4.19 in the
Company's Registration Statement on Form S-1 filed on October
15, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.20 Amendment to Recommended Offer by Sun Hydraulics Corporation to
acquire the whole of the issued share capital of Sun Hydraulik
Holdings Limited, dated December 17, 1996 (previously filed as
Exhibit 2.1 in the Pre-Effective Amendment No. 4 to the
Company's Registration Statement on Form S-1 filed on December
19, 1996 (File No. 333-14183) and incorporated herein by
reference).
4.21 Master Note, dated February 3, 1997, in the amount of
$10,000,000.00, made by the Company to evidence a line of
credit granted to the Company by Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.21 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by reference).
4.22 Renewal Master Note, dated February 3, 1998, in the amount of
$10,000,000.00, made by the Company to evidence a line of
credit granted to the Company by Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.22 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 and incorporated herein by reference).
4.23 Modification Agreement, dated March 1, 1998, between the
Company and Northern Trust Bank of Florida, N.A. (previously
filed as Exhibit 4.23 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1998 and incorporated
herein by reference).
4.24 Renewal Master Note, dated as of February 3, 1998, in the
amount of $4,965,524.51, between the Company and Northern Trust
Bank of Florida, N.A. (previously filed as Exhibit 4.24 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 and incorporated herein by reference).
4.25 Renewal Master Note, dated of February 3, 1999, in the amount
of $4,965,524.51, between the Company and Northern Trust Bank
of Florida, N.A. (previously filed as Exhibit 4.25 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
April 3, 1999 and incorporated herein by reference).
4.26 Renewal Master Note, dated July 23, 1999, in the amount of
$5,000,000.00 between the Company and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.26 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 and incorporated herein by reference).
22
4.27 Loan Agreement, dated July 23, 1999, in the amount of
$7,500,000.00, between the Company and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.27 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 and incorporated herein by reference).
4.28 Security Agreement, dated July 23, 1999, between the Company
and Northern Trust Bank of Florida, N.A. (previously filed as
Exhibit 4.28 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 3, 1999 and incorporated herein by
reference).
4.29 Promissory Note, dated July 23, 1999, in the amount of
$7,500,000.00, between the Company and Northern Trust Bank of
Florida, N.A. (previously filed as Exhibit 4.29 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 and incorporated herein by reference).
4.30 Loan Agreement, dated July 23, 2000, by and among Northern
Trust Bank of Florida, N.A. as Lender, Sun Hydraulics
Corporation as Borrower, and Sun Hydraulik Holdings Limited,
Sun Hydraulics Limited and Sun Hydraulik GmbH as Guarantors
(previously filed as Exhibit 4.30 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000
and incorporated herein by reference).
4.31 First Amendment to Security Agreement, dated July 23, 2000, by
and among Northern Trust Bank of Florida, N.A. and Sun
Hydraulics Corporation. (previously filed as Exhibit 4.31 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2000 and incorporated herein by
reference).
4.32 Master Note, dated July 23, 2000, in the amount of
$7,500,000.00, made by Sun Hydraulics Corporation in favor of
Northern Trust Bank of Florida, N.A. (previously filed as
Exhibit 4.32 to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 2000 and incorporated herein by
reference).
4.33 Amended and restated Loan Agreement by and among Northern Trust
Bank of Florida, N.A., Sun Hydraulics Corporation, Sun
Hydraulik Holdings Limited, Sun Hydraulics Limited and Sun
Hydraulik GmbH dated November 1, 2000 (previously filed as
Exhibit 4.33 to the Company's Annual Report on Form 10-K for
the year ended December 30, 2000 and incorporated herein by
reference.)
10.1 Form of Distributor Agreement (Domestic) (previously filed as
Exhibit 10.1 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
23
10.2 Form of Distributor Agreement (International) (previously filed
as Exhibit 10.2 in the Company's Registration Statement on Form
S-1 filed on October 15, 1996 (File No. 333-14183) and
incorporated herein by reference).
10.3+ 1996 Sun Hydraulics Corporation Stock Option Plan (previously
filed as Exhibit 10.3 in the Pre-Effective Amendment No. 4 to
the Company's Registration Statement on Form S-1 filed on
December 19, 1996 (File No. 333-14183) and incorporated herein
by reference).
10.4+ Amendment No. 1 to 1996 Stock Option Plan (previously filed as
Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997 and incorporated herein by
reference).
10.5+ Form of Indemnification Agreement (previously filed as Exhibit
10.4 in the Pre-Effective Amendment No. 4 to the Company's
Registration Statement on Form S-1 filed on December 19, 1996
(File No. 333-14183) and incorporated herein by reference).
10.6+ Sun Hydraulics Corporation Employee Stock Award Program
(previously filed as Exhibit 4 to the Company's registration
statement on Form S-8 filed on July 20, 1999 (file No.
333-83269), and incorporated herein by reference).
+ Executive management contract or compensatory plan or arrangement.
24