(Dollars in millions except net income per share) June 28, June 30, 2008 2007 Increase Three Months Ended Net Sales $ 51.6 $ 43.4 19% Net Income $ 8.9 $ 6.0 48% Net Income per share: Basic $ 0.54 $ 0.36 50% Diluted $ 0.54 $ 0.36 50% Six Months Ended Net Sales $ 100.6 $ 84.3 19% Net Income $ 16.6 $ 11.8 41% Net Income per share: Basic $ 1.00 $ 0.72 39% Fully Diluted $ 1.00 $ 0.71 41%
SUN HYDRAULICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data) Three months ended June 28, June 30, 2008 2007 (unaudited) (unaudited) Net sales $ 51,563 $ 43,422 Cost of sales 32,488 29,125 ----------- ----------- Gross profit 19,075 14,297 Selling, engineering and administrative expenses 5,792 5,438 ----------- ----------- Operating income 13,283 8,859 Interest income, net (155) (89) Foreign currency transaction loss, net 65 27 Miscellaneous (income)/expense, net 32 (124) ----------- ----------- Income before income taxes 13,341 9,045 Income tax provision 4,433 3,093 ----------- ----------- Net income $ 8,908 $ 5,952 =========== =========== Basic net income per common share $ 0.54 $ 0.36 Weighted average basic shares outstanding 16,592 16,425 Diluted net income per common share $ 0.54 $ 0.36 Weighted average diluted shares outstanding 16,623 16,494 Dividends declared per share $ 0.180 $ 0.090 SUN HYDRAULICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data) Six months ended June 28, June 30, 2008 2007 (unaudited) (unaudited) Net sales $ 100,571 $ 84,275 Cost of sales 64,402 56,096 ------------ ------------ Gross profit 36,169 28,179 Selling, engineering and administrative expenses 11,746 10,653 ------------ ------------ Operating income 24,423 17,526 Interest income, net (268) (162) Foreign currency transaction loss, net 101 1 Miscellaneous income, net (218) (206) ------------ ------------ Income before income taxes 24,808 17,893 Income tax provision 8,208 6,135 ------------ ------------ Net income $ 16,600 $ 11,758 ============ ============ Basic net income per common share $ 1.00 $ 0.72 Weighted average basic shares outstanding 16,577 16,401 Diluted net income per common share $ 1.00 $ 0.71 Weighted average diluted shares outstanding 16,610 16,478 Dividends declared per share $ 0.270 $ 0.157 SUN HYDRAULICS CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands) June 28, 2008 December 29, (unaudited) 2007 Assets Current assets: Cash and cash equivalents $ 27,962 $ 19,191 Restricted cash 153 146 Accounts receivable, net of allowance for doubtful accounts of $176 and $215 22,302 17,029 Inventories 12,203 11,421 Deferred income taxes 301 301 Other current assets 1,125 1,210 ------------- ------------- Total current assets 64,046 49,298 Property, plant and equipment, net 60,346 56,999 Other assets 4,467 4,483 ------------- ------------- Total assets $ 128,859 $ 110,780 ============= ============= Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 7,069 $ 5,668 Accrued expenses and other liabilities 4,796 4,857 Long-term debt due within one year 330 417 Dividends payable 1,495 1,484 Income taxes payable 2,338 674 ------------- ------------- Total current liabilities 16,028 13,100 Long-term debt due after one year 196 284 Deferred income taxes 5,106 5,108 Other noncurrent liabilities 563 406 ------------- ------------- Total liabilities 21,893 18,898 Shareholders' equity: Common stock 17 16 Capital in excess of par value 37,340 34,390 Retained earnings 63,959 51,844 Accumulated other comprehensive income 5,650 5,632 ------------- ------------- Total shareholders' equity 106,966 91,882 ------------- ------------- Total liabilities and shareholders equity $ 128,859 $ 110,780 ============= ============= SUN HYDRAULICS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) Six months ended June 28, June 30, 2008 2007 (unaudited) (unaudited) Cash flows from operating activities: Net income $ 16,600 $ 11,758 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,521 3,047 (Gain)/Loss on disposal of assets 115 (61) Provision for deferred income taxes (2) 84 Allowance for doubtful accounts (39) (38) Stock-based compensation expense 434 331 Stock options income tax benefit (15) (286) (Increase) decrease in: Accounts receivable (5,234) (3,831) Inventories (782) (754) Other current assets 85 (1,473) Other assets 3 (205) Increase in: Accounts payable 1,401 959 Accrued expenses and other liabilities 2,194 1,311 Income taxes payable 1,679 1,207 Other noncurrent liabilities 157 401 ------------ ------------ Net cash provided by operating activities 20,117 12,450 Cash flows from investing activities: Capital expenditures (6,862) (6,885) Proceeds from dispositions of equipment 99 76 ------------ ------------ Net cash used in investing activities (6,763) (6,809) Cash flows from financing activities: Repayment of debt (225) (210) Proceeds from exercise of stock options 84 256 Proceeds from stock issued 162 123 Dividends to shareholders (4,474) (2,181) Stock options income tax benefit 15 286 ------------ ------------ Net cash used in financing activities (4,438) (1,726) Effect of exchange rate changes on cash and cash equivalents (138) 310 ------------ ------------ Net increase in cash and cash equivalents 8,778 4,225 Cash and cash equivalents, beginning of period 19,337 9,497 ------------ ------------ Cash and cash equivalents, end of period $ 28,115 $ 13,722 ============ ============ Supplemental disclosure of cash flow information: Cash paid: Interest $ 19 $ 24 Income taxes $ 6,546 $ 5,349 Supplemental disclosure of noncash transactions: Common stock issued to ESOP through accrued expenses and other liabilities $ 2,255 $ 1,386 United United Elimin- Consoli- States Korea Germany Kingdom ation dated Three Months Ended June 28, 2008 Sales to unaffiliated customers $ 31,705 $ 5,465 $ 7,859 $ 6,534 $ - $ 51,563 Intercompany sales 8,677 - 65 615 (9,357) - Operating income 9,391 425 2,314 1,078 75 13,283 Depreciation 1,265 42 151 336 - 1,794 Capital expenditures 4,180 1 117 164 - 4,462 Three Months Ended June 30, 2007 Sales to unaffiliated customers $ 25,836 $ 5,695 $ 6,107 $ 5,784 $ - $ 43,422 Intercompany sales 7,995 - 20 650 (8,665) - Operating income 6,153 636 1,377 686 7 8,859 Depreciation 1,098 43 136 264 - 1,541 Capital expenditures 2,976 152 21 533 - 3,682 Six Months Ended June 28, 2008 Sales to unaffiliated customers $ 60,024 $ 11,819 $ 15,821 $ 12,907 $ - $100,571 Intercompany sales 17,804 - 143 1,204 (19,151) - Operating income 16,575 1,074 4,728 2,108 (62) 24,423 Depreciation 2,457 88 296 666 - 3,507 Capital expenditures 6,412 17 149 284 - 6,862 Six Months Ended June 30, 2007 Sales to unaffiliated customers $ 49,604 $ 10,652 $ 12,698 $ 11,321 $ - $ 84,275 Intercompany sales 16,163 - 50 1,534 (17,747) - Operating income 11,896 1,146 3,021 1,521 (58) 17,526 Depreciation 2,160 82 272 520 - 3,034 Capital expenditures 5,718 209 47 911 - 6,885
Contact Information: Contact: Richard K. Arter Investor Relations 941-362-1200 Tricia L. Fulton Chief Financial Officer 941-362-1200