Sun Hydraulics Corporation Reports Third Quarter EPS of $0.08

SARASOTA, Fla., Nov 6, 2002 /PRNewswire-FirstCall via COMTEX/ -- Sun Hydraulics Corporation (Nasdaq: SNHY) today announced that net sales for the third quarter ended September 28, 2002, were $16.04 million, a decrease of $1.37 million, or 7.9%, from the previous quarter, and an increase of $0.92 million, or 6.1%, compared to the net sales for the quarter ended September 29, 2001. Net income for the quarter ended September 28, 2002, was $0.51 million, or 3.2% of net sales, compared to $0.77 million, or 4.4% of net sales for the previous quarter, and $0.15 million, or 1.0% of net sales for the same quarter last year. Both basic and diluted earnings per share for the quarter ended September 28, 2002, were $0.08, compared to $0.02 for the quarter ended September 29, 2001.

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Orders for the three months ended September 28, 2002, were $15.76 million. This was a $1.05 million, or 7.2%, increase from the three months ended September 29, 2001, and a $2.52 million, or 13.8%, decrease compared to the previous quarter ended June 29, 2002. The 13.8% decrease from the previous quarter included a 15.0% decrease in domestic orders, and a 12.5% decrease in international orders as follows: Korean orders decreased 13.2%, German orders decreased 5.8% and United Kingdom orders decreased 15.8%.

Historically, the Company's order trends have tracked the manufacturing capacity utilization index in the United States. This index increased in January 2002 for the first time in approximately two years and generally continued to increase modestly each month through July before decreasing slightly in August and September.

"The Company's order rate since July has mirrored the lack of upward movement in the capacity utilization index," said Sun Hydraulics president Allen Carlson. "What we had hoped was a normal summer slowdown has turned out to be a stalling of the economic recovery in the manufacturing sector, particularly in the United States."


Based on the current order rates, the Company forecasts net sales for the fourth quarter ending December 28, 2002, to be in the range of $15.2 to $15.8 million. Net income for the quarter is estimated to be between $0.04 and $0.07 per share. Net income for the year would then be $0.26 to $0.29 per share.

"The protracted recession in the manufacturing sector of the economy has not changed our belief that preserving the workforce, while continuing to make prudent capital expenditures to improve productivity, will yield a return and is in the best long-term interest of our shareholders," concluded Carlson.

Sun Hydraulics Corporation will broadcast its third quarter conference call with analysts live over the Internet at 2:30 P.M. E.S.T. today, November 6, 2002. To listen, go to

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


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 28, 2002, and under the heading "Business" and particularly under the subheading, "Business Risk Factors" in the Company's Form 10-K for the year ended December 29, 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.

SOURCE Sun Hydraulics Corporation

Richard K. Arter, Investor Relations, or Richard J. Dobbyn, Chief Financial Officer, both of Sun Hydraulics Corporation, +1-941-362-1200 /Photo: NewsCom: AP Archive: PRN Photo Desk, 888-776-6555 or 212-782-2840 /Audio: