|By Marketwired .||
|May 5, 2014 05:00 PM EDT||
SARASOTA, FL -- (Marketwired) -- 05/05/14 -- Sun Hydraulics Corporation (NASDAQ: SNHY) today reported financial results for the first quarter of 2014 as follows:
March 29, 2014 March 30, 2013 Increase Three Months Ended Net sales $ 56.8 $ 51.1 11% Net income $ 11.4 $ 9.6 19% Net income per share: Basic $ 0.43 $ 0.37 18% Diluted $ 0.43 $ 0.37 18%
"Demand in the first quarter accelerated in late February and throughout March driving strong results for the quarter," said Allen Carlson, Sun's President and CEO. "All geographic markets grew year-over-year with Asia/Pacific increasing 20%, Europe 17%, and North America 4%."
"Seasonally, the second quarter is our strongest and we expect the increased demand for our products to continue," Carlson added. "Current order rates combined with positive economic indicators, including PMI, guide our expectations. We are ready for future opportunities and our workforce remains agile. We have the capabilities and capacity in place to meet future demand."
"Our focus remains on long-term goals," stated Carlson. "We continue to make investments, which will be funded from earnings throughout 2014, to drive future growth. These investments include new products, increased research and development, and sales and marketing efforts to expand our global reach. Asia has and will continue to be a market that provides many opportunities for growth. To help us fully realize the potential of this market, Tim Twitty, a member of our leadership team, is relocating to Shanghai, China, this summer with his family. Tim has over 20 years of experience with Sun's products, customers, and markets. His leadership will enhance our sales and marketing efforts and accelerate growth in this region, while remaining connected to the leadership team in Sarasota."
"Sun's end markets are strong, as reflected in our second quarter forecast," concluded Carlson. "Operationally, we have a common goal that permeates our value chain -- to satisfy and ship product on-time to our customers. Long term, we are making investments to remain a leader in our field and deliver value to all stakeholders."
Second quarter 2014 revenues are expected to be approximately $60 million, up approximately 8% from the second quarter of 2013. Earnings per share are estimated to be $0.44 to $0.46 compared to $0.45 in the same period a year ago. Top line growth and profitability are funding investments that will benefit Sun for the long term. In the short term, these investments will impact selling, engineering and administrative expenses, and therefore earnings, throughout 2014.
Sun Hydraulics Corporation will host its Annual Meeting of Shareholders on June 2, 2014, at 10:00 A.M. E.T., at the Company's newest facility, located at 803 Tallevast Road, Sarasota, Florida 34243. Our Annual Report and Proxy Statement were mailed to shareholders on April 21, 2014, and can also be accessed here:
Sun Hydraulics Corporation will broadcast its 2014 first quarter financial results conference call live over the Internet at 9:00 A.M. E.T. tomorrow, May 6, 2014. To listen to the webcast, go to the Investor Relations section of www.sunhydraulics.com.
If an individual wishes to ask questions directly during the webcast, the conference call may be accessed by dialing 1-888-438-5519 and using 2285575 as the access code. Questions also may be submitted to the Company via email by going to the Sun Hydraulics website, www.sunhydraulics.com, and clicking on Investor Relations on the top menu. Scroll down to the bottom of the page and click on contact email: [email protected], which will open an email window to type in your message. Sun management will then answer these and other questions during the Company's webcast. A copy of this earnings release is posted on the Investor Relations page of our website under "Press Releases."
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.
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 March 29, 2014, 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 28, 2013. 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.
SUN HYDRAULICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data) Three months ended March 29, March 30, 2014 2013 (unaudited) (unaudited) Net sales $ 56,809 $ 51,060 Cost of sales 32,742 30,556 ------------ ------------ Gross profit 24,067 20,504 Selling, engineering and administrative expenses 7,341 6,572 ------------ ------------ Operating income 16,726 13,932 Interest (income) expense, net (312) (196) Foreign currency transaction (gain) loss, net 8 (120) Miscellaneous (income) expense, net 83 94 ------------ ------------ Income before income taxes 16,947 14,154 Income tax provision 5,562 4,579 ------------ ------------ Net income $ 11,385 $ 9,575 ============ ============ Basic net income per common share $ 0.43 $ 0.37 Weighted average basic shares outstanding 26,374 26,131 Diluted net income per common share $ 0.43 $ 0.37 Weighted average diluted shares outstanding 26,374 26,132 Dividends declared per share $ 0.180 $ 0.180 SUN HYDRAULICS CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands) March 29, December 28, 2014 2013 (unaudited) Assets Current assets: Cash and cash equivalents $ 55,074 $ 54,912 Restricted cash 331 334 Accounts receivable, net of allowance for doubtful accounts of $100 and $117 23,627 16,984 Inventories 14,465 13,853 Income taxes receivable -- 954 Deferred income taxes 471 474 Short-term investments 41,890 38,729 Other current assets 4,022 2,816 ------------- ------------- Total current assets 139,880 129,056 Property, plant and equipment, net 75,854 75,731 Goodwill 5,198 5,221 Other assets 3,336 3,470 ------------- ------------- Total assets $ 224,268 $ 213,478 ============= ============= Liabilities and shareholders' equity Current liabilities: Accounts payable $ 6,645 $ 4,630 Accrued expenses and other liabilities 4,765 7,016 Income taxes payable 293 -- Dividends payable 2,379 2,372 ------------- ------------- Total current liabilities 14,082 14,018 Deferred income taxes 7,748 7,747 Other noncurrent liabilities 283 285 ------------- ------------- Total liabilities 22,113 22,050 Commitments and contingencies -- -- Shareholders' equity: Preferred stock, 2,000,000 shares authorized, par value $0.001, no shares outstanding -- -- Common stock, 40,000,000 shares authorized, par value $0.001, 26,430,370 and 26,352,692 shares outstanding 26 26 Capital in excess of par value 69,494 65,391 Retained earnings 130,048 123,420 Accumulated other comprehensive income (loss) 2,587 2,591 ------------- ------------- Total shareholders' equity 202,155 191,428 ------------- ------------- Total liabilities and shareholders' equity $ 224,268 $ 213,478 ============= ============= SUN HYDRAULICS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) Three months ended March 29, March 30, 2014 2013 (unaudited) (unaudited) Cash flows from operating activities: Net income $ 11,385 $ 9,575 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,074 1,796 (Gain)Loss on disposal of assets 44 (2) Provision for deferred income taxes 4 3 Allowance for doubtful accounts (17) 3 Stock-based compensation expense 936 691 (Increase) decrease in, net of assets acquired: Accounts receivable (6,626) (4,535) Inventories (612) 49 Income taxes receivable 954 728 Other current assets (1,206) (1,075) Other assets 111 136 Increase (decrease) in, net of liabilities assumed: Accounts payable 2,015 557 Accrued expenses and other liabilities 731 (156) Income taxes payable 293 3,430 Other noncurrent liabilities (2) 2 ------------ ------------ Net cash provided by operating activities 10,084 11,202 Cash flows from investing activities: Capital expenditures (1,959) (3,365) Purchases of short-term investments (11,066) (6,997) Proceeds from sale of short-term investments 7,833 8,809 ------------ ------------ Net cash used in investing activities (5,192) (1,553) Cash flows from financing activities: Proceeds from stock issued 185 267 Dividends to shareholders (4,750) (2,351) Change in restricted cash 3 14 ------------ ------------ Net cash used in financing activities (4,562) (2,070) Effect of exchange rate changes on cash and cash equivalents (168) (1,482) ------------ ------------ Net increase (decrease) in cash and cash equivalents 162 6,097 Cash and cash equivalents, beginning of period 54,912 34,478 ------------ ------------ Cash and cash equivalents, end of period $ 55,074 $ 40,575 ============ ============ Supplemental disclosure of cash flow information: Cash paid: Income taxes $ 4,311 $ 418 Supplemental disclosure of noncash transactions: Common stock issued for shared distribution through accrued expenses and other liabilities $ 2,982 $ 3,247 Common stock issued for deferred director's compensation through other noncurrent liabilities $ -- $ 294
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