8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest
Event Reported): November 4, 2003

SUN HYDRAULICS CORPORATION

(Exact name of registrant as specified in its charter)

Florida	0-21835	59-2754337
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1500 West University Parkway Sarasota, Florida	34243
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 941-362-1200

Item 5. Other Events and Regulation FD Disclosure.

     On November 4, 2003, the Registrant issued the press release attached hereto as Exhibit 99.1 announcing the results for the third quarter ended September 27, 2003.

Item 7. Financial Statements and Exhibits.

     (a)  Financial Statements of Businesses Acquired.

     None.

     (b)  Pro Forma Financial Information.

     None.

     (c)  Exhibits.

Exhibit
Number	Exhibit Description
99.1	Press Release of the Registrant dated November 4, 2003.

-2-

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUN HYDRAULICS CORPORATION
	By: /s/ Richard J. Dobbyn
	Richard J. Dobbyn Chief Financial Officer (Principal Financial and Accounting Officer)
Dated: November 4, 2003

-3- EX-99.1 3 g85637exv99w1.txt EX-99.1 PRESS RELEASE DATED 11/4/03 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 AN INCREASE OF SALES IN THE U.S. AND THIRD QUARTER NET INCOME OF $0.08 PER SHARE SARASOTA, FLA, NOVEMBER 4, 2003 -Sun Hydraulics Corporation (NASDAQ: SNHY) today announced that sales for the third quarter ended September 27, 2003, were $17.9 million, a decrease of 5.6% from the second quarter and a 11.3% increase from the same quarter last year. Net income was $0.5 million, equal to net income for the same quarter last year. Basic and diluted earnings per share for the quarter ended September 27, 2003, were $0.08 equal to the same period last year. Allen Carlson, Sun Hydraulics' president commented, "Sales in the United States increased 6% compared to the same quarter last year. We hope this signals the long awaited recovery in the United States manufacturing economy. International sales increased 17.0% in the third quarter compared to the same quarter last year, with continued strength in Germany and Korea." Carlson continued, "Net income per share was equal to the same quarter last year, despite an 11% increase in total sales, primarily because of the investments we are making in marketing and related areas. So far this year we have started an operation in the Midwest, opened a sales/marketing office in France and launched a new line of electro-hydraulic valves. We also have continued to invest in our website, focusing on electronically providing customers visual and technical information on millions of possible combinations of our cartridge/manifold assemblies. This feature will be available early next year." During the quarter ended September 27, 2003, the Company paid a special dividend of $13.3 million and increased debt $10.9 million to $20.0 million at quarter end. Year to date the Company has generated $6.9 million from operations and cash on hand at September 27, 2003, was $5.1 million. OUTLOOK Sales for the fourth quarter are projected to be $17.0 million, with net income of $0.08 per share. Last year sales for the fourth quarter were $15.5 million and net income was $0.06 per share. Until there are more positive signs of a recovery in the economy, the Company is reluctant to provide an estimate of sales for 2004. WEBCAST Sun Hydraulics Corporation will broadcast its third quarter financial results conference call with analysts live over the Internet at 2:30 P.M. E.T. tomorrow, November 5, 2003. To listen, go to HTTP://INVESTOR.SUNHYDRAULICS.COM/MEDIALIST.CFM. A copy of this earnings release is posted on the Investor Relations page of our website under "Press Releases." WEBCAST Q&A Questions may be submitted to the Company via email after reviewing this earnings release. Sun management will then answer these and other questions during the Company's webcast. Questions can be submitted by going to the Sun Hydraulics website, WWW.SUNHYDRAULICS.COM, and clicking on Investor Relations on the left hand menu. Scroll down to the bottom of the page and click on contact email: investor@sunhydraulics.com, which will open an email window to type in your message. Sun Hydraulics will answer as many legitimate questions pertaining to the 3rd quarter earnings release as possible during the webcast time. 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. 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 - 2 - 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 27, 2003, 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, 2002. 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. * Please see attached document for financial information. - 3 - SUN HYDRAULICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data) Three Months Ended ----------------------------- September 27, September 28, 2003 2002 ------------- ------------- Net sales $ 17,851 $ 16,043 Cost of sales 13,328 11,995 -------- -------- Gross profit 4,523 4,048 Selling, engineering and administrative expenses 3,604 3,021 -------- -------- Operating income 919 1,027 Interest expense 137 153 Foreign currency transaction loss (gain) (1) 87 Miscellaneous expense (income) (1) 7 -------- -------- Income before income taxes 784 780 Income tax provision 275 273 -------- -------- Net income $ 509 $ 507 ======== ======== Basic net income per share $ 0.08 $ 0.08 Basic weighted average shares outstanding 6,594 6,433 Diluted net income per share $ 0.08 $ 0.08 Diluted weighted average share outstanding 6,638 6,577 - 4 - SUN HYDRAULICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data) Nine Months Ended --------------------------- September 27, September 28, 2003 2002 ------------- ------------- Net sales $ 53,188 $ 49,069 Cost of sales 39,059 36,803 -------- -------- Gross profit 14,129 12,266 Selling, engineering and administrative expenses 11,491 9,472 -------- -------- Operating income 2,638 2,794 Interest expense 415 455 Foreign currency transaction loss (gain) (190) 76 Miscellaneous expense (income) (24) 95 -------- -------- Income before income taxes 2,437 2,168 Income tax provision 857 759 -------- -------- Net income $ 1,580 $ 1,409 ======== ======== Basic net income per share $ 0.24 $ 0.22 Basic weighted average shares outstanding 6,492 6,429 Diluted net income per share $ 0.24 $ 0.21 Diluted weighted average share outstanding 6,536 6,573 - 5 - CONSOLIDATED BALANCE SHEETS (in thousands) September 27, December 28, 2003 2002 ------------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,070 $ 3,958 Accounts receivable, net of allowance for doubtful accounts of $229 and $194 7,874 5,690 Inventories 6,812 6,846 Other current assets 198 810 -------- -------- Total current assets 19,954 17,304 Property, plant and equipment, net 42,792 43,987 Other assets 1,510 994 -------- -------- TOTAL ASSETS $ 64,256 $ 62,285 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,180 $ 1,706 Accrued expenses and other liabilities 3,022 1,081 Long-term debt due within one year 932 1,421 Dividends payable 269 258 Income taxes payable 694 10 -------- -------- Total current liabilities 7,097 4,476 Long-term debt due after one year 19,118 8,190 Deferred income taxes 4,091 4,092 Other liabilities 340 378 Redeemable Common Stock 2,250 2,250 -------- -------- Total liabilities 32,896 19,386 Shareholders' equity: Common stock 7 6 Capital in excess of par value 24,085 22,690 Unearned compensation related to outstanding restricted stock (494) (170) Retained earnings and accumulated comprehensive income 7,762 20,373 -------- -------- Total shareholders' equity 31,360 42,899 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 64,256 $ 62,285 ======== ======== - 6 - CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands)

Nine Months Ended ----------------------------- September 27, September 28, 2003 2002 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,580 $ 1,409 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,907 3,873 Gain/(Loss) on disposal of assets 367 155 Allowance for doubtful accounts 35 6 Provision for deferred income taxes (1) 10 (Increase) decrease in: Accounts receivable (2,219) (1,546) Inventories 34 302 Income tax receivable -- 668 Other current assets 612 603 Other assets, net (516) (51) Increase (decrease) in: Accounts payable 474 464 Accrued expenses and other liabilities 1,941 292 Dividends payable 11 1 Income taxes payable 684 458 Other liabilities (38) (37) -------- -------- Net cash from operating activities 6,871 6,607 CASH FLOWS USED IN INVESTING ACTIVITIES: Capital expenditures (3,090) (4,883) Proceeds from dispositions of equipment 11 53 -------- -------- Net cash used in investing activities (3,079) (4,830) CASH FLOWS USED IN FINANCING ACTIVITIES: Proceeds from debt 18,850 -- Repayment of debt (8,411) (778) Proceeds from stock issued 1,072 217 Dividends to shareholders (14,133) (771) -------- -------- Net cash used in financing activities (2,622) (1,332) Effect of exchange rate changes on cash and cash equivalents (58) 113 Net increase (decrease) in cash and cash equivalents 1,112 558 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,958 3,611 CASH AND CASH EQUIVALENTS, END OF PERIOD 5,070 4,169 Supplemental disclosure of cash flow information: Cash paid/(received): Interest $ 415 $ 455 Income taxes $ 174 $ (377)

- 7 -

United United States Korea Germany Kingdom Elimination Consolidated ------ ----- ------- ------- ----------- ------------ THREE MONTHS ENDED SEPTEMBER 27, 2003 Sales to unaffiliated customers $ 11,208 $ 1,630 $ 2,316 $ 2,697 $ -- $ 17,851 Intercompany sales 2,918 -- 9 323 (3,250) -- Operating income 508 187 432 (190) (18) 919 Depreciation 900 32 94 235 -- 1,261 Capital expenditures 757 386 111 466 -- 1,720 THREE MONTHS ENDED SEPTEMBER 28, 2002 Sales to unaffiliated customers $ 10,390 $ 1,399 $ 1,704 $ 2,550 $ -- $ 16,043 Intercompany sales 2,498 -- 5 325 (2,828) -- Operating income 557 167 175 58 70 1,027 Depreciation 912 28 79 203 -- 1,222 Capital expenditures 726 30 19 720 -- 1,495 NINE MONTHS ENDED SEPTEMBER 27, 2003 Sales to unaffiliated customers $ 32,473 $ 5,175 $ 6,951 $ 8,589 $ -- $ 53,188 Intercompany sales 9,794 -- 33 1,032 (10,859) -- Operating income 1,806 541 925 (655) 21 2,638 Depreciation 2,752 89 285 781 -- 3,907 Capital expenditures 1,688 418 203 781 -- 3,090 NINE MONTHS ENDED SEPTEMBER 28, 2002 Sales to unaffiliated customers $ 31,593 $ 4,606 $ 5,008 $ 7,863 $ -- $ 49,069 Intercompany sales 8,485 -- 24 1,245 (9,753) -- Operating income 1,528 369 332 589 (25) 2,794 Depreciation 3,005 87 224 557 -- 3,873 Capital expenditures 1,795 78 62 2,948 -- 4,883

- 8 - -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

                                                                    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 AN INCREASE OF SALES IN THE U.S. AND THIRD
                     QUARTER NET INCOME OF $0.08 PER SHARE

SARASOTA, FLA, NOVEMBER 4, 2003 -Sun Hydraulics Corporation (NASDAQ: SNHY) today
announced that sales for the third quarter ended September 27, 2003, were $17.9
million, a decrease of 5.6% from the second quarter and a 11.3% increase from
the same quarter last year. Net income was $0.5 million, equal to net income for
the same quarter last year. Basic and diluted earnings per share for the quarter
ended September 27, 2003, were $0.08 equal to the same period last year.

Allen Carlson, Sun Hydraulics' president commented, "Sales in the United States
increased 6% compared to the same quarter last year. We hope this signals the
long awaited recovery in the United States manufacturing economy. International
sales increased 17.0% in the third quarter compared to the same quarter last
year, with continued strength in Germany and Korea."

Carlson continued, "Net income per share was equal to the same quarter last
year, despite an 11% increase in total sales, primarily because of the
investments we are making in marketing and related areas. So far this year we
have started an operation in the Midwest, opened a sales/marketing office in
France and launched a new line of electro-hydraulic valves. We also have
continued to invest in our website, focusing on electronically providing
customers visual and technical information on millions of possible combinations
of our cartridge/manifold assemblies. This feature will be available early next
year."

During the quarter ended September 27, 2003, the Company paid a special dividend
of $13.3 million and increased debt $10.9 million to $20.0 million at quarter
end. Year to date the Company has generated $6.9 million from operations and
cash on hand at September 27, 2003, was $5.1 million.

OUTLOOK

Sales for the fourth quarter are projected to be $17.0 million, with net income
of $0.08 per share. Last year sales for the fourth quarter were $15.5 million
and net income was $0.06 per share. Until there are more positive signs of a
recovery in the economy, the Company is reluctant to provide an estimate of
sales for 2004.





WEBCAST

Sun Hydraulics Corporation will broadcast its third quarter financial results
conference call with analysts live over the Internet at 2:30 P.M. E.T. tomorrow,
November 5, 2003. To listen, go to
HTTP://INVESTOR.SUNHYDRAULICS.COM/MEDIALIST.CFM. A copy of this earnings release
is posted on the Investor Relations page of our website under "Press Releases."

WEBCAST Q&A

Questions may be submitted to the Company via email after reviewing this
earnings release. Sun management will then answer these and other questions
during the Company's webcast.

Questions can be submitted by going to the Sun Hydraulics website,
WWW.SUNHYDRAULICS.COM, and clicking on Investor Relations on the left hand menu.
Scroll down to the bottom of the page and click on contact email:
investor@sunhydraulics.com, which will open an email window to type in your
message. Sun Hydraulics will answer as many legitimate questions pertaining to
the 3rd quarter earnings release as possible during the webcast time.

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.

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


                                     - 2 -


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 27, 2003, 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, 2002. 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.

* Please see attached document for financial information.


                                     - 3 -



SUN HYDRAULICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)


                                                      Three Months Ended
                                                 -----------------------------
                                                 September 27,   September 28,
                                                     2003           2002
                                                 -------------   -------------

Net sales                                          $ 17,851       $ 16,043

Cost of sales                                        13,328         11,995
                                                   --------       --------

Gross profit                                          4,523          4,048

Selling, engineering and administrative expenses      3,604          3,021
                                                   --------       --------

Operating income                                        919          1,027

Interest expense                                        137            153
Foreign currency transaction loss (gain)                 (1)            87
Miscellaneous expense (income)                           (1)             7
                                                   --------       --------

Income before income taxes                              784            780

Income tax provision                                    275            273
                                                   --------       --------

Net income                                         $    509       $    507
                                                   ========       ========


Basic net income per share                         $   0.08       $   0.08

Basic weighted average shares outstanding             6,594          6,433

Diluted net income per share                       $   0.08       $   0.08

Diluted weighted average share outstanding            6,638          6,577


                                     - 4 -


SUN HYDRAULICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)


                                                         Nine Months Ended
                                                   ---------------------------
                                                   September 27, September 28,
                                                       2003          2002
                                                   ------------- -------------

Net sales                                            $ 53,188      $ 49,069

Cost of sales                                          39,059        36,803
                                                     --------      --------

Gross profit                                           14,129        12,266

Selling, engineering and administrative expenses       11,491         9,472
                                                     --------      --------

Operating income                                        2,638         2,794

Interest expense                                          415           455
Foreign currency transaction loss (gain)                 (190)           76
Miscellaneous expense (income)                            (24)           95
                                                     --------      --------

Income before income taxes                              2,437         2,168

Income tax provision                                      857           759
                                                     --------      --------

Net income                                           $  1,580      $  1,409
                                                     ========      ========


Basic net income per share                           $   0.24      $   0.22

Basic weighted average shares outstanding               6,492         6,429

Diluted net income per share                         $   0.24      $   0.21

Diluted weighted average share outstanding              6,536         6,573



                                     - 5 -



CONSOLIDATED BALANCE SHEETS
(in thousands)


                                                September 27,  December 28,
                                                    2003           2002
                                                -------------  ------------
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                      $  5,070       $  3,958
  Accounts receivable, net of allowance for
     doubtful accounts of $229 and $194             7,874          5,690
  Inventories                                       6,812          6,846
  Other current assets                                198            810
                                                 --------       --------
      Total current assets                         19,954         17,304

Property, plant and equipment, net                 42,792         43,987
Other assets                                        1,510            994
                                                 --------       --------

TOTAL ASSETS                                     $ 64,256       $ 62,285
                                                 ========       ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                               $  2,180       $  1,706
  Accrued expenses and other liabilities            3,022          1,081
  Long-term debt due within one year                  932          1,421
  Dividends payable                                   269            258
  Income taxes payable                                694             10
                                                 --------       --------
      Total current liabilities                     7,097          4,476

Long-term debt due after one year                  19,118          8,190
Deferred income taxes                               4,091          4,092
Other liabilities                                     340            378
Redeemable Common Stock                             2,250          2,250
                                                 --------       --------

      Total liabilities                            32,896         19,386

Shareholders' equity:
  Common stock                                          7              6
  Capital in excess of par value                   24,085         22,690
  Unearned compensation related to
     outstanding restricted stock                    (494)          (170)
  Retained earnings and
     accumulated comprehensive income               7,762         20,373
                                                 --------       --------
      Total shareholders' equity                   31,360         42,899

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $ 64,256       $ 62,285
                                                 ========       ========


                                     - 6 -



CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)




                                                             Nine Months Ended
                                                       -----------------------------
                                                       September 27,   September 28,
                                                            2003           2002
                                                       -------------   -------------

                                                                   
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                $  1,580       $  1,409
Adjustments to reconcile net income to
    net cash provided by operating activities:
Depreciation and amortization                                3,907          3,873
Gain/(Loss) on disposal of assets                              367            155
Allowance for doubtful accounts                                 35              6
Provision for deferred income taxes                             (1)            10
(Increase) decrease in:
   Accounts receivable                                      (2,219)        (1,546)
   Inventories                                                  34            302
   Income tax receivable                                        --            668
   Other current assets                                        612            603
   Other assets, net                                          (516)           (51)
Increase (decrease) in:
   Accounts payable                                            474            464
   Accrued expenses and other liabilities                    1,941            292
   Dividends payable                                            11              1
   Income taxes payable                                        684            458
   Other liabilities                                           (38)           (37)
                                                          --------       --------
Net cash from operating activities                           6,871          6,607

CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures                                        (3,090)        (4,883)
Proceeds from dispositions of equipment                         11             53
                                                          --------       --------
Net cash used in investing activities                       (3,079)        (4,830)

CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from debt                                          18,850             --
Repayment of debt                                           (8,411)          (778)
Proceeds from stock issued                                   1,072            217
Dividends to shareholders                                  (14,133)          (771)
                                                          --------       --------
Net cash used in financing activities                       (2,622)        (1,332)

Effect of exchange rate changes on cash and
   cash equivalents                                            (58)           113

Net increase (decrease) in cash and cash equivalents         1,112            558

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD               3,958          3,611

CASH AND CASH EQUIVALENTS, END OF PERIOD                     5,070          4,169

Supplemental disclosure of cash flow information:
Cash paid/(received):
   Interest                                               $    415       $    455
   Income taxes                                           $    174       $   (377)




                                     - 7 -






                                      United                                   United
                                      States         Korea        Germany      Kingdom    Elimination     Consolidated
                                      ------         -----        -------      -------    -----------     ------------

                                                                                           
THREE MONTHS
ENDED SEPTEMBER 27, 2003
Sales to unaffiliated customers      $ 11,208      $  1,630      $  2,316      $  2,697       $     --       $ 17,851
Intercompany sales                      2,918            --             9           323         (3,250)            --
Operating income                          508           187           432          (190)           (18)           919
Depreciation                              900            32            94           235             --          1,261
Capital expenditures                      757           386           111           466             --          1,720

THREE MONTHS
ENDED SEPTEMBER 28, 2002
Sales to unaffiliated customers      $ 10,390      $  1,399      $  1,704      $  2,550       $     --       $ 16,043
Intercompany sales                      2,498            --             5           325         (2,828)            --
Operating income                          557           167           175            58             70          1,027
Depreciation                              912            28            79           203             --          1,222
Capital expenditures                      726            30            19           720             --          1,495

NINE MONTHS
ENDED SEPTEMBER 27, 2003
Sales to unaffiliated customers      $ 32,473      $  5,175      $  6,951      $  8,589       $     --       $ 53,188
Intercompany sales                      9,794            --            33         1,032        (10,859)            --
Operating income                        1,806           541           925          (655)            21          2,638
Depreciation                            2,752            89           285           781             --          3,907
Capital expenditures                    1,688           418           203           781             --          3,090

NINE MONTHS
ENDED SEPTEMBER 28, 2002
Sales to unaffiliated customers      $ 31,593      $  4,606      $  5,008      $  7,863       $     --       $ 49,069
Intercompany sales                      8,485            --            24         1,245         (9,753)            --
Operating income                        1,528           369           332           589            (25)         2,794
Depreciation                            3,005            87           224           557             --          3,873
Capital expenditures                    1,795            78            62         2,948             --          4,883



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