For the quarterly period ended June 29, 2013 | Commission file number 0-21835 |
FLORIDA | 59-2754337 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
1500 WEST UNIVERSITY PARKWAY SARASOTA, FLORIDA | 34243 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | x | |||
Non-accelerated filer | o | Smaller Reporting Company | o |
Page | |||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. |
June 29, 2013 | December 29, 2012 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 41,686 | $ | 34,478 | |||
Restricted cash | 308 | 329 | |||||
Accounts receivable, net of allowance for doubtful accounts of $95 and $124 | 20,536 | 13,754 | |||||
Inventories | 12,441 | 12,559 | |||||
Income taxes receivable | — | 728 | |||||
Deferred income taxes | 429 | 248 | |||||
Short-term investments | 36,815 | 37,700 | |||||
Other current assets | 3,326 | 2,649 | |||||
Total current assets | 115,541 | 102,445 | |||||
Property, plant and equipment, net | 70,555 | 64,672 | |||||
Goodwill | 5,082 | 4,472 | |||||
Other assets | 3,803 | 3,532 | |||||
Total assets | $ | 194,981 | $ | 175,121 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 5,470 | $ | 4,606 | |||
Accrued expenses and other liabilities | 5,478 | 7,641 | |||||
Income taxes payable | 1,430 | — | |||||
Dividends payable | 2,362 | — | |||||
Total current liabilities | 14,740 | 12,247 | |||||
Deferred income taxes | 7,397 | 7,230 | |||||
Other noncurrent liabilities | 370 | 371 | |||||
Total liabilities | 22,507 | 19,848 | |||||
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, 26,239,642 and 26,094,580 shares outstanding | 26 | 26 | |||||
Capital in excess of par value | 63,064 | 57,402 | |||||
Retained earnings | 111,535 | 97,242 | |||||
Accumulated other comprehensive income (loss) | (2,151 | ) | 603 | ||||
Total shareholders’ equity | 172,474 | 155,273 | |||||
Total liabilities and shareholders’ equity | $ | 194,981 | $ | 175,121 |
Three months ended | |||||||
June 29, 2013 | June 30, 2012 | ||||||
(unaudited) | (unaudited) | ||||||
Net sales | $ | 55,788 | $ | 57,031 | |||
Cost of sales | 32,387 | 34,062 | |||||
Gross profit | 23,401 | 22,969 | |||||
Selling, engineering and administrative expenses | 6,640 | 6,505 | |||||
Operating income | 16,761 | 16,464 | |||||
Interest income, net | (242 | ) | (294 | ) | |||
Foreign currency transaction gain, net | (29 | ) | (66 | ) | |||
Miscellaneous (income) expense, net | (484 | ) | (39 | ) | |||
Income before income taxes | 17,516 | 16,863 | |||||
Income tax provision | 5,726 | 5,616 | |||||
Net income | $ | 11,790 | $ | 11,247 | |||
Basic net income per common share | $ | 0.45 | $ | 0.43 | |||
Weighted average basic shares outstanding | 26,236 | 25,937 | |||||
Diluted net income per common share | $ | 0.45 | $ | 0.43 | |||
Weighted average diluted shares outstanding | 26,236 | 25,975 | |||||
Dividends declared per share | $ | 0.090 | $ | 0.090 |
Six months ended | |||||||
June 29, 2013 | June 30, 2012 | ||||||
(unaudited) | (unaudited) | ||||||
Net sales | $ | 106,848 | $ | 112,305 | |||
Cost of sales | 62,943 | 67,118 | |||||
Gross profit | 43,905 | 45,187 | |||||
Selling, engineering and administrative expenses | 13,212 | 13,459 | |||||
Operating income | 30,693 | 31,728 | |||||
Interest income, net | (438 | ) | (635 | ) | |||
Foreign currency transaction gain, net | (149 | ) | (77 | ) | |||
Miscellaneous (income) expense, net | (390 | ) | (164 | ) | |||
Income before income taxes | 31,670 | 32,604 | |||||
Income tax provision | 10,305 | 10,734 | |||||
Net income | $ | 21,365 | $ | 21,870 | |||
Basic net income per common share | $ | 0.82 | $ | 0.85 | |||
Weighted average basic shares outstanding | 26,185 | 25,861 | |||||
Diluted net income per common share | $ | 0.82 | $ | 0.84 | |||
Weighted average diluted shares outstanding | 26,185 | 25,905 | |||||
Dividends declared per share | $ | 0.270 | $ | 0.300 |
Three months ended | Six months ended | ||||||||||||||
June 29, 2013 | June 30, 2012 | June 29, 2013 | June 30, 2012 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
Net income | $ | 11,790 | $ | 11,247 | $ | 21,365 | $ | 21,870 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Foreign currency translation adjustments | 57 | (1,812 | ) | (2,530 | ) | (200 | ) | ||||||||
Unrealized gain (loss) on available-for-sale securities | (388 | ) | (408 | ) | (224 | ) | (15 | ) | |||||||
Total other comprehensive income (loss) | (331 | ) | (2,220 | ) | (2,754 | ) | (215 | ) | |||||||
Comprehensive income | $ | 11,459 | $ | 9,027 | $ | 18,611 | $ | 21,655 |
Preferred shares | Preferred stock | Common shares | Common stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive income | Total | ||||||||||||||||||||||
Balance, December 29, 2012 | — | $ | — | 26,095 | $ | 26 | $ | 57,402 | $ | 97,242 | $ | 603 | $ | 155,273 | |||||||||||||||
Shares issued, other comp | 19 | — | |||||||||||||||||||||||||||
Shares issued, ESPP | 20 | 466 | 466 | ||||||||||||||||||||||||||
Shares issued, shared distribution | 106 | 3,486 | 3,486 | ||||||||||||||||||||||||||
Stock-based compensation | 1,710 | 1,710 | |||||||||||||||||||||||||||
Dividends declared | (7,072 | ) | (7,072 | ) | |||||||||||||||||||||||||
Net income | 21,365 | 21,365 | |||||||||||||||||||||||||||
Other comprehensive income (loss) | (2,754 | ) | (2,754 | ) | |||||||||||||||||||||||||
Balance, June 29, 2013 | — | $ | — | 26,240 | $ | 26 | $ | 63,064 | $ | 111,535 | $ | (2,151 | ) | $ | 172,474 |
Six months ended | |||||||
June 29, 2013 | June 30, 2012 | ||||||
(unaudited) | (unaudited) | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 21,365 | $ | 21,870 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 3,565 | 3,576 | |||||
(Gain)Loss on disposal of assets | 15 | (21 | ) | ||||
Gain on investment in business | (528 | ) | — | ||||
Unrealized foreign exchange gain | — | 15 | |||||
Provision for deferred income taxes | (14 | ) | 1 | ||||
Allowance for doubtful accounts | (29 | ) | (15 | ) | |||
Stock-based compensation expense | 1,416 | 1,157 | |||||
(Increase) decrease in: | |||||||
Accounts receivable | (6,740 | ) | (5,442 | ) | |||
Inventories | 186 | (890 | ) | ||||
Income taxes receivable | 728 | 120 | |||||
Other current assets | (677 | ) | (356 | ) | |||
Other assets | 258 | 181 | |||||
Increase (decrease) in: | |||||||
Accounts payable | 864 | 403 | |||||
Accrued expenses and other liabilities | 1,617 | 2,834 | |||||
Income taxes payable | 1,430 | 342 | |||||
Other noncurrent liabilities | (1 | ) | 25 | ||||
Net cash provided by operating activities | 23,455 | 23,800 | |||||
Cash flows from investing activities: | |||||||
Investment in business, net of cash acquired | (923 | ) | — | ||||
Capital expenditures | (9,518 | ) | (4,752 | ) | |||
Proceeds from dispositions of equipment | — | 21 | |||||
Purchases of short-term investments | (11,888 | ) | (12,251 | ) | |||
Proceeds from sale of short-term investments | 11,744 | 3,130 | |||||
Net cash used in investing activities | (10,585 | ) | (13,852 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from stock issued | 466 | 333 | |||||
Dividends to shareholders | (4,710 | ) | (7,769 | ) | |||
Change in restricted cash | 21 | 2 | |||||
Net cash used in financing activities | (4,223 | ) | (7,434 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,439 | ) | (311 | ) | |||
Net increase (decrease) in cash and cash equivalents | 7,208 | 2,203 | |||||
Cash and cash equivalents, beginning of period | 34,478 | 51,262 | |||||
Cash and cash equivalents, end of period | $ | 41,686 | $ | 53,465 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid: | |||||||
Income taxes | $ | 8,161 | $ | 10,272 | |||
Supplemental disclosure of noncash transactions: | |||||||
Common stock issued for shared distribution through accrued expenses and other liabilities | $ | 3,486 | $ | 4,407 | |||
Common stock issued for deferred director’s compensation through other noncurrent liabilities | $ | 294 | $ | 930 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 29, 2013 | June 30, 2012 | June 29, 2013 | June 30, 2012 | ||||||||||||
Net income | $ | 11,790 | $ | 11,247 | $ | 21,365 | $ | 21,870 | |||||||
Weighted average basic shares outstanding | 26,236 | 25,937 | 26,185 | 25,861 | |||||||||||
Basic net income per common share | $ | 0.45 | $ | 0.43 | $ | 0.82 | $ | 0.85 | |||||||
Effect of dilutive stock options | — | 38 | — | 44 | |||||||||||
Weighted average diluted shares outstanding | 26,236 | 25,975 | 26,185 | 25,905 | |||||||||||
Diluted net income per common share | $ | 0.45 | $ | 0.43 | $ | 0.82 | $ | 0.84 |
Number of shares | Weighted average grant-date fair value | ||||
Nonvested balance at December 29, 2012 | 169 | 25.81 | |||
Granted | — | — | |||
Vested | — | — | |||
Forfeitures | — | — | |||
Nonvested balance at June 29, 2013 | 169 | — |
June 29, 2013 | December 29, 2012 | ||||||
Raw materials | $ | 5,619 | $ | 5,564 | |||
Work in process | 3,766 | 3,695 | |||||
Finished goods | 3,726 | 3,980 | |||||
Provision for slow moving inventory | (670 | ) | (680 | ) | |||
Total | $ | 12,441 | $ | 12,559 |
Balance, December 29, 2012 | $ | 4,472 | |
Acquisitions | 726 | ||
Currency translation | (116 | ) | |
Balance, June 29, 2013 | $ | 5,082 |
June 29, 2013 | December 29, 2012 | ||||||||||||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||
Definite-lived intangibles: | |||||||||||||||||||||||
Trade Name | $ | 774 | $ | (136 | ) | $ | 638 | $ | 756 | $ | (95 | ) | $ | 661 | |||||||||
Non-compete agreement | 11 | (2 | ) | 9 | — | — | — | ||||||||||||||||
Technology | 868 | (86 | ) | 782 | 697 | (256 | ) | 441 | |||||||||||||||
Customer Relationships | 1,751 | (134 | ) | 1,617 | 1,475 | (92 | ) | 1,383 | |||||||||||||||
$ | 3,404 | $ | (358 | ) | $ | 3,046 | $ | 2,928 | $ | (443 | ) | $ | 2,485 |
Year: | |||
2014 | 264 | ||
2015 | 256 | ||
2016 | 255 | ||
2017 | 255 | ||
2018 | 255 | ||
Total | $ | 1,285 |
Three Months Ended June 29, 2013 | Three Months Ended June 30, 2012 | Six Months Ended June 29, 2013 | Six Months Ended June 30, 2012 | ||||||||
Net sales | |||||||||||
Americas | 27,422 | 28,875 | 51,981 | 55,399 | |||||||
Europe/Africa/ME | 16,293 | 16,347 | 31,862 | 33,503 | |||||||
Asia/Pacific | 12,073 | 11,809 | 23,005 | 23,403 | |||||||
Total | 55,788 | 57,031 | 106,848 | 112,305 |
June 29, 2013 | December 29, 2012 | ||||
Total assets | |||||
Americas | 129,599 | 110,392 | |||
Europe/Africa/ME | 50,221 | 50,054 | |||
Asia/Pacific | 15,161 | 14,675 | |||
Total | 194,981 | 175,121 | |||
Long-lived assets | |||||
Americas | 67,137 | 60,240 | |||
Europe/Africa/ME | 8,307 | 8,085 | |||
Asia/Pacific | 3,996 | 4,351 | |||
Total | 79,440 | 72,676 |
June 29, 2013 | |||||||||||
Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||
Assets | |||||||||||
Level 1: | |||||||||||
Equity securities | 788 | 25 | (143 | ) | 670 | ||||||
Mutual funds | 2,039 | 1 | (23 | ) | 2,017 | ||||||
Subtotal | 2,827 | 26 | (166 | ) | 2,687 | ||||||
Level 2: | |||||||||||
Corporate fixed income | 18,792 | 66 | (272 | ) | 18,586 | ||||||
Municipal bonds | 4,357 | 3 | (16 | ) | 4,344 | ||||||
Certificates of deposit and time deposits | 10,111 | 1 | — | 10,112 | |||||||
Asset backed securities | 1,118 | — | (32 | ) | 1,086 | ||||||
Subtotal | 34,378 | 70 | (320 | ) | 34,128 | ||||||
Total | 37,205 | 96 | (486 | ) | 36,815 | ||||||
Liabilities | |||||||||||
Level 1: | |||||||||||
Phantom stock units | 59 | — | — | 59 | |||||||
Total | 59 | — | — | 59 |
December 29, 2012 | |||||||||||
Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||
Assets | |||||||||||
Level 1: | |||||||||||
Equity securities | 602 | 6 | (86 | ) | 522 | ||||||
Mutual funds | 1,936 | — | (28 | ) | 1,908 | ||||||
Subtotal | 2,538 | 6 | (114 | ) | 2,430 | ||||||
Level 2: | |||||||||||
Corporate fixed income | 18,270 | 48 | (105 | ) | 18,213 | ||||||
Government securities | 195 | 14 | — | 209 | |||||||
Municipal bonds | 4,525 | 4 | (15 | ) | 4,514 | ||||||
Certificates of deposit and time deposits | 10,891 | 1 | — | 10,892 | |||||||
Asset backed securities | 1,447 | — | (5 | ) | 1,442 | ||||||
Subtotal | 35,328 | 67 | (125 | ) | 35,270 | ||||||
Total | 37,866 | 73 | (239 | ) | 37,700 | ||||||
Liabilities | |||||||||||
Level 1: | |||||||||||
Deferred director stock units | 263 | — | — | 263 | |||||||
Phantom stock units | 30 | — | — | 30 | |||||||
Total | 293 | — | — | 293 |
Adjusted Cost | Fair Value | ||||||
Due in less than one year | $ | 20,604 | $ | 20,598 | |||
Due after one year but within five years | 9,701 | 9,528 | |||||
Due after five years but within ten years | 304 | 304 | |||||
Due after ten years | 3,769 | 3,698 | |||||
Equity securities | 788 | 670 | |||||
Mutual Funds | 2,039 | 2,017 | |||||
Total | $ | 37,205 | $ | 36,815 |
Unrealized Gains and Losses on Available-for- Sale Securities | Foreign Currency Items | Total | |||||||||
Balance at December 29, 2012 | $ | (166 | ) | $ | 769 | $ | 603 | ||||
Other comprehensive income (loss) before reclassifications | (228 | ) | (2,530 | ) | (2,758 | ) | |||||
Amounts reclassified from accumulated other comprehensive income | 4 | — | 4 | ||||||||
Net current period other comprehensive income (loss) | (224 | ) | (2,530 | ) | (2,754 | ) | |||||
Balance at June 29, 2013 | $ | (390 | ) | $ | (1,761 | ) | $ | (2,151 | ) |
Amount Reclassified from AOCI | ||||||||||
Details about Accumulated Other Comprehensive Income Components | Three Months Ended June 29, 2013 | Six Months Ended June 29, 2013 | Affected Line Item in the Consolidated Statements of Operations | |||||||
Unrealized gains and losses on available-for-sale securities | ||||||||||
Realized gain/(loss) on sale of securities | $ | 47 | $ | 56 | Miscellaneous (income) expense, net | |||||
Other than temporary impairment | — | (61 | ) | Miscellaneous (income) expense, net | ||||||
47 | (5 | ) | Total before tax | |||||||
(16 | ) | 1 | Tax benefit | |||||||
$ | 31 | $ | (4 | ) | Net of tax | |||||
Total reclassifications for the period | $ | 31 | $ | (4 | ) |
June 29, 2013 | June 30, 2012 | Increase/(Decrease) | ||||||||
Three Months Ended | ||||||||||
Net sales | $ | 55.8 | $ | 57.0 | (2 | )% | ||||
Net income | $ | 11.8 | $ | 11.2 | 5 | % | ||||
Net income per share: | ||||||||||
Basic | $ | 0.45 | $ | 0.43 | 5 | % | ||||
Diluted | $ | 0.45 | $ | 0.43 | 5 | % | ||||
Six Months Ended | ||||||||||
Net sales | $ | 106.8 | $ | 112.3 | (5 | )% | ||||
Net income | $ | 21.4 | $ | 21.9 | (2 | )% | ||||
Net income per share: | ||||||||||
Basic | $ | 0.82 | $ | 0.85 | (4 | )% | ||||
Diluted | $ | 0.82 | $ | 0.84 | (2 | )% |
Item 6. | Exhibits. |
Exhibit Number | Exhibit Description | ||
31.1 | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2 | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32.1 | CEO Certification pursuant to 18 U.S.C. § 1350. | ||
32.2 | CFO Certification pursuant to 18 U.S.C. § 1350. | ||
Exhibit 101.1 | Interactive Data File | ||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Schema Document | ||
101.CAL | XBRL Calculation Linkbase Document | ||
101.DEF | XBRL Definition Linkbase Document | ||
101.LAB | XBRL Label Linkbase Document | ||
101.PRE | XBRL Presentation Linkbase Document |
SUN HYDRAULICS CORPORATION | ||
By: | /s/ Tricia L. Fulton | |
Tricia L. Fulton | ||
Chief Financial Officer (Principal Financial and Accounting Officer) |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Allen J. Carlson |
Allen J. Carlson |
President, Chief Executive Officer |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Tricia L. Fulton |
Tricia L. Fulton |
Chief Financial Officer |
/s/ Allen J. Carlson |
Chief Executive Officer |
August 6, 2013 |
/s/ Tricia L. Fulton |
Chief Financial Officer |
August 6, 2013 |
Segment Reporting
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Jun. 29, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING Historically, the Company had four operating and reportable segments, which were based on the geographic location of its subsidiaries. In 2012, the Company re-evaluated its operating and reportable segments, resulting in a change to a single reportable segment in manufacturing, marketing, selling and distributing its products worldwide. This change was made because, increasingly, the Company is shipping products directly from the factory of origin to end-customers worldwide. Management believes the discrete financial information of the Company’s individual foreign subsidiaries is no longer representative of the business level in those locations, and management no longer makes decisions or assesses performance based on this information. Management believes the investment community will have a better understanding, with less confusion, when reviewing our results as one operating segment. The additional information related to the region to which our products are sold, as opposed to the region where the sale was recorded, is more aligned with managerial decision-making and will best inform all interested parties. The individual subsidiaries comprising the Company operate predominantly in a single industry as manufacturers and distributors of hydraulic components. Given the similar nature of products offered for sale, the type of customers, the methods of distribution and how the Company is managed, the Company determined that it now has only one operating and reporting segment for both internal and external reporting purposes. Prior period financial information included herein has been restated to reflect the financial position and results of operations as one segment. Geographic Region Information: Net sales are measured based on the geographic destination of sales. Total and long-lived assets are shown based on the physical location of the assets. Long-lived assets primarily include net property, plant and equipment:
|
Consolidated Statements of Operations (unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2013
|
Jun. 30, 2012
|
Jun. 29, 2013
|
Jun. 30, 2012
|
|
Income Statement [Abstract] | ||||
Net sales | $ 55,788 | $ 57,031 | $ 106,848 | $ 112,305 |
Cost of sales | 32,387 | 34,062 | 62,943 | 67,118 |
Gross profit | 23,401 | 22,969 | 43,905 | 45,187 |
Selling, engineering and administrative expenses | 6,640 | 6,505 | 13,212 | 13,459 |
Operating income | 16,761 | 16,464 | 30,693 | 31,728 |
Interest income, net | (242) | (294) | (438) | (635) |
Foreign currency transaction gain, net | (29) | (66) | (149) | (77) |
Miscellaneous (income) expense, net | (484) | (39) | (390) | (164) |
Income before income taxes | 17,516 | 16,863 | 31,670 | 32,604 |
Income tax provision | 5,726 | 5,616 | 10,305 | 10,734 |
Net income | $ 11,790 | $ 11,247 | $ 21,365 | $ 21,870 |
Basic net income per common share (in dollars per share) | $ 0.45 | $ 0.43 | $ 0.82 | $ 0.85 |
Weighted average basic shares outstanding | 26,236 | 25,937 | 26,185 | 25,861 |
Diluted net income per common share (in dollars per share) | $ 0.45 | $ 0.43 | $ 0.82 | $ 0.84 |
Weighted average diluted shares outstanding | 26,236 | 25,975 | 26,185 | 25,905 |
Dividends declared per share (in dollars per share) | $ 0.090 | $ 0.090 | $ 0.27 | $ 0.300 |
Stock-Based Compensation
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 29, 2013
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company’s 2006 Stock Option Plan (“2006 Plan”) provides for the grant of incentive stock options and nonqualified stock options for the purchase of up to an aggregate of 1,125,000 shares of the Company’s common stock by officers, employees and directors of the Company. Under the terms of the plan, incentive stock options may be granted to employees at an exercise price per share of not less than the fair value per common share on the date of the grant (not less than 110% of the fair value in the case of holders of more than 10% of the Company’s voting stock). Nonqualified stock options may be granted at the discretion of the Company’s Board of Directors. The maximum term of an option may not exceed 10 years, and options become exercisable at such times and in such installments as determined by the Board of Directors. No awards have been granted under the 2006 Plan. The Company’s 2001 Restricted Stock Plan provides for the grant of restricted stock of up to an aggregate of 928,125 shares of the Company’s common stock to officers, employees, consultants and directors of the Company. Under the terms of the plan, the minimum period before any shares become non-forfeitable may not be less than six months. The 2001 Restricted Stock Plan expired in 2011 and was replaced in September 2011 with the 2011 Equity Incentive Plan (“2011 Plan”). The 2011 Plan provides for the grant of up to an aggregate of 1,000,000 shares of restricted stock, restricted share units, stock appreciation rights, dividend or dividend equivalent rights, stock awards and other awards valued in whole or in part by reference to or otherwise based on the Company’s common stock, to officers, employees and directors of the Company. The 2011 Plan was approved by the Company’s shareholders at the 2012 Annual Meeting. At June 29, 2013, 823,712 shares remained available to be issued through the 2011 Plan. Compensation cost is measured at the date of the grant and is recognized in earnings over the period in which the shares vest. Restricted stock expense for the six months ended June 29, 2013, and June 30, 2012, totaled $1,038 and $835 respectively. The following table summarizes restricted stock activity from December 29, 2012, through June 29, 2013:
The Company has $2,613 of total unrecognized compensation cost related to restricted stock awards granted under the two plans as of June 29, 2013. That cost is expected to be recognized over a weighted average period of 1.11 years. The Company maintains an Employee Stock Purchase Plan (“ESPP”), in which most employees are eligible to participate. Employees in the United States who choose to participate are granted an opportunity to purchase common stock at 85 percent of market value on the first or last day of the quarterly purchase period, whichever is lower. Employees in the United Kingdom, under a separate plan, are granted an opportunity to purchase common stock at market value, on the first or last day of the quarterly purchase period, whichever is lower, with the Company issuing one additional free share of common stock for each six shares purchased by the employee under the ESPP. The ESPP authorizes the issuance, and the purchase by employees, of up to 1,096,875 shares of common stock through payroll deductions. No U.S. employee is allowed to buy more than $25 of common stock in any year, based on the market value of the common stock at the beginning of the purchase period, and no U.K. employee is allowed to buy more than the lesser of £1.5 or 10% of his or her annual salary in any year. Employees purchased 20,203 shares at a weighted average price of $23.08, and 17,593 shares at a weighted average price of $18.92, under the ESPP during the six months ended June 29, 2013, and June 30, 2012, respectively. The Company recognized $112 and $101 of compensation expense during the six months ended June 29, 2013 and June 30, 2012, respectively. At June 29, 2013, 693,081 shares remained available to be issued through the ESPP and the U.K. plan. The Nonemployee Director Equity and Deferred Compensation Plan (the “Plan”) originally was adopted by the Board of Directors and approved by the shareholders in 2004, and amended in 2008. Under the Plan, Directors who were not officers of the Company were paid 375 shares of Company common stock and $3 in cash fees for attendance at each meeting of the Board of Directors, as well as each meeting of each Board Committee on which they served when the committee meeting was not held within one day of a meeting of the Board of Directors. Committee Chairmen received additional fees equal to 25% of normal compensation and the Chairman of the Board was paid twice the amount of normal compensation, with such additional compensation payable in Company common stock. Prior to June 7, 2011, Directors were able to elect under the Plan to receive all or part of their cash fees in Company stock and to defer receipt of their fees until a subsequent year. When so deferred, the shares of stock were converted to deferred stock units. Deferred stock units are treated as liabilities. At June 29, 2013, there were zero deferred stock units outstanding. The Plan has now been terminated, and no further issuance of shares will be made under the Plan. In March 2012, the Board reviewed its non-employee director compensation policy and determined that compensating Directors solely in Company stock would further align the interests of the Board and the shareholders. Accordingly, the Board of Directors adopted the Sun Hydraulics Corporation 2012 Nonemployee Director Fees Plan (the “2012 Directors Plan”), which was approved by the shareholders of the Company at its 2012 annual meeting. Under the 2012 Directors Plan, as compensation for attendance at each Board meeting and each meeting of each committee of the Board on which he or she serves when the committee meeting is not held within one day of a meeting of the Board, each Nonemployee Director will be paid 500 shares of Common Stock. The Chairman’s fee is twice that of a regular director, and the fee for the chairs of each Board committee is 125% that of a regular director. The Board has the authority to change from time to time, in any manner it deems desirable or appropriate, the share compensation to be awarded to all or any one or more Nonemployee Directors, provided that, with limited exceptions, such changes are subject to prior shareholder approval. The aggregate number of Shares which may be issued during any single calendar year is limited to 25,000 Shares. The 2012 Directors Plan authorizes the issuance of up to 270,000 shares of common stock. At June 29, 2013, 248,249 shares remained available for issuance under the 2012 Directors Plan. Directors were granted 8,500 and 8,266 shares for the six months ended June 29, 2013, and June 30, 2012, respectively. The Company recognized director stock compensation expense of $288 and $218 for the six months ended June 29, 2013, and June 30, 2012, respectively. |
Stock Based Compensation (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 29, 2013
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restricted stock activity | The following table summarizes restricted stock activity from December 29, 2012, through June 29, 2013:
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Fair Value of Financial Instruments
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Jun. 29, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company applies fair value accounting guidelines for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Under these guidelines, fair value is defined as the price that would be received for the sale of an asset or paid to transfer a liability (i.e. an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. Level 3 - Unobservable inputs that are supported by little, infrequent, or no market activity and reflect the Company’s own assumptions about inputs used in pricing the asset or liability. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s valuation techniques used to measure the fair value of marketable equity securities, mutual funds, and phantom stock units were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of all other financial instruments were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. The Company’s investments have been classified and accounted for as available-for-sale. Management determines the appropriate classification of its investments at the time of purchase and reevaluates the designation at each balance sheet date. The Company may or may not hold securities with stated maturities greater than 12 months until maturity. As management views these securities as available to support current operations, the Company classifies securities with maturities beyond 12 months as current assets under the caption short-term investments in the accompanying Consolidated Balance Sheets. These investments are carried at fair value, with the unrealized gains and losses reported as a component of shareholder’s equity. Realized gains and losses on sales of investments are generally determined using the specific identification method, and are included in miscellaneous (income) expense in the Consolidated Statements of Operations. The following tables provide information regarding the Company’s assets and liabilities measured at fair value on a recurring basis at June 29, 2013, and December 29, 2012.
The Company recognized a net realized loss on investments during the six months ended June 29, 2013 of $5 and a net realized gain of $14 during the six months ended June 30, 2012. As of June 29, 2013, gross unrealized losses related to individual securities that had been in a continuous loss position for 12 months or longer were not significant. The Company considers these unrealized losses in market value of its investments to be temporary in nature. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the six months ended June 29, 2013, the Company recognized an impairment charge of $61, which is included in the net realized loss for the period. This resulted from the deterioration of the financial condition of an issuer of a corporate bond security. Maturities of investments at June 29, 2013 are as follows:
The Company reports deferred director stock units and phantom stock units as a liability. All remaining deferred stock units were issued in 2013. The Company recognized expense relating to these liabilities of $29 and $35, for the periods ended June 29, 2013, and June 30, 2012. Phantom stock units vest over a period of three years. The Company did not have any fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the period ended June 29, 2013. |
Goodwill and Intangible Assets (Details 2) (USD $)
In Thousands, unless otherwise specified |
Jun. 29, 2013
|
---|---|
Schedule of estimated amortization expense | |
2014 | $ 264 |
2015 | 256 |
2016 | 255 |
2017 | 255 |
2018 | 255 |
Total | $ 1,285 |
Segment Reporting (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 29, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment information | Long-lived assets primarily include net property, plant and equipment:
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Goodwill and Intangible Assets (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 29, 2013
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in goodwill | A summary of changes in goodwill at June 29, 2013 is as follows:
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Schedule of intangible assets | At June 29, 2013, and December 29, 2012, intangible assets consisted of the following:
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Schedule of estimated amortization expense | Total estimated amortization expense for the years 2014 through 2018 is presented below. The remaining amortization for 2013 is approximately $139.
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Fair Value of Financial Instruments (Details 1) (USD $)
In Thousands, unless otherwise specified |
Jun. 29, 2013
|
---|---|
Summary of maturities of marketable securities | |
Due in less than one year, adjusted cost | $ 20,604 |
Due after one year but within five years, adjusted cost | 9,701 |
Due after five years but within ten years, adjusted cost | 304 |
Due after ten years, adjusted cost | 3,769 |
Equity securities, adjusted cost | 788 |
Mutual Funds, adjusted cost | 2,039 |
Total, Adjusted Cost | 37,205 |
Due in less than one year, fair value | 20,598 |
Due after one year but within five years, fair value | 9,528 |
Due after five years but within ten years, fair value | 304 |
Due after ten years, fair value | 3,698 |
Equity securities, fair value | 670 |
Mutual Funds, fair value | 2,017 |
Asset measured at, fair value | $ 36,815 |
Restricted Cash (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 29, 2013
|
Dec. 29, 2012
|
|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 308 | $ 329 |
Estimated period of restricted cash amount | 2 months | |
Seungwon Acquisition [Member]
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 262 | |
United Kingdom [Member] | Customs deferment Reserves [Member]
|
||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 46 |
Acquisitions (Details Textual) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||
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Jun. 29, 2013
|
Jun. 30, 2012
|
Apr. 01, 2013
|
Mar. 30, 2013
|
Dec. 29, 2012
|
Jun. 29, 2013
WhiteOak [Member]
|
Apr. 01, 2013
WhiteOak [Member]
|
Oct. 18, 2012
Seungwon Solutions Corporation [Member]
|
Jun. 29, 2013
Trade Name
|
Apr. 01, 2013
Trade Name
WhiteOak [Member]
|
Jun. 29, 2013
Noncompete Agreements [Member]
|
Apr. 01, 2013
Noncompete Agreements [Member]
WhiteOak [Member]
|
Jun. 29, 2013
Technology
WhiteOak [Member]
|
Apr. 01, 2013
Technology
WhiteOak [Member]
|
Jun. 29, 2013
Developed Technology Rights [Member]
WhiteOak [Member]
|
Apr. 01, 2013
Developed Technology Rights [Member]
WhiteOak [Member]
|
|
Business Acquisition [Line Items] | ||||||||||||||||
Purchase of Remaining Interest in Equity Investee | 60.00% | |||||||||||||||
Purchase of outstanding stock | $ 1,000 | $ 1,458 | ||||||||||||||
Goodwill arising from acquisition | 5,082 | 4,472 | 726 | 1,731 | ||||||||||||
Acquired definite lived intangible assets | 746 | 18 | 11 | 276 | 441 | |||||||||||
Acquisition related costs | 12 | |||||||||||||||
Finite-Lived Intangible Asset, Useful Life | 1 year | 2 years | 15 years | 10 years | ||||||||||||
Gain on Purchase of Business | 528 | 0 | 528 | |||||||||||||
Equity Method Investment, Ownership Percentage | 40.00% | |||||||||||||||
Percentage of sale of component supplier | 80.00% | |||||||||||||||
Transaction cost arising from acquisition | $ 80 |
Summary of Significant Accounting Policies (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2013
|
Jun. 30, 2012
|
Jun. 29, 2013
|
Jun. 30, 2012
|
|
Computation of basic and diluted earnings per common share | ||||
Net income | $ 11,790 | $ 11,247 | $ 21,365 | $ 21,870 |
Weighted average basic shares outstanding | 26,236 | 25,937 | 26,185 | 25,861 |
Basic net income per common share (in dollars per share) | $ 0.45 | $ 0.43 | $ 0.82 | $ 0.85 |
Effect of dilutive stock options | 0 | 38 | 0 | 44 |
Weighted average diluted shares outstanding | 26,236 | 25,975 | 26,185 | 25,905 |
Diluted net income per common share (in dollars per share) | $ 0.45 | $ 0.43 | $ 0.82 | $ 0.84 |
Segment Reporting (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 29, 2013
|
Jun. 30, 2012
|
Jun. 29, 2013
|
Jun. 30, 2012
|
Dec. 29, 2012
|
|
Net sales | |||||
Net sales | $ 55,788 | $ 57,031 | $ 106,848 | $ 112,305 | |
Total assets | |||||
Total assets | 194,981 | 194,981 | 175,121 | ||
Long-lived assets | |||||
Long-lived assets | 79,440 | 79,440 | 72,676 | ||
Americas [Member]
|
|||||
Net sales | |||||
Net sales | 27,422 | 28,875 | 51,981 | 55,399 | |
Total assets | |||||
Total assets | 129,599 | 129,599 | 110,392 | ||
Long-lived assets | |||||
Long-lived assets | 67,137 | 67,137 | 60,240 | ||
Europe/Africa/ME [Member]
|
|||||
Net sales | |||||
Net sales | 16,293 | 16,347 | 31,862 | 33,503 | |
Total assets | |||||
Total assets | 50,221 | 50,221 | 50,054 | ||
Long-lived assets | |||||
Long-lived assets | 8,307 | 8,307 | 8,085 | ||
Asia/Pacific [Member]
|
|||||
Net sales | |||||
Net sales | 12,073 | 11,809 | 23,005 | 23,403 | |
Total assets | |||||
Total assets | 15,161 | 15,161 | 14,675 | ||
Long-lived assets | |||||
Long-lived assets | $ 3,996 | $ 3,996 | $ 4,351 |
Inventories (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 29, 2013
|
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of inventories |
|
Consolidated Statement of Changes in Shareholders' Equity (unaudited) (USD $)
In Thousands |
Total
|
Preferred stock
|
Common stock
|
Capital in excess of par value
|
Retained earnings
|
Accumulated other comprehensive income
|
---|---|---|---|---|---|---|
Beginning Balance at Dec. 29, 2012 | $ 155,273 | $ 0 | $ 26 | $ 57,402 | $ 97,242 | $ 603 |
Beginning Balance, Shares at Dec. 29, 2012 | 0 | 26,095 | ||||
Shares issued, other comp | 0 | |||||
Shares issued, other comp, Shares | 19 | |||||
Shares issued, ESPP | 466 | 466 | ||||
Shares issued, ESPP, Shares | 20 | |||||
Shares issued, shared distribution | 3,486 | 3,486 | ||||
Shares issued, shared distribution, Shares | 106 | |||||
Stock-based compensation | 1,710 | 1,710 | ||||
Dividends declared | (7,072) | (7,072) | ||||
Net income | 21,365 | 21,365 | ||||
Other comprehensive income (loss) | (2,754) | (2,754) | ||||
Ending Balance at Jun. 29, 2013 | $ 172,474 | $ 0 | $ 26 | $ 63,064 | $ 111,535 | $ (2,151) |
Ending Balance, Shares at Jun. 29, 2013 | 0 | 26,240 |
Basis of Presentation and Summary of Business
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6 Months Ended |
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Jun. 29, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF BUSINESS | BASIS OF PRESENTATION AND SUMMARY OF BUSINESS Sun Hydraulics Corporation, and its wholly-owned subsidiaries, 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, France, China, and India. Sun Hydraulics Corporation (“Sun Hydraulics”), with its main offices located in Sarasota, Florida, designs, manufactures, and sells its products primarily through distributors. 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. In 2012, Sun Korea acquired Seungwon Solutions Corporation (“Seungwon”), also located in Inchon, South Korea, a component supplier to Sun Korea and third parties. Sun Hydraulics, SARL (“Sun France”), a wholly-owned subsidiary of Sun Hydraulics was dissolved in November 2011. Concurrently, Sun Hydraulics opened a liaison office in Bordeaux, France to service the French market. Sun Hydraulics established Sun Hydraulics China Co. Ltd, a representative office in Shanghai in January 2011, to develop new business opportunities in the Chinese market. Sun Hydraulics (India) a liaison office in Bangalore, India is used to develop new business opportunities in the Indian market. On September 27, 2011, Sun Hydraulics purchased the outstanding shares of High Country Tek, Inc. (“HCT”) it did not already own. HCT, now a wholly-owned subsidiary of Sun Hydraulics, is located in Nevada City, California, and designs and manufactures ruggedized electronic/hydraulic control solutions for mobile equipment markets. WhiteOak Controls, Inc. (“WhiteOak”), a 40% equity method investment, located in Mediapolis, Iowa, designs and produces complementary electronic control products. On April 1, 2013, Sun Hydraulics purchased the remaining 60% of WhiteOak, which was merged into HCT (see note 7). 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 accounting principles generally accepted in the United States of America 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 29, 2012, filed by Sun Hydraulics Corporation (together with its subsidiaries, the “Company”) with the Securities and Exchange Commission on March 12, 2013. In Management’s opinion, all adjustments necessary for a fair presentation of the Company’s financial statements are reflected in the interim periods presented. Operating results for the six month period ended June 29, 2013, are not necessarily indicative of the results that may be expected for the period ending December 28, 2013. |
Restricted Cash
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6 Months Ended |
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Jun. 29, 2013
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Restricted Cash [Abstract] | |
RESTRICTED CASH | RESTRICTED CASH On June 29, 2013, the Company had restricted cash of $308. A restricted cash reserve for customs and excise taxes in the U.K. operation was $46 at June 29, 2013. The restricted amount was calculated as an estimate of two months of customs and excise taxes for items coming into the Company’s U.K. operations and is held with Lloyds TSB in the U.K. Restricted cash of $262 at June 29, 2013, represents the holdback of the purchase price associated with the acquisition of Seungwon on October 18, 2012. |
Summary of Significant Accounting Policies
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Earnings per share The following table represents the computation of basic and diluted earnings per common share (in thousands, except per share data):
Reclassification Certificates of deposit classified as cash in the prior period were reclassified to marketable securities to conform to the current year presentation. Non-trade receivables classified as accounts receivable in the prior period were reclassified to other current assets to conform to the current year presentation. |
Fair Value of Financial Instruments (Tables)
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables provide information regarding the Company’s assets and liabilities measured at fair value on a recurring basis at June 29, 2013, and December 29, 2012.
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Summary of maturities of marketable securities | Maturities of investments at June 29, 2013 are as follows:
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Stock Based Compensation (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | |
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Jun. 29, 2013
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Dec. 29, 2012
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Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Nonvested Beginning balance Number of shares | 169 | |
Granted, Number of shares | 0 | |
Vested, Number of shares | 0 | |
Forfeitures, Number of shares | 0 | |
Nonvested Ending balance Number of shares | 169 | 169 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Nonvested Beginning balance, Weighted average grant-date fair value | $ 25.81 | |
Nonvested Ending balance, Weighted average grant-date fair value | $ 0 | $ 25.81 |
Goodwill and Intangible Assets (Details 1) (USD $)
In Thousands, unless otherwise specified |
Jun. 29, 2013
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Mar. 30, 2013
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Dec. 29, 2012
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Definite-lived intangibles: | |||
Gross carrying amount | $ 3,404 | $ 2,928 | |
Accumulated amortization | (358) | (443) | |
Net carrying amount | 3,046 | 2,485 | |
Trade Name
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Definite-lived intangibles: | |||
Gross carrying amount | 774 | 756 | |
Accumulated amortization | (136) | (95) | |
Net carrying amount | 638 | 661 | |
Noncompete Agreements [Member]
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Definite-lived intangibles: | |||
Gross carrying amount | 11 | 0 | |
Accumulated amortization | (2) | 0 | |
Net carrying amount | 9 | 0 | |
Non-compete agreement
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Definite-lived intangibles: | |||
Gross carrying amount | 868 | 0 | 697 |
Accumulated amortization | (86) | 0 | (256) |
Net carrying amount | 782 | 441 | |
Technology
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Definite-lived intangibles: | |||
Gross carrying amount | 1,751 | 1,475 | |
Accumulated amortization | (134) | (92) | |
Net carrying amount | $ 1,617 | $ 1,383 |