Sun Hydraulics Second Quarter Earnings Up 38% on Sales Increase of 18%

Sun Hydraulics Corporation (NASDAQ: SNHY) reported financial results for the second quarter of 2007 as follows:

(Dollars in millions except net income per share)


                                               June 30,  July 1,
                                                 2007     2006    Increase

     Three Months Ended
Net Sales                                      $   43.4 $   36.9     18%
Net Income                                     $    6.0 $    4.3     38%
Net Income per share:
   Basic                                       $   0.36 $   0.26     38%
   Diluted                                     $   0.36 $   0.26     38%


     Six Months Ended
Net Sales                                      $   84.3 $   71.1     19%
Net Income                                     $   11.8 $    8.5     38%
Net Income per share:
   Basic                                       $   0.72 $   0.52     38%
   Fully Diluted                               $   0.71 $   0.51     39%

Note:  The Company announced a 50% stock dividend to shareholders of record
on June 30, 2007, payable on July 15, 2007.  All earnings per share and
weighted average share information reflect the 50% stock dividend.

"We were extremely pleased with the revenue and earnings growth this quarter," said Allen Carlson, Sun's President and CEO. "Gross profit margins remained strong at this level of sales and the incremental sales allowed additional profit to flow to the bottom line, with earnings up 38% over the previous year.

"Growth continued across all business segments in the second quarter," Carlson continued. "European and Asian sales were especially strong, making up 78% of the increase over last year. Our success in reaching into new markets around the world continues to be a significant contributor to our growth.

"Last week we announced that we will open a sales office in Bangalore, India, to help Sun develop new business opportunities in the Indian market. We are excited about our opportunities in India and other expanding markets around the globe," concluded Carlson. "We believe this is a great time in the business cycle to be making strategic investments that will yield future benefits for Sun."

Outlook

2007 third quarter sales are estimated to be approximately $40 million and earnings per share are estimated to be in the range of $0.30 to $0.32. This would represent an increase of approximately 10% in sales and 29% in earnings per share over last year.

Webcast

Sun Hydraulics Corporation will broadcast its second quarter financial results conference call live over the Internet at 2:30 P.M. E.T. tomorrow, August 8, 2007. To listen to the webcast, 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 the earnings release by going to the Sun Hydraulics website, www.sunhydraulics.com , and clicking on Investor Relations. Scroll down to the bottom of the page and click on contact email: investor@sunhydraulics.com . Sun management will answer these and other questions during the Company's webcast. If an individual wishes to ask questions directly during the webcast, the conference call may be accessed by dialing 1-877-407-8033.

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.