Sun Hydraulics Corporation (SNHY) has reported a 24.40 percent rise in profit for the quarter ended Apr. 01, 2017. The company has earned $10.21 million, or $0.38 a share in the quarter, compared with $8.21 million, or $0.31 a share for the same period last year.

Revenue during the quarter surged 59.43 percent to $81.35 million from $51.03 million in the previous year period. Gross margin for the quarter expanded 202 basis points over the previous year period to 40.31 percent. Total expenses were 80.60 percent of quarterly revenues, up from 76.71 percent for the same period last year. That has resulted in a contraction of 389 basis points in operating margin to 19.40 percent.

Operating income for the quarter was $15.78 million, compared with $11.89 million in the previous year period.

Wolfgang Dangel, Sun's president and chief executive officer, commented, "This is an exciting time for the entire Sun organization, reporting a solid start to 2017. With sales up 59% driven by organic as well as acquisition growth, we grew our EBITDA by 58%. Additionally, Enovation Controls was approximately $0.04 accretive to GAAP EPS in this first full quarter since closing on the acquisition, net of incremental amortization of $0.10 and incremental interest expense of $0.02."

For financial year 2017, Sun Hydraulics Corporation forecasts revenue to be in the range of $295 million to $310 million. The company forecasts operating income to grow in the range of 20 percent to 22 percent.

Cash flow from investing activities was $1.34 million for the quarter, up 340.13 percent or $1.03 million, when compared with the last year period.

The company has spent $18.76 million cash to carry out financing activities during the quarter as against cash outgo of $3.27 million in the last year period.

Cash and cash equivalents stood at $70.41 million as on Apr. 01, 2017, down 21.68 percent or $19.49 million from $89.90 million on Apr. 02, 2016.

Working capital drops significantly

Sun Hydraulics Corporation has witnessed a decline in the working capital over the last year. It stood at $108.90 million as at Apr. 01, 2017, down 29.40 percent or $45.35 million from $154.25 million on Apr. 02, 2016. Current ratio was at 3.66 as on Apr. 01, 2017, down from 11.14 on Apr. 02, 2016.

Cash conversion cycle (CCC) has decreased to 41 days for the quarter from 52 days for the last year period. Days sales outstanding were almost stable at 29 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 30 days for the quarter compared with 37 days for the previous year period. At the same time, days payable outstanding went up to 18 days for the quarter from 15 for the same period last year.