Sun Hydraulics 2006 Sales Rise 22% to $142 Million, Net Income Up 27%, Board Declares First Quarter Dividend of $0.10, SNHY Celebrates 10 Years on NASDAQ

Market Wire, March, 2007

Sun Hydraulics Corporation (NASDAQ: SNHY) reported financial results for the year and fourth quarter 2006 as follows:

(Dollars in millions except net income per share)

                               December 30, December 31,
                                   2006         2005        Increase

      Twelve Months Ended
Net Sales                      $      142.3 $      116.8          22%
Net Income                     $       16.2 $       12.8          27%
Net Income per share:
   Basic                       $       1.49 $       1.18          26%
   Diluted                     $       1.48 $       1.17          26%

      Three Months Ended
Net Sales                      $       35.0 $       27.9          25%
Net Income                     $        3.8 $        2.9          31%
Net Income per share:
   Basic                       $       0.35 $       0.26          35%
   Diluted                     $       0.35 $       0.26          35%

"Fourth quarter orders and shipments finished very strong and our 2006 financial results were even better than we had expected," said Allen Carlson, Sun's President and CEO. "While North America continued to hold up, we saw robust demand in Europe and Asia/Pacific. The strong order trends have continued through January and February and we anticipate first quarter 2007 results will continue to outpace the industry. We expect continued double digit growth in Q1 2007. This is exceptional given the strength of last year's first quarter."

"The keys to our success have not changed," Carlson continued. "Shipping reliability, new complementary and differentiated products, a focus on integrated packages, our strong geographic presence and our website continue to help Sun gain market share. In the product area, we are excited about the launch of additional electro-hydraulic products at the Hannover Fair in Germany in April. Having the right products at the right time has been, and continues to be, our focus," Carlson stated.

"Sun is proud to celebrate 10 years as a public company. During that time we have continued to grow both the top and bottom lines, and have returned to shareholders over $29 million in dividends," confirmed Carlson. "For long-term investors, the value of an investment in Sun in January 1997, has grown more than 300%, compared to a return of over 200% on the S&P 500 over the same 10-year period," Carlson concluded.

Taxes

Year-end tax provision adjustments included additional taxes due from the repatriation of approximately $5 million from our U.K. and German operations. "While our tax rate was slightly higher than expected, we were able to pay down all U.S. debt in the fourth quarter with the cash brought back from Europe," stated Tricia Fulton, Sun's CFO. The effect on earnings per share from the year-end tax provision adjustments, including repatriation and other items, was approximately $0.03.

Dividend

On March 3, 2007, Sun Hydraulics Board of Directors declared a $0.10 per share dividend on its common stock. The dividend is payable on April 15, 2007, to shareholders of record as of March 31, 2007.

Outlook

2007 first quarter sales are estimated to be $39 million, a 14% increase over last year. First quarter earnings per share are estimated to be between $0.42 and $0.45 per share, compared to $0.38 per share last year.

Open House and Webcast

Sun Hydraulics Corporation will broadcast its 2006 financial results conference call live over the Internet at 4:00 P.M. E.T. tomorrow, March 7, 2007. The conference call will be in conjunction with an Investor Open House to be held at the Company's facility at 701 Tallevast Road, Sarasota, Florida, starting at 3:45 P.M. 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 this earnings release, by going to the Sun Hydraulics website, www.sunhydraulics.com , and clicking on Investor Relations on the top menu. Scroll down to the bottom of the page and click on contact email: investor@sunhydraulics.com , which will open an email window to type in your message. Sun management will then answer these and other questions during the Company's webcast. 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.