Exhibit 99.1

NEWS RELEASE

1500 West University Parkway, Sarasota, FL 34243  •  (941) 362-1200

FOR IMMEDIATE RELEASE

Sun Hydraulics Reports Second Quarter 2017 Results

Sarasota, FL, August 7, 2017 — Sun Hydraulics Corporation (NASDAQ: SNHY) (“Sun” or the “Company”), a global industrial technology leader that develops and manufactures solutions for both the hydraulics and electronics markets, today reported financial results for the second quarter and first half of 2017, ended July 1, 2017.  The results include Enovation Controls since its acquisition on December 5, 2016 (the “Acquisition”).

Wolfgang Dangel, Sun's President and Chief Executive Officer, commented, "Global growth evidenced in the first quarter gained momentum as we progressed through the subsequent months.  This, along with our proactive sales and marketing initiatives and new product introductions are driving our sales growth, which increased by 68% for the first half of 2017.  Our team is executing well from a production and administrative standpoint as well, generating significant leverage on our cost base, and delivering 28% Adjusted EBITDA margin for the first half of the year.”  

He added, “Driven by faster-than-expected growth, we are accelerating our capital expenditure activities for 2017 in accordance with our strategy.  Our Vision 2025 for the Asia Pacific region has us manufacturing product locally to serve customers in that growing market.  We recently identified property in South Korea which we believe is ideally suited for this purpose.  Accordingly, we intend to purchase land and develop a production facility, of which approximately half of the cost is expected to be incurred in 2017, with completion in 2018.

“Additionally, significant growth by our Enovation Controls business, of 40% year to date, warrants purchasing the production facility we currently lease in Tulsa.  This provides us stability and a footprint to grow and develop this operation as our North American electronics competence hub.”  

Second Quarter 2017 Consolidated Results

Sales in the 2017 second quarter grew $38.5 million, or 76%, over the prior year, with the Enovation Controls business contributing $27.8 million, while organic business sales grew 21%.  The Enovation Controls sales reflect 44% growth over the 2016 second quarter on a pro forma basis.  Sales in each of the Company’s geographic regions increased considerably, with the Americas, Europe/Middle East/Africa (“EMEA”) and Asia Pacific (“APAC”) comprising 59%, 22% and 19% of consolidated sales, respectively.  Foreign currency translation unfavorably impacted consolidated sales by approximately $0.9 million.

Operating income in the second quarter of 2017 was impacted by $2.0 million for amortization of acquisition-related intangible assets.  

Net interest expense of $1.0 million contrasts with $0.4 million of net interest income for the second quarter of 2016, with the increase primarily due to debt to fund the Acquisition.

Tricia L. Fulton, Sun’s Chief Financial Officer, noted, “Given stronger-than-expected operating and financial performance delivered by the Enovation Controls business, we revalued the contingent consideration provided for in the acquisition agreement.  This additional consideration is based on defined revenue and EBITDA targets through early 2019.  As a result, we recorded $8.2 million of additional acquisition consideration during the second quarter, impacting net income and EPS by $5.3 million and $0.19 per share, respectively.  This incremental consideration is a testament to excellent performance thus far and the favorable outlook for this business.”

Net income was $7.3 million, or $0.27 per share.  Excluding acquisition-related amortization and contingent consideration, non-GAAP net income was $14.1 million, or $0.52 per share, double the prior-year second quarter earnings per share.  See the attached tables for additional important disclosures regarding Sun’s use of non-GAAP net income and non-GAAP EPS as well as a reconciliation of net income to non-GAAP net income.

Second Quarter Adjusted EBITDA

Second quarter 2017 Adjusted EBITDA (consolidated net income before net interest expense/income, income taxes, depreciation and amortization, and acquisition-related contingent consideration) benefited from improved gross margin on higher sales volume, cost reduction initiatives and leverage on fixed selling, engineering and administrative (SEA) expenses.

Sun believes that, when used in conjunction with measures prepared in accordance with GAAP, Adjusted EBITDA and Adjusted EBITDA margin (Adjusted EBITDA as a percentage of sales), which are non-GAAP measures, help in the understanding of its operating performance.  See

the attached tables for additional important disclosures regarding Sun’s use of Adjusted EBITDA and Adjusted EBITDA margin as well as a reconciliation of net income to Adjusted EBITDA.

First Half 2017 Consolidated Results

Sales in the 2017 first half grew $68.9 million, or 68%, over the prior year, with the Enovation Controls business contributing $54.3 million, while organic business sales grew 14%. The Enovation Controls sales reflect 40% growth over the 2016 second quarter on a pro forma basis.  Foreign currency translation unfavorably impacted consolidated sales by approximately $1.9 million.

Operating income in the first half of 2017 was impacted by acquisition-related items, including $1.8 million for amortization of inventory valuation and $4.2 million for amortization of intangible assets.  

Net interest expense of $1.6 million contrasts with $0.8 million of net interest income for the first half of 2016, with the increase primarily due to debt to fund the Acquisition.

Net income was $17.5 million, or $0.65 per share.  Excluding acquisition-related amortization and contingent consideration, non-GAAP net income was $27.1 million, or $1.00 per share, up 75% over the prior-year first half on a per share basis.  See the attached tables for additional important disclosures regarding Sun’s use of non-GAAP net income and non-GAAP EPS as well as a reconciliation of net income to non-GAAP net income.

First Half Adjusted EBITDA

First half 2017 Adjusted EBITDA (consolidated net income before net interest expense/income, income taxes, depreciation and amortization, and acquisition-related contingent consideration) benefited from improved gross margin on higher sales volume, cost reduction initiatives and leverage on fixed SEA expenses.

Sun believes that, when used in conjunction with measures prepared in accordance with GAAP, Adjusted EBITDA and Adjusted EBITDA margin (Adjusted EBITDA as a percentage of sales), which are non-GAAP measures, help in the understanding of its operating performance.  See the attached tables for additional important disclosures regarding Sun’s use of Adjusted EBITDA and Adjusted EBITDA margin as well as a reconciliation of net income to Adjusted EBITDA.

Hydraulics Segment Review

(refer to sales by geographic region and segment data in accompanying tables)

Segment sales of $60.8 million grew 22% over the prior-year second quarter. Growth was realized in all geographic regions, with APAC and Americas showing particular strength, growing 38% and 25%, respectively.  

For the first half of the year, sales were $114.9 million, up 15%.  Growth was realized in all geographic regions, especially APAC and Americas growing 28% and 14%, respectively.  

In addition to market expansion, the Company believes that demand was favorably impacted by its global sales and marketing initiatives.  Additionally, improvement was realized across all end markets, during both the second quarter as well as the year-to-date period.

Second quarter operating income grew 55% to $16.4 million, compared with the second quarter of last year.  Operating margin improved to 26.9%, compared with last year’s 21.3%, with the increase driven by improved gross margin on higher revenue and cost reduction efforts as well as leverage on fixed SEA costs.  

For the first half of 2017, operating income was $30.1 million, up 33% over the first half of 2016.  Operating margin improved to 26.2%, compared with 22.5% in the first half of 2016, benefiting from the same factors noted above for the second quarter.

Electronics Segment Review

(refer to sales by geographic region and segment data in accompanying tables)

Segment sales were $28.5 million for the second quarter, which included $27.8 million from the Acquisition. On a pro forma basis, Enovation Controls realized 44% growth over the second quarter of 2016, which was prior to the Acquisition.    

For the first half of the year, sales were $55.7 million, which included $54.3 million from the Acquisition.  Enovation Controls realized 40% growth over the first half of 2016, on a pro forma basis.

Growth for both periods was driven by increased demand in the power controls and recreational vehicle end markets, the business’ proactive sales initiatives and new products introduced over the past year.    

Second quarter operating income was $6.4 million, or 22.5% of sales.  

For the first half of 2017, operating income was $12.7 million, or 22.7% of sales.

Balance Sheet and Cash Flow Review

Total debt was $124 million at July 1, 2017, consistent with April 1, 2017 and down from
$140 million at December 31, 2016.  The Company repaid $16 million of debt during the first quarter of 2017 and had $176 million of available capacity under its revolving credit facility at July 1, 2017.

Cash and cash equivalents at July 1, 2017 were $78.7 million compared with $74.2 million at the end of 2016.  Short-term investments were $3.8 million and $6.8 million at July 1, 2017 and the end of 2016, respectively.  

Cash provided by operations was comparable for the first half of 2017 and 2016, at $21.7 million for the 2017 period and $21.9 million for the 2016 period.  Capital expenditures were
$3.3 million and $2.6 million for the first half of 2017 and 2016, respectively.

2017 Outlook and Guidance

Mr. Dangel stated, “The positive trends we have been experiencing globally, coupled with a favorable economic outlook, support higher full year expectations.  Accordingly, we have increased our sales guidance for both of our segments, as well as our operating margin expectations.  Additionally, as noted above, we have increased our capital expenditure guidance.”

The following summarizes the Company’s current and previous expectations for 2017:

Mr. Dangel concluded, “The positive momentum we are experiencing within our organization and marketplaces indicates that we are progressing well toward achievement of our 2025 Vision, the goals of which are $1 billion in sales, superior profitability and financial strength.”

Webcast

The Company will host a conference call and webcast tomorrow morning at 9:00 a.m. Eastern Time to review its financial and operating results, and discuss its corporate strategies and outlook.  A question-and-answer session will follow.

The conference call can be accessed by calling (201) 689-8573.  The audio webcast can be monitored at www.sunhydraulics.com.  Participants will have the ability to ask questions on either the teleconference call or the webcast.

A telephonic replay will be available from 12:00 p.m. ET on the day of the call through Tuesday, August 15, 2017.  To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13665982.  The webcast replay will be available in the investor relations section of the Company’s website at www.sunhydraulics.com, where a transcript will also be posted once available.

About Sun
Sun Hydraulics Corporation is an industrial technology leader that develops and manufactures solutions for both the hydraulics and electronics markets.  In the hydraulics market, the Company is a leading manufacturer of high-performance screw-in hydraulic cartridge valves, electro-hydraulics, manifolds, and integrated package solutions for the worldwide industrial and mobile hydraulics markets.  In the electronics market, the Company is a global provider of innovative electronic control, display and instrumentation solutions for both recreational and off-highway vehicles, as well as stationary and power generation equipment.  For more information about Sun, please visit www.sunhydraulics.com.  

FORWARD-LOOKING INFORMATION

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Forward-looking statements involve risks and uncertainties, and actual results may differ materially from those expressed or implied by such statements. They include 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 and make acquisitions; (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 impact on the Company’s hydraulics and electronics segments, directly affecting customer orders, lead times and sales volume; (ii) fluctuations in global business conditions, including the impact of economic recessions in the U.S. and other parts of the world, (iii) conditions in the capital markets, including the interest rate environment and the availability of capital; (iv) changes in the competitive marketplace that could affect the Company's revenue and/or costs, such as increased competition, lack of qualified engineering, marketing, management or other personnel, and increased labor and raw materials costs; (v) risks related to the integration of the businesses of the Company; (vi) 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; (vii) new product introductions, product sales mix and the geographic mix of sales nationally and internationally; and (viii) 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 headings Item 1. "Business," Item 1A. "Risk Factors," and Item 7. "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in the Company's Form 10-K for the year ended December 31, 2016. 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.

For more information, contact:
Karen L. Howard / Deborah K. Pawlowski
Kei Advisors LLC
(716) 843-3942 / (716) 843-3908
khoward@keiadvisors.com / dpawlowski@keiadvisors.com

Financial Tables Follow.

SUN HYDRAULICS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

SUN HYDRAULICS CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

SUN HYDRAULICS CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

(Unaudited)

SUN HYDRAULICS CORPORATION

SEGMENT DATA

(in thousands)

(Unaudited)

SUN HYDRAULICS CORPORATION

ADDITIONAL INFORMATION

(Unaudited)

2017 Sales by Geographic Region and Segment

(in millions)

2016 Sales by Geographic Region and Segment

(in millions)

SUN HYDRAULICS CORPORATION

Adjusted EBITDA RECONCILIATION

(in thousands)

(Unaudited)

SUN HYDRAULICS CORPORATION

Non-GAAP Net Income RECONCILIATION

(in thousands)

(Unaudited)

Non-GAAP Financial Measures:

Adjusted EBITDA is defined as consolidated net income before net interest expense (income), income taxes, depreciation and amortization, and acquisition-related contingent consideration.  Adjusted EBITDA margin is Adjusted EBITDA divided by sales.  Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP.  Nevertheless, Sun believes that providing non-GAAP information such as Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income are important for investors and other readers of Sun's financial statements, as they are used as analytical indicators by Sun's management to better understand operating performance.  Because Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income are non-GAAP measures and are thus susceptible to varying calculations, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income, as presented, may not be directly comparable to other similarly titled measures used by other companies.