UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October ~~2, 2021~~1, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 1-34679

VISHAY PRECISION GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware

27-0986328

(State or Other Jurisdiction of Incorporation)

(I.R.S. Employer Identification Number)

3 Great Valley Parkway, Suite 150

Malvern, PA, 19355

484-321-5300

(Address of Principal Executive Offices) (Zip Code)

(Registrant’s Telephone Number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.10 par value	VPG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ý No

As of November ~~12, 2021,~~8, 2022, the registrant had ~~12,603,220~~12,550,775 shares of its common stock and 1,022,887 shares of its Class B convertible common stock outstanding.

VISHAY PRECISION GROUP, INC.

FORM 10-Q

October ~~2, 2021~~1, 2022

CONTENTS


		Page Number
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets – October 2 ~~, 2021~~1, 2022 (Unaudited) and December 31, ~~2020~~2021	3

	Consolidated Condensed Statements of Operations (Unaudited) – Fiscal Quarters Ended October 1, 2022 and October 2,, 2021 ~~and~~ ~~September 26, 2020~~	5

	Consolidated Condensed Statements of Operations (Unaudited) – N ~~ine~~Nine Fiscal Months Ended October 1, 2022 and October 2, 2021 ~~and~~ ~~September 26, 2020~~	6

	Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) – Fiscal Quarters Ended October 1, 2022 and October 2, 2021 ~~and~~ ~~September 26, 2020~~	7

	Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) – Nine Fiscal Months Ended October 1, 2022 and October 2, 2021 ~~and~~ ~~September 26, 2020~~	8

	Consolidated Condensed Statements of Cash Flows (Unaudited) –~~Nine~~–Nine Fiscal Months Ended October 1, 2022 and October 2, 2021 ~~and~~ ~~September 26, 2020~~	9

	Consolidated Condensed Statements of Equity (Unaudited) – Fiscal Quarters Ended October 1, 2022 and October 2, 2021 ~~and~~ ~~September 26, 2020~~	10

	Consolidated Condensed Statements of Equity ~~(Unaudite~~d)(Unaudited) – Nine F~~iscal~~Fiscal Months Ended October 1, 2022 and October 2, 2021 ~~and~~ ~~September 26, 2020~~	11

	Notes to Unaudited Consolidated Condensed Financial Statements	12

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2524

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4240

Item 4.	Controls and Procedures	4240

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	4341

Item 1A.	Risk Factors	4341

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4341

Item 3.	Defaults Upon Senior Securities	4341

Item 4.	Mine Safety Disclosures	4341

Item 5.	Other Information	4341

Item 6.	Exhibits	4442

	SIGNATURES	4543

-2-

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS


VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)	VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)					VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)
		October 2, 2021		December 31, 2020			October 1, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	75,544	$	98,438	Cash and cash equivalents	$	79,910	$	84,335
Accounts receivable, net	Accounts receivable, net	53,711		45,339		Accounts receivable, net	55,151		58,265
Inventories:	Inventories:					Inventories:
Raw materials	Raw materials	26,071		21,894		Raw materials	31,036		25,464
Work in process	Work in process	27,142		21,534		Work in process	27,903		23,851
Finished goods	Finished goods	25,279		18,920		Finished goods	26,384		27,112
Inventories, net	Inventories, net	78,492		62,348		Inventories, net	85,323		76,427

Prepaid expenses and other current assets	Prepaid expenses and other current assets	19,463		15,761		Prepaid expenses and other current assets	16,160		15,916

Total current assets	Total current assets	227,210		221,886		Total current assets	236,544		234,943

Property and equipment:	Property and equipment:					Property and equipment:
Land	Land	4,248		4,282		Land	4,029		4,241
Buildings and improvements	Buildings and improvements	68,616		67,581		Buildings and improvements	69,769		68,778
Machinery and equipment	Machinery and equipment	119,826		115,717		Machinery and equipment	122,412		122,202
Software	Software	8,386		10,026		Software	9,136		8,871
Construction in progress	Construction in progress	3,930		6,341		Construction in progress	6,364		7,747
Accumulated depreciation	Accumulated depreciation	(128,698)		(128,931)		Accumulated depreciation	(129,225)		(130,619)
Property and equipment, net	Property and equipment, net	76,308		75,016		Property and equipment, net	82,485		81,220

Goodwill	Goodwill	45,560		31,105		Goodwill	45,460		45,830
Intangible assets, net	Intangible assets, net	53,327		32,039		Intangible assets, net	49,081		52,437
Operating lease right-of-use assets	Operating lease right-of-use assets	27,405		21,788		Operating lease right-of-use assets	24,737		27,764
Other assets	Other assets	20,113		20,053		Other assets	15,890		19,695
Total assets	Total assets	$	449,923	$	401,887	Total assets	$	454,197	$	461,889

Continues on the following page.

-3-


VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)	VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)					VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)
		October 2, 2021		December 31, 2020			October 1, 2022		December 31, 2021
Liabilities and equity	Liabilities and equity					Liabilities and equity	(Unaudited)
Current liabilities:	Current liabilities:					Current liabilities:
Trade accounts payable	Trade accounts payable	$	13,103	$	10,487	Trade accounts payable	$	10,234	$	14,876
Payroll and related expenses	Payroll and related expenses	17,867		17,595		Payroll and related expenses	20,658		23,772
Other accrued expenses	Other accrued expenses	19,291		13,843		Other accrued expenses	21,863		17,596
Income taxes	Income taxes	679		1,593		Income taxes	818		3,774
Current portion of operating lease liabilities	Current portion of operating lease liabilities	4,415		4,011		Current portion of operating lease liabilities	4,119		4,610
Current portion of long-term debt		—		18

Total current liabilities	Total current liabilities	55,355		47,547		Total current liabilities	57,692		64,628

Long-term debt, less current portion	Long-term debt, less current portion	60,692		40,626		Long-term debt, less current portion	60,780		60,714
Deferred income taxes	Deferred income taxes	8,516		3,403		Deferred income taxes	4,585		5,848
Operating lease liabilities	Operating lease liabilities	24,462		19,504		Operating lease liabilities	20,422		25,140
Other liabilities	Other liabilities	15,962		16,263		Other liabilities	13,959		16,264
Accrued pension and other postretirement costs	Accrued pension and other postretirement costs	15,270		16,687		Accrued pension and other postretirement costs	10,259		12,253
Total liabilities	Total liabilities	180,257		144,030		Total liabilities	167,697		184,847

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies

Equity:	Equity:					Equity:
Common stock	Common stock	1,322		1,317		Common stock	1,325		1,322
Class B convertible common stock	Class B convertible common stock	103		103		Class B convertible common stock	103		103
Treasury stock	Treasury stock	(8,765)		(8,765)		Treasury stock	(9,826)		(8,765)
Capital in excess of par value	Capital in excess of par value	198,235		197,764		Capital in excess of par value	200,308		199,151
Retained earnings	Retained earnings	114,335		100,075		Retained earnings	147,525		120,296
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(35,549)		(32,671)		Accumulated other comprehensive loss	(52,995)		(35,008)
Total Vishay Precision Group, Inc. stockholders' equity	Total Vishay Precision Group, Inc. stockholders' equity	269,681		257,823		Total Vishay Precision Group, Inc. stockholders' equity	286,440		277,099
Noncontrolling interests	Noncontrolling interests	(15)		34		Noncontrolling interests	60		(57)
Total equity	Total equity	269,666		257,857		Total equity	286,500		277,042
Total liabilities and equity	Total liabilities and equity	$	449,923	$	401,887	Total liabilities and equity	$	454,197	$	461,889

See accompanying notes.

-4-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Operations

(Unaudited - In thousands, except per share amounts)


		Fiscal quarter ended					Fiscal quarter ended
		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021
Net revenues	Net revenues	$	81,974	$	67,525	Net revenues	$	90,057	$	81,974
Costs of products sold	Costs of products sold	50,129		40,176		Costs of products sold	52,737		50,129
Gross profit	Gross profit	31,845		27,349		Gross profit	37,320		31,845

Selling, general, and administrative expenses	Selling, general, and administrative expenses	24,580		19,144		Selling, general, and administrative expenses	25,271		24,580

Restructuring costs	Restructuring costs	—		84		Restructuring costs	165		—
Operating income	Operating income	7,265		8,121		Operating income	11,884		7,265

Other income (expense):	Other income (expense):					Other income (expense):
Interest expense	Interest expense	(328)		(309)		Interest expense	(636)		(328)
Other	Other	174		(39)		Other	1,223		174
Other expense		(154)		(348)
Other income (expense)						Other income (expense)	587		(154)

Income before taxes	Income before taxes	7,111		7,773		Income before taxes	12,471		7,111

Income tax expense	Income tax expense	1,662		2,109		Income tax expense	2,323		1,662

Net earnings	Net earnings	5,449		5,664		Net earnings	10,148		5,449
Less: net earnings attributable to noncontrolling interests	Less: net earnings attributable to noncontrolling interests	70		66		Less: net earnings attributable to noncontrolling interests	30		70
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	$	5,379	$	5,598	Net earnings attributable to VPG stockholders	$	10,118	$	5,379

Basic earnings per share attributable to VPG stockholders	Basic earnings per share attributable to VPG stockholders	$	0.39	$	0.41	Basic earnings per share attributable to VPG stockholders	$	0.74	$	0.39
Diluted earnings per share attributable to VPG stockholders	Diluted earnings per share attributable to VPG stockholders	$	0.39	$	0.41	Diluted earnings per share attributable to VPG stockholders	$	0.74	$	0.39

Weighted average shares outstanding - basic	Weighted average shares outstanding - basic	13,626		13,575		Weighted average shares outstanding - basic	13,649		13,626
Weighted average shares outstanding - diluted	Weighted average shares outstanding - diluted	13,664		13,637		Weighted average shares outstanding - diluted	13,708		13,664

See accompanying notes.

-5-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Operations

(Unaudited - In thousands, except per share amounts)


		Nine fiscal months ended					Nine fiscal months ended
		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021
Net revenues	Net revenues	$	227,902	$	194,367	Net revenues	$	266,340	$	227,902
Costs of products sold	Costs of products sold	137,637		118,843		Costs of products sold	156,436		137,637
Gross profit	Gross profit	90,265		75,524		Gross profit	109,904		90,265

Selling, general, and administrative expenses	Selling, general, and administrative expenses	69,216		58,075		Selling, general, and administrative expenses	77,824		69,216
Acquisition costs	Acquisition costs	1,198		—		Acquisition costs	—		1,198
Impairment of goodwill and indefinite-lived intangibles	Impairment of goodwill and indefinite-lived intangibles	1,223		—		Impairment of goodwill and indefinite-lived intangibles	—		1,223

Restructuring costs	Restructuring costs	—		713		Restructuring costs	1,330		—
Operating income	Operating income	18,628		16,736		Operating income	30,750		18,628
Other income (expense):	Other income (expense):					Other income (expense):
Interest expense	Interest expense	(906)		(1,037)		Interest expense	(1,393)		(906)
Other	Other	421		(629)		Other	5,006		421
Other expense		(485)		(1,666)
Other income (expense)						Other income (expense)	3,613		(485)

Income before taxes	Income before taxes	18,143		15,070		Income before taxes	34,363		18,143

Income tax expense	Income tax expense	3,688		4,367		Income tax expense	6,651		3,688

Net earnings	Net earnings	14,455		10,703		Net earnings	27,712		14,455
Less: net earnings attributable to noncontrolling interests	Less: net earnings attributable to noncontrolling interests	195		34		Less: net earnings attributable to noncontrolling interests	483		195
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	$	14,260	$	10,669	Net earnings attributable to VPG stockholders	$	27,229	$	14,260

Basic earnings per share attributable to VPG stockholders	Basic earnings per share attributable to VPG stockholders	$	1.05	$	0.79	Basic earnings per share attributable to VPG stockholders	$	2.00	$	1.05

Diluted earnings per share attributable to VPG stockholders	Diluted earnings per share attributable to VPG stockholders	$	1.04	$	0.78	Diluted earnings per share attributable to VPG stockholders	$	1.99	$	1.04

Weighted average shares outstanding - basic	Weighted average shares outstanding - basic	13,612		13,562		Weighted average shares outstanding - basic	13,645		13,612

Weighted average shares outstanding - diluted	Weighted average shares outstanding - diluted	13,647		13,611		Weighted average shares outstanding - diluted	13,692		13,647

See accompanying notes.

-6-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited - In thousands)


		Fiscal quarter ended					Fiscal quarter ended
		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021
Net earnings	Net earnings	$	5,449	$	5,664	Net earnings	$	10,148	$	5,449

Other comprehensive income (loss):
Other comprehensive income (loss), net of tax:						Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	Foreign currency translation adjustment	(2,116)		2,479		Foreign currency translation adjustment	(8,479)		(2,116)
Pension and other postretirement actuarial items, net of tax		113		(137)
Other comprehensive (loss) income		(2,003)		2,342
Pension and other postretirement actuarial items						Pension and other postretirement actuarial items	65		113
Other comprehensive loss						Other comprehensive loss	(8,414)		(2,003)

Comprehensive income	Comprehensive income	3,446		8,006		Comprehensive income	1,734		3,446

Less: comprehensive income attributable to noncontrolling interests	Less: comprehensive income attributable to noncontrolling interests	70		66		Less: comprehensive income attributable to noncontrolling interests	30		70

Comprehensive income attributable to VPG stockholders	Comprehensive income attributable to VPG stockholders	$	3,376	$	7,940	Comprehensive income attributable to VPG stockholders	$	1,704	$	3,376

See accompanying notes.

-7-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited - In thousands)


		Nine fiscal months ended					Nine fiscal months ended
		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021
Net earnings	Net earnings	$	14,455	$	10,703	Net earnings	$	27,712	$	14,455

Other comprehensive income (loss):	Other comprehensive income (loss):					Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	(3,309)		409		Foreign currency translation adjustment	(18,214)		(3,309)
Pension and other postretirement actuarial items, net of tax	Pension and other postretirement actuarial items, net of tax	431		(448)		Pension and other postretirement actuarial items, net of tax	227		431
Other comprehensive loss	Other comprehensive loss	(2,878)		(39)		Other comprehensive loss	(17,987)		(2,878)

Comprehensive income	Comprehensive income	11,577		10,664		Comprehensive income	9,725		11,577

Less: comprehensive income attributable to noncontrolling interests	Less: comprehensive income attributable to noncontrolling interests	195		34		Less: comprehensive income attributable to noncontrolling interests	483		195

Comprehensive income attributable to VPG stockholders	Comprehensive income attributable to VPG stockholders	$	11,382	$	10,630	Comprehensive income attributable to VPG stockholders	$	9,242	$	11,382

See accompanying notes.

-8-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Cash Flows

(Unaudited - In thousands)


		Nine fiscal months ended					Nine fiscal months ended
		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021
Operating activities	Operating activities					Operating activities
Net earnings	Net earnings	$	14,455	$	10,703	Net earnings	$	27,712	$	14,455
Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:					Adjustments to reconcile net earnings to net cash provided by operating activities:
Impairment of goodwill and indefinite-lived intangibles	Impairment of goodwill and indefinite-lived intangibles	1,223		—		Impairment of goodwill and indefinite-lived intangibles	—		1,223
Depreciation and amortization	Depreciation and amortization	11,033		9,334		Depreciation and amortization	11,519		11,033
Loss from extinguishment of debt		—		30

Gain on sale of property and equipment	Gain on sale of property and equipment	(35)		(140)		Gain on sale of property and equipment	(182)		(35)

Reclassification of foreign currency translation adjustment related to disposal of subsidiary						Reclassification of foreign currency translation adjustment related to disposal of subsidiary	191		—
Share-based compensation expense	Share-based compensation expense	1,328		1,137		Share-based compensation expense	1,583		1,328
Inventory write-offs for obsolescence	Inventory write-offs for obsolescence	1,613		1,873		Inventory write-offs for obsolescence	1,451		1,613
Deferred income taxes	Deferred income taxes	(1,412)		127		Deferred income taxes	(72)		(1,412)
Other	Other	(2,022)		364		Other	(4,319)		(2,022)
Net changes in operating assets and liabilities:	Net changes in operating assets and liabilities:					Net changes in operating assets and liabilities:
Accounts receivable, net	Accounts receivable, net	(3,078)		(1,541)		Accounts receivable, net	(2,077)		(3,078)
Inventories, net	Inventories, net	(9,624)		(1,214)		Inventories, net	(14,151)		(9,624)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(3,591)		(75)		Prepaid expenses and other current assets	(984)		(3,591)
Trade accounts payable	Trade accounts payable	3,695		605		Trade accounts payable	(1,459)		3,695
Other current liabilities	Other current liabilities	4,496		1,631		Other current liabilities	1,303		4,496
Net cash provided by operating activities	Net cash provided by operating activities	18,081		22,834		Net cash provided by operating activities	20,515		18,081

Investing activities	Investing activities					Investing activities
Capital expenditures	Capital expenditures	(11,191)		(15,815)		Capital expenditures	(15,545)		(11,191)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	181		423		Proceeds from sale of property and equipment	397		181

Purchase of business, net of cash acquired	Purchase of business, net of cash acquired	(47,216)		156		Purchase of business, net of cash acquired	—		(47,216)
Net cash used in investing activities	Net cash used in investing activities	(58,226)		(15,236)		Net cash used in investing activities	(15,148)		(58,226)

Financing activities	Financing activities					Financing activities

Principal payments on long-term debt	Principal payments on long-term debt	(18)		(3,459)		Principal payments on long-term debt	—		(18)

Proceeds from revolving facility	Proceeds from revolving facility	20,000		—		Proceeds from revolving facility	—		20,000

Debt issuance costs		—		(402)
Purchase of noncontrolling interest		—		(253)
(Distributions to) contributions from noncontrolling interests		(244)		35

Purchase of treasury stock						Purchase of treasury stock	(1,061)		—

Distributions to noncontrolling interests						Distributions to noncontrolling interests	(366)		(244)
Payments of employee taxes on certain share-based arrangements	Payments of employee taxes on certain share-based arrangements	(853)		(813)		Payments of employee taxes on certain share-based arrangements	(435)		(853)
Net cash provided by (used in) financing activities		18,885		(4,892)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(1,862)		18,885
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(1,634)		179		Effect of exchange rate changes on cash and cash equivalents	(7,930)		(1,634)
(Decrease) increase in cash and cash equivalents		(22,894)		2,885
Decrease in cash and cash equivalents						Decrease in cash and cash equivalents	(4,425)		(22,894)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	98,438		86,910		Cash and cash equivalents at beginning of period	84,335		98,438
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	75,544	$	89,795	Cash and cash equivalents at end of period	$	79,910	$	75,544

Supplemental disclosure of investing transactions:	Supplemental disclosure of investing transactions:					Supplemental disclosure of investing transactions:
Capital expenditures purchased	Capital expenditures purchased	$	(9,368)	$	(15,395)	Capital expenditures purchased	$	(13,198)	$	(9,368)
Capital expenditures accrued but not yet paid	Capital expenditures accrued but not yet paid	$	738	$	762	Capital expenditures accrued but not yet paid	$	720	$	738

See accompanying notes.

-9-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Equity

(Unaudited - In thousands, except share amounts)

Fiscal quarter ended

October 2, 2021
Common
Stock Class B
Convertible
Common Stock Treasury Stock Capital in
Excess of
Par Value Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total VPG Inc.
Stockholders'
Equity Noncontrolling
Interests Total
Equity
Balance at July 3, 2021 $ 1,322 $ 103 $ (8,765) $ 197,856 $ 108,956 $ (33,546) $ 265,926 $ (8) $ 265,918
Net earnings — — — — 5,379 — 5,379 70 5,449
Other comprehensive income — — — — — (2,003) (2,003) — (2,003)
Share-based compensation expense — — — 386 — — 386 — 386
Restricted stock issuances ( 465 shares) — — — (7) — — (7) — (7)
Distributions to noncontrolling interests — — — — — — — (77) (77)
Balance at October 2, 2021 $ 1,322 $ 103 $ (8,765) $ 198,235 $ 114,335 $ (35,549) $ 269,681 $ (15) $ 269,666


	Fiscal quarter ended October 1, 2022
	Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total VPG Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
Balance at July 2, 2022	$	1,325	$	103	$	(8,765)	$	199,749	$	137,407	$	(44,581)	$	285,238	$	112	$	285,350
Net earnings	—		—		—		—		10,118		—		10,118		30		10,148
Other comprehensive loss	—		—		—		—		—		(8,414)		(8,414)		—		(8,414)
Share-based compensation expense	—		—		—		559		—		—		559		—		559



Purchase of treasury stock. (32,601 shares)	—		—		(1,061)		—		—		—		(1,061)		—		(1,061)


Distributions to noncontrolling interests	—		—		—		—		—		—		—		(82)		(82)
Balance at October 1, 2022	$	1,325	$	103	$	(9,826)	$	200,308	$	147,525	$	(52,995)	$	286,440	$	60	$	286,500


		Fiscal quarter ended September 26, 2020																			Fiscal quarter ended October 2, 2021
		Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total VPG Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity			Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total VPG Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
Balance at June 27, 2020		$	1,317	$	103	$	(8,765)	$	197,134	$	94,359	$	(40,084)	$	244,064	$	176	$	244,240
Balance at July 3, 2021																				Balance at July 3, 2021	$	1,322	$	103	$	(8,765)	$	197,856	$	108,956	$	(33,546)	$	265,926	$	(8)	$	265,918
Net earnings	Net earnings	—		—		—		—		5,598		—		5,598		66		5,664		Net earnings	—		—		—		—		5,379		—		5,379		70		5,449
Other comprehensive loss		—		—		—		—		—		2,342		2,342		—		2,342
Other comprehensive income																				Other comprehensive income	—		—		—		—		—		(2,003)		(2,003)		—		(2,003)
Share-based compensation expense	Share-based compensation expense	—		—		—		380		—		—		380		—		380		Share-based compensation expense	—		—		—		386		—		—		386		—		386

Restricted stock issuances (465 shares)																				Restricted stock issuances (465 shares)	—		—		—		(7)		—		—		(7)		—		(7)

Distribution to noncontrolling interests	Distribution to noncontrolling interests	—		—		—		—		—		—		—		(82)		(82)		Distribution to noncontrolling interests	—		—		—		—		—		—		—		(77)		(77)
Balance at September 26, 2020		$	1,317	$	103	$	(8,765)	$	197,514	$	99,957	$	(37,742)	$	252,384	$	160	$	252,544
Balance at October 2, 2021																				Balance at October 2, 2021	$	1,322	$	103	$	(8,765)	$	198,235	$	114,335	$	(35,549)	$	269,681	$	(15)	$	269,666

See accompanying notes.

-10-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Equity

(Unaudited - In thousands, except share amounts)


		Nine Fiscal Months Ended October 2, 2021																			Nine Fiscal Months Ended October 1, 2022
		Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total VPG, Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity			Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total VPG, Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2020		$	1,317	$	103	$	(8,765)	$	197,764	$	100,075	$	(32,671)	$	257,823	$	34	$	257,857
Balance at December 31, 2021																				Balance at December 31, 2021	$	1,322	$	103	$	(8,765)	$	199,151	$	120,296	$	(35,008)	$	277,099	$	(57)	$	277,042
Net earnings	Net earnings	—		—		—		—		14,260		—		14,260		195		14,455		Net earnings	—		—		—		—		27,229		—		27,229		483		27,712
Other comprehensive loss	Other comprehensive loss	—		—		—		—		—		(2,878)		(2,878)		—		(2,878)		Other comprehensive loss	—		—		—		—		—		(17,987)		(17,987)		—		(17,987)
Share-based compensation expense	Share-based compensation expense	—		—		—		1,328		—		—		1,328		—		1,328		Share-based compensation expense	—		—		—		1,583		—		—		1,583		—		1,583
Restricted stock issuances (50,781 shares)		5		—		—		(857)		—		—		(852)		—		(852)
Restricted stock issuances (28,368 shares)																				Restricted stock issuances (28,368 shares)	3		—		—		(426)		—		—		(423)		—		(423)

Purchase of treasury stock (32,601 shares)																				Purchase of treasury stock (32,601 shares)	—		—		(1,061)		—		—		—		(1,061)		—		(1,061)

Distributions to noncontrolling interests	Distributions to noncontrolling interests	—		—		—		—		—		—		—		(244)		(244)		Distributions to noncontrolling interests	—		—		—		—		—		—		—		(366)		(366)
Balance at October 2, 2021		$	1,322	$	103	$	(8,765)	$	198,235	$	114,335	$	(35,549)	$	269,681	$	(15)	$	269,666
Balance at October 1, 2022																				Balance at October 1, 2022	$	1,325	$	103	$	(9,826)	$	200,308	$	147,525	$	(52,995)	$	286,440	$	60	$	286,500

Nine Fiscal Months Ended September 26, 2020
Common
Stock Class B
Convertible
Common Stock Treasury Stock Capital in
Excess of
Par Value Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total VPG, Inc.
Stockholders'
Equity Noncontrolling
Interests Total
Equity
Balance at December 31, 2019 $ 1,312 $ 103 $ (8,765) $ 197,125 $ 89,288 $ (37,703) $ 241,360 $ 392 $ 241,752
Net earnings — — — — 10,669 — 10,669 34 10,703
Other comprehensive loss — — — — — (39) (39) — (39)
Share-based compensation expense — — — 1,137 — — 1,137 — 1,137
Restricted stock issuances (52,433 shares) 5 — — (796) — — (791) — (791)
Purchase of noncontrolling interest — — — 48 — — 48 (301) (253)
Contributions from noncontrolling interests — — — — — — — 35 35
Balance at September 26, 2020 $ 1,317 $ 103 $ (8,765) $ 197,514 $ 99,957 $ (37,742) $ 252,384 $ 160 $ 252,544


	Nine Fiscal Months Ended October 2, 2021
	Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total VPG, Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2020	$	1,317	$	103	$	(8,765)	$	197,764	$	100,075	$	(32,671)	$	257,823	$	34	$	257,857
Net earnings	—		—		—		—		14,260		—		14,260		195		14,455
Other comprehensive loss	—		—		—		—		—		(2,878)		(2,878)		—		(2,878)
Share-based compensation expense	—		—		—		1,328		—		—		1,328		—		1,328
Restricted stock issuances (50,781 shares)	5		—		—		(857)		—		—		(852)		—		(852)



Distribution to noncontrolling interests	—		—		—		—		—		—		—		(244)		(244)
Balance at October 2, 2021	$	1,322	$	103	$	(8,765)	$	198,235	$	114,335	$	(35,549)	$	269,681	$	(15)	$	269,666

See accompanying notes.

-11-

Vishay Precision Group, Inc.

Notes to Unaudited Consolidated Condensed Financial Statements

Note 1 – Basis of Presentation

Background

Vishay Precision Group, Inc. (“VPG” or the “Company”) is ~~an internationally recognized designer, manufacturer~~a global, diversified company focused on precision measurement sensing technologies, including specialized sensors, weighing solutions, and ~~marketer~~measurement systems. Many of ~~sensors, and sensor-based~~our precision measurement ~~systems, as well as specialty resistors and strain gages based upon the Company's proprietary technology. The Company provides precision~~sensing products and solutions ~~many of which~~ are “designed-in” by ~~its~~our customers, ~~specializing in the~~and address growing ~~markets~~applications across a diverse array of ~~stress, force, weight, pressure,~~industries and ~~current measurements.~~markets. Our products are marketed under a variety of brand names that we believe are characterized as having a very high level of precision and quality, and we employ an operationally diversified structure to manage our businesses.

Interim Financial Statements

These unaudited consolidated condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements and therefore do not include all information and footnotes necessary for the presentation of financial position, results of operations, and cash flows required by accounting principles generally accepted in the United States for complete financial statements. The information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations, and cash flows for the interim periods presented. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of December 31, ~~2020~~2021 and ~~2019~~2020 and for each of the three years in the period ended December 31, ~~2020,~~2021, included in VPG’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, filed with the SEC on March ~~11, 2021.~~4, 2022. The results of operations for the fiscal quarter ended October ~~2, 2021~~1, 2022 are not necessarily indicative of the results to be expected for the full year. VPG reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first quarter, which always begins on January 1, and the fourth quarter, which always ends on December 31. The four fiscal quarters in ~~2021~~2022 and ~~2020~~2021 end on the following dates:

2021 2020
Quarter 1 April 3, March 28,
Quarter 2 July 3, June 27,
Quarter 3 October 2, September 26,
Quarter 4 December 31, December 31,

~~Recently Adopted Accounting Pronouncements~~

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update No. ASU 2019-12, "Simplifying the Accounting for Income Taxes". This ASU amends Accounting Standards Codification ("ASC") 740 by removing certain exceptions to the general principles, clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. The Company adopted this standard in the first quarter of 2021. The adoption of this ASU did not impact our financial statements or the related disclosures.


	2022	2021
Quarter 1	April 2,	April 3,
Quarter 2	July 2,	July 3,
Quarter 3	October 1,	October 2,
Quarter 4	December 31,	December 31,

Note 2 – Revenues

Revenue Recognition

The following table disaggregates net revenue by geographic region from contracts with customers based on net revenues generated by subsidiaries within that geographic location (in thousands):

-12-

Note 2 – Revenues (continued)


		Fiscal quarter ended October 2, 2021								Fiscal quarter ended September 26, 2020									Fiscal quarter ended October 1, 2022								Fiscal quarter ended October 2, 2021
		Foil Technology Products		Force Sensors		Weighing and Control Systems		Total		Foil Technology Products		Force Sensors		Weighing and Control Systems		Total			Sensors		Weighing Solutions		Measurement Systems		Total		Sensors		Weighing Solutions		Measurement Systems		Total
United States	United States	$	11,458	$	8,183	$	16,642	$	36,283	$	12,733	$	6,974	$	8,328	$	28,035	United States	$	12,992	$	14,671	$	13,065	$	40,728	$	9,640	$	12,729	$	13,914	$	36,283
United Kingdom	United Kingdom	875		606		3,760		5,241		778		2,321		2,633		5,732		United Kingdom	752		4,090		55		4,897		746		4,366		129		5,241
Other Europe	Other Europe	6,185		5,563		5,191		16,939		7,660		2,357		3,441		13,458		Other Europe	7,740		8,714		986		17,440		6,063		9,681		1,194		16,938
Israel	Israel	4,711		232		—		4,943		5,981		78		—		6,059		Israel	7,447		101		—		7,548		4,711		232		—		4,943
Asia	Asia	9,561		3,120		2,481		15,162		5,754		2,132		2,471		10,357		Asia	8,948		3,815		2,462		15,225		9,561		3,668		1,933		15,162
Canada	Canada	—		—		3,406		3,406		—		—		3,884		3,884		Canada	—		8		4,211		4,219		—		—		3,407		3,407
Total	Total	$	32,790	$	17,704	$	31,480	$	81,974	$	32,906	$	13,862	$	20,757	$	67,525	Total	$	37,879	$	31,399	$	20,779	$	90,057	$	30,721	$	30,676	$	20,577	$	81,974

		Nine Fiscal Months Ended October 2, 2021								Nine Fiscal Months Ended September 26, 2020									Nine Fiscal Months Ended October 1, 2022								Nine Fiscal Months Ended October 2, 2021
		Foil Technology Products		Force Sensors		Weighing and Control Systems		Total		Foil Technology Products		Force Sensors		Weighing and Control Systems		Total			Sensors		Weighing Solutions		Measurement Systems		Total		Sensors		Weighing Solutions		Measurement Systems		Total
United States	United States	$	32,940	$	23,971	$	34,883	$	91,794	$	35,456	$	19,479	$	23,226	$	78,161	United States	$	39,467	$	41,212	$	34,838	$	115,517	$	28,783	$	38,241	$	24,771	$	91,795
United Kingdom	United Kingdom	2,875		1,687		11,454		16,016		2,315		6,012		8,068		16,395		United Kingdom	2,562		12,283		514		15,359		2,350		13,141		525		16,016
Other Europe	Other Europe	20,055		16,056		14,956		51,067		22,346		6,165		10,615		39,126		Other Europe	23,556		28,065		3,985		55,606		19,640		29,511		1,916		51,067
Israel	Israel	16,436		623		—		17,059		14,627		268		—		14,895		Israel	22,828		401		—		23,229		16,436		623		—		17,059
Asia	Asia	26,503		9,516		6,094		42,113		20,424		5,549		6,001		31,974		Asia	27,496		10,657		4,283		42,436		26,503		11,794		3,815		42,112
Canada	Canada	—		—		9,853		9,853		—		—		13,816		13,816		Canada	—		8		14,185		14,193		—		9		9,844		9,853
Total	Total	$	98,809	$	51,853	$	77,240	$	227,902	$	95,168	$	37,473	$	61,726	$	194,367	Total	$	115,909	$	92,626	$	57,805	$	266,340	$	93,712	$	93,319	$	40,871	$	227,902

The following table disaggregates net revenue from contracts with customers by market sector (in thousands).


		Fiscal quarter ended				Nine fiscal months ended					Fiscal quarter ended				Nine fiscal months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Test & Measurement	Test & Measurement	$	15,883	$	11,953	$	46,578	$	40,325	Test & Measurement	$	20,659	$	15,883	$	60,115	$	46,578
Avionics, Military & Space	Avionics, Military & Space	7,542		9,225		19,444		22,112		Avionics, Military & Space	6,523		7,542		21,563		19,444
Transportation	Transportation	13,668		7,138		35,152		20,570		Transportation	13,912		13,668		41,061		35,152
Other Markets	Other Markets	17,453		15,350		52,487		40,670		Other Markets	20,110		17,453		59,295		52,487
Industrial Weighing	Industrial Weighing	12,254		10,708		36,301		31,758		Industrial Weighing	12,473		12,254		38,626		36,301
General Industrial	General Industrial	4,069		3,753		12,324		11,415		General Industrial	4,981		4,069		16,172		12,324
Steel	Steel	11,105		9,398		25,616		27,517		Steel	11,399		11,105		29,508		25,616

Total	Total	$	81,974	$	67,525	$	227,902	$	194,367	Total	$	90,057	$	81,974	$	266,340	$	227,902

Contract Assets & Liabilities

Contract assets are established when revenues are recognized prior to a contractual payment due from the customer. When a payment becomes due based on the contract terms, the Company will reduce the contract asset and record a receivable. Contract liabilities are deferred revenues that are recorded when cash payments are received or due in advance of our performance obligations. Our payment terms vary by the type and location of the products offered. The term between invoicing and when payment is due is not significant.

The outstanding contract assets and liability accounts were as follows (in thousands):

-13-

Note 2 – Revenues (continued)

Contract Asset Contract Liability
Unbilled Revenue Accrued Customer Advances
Balance at December 31, 2020 $ 3,605 $ 2,873
Balance at October 2, 2021 6,113 6,018
(Decrease)/increase $ 2,508 $ 3,145


	Contract Asset		Contract Liability
	Unbilled Revenue		Accrued Customer Advances
Balance at December 31, 2021	$	3,570	$	4,765
Balance at October 1, 2022	3,621		8,867
Increase	$	51	$	4,102

The amount of revenue recognized during the nine fiscal months ended October ~~2, 2021~~1, 2022 that was included in the contract liability balance at December 31, ~~2020~~2021 was $~~2.6~~3.2 million.

~~Practical Expedients~~

The Company does not disclose the value of unsatisfied performance obligations for contracts that have a duration of one year or less and for contracts that are substantially complete. The Company treats shipping and handling activities as fulfillment costs.

Note 3 - Acquisition

Diversified Technical Systems, Inc.

On June 1, 2021, VPG completed the acquisition of California-based Diversified Technical Systems, Inc. (“DTS”), a manufacturer of data acquisition systems and sensors for product safety and testing, for a purchase price of $47.2 ~~million, subject to customary adjustments.~~million. The Company used cash on hand and borrowings under its revolving credit facility to fund the purchase price under the purchase agreement. DTS reports into the Company's ~~Weighing and Control~~Measurement Systems segment. The following table summarizes the ~~provisional~~final fair values assigned to the assets and liabilities of DTS as of June 1, 2021 (in thousands):


	June 1, 2021
Working capital	$	~~12,999~~12,494
Property and equipment	1,209
Deferred income tax liability	~~(6,274)~~(6,215)

Intangible assets:
Acquired technology	13,167
Customer relationships	8,135
Trade names	2,393
Total intangible assets	23,695
Fair value of acquired identifiable assets	~~31,629~~31,183
Purchase price	$	47,216
Goodwill	$	~~15,587~~16,033

The Company utilizes certain valuations and studies to determine the fair value of the tangible and intangible assets acquired. These valuations and studies are currently being analyzed and have yet to be finalized. Accordingly, the assets and liabilities assumed are subject to adjustment once the detailed analysis is completed. The ~~provisional~~ estimated weighted average useful lives for the acquired technology and customer relationships are 15 years. Trade names are treated as indefinite-lived intangible assets. None of the goodwill associated with DTS ~~will be~~is deductible for income tax purposes.

The Company recorded acquisition costs associated with this transaction ~~as follows~~ (of $1.2 million in ~~thousands~~):the second quarter of 2021, which included legal fees, appraisal fees, investments banker fees and insurance costs.


	~~Fiscal quarter ended~~		~~Nine fiscal months ended~~
	~~October 2, 2021~~			~~October 2, 2021~~
~~Legal fees~~	$	—		$	~~341~~
~~Appraisal fees~~	—			18
~~Other (investment banker and insurance costs)~~	—			~~839~~
	$	—		$	~~1,198~~

~~-14-~~

~~Note 3 - Acquisition (continued)~~

Included in the results of the operations of the Company ~~starting on June~~for the fiscal quarter ended October 1, ~~2021,~~2022, are net revenues of ~~$7.6 million and $10.7~~$7.9 million from DTS and a net income of $0.2 million from DTS. DTS results include amortization of the inventory step-up of $0.3 million for the fiscal quarter ended October 1, 2022, and amortization of intangible assets of $0.4 million for the fiscal quarter ended October 1, 2022. Included in the results of the operations of the Company for the nine fiscal months ended October ~~2, 2021~~1, 2022 are net revenues of $22.5 million from DTS and a net ~~earnings~~loss of $0.3 million ~~and $0.1 million for the fiscal quarter and nine fiscal months ended October 2, 2021.~~from DTS. DTS results include amortization of the inventory step-up of $1.3 million and ~~$2.2~~amortization of intangible assets of $1.1 million for the ~~fiscal quarter and~~ nine fiscal months ended October ~~2, 2021, and amortization of intangible assets of $0.4 million and $0.5 million for the fiscal quarter and nine fiscal months ended October 2, 2021.~~1, 2022.

Following is the supplemental consolidated financial results for the Company on an unaudited pro forma basis, as if the DTS acquisition had been consummated on January 1, ~~2020:~~2021:

Fiscal quarter ended Nine fiscal months ended Fiscal quarter ended Nine fiscal months ended
September 26, 2020 September 26, 2020 October 2, 2021 October 2, 2021
Pro forma net revenues $ 75,605 $ 235,316 81,974 241,138
Pro forma net earnings attributable to VPG stockholders $ 5,778 $ 18,173 5,737 19,148
Pro forma basic earnings per share attributable to VPG stockholders $ 0.43 $ 1.34 $ 0.42 $ 1.41
Pro forma diluted earnings per share attributable to VPG stockholders $ 0.42 $ 1.34 $ 0.42 $ 1.40

-14-


	Nine fiscal months ended
	October 2, 2021
Pro forma net revenues	$	241,138

Pro forma net earnings attributable to VPG stockholders	$	17,641

Pro forma basic earnings per share attributable to VPG stockholders	$	1.30
Pro forma diluted earnings per share attributable to VPG stockholders	$	1.29

Note 4 – Goodwill ~~and Other Intangible Assets~~

The Company tests the goodwill in each of its goodwill reporting units for impairment at least annually, as of the first day of ~~it's~~its fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have been incurred. Due to updated financial projections, the Company performed a quantitative impairment test for the instrumentation reporting unit during the second quarter of 2021. In estimating the fair value of our instrumentation reporting unit the Company used the income approach.

The results of the quantitative impairment test for the instrumentation reporting unit's goodwill and indefinite-lived trade name indicated an impairment, and in the second quarter of 2021, the Company recognized a non-cash impairment loss of $1.1 million in goodwill and $0.1 million to the indefinite-lived trade name. The impairment was driven mainly by changes in forecasted projections including a slower growth rate in revenues. After considering the impact of the impairment charges, the carrying amount of goodwill and indefinite-lived trade names as of October 2, 2021 was $0.0 million and $0.3 million, respectively.

The change in the carrying amount of goodwill by segment is as follows (in thousands):

Total Weighing and Control Systems Segment Foil Technology Products Segment
KELK Acquisition DSI Acquisition DTS Acquisition Stress-Tek Acquisition Pacific Acquisition
Balance at December 31, 2020 $ 31,105 $ 6,726 $ 16,942 $ 6,311 $ 1,126
Goodwill acquired 15,587 15,587
Impairment charges (1,126) (1,126)
Foreign currency translation adjustment (6) 17 (23) — —
Balance at October 2, 2021 $ 45,560 $ 6,743 $ 16,919 $ 15,587 $ 6,311 $ —

~~-15-~~

~~Note 4 – Goodwill and Other Intangible Assets (continued)~~

~~Intangible assets were as follows~~ ~~(in thousands)~~:

October 2, 2021 December 31, 2020
Intangible assets subject to amortization
(Definite-lived):
Patents and acquired technology $ 32,938 $ 19,804
Customer relationships 34,117 26,061
Trade names 1,684 1,747
Non-competition agreements 11,576 12,259
80,315 59,871
Accumulated amortization:
Patents and acquired technology (6,960) (5,895)
Customer relationships (14,497) (13,363)
Trade names (1,684) (1,747)
Non-competition agreements (11,569) (12,250)
(34,710) (33,255)
Net intangible assets subject to amortization $ 45,605 $ 26,616
Intangible assets not subject to amortization
(Indefinite-lived):
Trade names 7,722 5,423
$ 53,327 $ 32,039

The increase in net intangible assets from December 31, 2020 is due to the acquisition of DTS on June 1, 2021. The Company has preliminarily allocated $21.3 million of the purchase price to definite-lived intangible assets and $2.4 million to indefinite-lived intangible assets.

Amortization expense for the fiscal quarter and nine fiscal months ended October 2, 2021 was $1.0 million and $2.3 million, respectively. The DTS intangible assets accounted for $0.4 million and $0.5 million of amortization expense for the fiscal quarter and nine fiscal months ended October 2, 2021.

~~Estimated annual amortization expense for the full year of 2021 and each of the next four years, is as follows~~ ~~( in thousands)~~:

2021 $ 3,280
2022 3,871
2023 3,763
2024 3,728
2025 3,728


	Total		Measurement Systems						Weighing Solutions
			KELK Acquisition		DSI Acquisition		DTS Acquisition		Stress-Tek Acquisition
Balance at December 31, 2021	$	45,830	$	6,706	$	16,910	$	15,903	$	6,311
Adjustment to goodwill acquired	130		—		—		130		—

Foreign currency translation adjustment	(500)		(446)		(54)		—		—

Balance at October 1, 2022	$	45,460	$	6,260	$	16,856	$	16,033	$	6,311

Note 5 – Leases

The Company primarily leases office and manufacturing facilities in addition to vehicles, which have remaining terms of less than one year to ~~eleven~~fourteen years. The Company has no finance leases.

Leases recorded on the balance sheet consist of the following (in thousands):

~~-16-~~

~~Note 5 - Leases (continued)~~


Leases	Leases	October 2, 2021		December 31, 2020		Leases	October 1, 2022		December 31, 2021
Assets	Assets					Assets
Operating lease right of use asset	Operating lease right of use asset	$	27,405	$	21,788	Operating lease right of use asset	$	24,737	$	27,764

Liabilities	Liabilities					Liabilities
Operating lease - current	Operating lease - current	$	4,415	$	4,011	Operating lease - current	$	4,119	$	4,610
Operating lease - non-current	Operating lease - non-current	$	24,462	$	19,504	Operating lease - non-current	$	20,422	$	25,140

Other information related to lease term and discount rate is as follows:


	October ~~2, 2021~~1, 2022
Operating leases weighted average remaining lease term (in years)	~~8.74~~7.94 years
Operating leases weighted average discount rate	~~3.17~~3.12	%

The components of lease expense are as follows (in thousands):

Fiscal quarter ended Nine Fiscal Months Ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Operating lease cost $ 1,407 $ 1,164 $ 3,847 $ 3,177
Short-term lease cost 30 31 98 88
Sublease income (78) — (106) —
Total net lease cost $ 1,359 $ 1,195 $ 3,839 $ 3,265

-15-

Note 5 - Leases (continued)


	Fiscal quarter ended				Nine Fiscal Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Operating lease cost	$	1,267	$	1,407	$	3,876	$	3,847
Short-term lease cost	30		30		72		98
Sublease income	(104)		(78)		(321)		(106)
Total net lease cost	$	1,193	$	1,359	$	3,627	$	3,839

Right of use assets obtained in exchange for new operating lease liability during ~~2021~~2022 were ~~$9.1~~$0.7 million. The Company paid ~~$3.8~~$3.9 million and ~~$2.6~~$3.8 million for its operating leases for each of the nine fiscal months ended October 1, 2022 and October 2, 2021, ~~and September 26, 2020,~~ which are included in operating cash flows on the consolidated condensed statements of cash flows.

Undiscounted maturities of operating lease payments as of October ~~2, 2021~~1, 2022 are summarized as follows (in thousands):


2021 (excluding the nine months ended October 2, 2021)		$	1,322
2022		4,718
2022 (excluding the nine months ended October 1, 2022)				2022 (excluding the nine months ended October 1, 2022)	$	1,172
2023	2023	4,177		2023	4,432
2024	2024	3,738		2024	3,809
2025	2025	3,249		2025	3,223
2026				2026	2,886
Thereafter	Thereafter	15,757		Thereafter	12,123
Total future minimum lease payments	Total future minimum lease payments	$	32,961	Total future minimum lease payments	$	27,645
Less: amount representing interest	Less: amount representing interest	(4,084)		Less: amount representing interest	(3,104)
Present value of future minimum lease payments	Present value of future minimum lease payments	$	28,877	Present value of future minimum lease payments	$	24,541

Note 6 – Income Taxes

~~-17-~~

~~Note 6 - Income Taxes (continued)~~

may still be challenged by the jurisdiction's tax authorities. In anticipation of such challenges, the Company has established reserves for tax-related uncertainties. These liabilities are based on the Company’s best estimate of the potential tax exposures in each respective jurisdiction. It may take a number of years for a final tax liability in a jurisdiction to be determined, particularly in the event of an audit. If an uncertain matter is determined favorably, there could be a reduction in the Company’s tax expense. An unfavorable determination could increase tax expense and could require a cash payment, including interest and penalties.

Note 7 – Long-Term Debt

Long-term debt consists of the following (in thousands):


		October 2, 2021		December 31, 2020			October 1, 2022		December 31, 2021
2020 Credit Agreement - Revolving Facility	2020 Credit Agreement - Revolving Facility	$	61,000	$	41,000	2020 Credit Agreement - Revolving Facility	$	61,000	$	61,000

Other debt		—		18

Deferred financing costs	Deferred financing costs	(308)		(374)		Deferred financing costs	(220)		(286)
Total long-term debt	Total long-term debt	60,692		40,644		Total long-term debt	$	60,780	$	60,714
Less: current portion		—		18
Long-term debt, less current portion		$	60,692	$	40,626

-16-

Note 8 – Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, consist of the following (in thousands):

Foreign Currency Translation Adjustment Pension
and Other
Postretirement
Actuarial Items Total
Balance at January 1, 2021 $ (25,591) $ (7,080) $ (32,671)
Other comprehensive loss before reclassifications (3,309) — (3,309)
Amounts reclassified from accumulated other comprehensive income (loss) — 431 431
Balance at October 2, 2021 $ (28,900) $ (6,649) $ (35,549)


	Foreign Currency Translation Adjustment		Pension and Other Postretirement Actuarial Items		Total
Balance at January 1, 2022	$	(30,276)	$	(4,732)	$	(35,008)
Other comprehensive loss before reclassifications	(18,405)		—		(18,405)
Amounts reclassified from accumulated other comprehensive income	191		227		418
Balance at October 1, 2022	$	(48,490)	$	(4,505)	$	(52,995)

Foreign Currency Translation Adjustment Pension
and Other
Postretirement
Actuarial Items Total
Balance at January 1, 2020 $ (30,761) $ (6,942) $ (37,703)
Other comprehensive loss before reclassifications 409 — 409
Amounts reclassified from accumulated other comprehensive income (loss) — (448) (448)
Balance at September 26, 2020 $ (30,352) $ (7,390) $ (37,742)


	Foreign Currency Translation Adjustment		Pension and Other Postretirement Actuarial Items		Total
Balance at January 1, 2021	$	(25,591)	$	(7,080)	$	(32,671)
Other comprehensive loss before reclassifications	(3,309)		—		(3,309)
Amounts reclassified from accumulated other comprehensive income	—		431		431
Balance at October 2, 2021	$	(28,900)	$	(6,649)	$	(35,549)

Reclassification of foreign currency translation adjustment for the loss on liquidation of subsidiaries is included in other income and expense other (see Note 13). Reclassifications of pension and other postretirement actuarial items out of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost (see Note 9).

Note 9 – Pension and Other Postretirement Benefits

Employees of VPG participate in various defined benefit pension and other postretirement benefit ("OPEB") plans. The following table sets forth the components of the net periodic benefit cost for the Company's defined benefit pension and OPEB plans (in thousands):

~~-18-~~-17-

Note 9 - Pension and Other Postretirement Benefits ( continued)


		Fiscal quarter ended October 2, 2021				Fiscal quarter ended September 26, 2020					Fiscal quarter ended October 1, 2022				Fiscal quarter ended October 2, 2021
		Pension Plans		OPEB Plans		Pension Plans		OPEB Plans			Pension Plans		OPEB Plans		Pension Plans		OPEB Plans
Net service cost	Net service cost	$	96	$	9	$	99	$	31	Net service cost	$	79	$	7	$	96	$	9
Interest cost	Interest cost	102		17		128		33		Interest cost	117		17		102		17
Expected return on plan assets	Expected return on plan assets	(97)		0		(110)		—		Expected return on plan assets	(116)				(97)		—
Amortization of actuarial losses	Amortization of actuarial losses	102		5		77		34		Amortization of actuarial losses	69		1		102		5
Net periodic benefit cost	Net periodic benefit cost	$	203	$	31	$	194	$	98	Net periodic benefit cost	$	149	$	25	$	203	$	31


		Nine fiscal months ended October 2, 2021				Nine fiscal months ended September 26, 2020					Nine fiscal months ended October 1, 2022				Nine fiscal months ended October 2, 2021
		Pension Plans		OPEB Plans		Pension Plans		OPEB Plans			Pension Plans		OPEB Plans		Pension Plans		OPEB Plans
Net service cost	Net service cost	$	289	$	27	$	297	$	93	Net service cost	$	244	$	21	$	289	$	27
Interest cost	Interest cost	308		51		384		99		Interest cost	360		51		308		51
Expected return on plan assets	Expected return on plan assets	(291)		—		(330)		—		Expected return on plan assets	(358)		—		(291)		—
Amortization of actuarial losses	Amortization of actuarial losses	306		15		230		102		Amortization of actuarial losses	215		3		306		15
Net periodic benefit cost	Net periodic benefit cost	$	612	$	93	$	581	$	294	Net periodic benefit cost	$	461	$	75	$	612	$	93

Note 10 – Share-Based Compensation

~~The~~ On May 26, 2022, the Company’s stockholders voted to approve the adoption of the Vishay Precision Group, Inc. 2022 Stock Incentive Plan (the "2022 plan"), which replaced the Amended and Restated Vishay Precision Group, Inc. 2010 Stock Incentive Program ~~(as amended and restated, the “Plan”~~(the "previous plan"). The 2022 plan permits ~~the~~ issuance of up to ~~1,000,000~~608,000 shares of common ~~stock.~~stock, which includes approximately 308,000 shares that were reserved for issuance under the previous plan and up to an additional 197,685 additional shares underlying awards outstanding under the previous plan. At October ~~2, 2021,~~1, 2022, the Company had reserved ~~328,418~~590,034 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the ~~Plan.~~2022 plan. If any outstanding awards are forfeited by the holder or canceled by the Company, the underlying shares would be available for re-grant to others. If shares are withheld for payment of taxes, those shares do not become available for grant under the 2022 plan.

On March ~~4, 2021~~3, 2022 and in accordance with their respective employment agreements, VPG’s 3three executive officers were granted annual equity awards in the form of RSUs, of which 50% are performance-based. The awards have an aggregate target grant-date fair value of ~~$1.7~~$1.5 million and were comprised of ~~52,486~~47,831 RSUs. ~~NaN~~Fifty percent of these awards will vest on January 1, ~~2024,~~2025, subject to the executives’ continued employment. The performance-based portion of the RSUs will also vest on January 1, ~~2024,~~2025, subject to the executives' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative “adjusted free cash flow” and "net earnings goals", each weighted equally.

On March ~~8, 2021,~~9, 2022, certain non-executive VPG employees were granted annual equity awards in the form of RSUs. Certain employees received awards, of which 75% are performance-based and certain employees received awards of which 50% are performance-based. The awards have an aggregate grant-date fair value of ~~$0.6~~$0.5 million and were comprised of ~~17,793~~16,324 RSUs. The non-performance portion of these awards ~~(NaN~~(twenty-five percent for certain employees and 50fifty percent for certain employees) will vest on January 1, ~~2024~~2025 subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, ~~2024,~~2025, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings and cash flow goals, each weighted equally.

On January 1, 2022 and in accordance with the Company's 2017 Non-Employee Director Compensation Plan (the "Director Plan"), the Board of Directors approved the issuance of an aggregate of 595 RSUs to the newly-appointed independent member of the Board of Directors. This award represented a pro-rated portion of the annual equity grant made to non-executive directors pursuant to the Director Plan. The aggregate grant-date fair value of this award is immaterial, and the award vested on May ~~27, 2021~~26, 2022, the date of the 2022 Annual Stockholders Meeting.

-18-

Note 10 - Share-Based Compensation (continued)

On May 26, 2022 and in accordance with the Company's 2017 Non-Employee Director Compensation Plan, the Board of Directors approved the issuance of an aggregate of ~~9,936~~16,534 RSUs to the independent board members of the Board of Directors and to the non-executive Chairman of the Board of Directors. The awards have an aggregate grant-date fair value of ~~$0.3~~$0.5 million and will vest on the earlier of the ~~2022~~2023 Annual Stockholders Meeting or May ~~27, 2022,~~26, 2023, subject to the directors' continued service on the Board of Directors.

On July 1, 2022, a non-executive VPG employee was granted an annual equity award in the form of RSU's, of which 50% are performance-based. The award has an aggregate grant-date fair value of $0.04 million and was comprised of 1,432 RSU's. The non-performance portion of this award will vest on July 1, 2025, subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on July 1, 2025, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings and cash flow goals, each weighted equally.

Vesting of equity awards is subject to acceleration under certain circumstances.

~~-19-~~

~~Note 10 - Share-Based Compensation (continued)~~

The amount of compensation cost related to share-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. VPG determines compensation cost for RSUs based on the grant-date fair value of the underlying common stock. The Company recognizes compensation cost for RSUs that are expected to vest and for which performance criteria are expected to be met. The following table summarizes share-based compensation expense recognized (in thousands):

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Restricted stock units $ 386 $ 380 $ 1,328 $ 1,137


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Restricted stock units	$	559	$	386	$	1,583	$	1,328

Note 11 – Segment Information

VPG reports in 3three product segments: the ~~Foil Technology Products~~Sensors segment, the ~~Force Sensors~~Weighing Solutions segment, and the ~~Weighing and Control~~Measurement Systems segment. The ~~Foil Technology Products~~Sensors reporting segment is comprised of the foil resistor and strain gage operating segments. The ~~Force Sensors reporting~~Weighing Solutions segment is comprised of ~~transducers, load cells,~~specialized modules and ~~modules.~~systems used to precisely measure weight, force torque, and pressure. The ~~Weighing and Control~~Measurement Systems reporting segment is comprised of ~~complete~~highly specialized systems ~~which include load cells~~for steel production, materials development, and ~~instrumentation for weighing, force control and force measurement for a variety~~safety testing.

The chief operating decision maker ("CODM") is our chief executive officer. The CODM evaluates each operating segment's performance. The evaluation of ~~uses such as process control on-board weighing applications.~~

~~VPG evaluates reporting segment~~the segment's performance is based on multiple performance measures including ~~third party net revenues,~~ gross profits, revenues, and operating income, exclusive of certain items. Management believes that evaluating segment performance, excluding items such as restructuring and severance costs, impairment of goodwill and indefinite-lived intangible assets, acquisition costs, and other items is meaningful because itthey relate to occurrences or events that are outside of our core operations, and management believes that the use of these measures provides ~~insight with respect~~a consistent basis to ~~the intrinsic~~evaluate our operating ~~results of VPG.~~ profitability and performance trends across comparable periods.

The following table sets forth reporting segment information. The reporting segment information reported for the fiscal quarter and nine fiscal months ended October 2, 2021 has been recast to reflect the new reporting segments adopted by the Company in the fourth quarter of 2021, as described in the consolidated financial statements as of December 31, 2021, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 4, 2022 (in thousands):

~~-20-~~-19-

Note 11 - Segment Information (continued)

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Net revenues:
Foil Technology Products $ 32,790 $ 32,906 $ 98,809 $ 95,168
Force Sensors 17,704 13,862 51,853 37,473
Weighing and Control Systems 31,480 20,757 77,240 61,726
Total $ 81,974 $ 67,525 $ 227,902 $ 194,367
Gross profit:
Foil Technology Products $ 10,530 $ 13,515 $ 36,511 $ 38,002
Force Sensors 6,108 4,235 18,116 8,845
Weighing and Control Systems 15,207 9,599 35,638 28,677
Total $ 31,845 $ 27,349 $ 90,265 $ 75,524
Reconciliation of segment operating income to consolidated results:
Foil Technology Products $ 5,087 $ 8,078 $ 19,138 $ 21,532
Force Sensors 3,511 2,010 10,489 2,201
Weighing and Control Systems 7,048 5,222 15,467 13,909
Unallocated G&A expenses (8,381) (7,105) (24,045) (20,193)
Acquisition costs — — (1,198) —
Impairment of goodwill and indefinite-lived intangibles — — (1,223) —
Restructuring costs — (84) — (713)
Operating income $ 7,265 $ 8,121 $ 18,628 $ 16,736
Acquisition costs:
Weighing and Control Systems — — (1,198) —
$ — $ — $ (1,198) $ —
Impairment of goodwill and indefinite-lived intangibles:
Foil Technology Products $ — $ — $ (1,223) $ —
$ — $ — $ (1,223) $ —
Restructuring costs:
Foil Technology Products $ — $ (23) $ — $ (466)
Force Sensors — — — (108)
Weighing and Control Systems — (61) — (61)
Corporate/Other — — — (78)
$ — $ (84) $ — $ (713)


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Net revenues:
Sensors	$	37,879	$	30,721	$	115,909	$	93,712
Weighing Solutions	31,399		30,676		92,626		93,319
Measurement Systems	20,779		20,577		57,805		40,871
Total	$	90,057	$	81,974	$	266,340	$	227,902

Gross profit:
Sensors	$	15,324	$	9,568	$	47,441	$	34,521
Weighing Solutions	10,470		11,422		32,134		34,988
Measurement Systems	11,526		10,855		30,329		20,756
Total	$	37,320	$	31,845	$	109,904	$	90,265

Reconciliation of segment operating income to consolidated results:
Sensors	$	10,703	$	5,070	$	32,721	$	20,217
Weighing Solutions	5,392		5,917		15,783		17,831
Measurement Systems	4,876		4,659		10,350		7,046
Unallocated G&A expenses	(8,922)		(8,381)		(26,774)		(24,045)
Acquisition costs	—		—		—		(1,198)
Impairment of goodwill and indefinite-lived intangibles	—		—		—		(1,223)

Restructuring costs	(165)		—		(1,330)		—
Operating income	$	11,884	$	7,265	$	30,750	$	18,628

Acquisition costs:


Measurement Systems	—		—		—		(1,198)
	$	—	$	—	$	—	$	(1,198)

Impairment of goodwill and indefinite-lived intangibles:


Measurement Systems	—		—		—		(1,223)
	$	—	$	—	$	—	$	(1,223)

Restructuring costs:
Sensors	$	(165)	$	—	$	(1,272)	$	—

Measurement Systems	—		—		(58)		—

	$	(165)	$	—	$	(1,330)	$	—

Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products. The table below summarizes intersegment sales (in thousands):


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Sensors to Weighing Solutions	$	542	$	824	$	1,364	$	2,730

Sensors to Measurement Systems	32		51		191		66

~~-21-~~

-20-

~~Note 11 - Segment Information (continued)~~

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Foil Technology Products to Force Sensors and Weighing and Control Systems $ 875 $ 858 $ 2,795 $ 2,451
Weighing and Control Systems to Foil Technology Products and Force Sensors $ 155 $ 83 $ 419 $ 294

Note 12 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share attributable to VPG stockholders (in thousands, except earnings per share):

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Numerator:
Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders $ 5,379 $ 5,598 $ 14,260 $ 10,669
Denominator:
Denominator for basic earnings per share:
Weighted average shares 13,626 13,575 13,612 13,562
Effect of dilutive securities:
Restricted stock units 38 62 35 49
Dilutive potential common shares 38 62 35 49
Denominator for diluted earnings per share:
Adjusted weighted average shares 13,664 13,637 13,647 13,611
Basic earnings per share attributable to VPG stockholders $ 0.39 $ 0.41 $ 1.05 $ 0.79
Diluted earnings per share attributable to VPG stockholders $ 0.39 $ 0.41 $ 1.04 $ 0.78

~~-22-~~


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Numerator:
Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders	$	10,118	$	5,379	$	27,229	$	14,260







Denominator:
Denominator for basic earnings per share:
Weighted average shares	13,649		13,626		13,645		13,612

Effect of dilutive securities:


Restricted stock units	59		38		47		35
Dilutive potential common shares	59		38		47		35

Denominator for diluted earnings per share:
Adjusted weighted average shares	13,708		13,664		13,692		13,647

Basic earnings per share attributable to VPG stockholders	$	0.74	$	0.39	$	2.00	$	1.05

Diluted earnings per share attributable to VPG stockholders	$	0.74	$	0.39	$	1.99	$	1.04

Note 13 – Additional Financial Statement Information

Other Income (Expense) Other

The caption “Other” on the consolidated condensed statements of operations consists of the following (in thousands):


		Fiscal quarter ended				Nine fiscal months ended					Fiscal quarter ended				Nine fiscal months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Foreign exchange (loss) gain		$	(38)	$	162	$	522	$	(123)
Foreign currency exchange gain (loss)										Foreign currency exchange gain (loss)	$	1,261	$	(38)	$	5,195	$	522
Interest income	Interest income	151		29		216		205		Interest income	91		151		235		216
Pension expense	Pension expense	(151)		(159)		(431)		(482)		Pension expense	(81)		(151)		(261)		(431)
Other	Other	212		(71)		114		(229)		Other	(48)		212		(163)		114
		$	174	$	(39)	$	421	$	(629)		$	1,223	$	174	$	5,006	$	421

-21-

Foreign currency exchange gains ~~and losses~~ represent the impact of changes in foreign currency exchange rates. For the fiscal quarter and nine fiscal months ended October ~~2, 2021,~~1, 2022, the change in foreign currency exchange gains and losses during the period, as compared to the prior year ~~period,~~periods, is largely due to exposure toof currency fluctuations with the Israeli shekel, the Japanese yen, the Canadian dollar, ~~the euro, the Israeli shekel~~ and the British pound. The change in the dollar-shekel exchange rate resulted in a favorable foreign currency exchange impact primarily related to the shekel-denominated lease liability for the Sensors facility in Israel.

~~For~~

Included in Other for the nine fiscal months ended October ~~2, 2021,~~1, 2022 is a $0.2 million loss on the ~~change in foreign exchange gains and losses during~~liquidation of two of the ~~period as compared to the prior year period is largely due to exposure to currency fluctuations with the euro, the Israeli shekel, and the Japanese yen.~~

Company's European subsidiaries.

Note 14 – Fair Value Measurements

ASC Topic 820, Fair Value Measurement, establishes a valuation hierarchy of the inputs used to measure fair value. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the Company’s own assumptions.

An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis (in thousands):


				Fair value measurements at reporting date using:									Fair value measurements at reporting date using:
		Total Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs			Total Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
October 2, 2021
October 1, 2022										October 1, 2022
Assets	Assets									Assets
Assets held in rabbi trusts	Assets held in rabbi trusts	$	5,991	$	61	$	5,930	$	—	Assets held in rabbi trusts	$	5,282	$	79	$	5,203	$	—

December 31, 2020
December 31, 2021										December 31, 2021
Assets	Assets									Assets
Assets held in rabbi trusts	Assets held in rabbi trusts	$	5,601	$	61	$	5,540	$	—	Assets held in rabbi trusts	$	6,158	$	49	$	6,109	$	—

The Company maintains non-qualified trusts, referred to as “rabbi” trusts, to fund payments under deferred compensation and non-qualified pension plans. Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale money market funds at October ~~2, 2021~~1, 2022 and December 31, ~~2020,~~2021, and company-owned life insurance assets. The marketable securities

~~-23-~~

~~Note 14 - Fair Value Measurements (continued)~~

held in the rabbi trusts are valued using quoted market prices on the last business day of the period. The company-owned life insurance assets are valued in consultation with the Company’s insurance brokers using the value of underlying assets of the insurance contracts. The fair value measurement of the cash equivalents held in the rabbi trust are considered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within the fair value hierarchy.

The fair value of the long-term debt, excluding capitalized deferred financing costs, at October ~~2, 2021~~1, 2022 and December 31, ~~2020~~2021 approximates its carrying value as the revolving debt is reset on a monthly basis based on current market rates, plus a base rate as specified in the debt agreement. The fair value of long-term debt is considered a Level 2 measurement within the fair value hierarchy. The Company’s financial instruments include cash and cash equivalents, accounts receivable, short-term notes payable, and accounts payable. The carrying amounts for these financial instruments reported in the consolidated condensed balance sheets approximate their fair values.

Note 15 – Restructuring Costs

-22-

costs are recorded based upon estimates, actual expenditures for the restructuring activities may differ from the initially recorded costs. If the initial estimates are too low or too high, the Company could be required to either record additional expense in future periods or to reverse part of the previously recorded charges.

The Company recorded ~~$0.0~~$0.2 million and ~~$0.1~~$0.0 million of restructuring costs during the fiscal quarter ended October 1, 2022 and October 2, 2021, ~~and September 26, 2020,~~ respectively and ~~$0.0~~$1.3 million and ~~$0.7~~$0.0 million of restructuring costs during the nine fiscal months ended October 1, 2022 and October 2, 2021, ~~and September 26, 2020,~~ respectively. Restructuring costs were comprised primarily of employee ~~terminations~~termination costs, including severance and statutory retirement allowances, and were incurred in ~~connections~~connection with various cost reduction programs.

The following table summarizes recent activity related to all restructuring programs. The accrued restructuring liability balance as of October ~~2, 2021~~1, 2022 and December 31, ~~2020,~~2021, respectively, is included in Other accrued expenses in the accompanying consolidated condensed balance sheets (in thousands):






Balance at December 31, ~~2020~~2021	$	63—
Restructuring charges in 2022	1,330

Cash payments	~~(43)~~(1,338)
Foreign currency translation	8
Balance at October ~~2, 2021~~1, 2022	$	20—

Note 16 – Stockholder's Equity

On August 8, 2022, the Board of Directors (the “Board”) of the Company authorized the repurchase of up to 600,000 shares ofthe Company’s outstanding common stock (the “Stock Repurchase Plan”). The Stock Repurchase Plan will expire on August 11, 2023, and the Board authorized purchases thereunder to be made through an issuer repurchase plan adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), open market purchases or private transactions, in accordance with the applicable federal securities laws, including Rule 10b-18 under the Exchange Act. At October 1, 2022, the Company had repurchased 32,601 shares of its common stock under the Stock Repurchase Plan.

~~-24-~~-23-

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

VPG is ~~an internationally recognized designer, manufacturer~~a global, diversified company focused on precision measurement sensing technologies, including specialized sensors, weighing solutions, and ~~marketer~~measurement systems. Many of ~~sensors, and sensor-based~~our precision measurement ~~systems, as well as specialty resistors and strain gages based upon our proprietary technology. We provide precision~~sensing products and solutions ~~many of which~~ are “designed-in” by our customers ~~specializing in the~~and address growing ~~markets~~applications across a diverse array of ~~stress, force, weight, pressure,~~industries and current measurements. A significant portion of our products and solutions are primarily based upon our proprietary foil technology and are produced as part of our vertically integrated structure. We believe this strategy results in higher quality, more cost effective and focused solutions for our customers.markets. Our products are marketed under a variety of brand names that we believe are characterized as having a very high level of precision and ~~quality. Our global operations enable us~~quality, and we employ an operationally diversified structure to ~~produce~~manage our businesses.

Driven by the continued proliferation of data generated by the expanding use of sensors across a ~~wide variety~~widening array of ~~products~~industrial and non-industrial applications, precision measurement technologies help ensure and deliver required levels of quality of mission-critical or high-value data. Over the past few years, we have seen a broadening of precision sensing applications in ~~strategically effective geographic locations that also optimize~~both our ~~resources for specific technologies, sensors, assemblies,~~traditional industrial markets and ~~systems.~~

The Company also has a long heritage of innovation in precision foil resistors, foil strain gages, and sensors that convert mechanical inputs into an electronic signal for display, processing, interpretation, or control by our instrumentation and systems products. Our advanced sensor product line continues this heritage by offering high-quality foil strain gages produced in a proprietary, highly automated environment. Precision sensors are essential to the accurate measurement, resolution and display of force, weight, pressure, torque, tilt, motion, or acceleration, especially in the legal-for-trade, commercial, and industrial marketplaces. This expertise served as a foundation for our expansion into strain gage instrumentation, load cells, transducers, weighing modules, and complete systems for process control and on-board weighing. Although our products are typically used in the industrial market, our advanced sensors have been used in a consumer electronics product and are being evaluated for other non-industrial applications.

~~The precision sensor market is integral~~new markets, due to the development of ~~intelligent products~~higher functionality in our customers' end products. Our precision measurement solutions are used across a wide variety of end markets upon which we focus, including industrial, test and measurement, transportation, steel, medical, ~~agricultural, transportation, industrial,~~agriculture, avionics, military and space, and consumer product applications. ~~We believe~~The Company has a long heritage of innovation in sensor technologies that ~~as original equipment manufacturers (“OEMs”) continue a drive to~~provide accuracy, reliability and repeatability that make our customers' products ~~“smarter,”~~safer, smarter, and more productive. As the functionality of customers products increases, and they ~~will~~ integrate more precision measurement sensors and related systems into their solutions in order to link the ~~mechanical/~~mechanical and physical world with digital control and/or ~~response. We~~response, we believe this ~~offers a~~will offer substantial growth ~~opportunity~~opportunities for our products and expertise.

~~Impact of COVID-19 on Our Business~~

As of November 12, 2021, all of the Company’s facilities are open and operational. The Company is continuing to maintain COVID-19 best practices it believes are warranted with respect to working conditions. Nonetheless, given the ongoing uncertainty concerning the magnitude and duration of the COVID-19 pandemic around the world, any ongoing economic disruption may adversely affect the Company’s business and financial results.

Overview of Financial Results

VPG reports in three product segments: the ~~Foil Technology Products~~Sensors segment, the ~~Force Sensors~~Weighing Solutions segment, and the ~~Weighing and Control~~Measurement Systems segment. The ~~Foil Technology Products~~Sensors reporting segment is comprised of the foil resistor and strain gage operating segments. The ~~Force Sensors reporting~~Weighing Solutions segment is comprised of ~~transducers, load cells,~~specialized modules and ~~modules.~~systems used to precisely measure weight, force torque, and pressure. The ~~Weighing and Control~~Measurement Systems reporting segment is comprised of ~~complete~~highly specialized systems ~~which include load cells~~for steel production, materials development, and instrumentation for weighing, force control and force measurement for a variety of uses such as process control on-board weighing applications. On June 1, 2021, we completed the acquisition of California-based Diversified Technical Systems, Inc. (“DTS”), a manufacturer of data acquisition systems and sensors for product safety ~~and~~ testing. ~~DTS reports into the Company's Weighing and Control Systems segment.~~

Net revenues for the fiscal quarter ended October ~~2, 2021~~1, 2022 were ~~$82.0~~$90.1 million versus ~~$67.5~~$82.0 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the fiscal quarter ended October ~~2, 2021~~1, 2022 were $10.1 million, or $0.74 per diluted share, versus $5.4 million, or $0.39 ~~per diluted share, versus $5.6 million, or $0.41~~ per diluted share, for the comparable prior year period.

Net revenues for the nine fiscal months ended October ~~2, 2021~~1, 2022 were ~~$227.9~~$266.3 million versus ~~$194.4~~$227.9 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the nine fiscal months ended October ~~2, 2021~~1, 2022 were $27.2 million, or $1.99 per diluted share, versus $14.3 million, or $1.04 ~~per diluted share, versus $10.7 million, or $0.78~~ per diluted share, for the comparable prior year period.

The results of operations for the fiscal quarter and nine fiscal months ended October 1, 2022 and October 2, 2021 ~~and September 26, 2020~~ include items affecting comparability as listed in the reconciliations below. The reconciliations below include certain financial measures which are not recognized in accordance with U.S. generally accepted accounting principles ("GAAP"), including adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA. These non-GAAP measures should not be viewed as an alternative to

~~-25-~~

GAAP measures of performance. Non-GAAP measures such as adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA do not have uniform definitions. These measures, as calculated by VPG, may not be comparable to similarly titled measures used by other companies. Management believes that these non-GAAP measures are useful to investors because each presents what management views as our core operating ~~performance~~results for the relevant period. The adjustments to the applicable GAAP measures relate to occurrences or events that are outside of our core operations, and management believes that the use of these non-GAAP measures provides a consistent basis to evaluate our operating profitability and performance trends across comparable periods. In addition, the Company has historically provided these or similar non-GAAP measures and understands that some investors and financial analysts find this information helpful in analyzing the Company’s performance and in comparing the Company’s financial performance to that of its peer companies and competitors. Management believes that the Company’s non-GAAP measures are regarded as supplemental to its GAAP financial results. Beginning in the fourth quarter of 2020, the Company determined to include the impact of foreign currency exchange rates on its assets and liabilities in certain of its non-GAAP measures for its current and comparative periods.

Gross Profit Operating Income Net Earnings Attributable to VPG Stockholders Diluted Earnings Per share
Three months ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
As reported - GAAP $ 31,845 $ 27,349 $ 7,265 $ 8,121 $ 5,379 $ 5,598 $ 0.39 $ 0.41
As reported - GAAP Margins 38.8 % 40.5 % 8.9 % 12.0 %
Acquisition purchase accounting adjustments (a) 1,329 4 1,329 4 1,329 4 0.10 —
Acquisition costs — — — — — — —
COVID-19 impact (b) 111 (22) 111 (320) 111 (320) 0.01 (0.02)
Start-up costs (c) 970 — 970 — 970 — 0.07 —
Impairment of goodwill and indefinite-lived intangibles — — — — — — —
Restructuring costs — — 84 — 84 — 0.01
Foreign exchange (gain)/loss (d) — — 38 (162) 0.01 (0.01)
Less: Tax effect of reconciling items and discrete tax items — — 754 (109) 0.06 (0.01)
As Adjusted - Non GAAP $ 34,255 $ 27,331 $ 9,675 $ 7,889 $ 7,073 $ 5,313 $ 0.52 $ 0.40
As Adjusted - Non GAAP Margins 41.8 % 40.5 % 11.8 % 11.7 %

~~-26-~~-24-


		Gross Profit						Operating Income						Net Earnings Attributable to VPG Stockholders				Diluted Earnings Per share					Gross Profit						Operating Income						Net Earnings Attributable to VPG Stockholders				Diluted Earnings Per share
Nine fiscal months ended		October 2, 2021			September 26, 2020			October 2, 2021			September 26, 2020			October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Three months ended																						Three months ended	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021			October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
As reported - GAAP	As reported - GAAP	90,265			75,524			18,628			16,736			$	14,260	$	10,669	$	1.04	$	0.78	As reported - GAAP	$	37,320		$	31,845		$	11,884		$	7,265		$	10,118	$	5,379	$	0.74	$	0.39
As reported - GAAP Margins	As reported - GAAP Margins	39.6		%	38.9		%	8.2		%	8.6		%									As reported - GAAP Margins	41.4		%	38.8		%	13.2		%	8.9		%
Acquisition purchase accounting adjustments (a)	Acquisition purchase accounting adjustments (a)	2,259			560			2,259			560			2,259		560		0.17		0.04		Acquisition purchase accounting adjustments (a)	260			1,329			260			1,329			260		1,329		0.02		0.10
Acquisition costs					—			1,198			—			1,198		—		0.09		—

COVID-19 impact (b)	COVID-19 impact (b)	(66)			536			(574)			123			(574)		123		(0.04)		0.01		COVID-19 impact (b)	—			111			—			111			—		111		—		0.01
Start-up costs (c)	Start-up costs (c)	2,258			—			2,258			—			2,258		—		0.17		—		Start-up costs (c)	—			970			—			970			—		970		—		0.07
Impairment of goodwill and indefinite-lived intangibles		—			—			1,223			—			1,223		—		0.09		—

Restructuring costs	Restructuring costs							—			713			—		713		—		0.05		Restructuring costs				—			165			—			165		—		0.01		—
Foreign exchange (gain)/loss (d)														(523)		123		(0.04)		0.01
Foreign currency exchange (gain)/loss (d)																						Foreign currency exchange (gain)/loss (d)				—						—			(1,261)		38		(0.09)		0.01
Less: Tax effect of reconciling items and discrete tax items	Less: Tax effect of reconciling items and discrete tax items													2,160		37		0.16		—		Less: Tax effect of reconciling items and discrete tax items				—						—			(194)		754		(0.01)		0.06
As Adjusted - Non GAAP	As Adjusted - Non GAAP	$	94,716		$	76,620		$	24,992		$	18,132		$	17,941	$	12,151	$	1.32	$	0.89	As Adjusted - Non GAAP	$	37,580		$	34,255		$	12,309		$	9,675		$	9,476	$	7,073	$	0.69	$	0.52
As Adjusted - Non GAAP Margins	As Adjusted - Non GAAP Margins	41.6		%	39.4		%	11.0		%	9.3		%									As Adjusted - Non GAAP Margins	41.7		%	41.8		%	13.7		%	11.8		%

Three months ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Net earnings attributable to VPG stockholders $ 5,379 $ 5,598 $ 14,260 $ 10,669
Interest Expense 328 309 906 1,037
Income tax expense 1,662 2,109 3,688 4,367
Depreciation 2,955 2,426 8,691 7,506
Amortization 970 596 2,342 1,828
EBITDA 11,294 $ 11,038 29,887 $ 25,407
EBITDA MARGIN 13.8 % 16.3 % 13.1 % 13.1 %
Impairment of goodwill and indefinite-lived intangibles — — 1,223 —
Acquisition purchase accounting adjustments (a) 1,329 4 2,259 560
Acquisition costs — — 1,198 —
Restructuring costs — 84 — 713
COVID-19 impact (b) 111 (320) (574) 123
Start-up costs (c) 970 — 2,258 —
Foreign exchange (gain)/loss (d) 38 (162) (523) 123
ADJUSTED EBITDA $ 13,742 $ 10,644 $ 35,728 $ 26,926
ADJUSTED EBITDA MARGIN 16.8 % 15.8 % 15.7 % 13.9 %



	Gross Profit						Operating Income						Net Earnings Attributable to VPG Stockholders				Diluted Earnings Per share
Nine fiscal months ended	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021			October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
As reported - GAAP	109,904			90,265			30,750			18,628			$	27,229	$	14,260	$	1.99	$	1.04
As reported - GAAP Margins	41.3		%	39.6		%	11.5		%	8.2		%
Acquisition purchase accounting adjustments (a)	1,310			2,259			1,310			2,259			1,310		2,259		0.10		0.17
Acquisition costs				—			—			1,198			—		1,198		—		0.09
COVID-19 impact (b)	138			(66)			138			(574)			138		(574)		0.01		(0.04)
Start-up costs (c)	150			2,258			150			2,258			150		2,258		0.01		0.17
Impairment of goodwill and indefinite-lived intangibles	—			—			—			1,223			—		1,223		—		0.09
Restructuring costs							1,330			—			1,330		—		0.10		—
Foreign currency exchange (gain)/loss (d)													(5,195)		(523)		(0.38)		(0.04)
Less: Tax effect of reconciling items and discrete tax items													(496)		2,160		(0.03)		0.16
As Adjusted - Non GAAP	$	111,502		$	94,716		$	33,678		$	24,992		$	25,458	$	17,941	$	1.86	$	1.32
As Adjusted - Non GAAP Margins	41.9		%	41.6		%	12.6		%	11.0		%

-25-


	Three months ended						Nine fiscal months ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Net earnings attributable to VPG stockholders	$	10,118		$	5,379		$	27,341		$	14,260
Interest Expense	636			328			1,393			906
Income tax expense	2,323			1,662			6,539			3,688
Depreciation	2,937			2,955			8,622			8,691
Amortization	960			970			2,897			2,342
EBITDA	16,974			$	11,294		46,792			$	29,887
EBITDA MARGIN	18.8		%	13.8		%	17.6		%	13.1		%
Impairment of goodwill and indefinite-lived intangibles	—			—			—			1,223
Acquisition purchase accounting adjustments (a)	260			1,329			1,310			2,259
Acquisition costs	—			—			—			1,198
Restructuring costs	165			—			1,330			—
COVID-19 impact (b)	—			111			138			(574)
Start-up costs (c)	—			970			150			2,258
Foreign currency exchange (gain)/loss (d)	(1,261)			38			(5,195)			(523)
ADJUSTED EBITDA	$	16,138		$	13,742		$	44,525		$	21,986
ADJUSTED EBITDA MARGIN	17.9		%	16.8		%	16.7		%	9.6		%

(a) Acquisition purchase accounting adjustments include fair market value adjustments associated with inventory recorded as a component of costs of products sold.

(b) COVID-19 impact is the net impact to the Company of costs incurred as a result of the COVID-19 pandemic, net of government subsidies received.

(d) Impact of foreign currency exchange rates on assets and liabilities. ~~Note that impacts in prior year have been added to this table.~~

~~-27-~~

Financial Metrics

We utilize several financial measures and metrics to evaluate performance and assess the future direction of our business. These key financial measures and metrics include net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover.

Gross profit margin is computed as gross profit as a percentage of net revenues. Gross profit is generally net revenues less costs of products sold, but could also include certain other period costs. Gross profit margin is a function of net revenues, but also reflects our cost-cutting programs and our ability to contain fixed costs.

End-of-period backlog is one indicator of potential future sales. We include in our backlog only open orders that have been released by the customer for shipment in the next twelve months. If demand falls below customers’ forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty. Therefore, backlog is not necessarily indicative of the results expected for future periods.

Another important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period compared with the amount of product shipped during that period. A book-to-bill ratio that is greater than one indicates that revenues may increase in future periods. Conversely, a book-to-bill ratio that is less than one is an indicator of lower demand and may foretell declining sales. The book-to-bill ratio is also impacted by the timing of orders, particularly from our project-based product lines.

We focus on inventory turnover as a measure of how well we manage our inventory. We define inventory turnover for a financial reporting period as our costs of products sold for the four fiscal quarters ending on the last day of the reporting period divided by our average inventory (computed using each quarter-end balance) for this same period. A higher level of inventory turnover reflects more efficient use of our capital.

-26-

The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following tables show net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover for our business as a whole and by segment during the five quarters beginning with the third quarter of ~~2020~~2021 through the third quarter of ~~2021~~2022 (dollars in thousands):


		3rd Quarter			4th Quarter			1st Quarter			2nd Quarter			3rd Quarter				3rd Quarter			4th Quarter			1st Quarter			2nd Quarter			3rd Quarter
		2020			2020			2021			2021			2021				2021			2021			2022			2022			2022
Net revenues	Net revenues	$	67,525		$	75,445		$	70,589		$	75,339		$	81,974		Net revenues	$	81,974		$	90,017		$	87,665		$	88,618		$	90,057

Gross profit margin	Gross profit margin	40.5		%	38.1		%	40.5		%	39.6		%	38.8		%	Gross profit margin	38.8		%	38.7		%	40.2		%	42.1		%	41.4		%

End-of-period backlog	End-of-period backlog	$	90,800		$	87,600		$	100,700		$	130,900		$	146,700		End-of-period backlog	$	146,700		$	150,500		$	170,600		$	171,400		$	171,700

Book-to-bill ratio	Book-to-bill ratio	0.95			0.93			1.21			1.40			1.21			Book-to-bill ratio	1.21			1.06			1.25			1.08			1.08

Inventory turnover	Inventory turnover	2.38			2.86			2.67			2.64			2.55			Inventory turnover	2.55			2.82			2.69			2.52			2.47

~~-28-~~


		3rd Quarter			4th Quarter			1st Quarter			2nd Quarter			3rd Quarter				3rd Quarter			4th Quarter			1st Quarter			2nd Quarter			3rd Quarter
		2020			2020			2021			2021			2021				2021			2021			2022			2022			2022
Foil Technology Products
Sensors																	Sensors
Net revenues	Net revenues	$	32,906		$	36,477		$	32,711		$	33,308		$	32,790		Net revenues	$	30,721		$	34,149		$	37,750		$	40,280		$	37,879
Gross profit margin	Gross profit margin	41.1		%	38.4		%	39.9		%	38.9		%	32.1		%	Gross profit margin	31.1		%	32.1		%	37.8		%	44.3		%	40.5		%
End-of-period backlog	End-of-period backlog	$	48,500		$	43,700		$	48,400		$	60,600		$	72,500		End-of-period backlog	$	70,100		$	72,900		$	81,300		$	84,200		$	80,600
Book-to-bill ratio	Book-to-bill ratio	1.01			0.84			1.19			1.37			1.38			Book-to-bill ratio	1.37			1.11			1.27			1.17			0.99
Inventory turnover	Inventory turnover	2.63			3.05			2.72			2.67			2.88			Inventory turnover	3.14			3.53			3.54			3.20			3.04

Force Sensors
Weighing Solutions																	Weighing Solutions
Net revenues	Net revenues	$	13,862		$	16,251		$	16,933		$	17,216		$	17,704		Net revenues	$	30,676		$	32,071		$	32,768		$	28,459		$	31,399
Gross profit margin	Gross profit margin	30.5		%	29.1		%	35.7		%	34.7		%	34.5		%	Gross profit margin	37.2		%	34.0		%	36.9		%	33.7		%	33.3		%
End-of-period backlog	End-of-period backlog	$	21,300		$	24,700		$	26,800		$	30,700		$	30,700		End-of-period backlog	$	42,600		$	41,800		$	43,600		$	43,000		$	43,000
Book-to-bill ratio	Book-to-bill ratio	0.90			1.18			1.14			1.23			1.01			Book-to-bill ratio	1.06			0.98			1.06			1.03			1.05
Inventory turnover	Inventory turnover	2.28			2.74			2.72			2.57			2.38			Inventory turnover	2.47			2.63			2.61			2.33			2.48

Weighing and Control Systems
Measurement Systems																	Measurement Systems
Net revenues	Net revenues	$	20,757		$	22,717		$	20,945		$	24,815		$	31,480		Net revenues	$	20,577		$	23,797		$	17,147		$	19,879		$	20,779
Gross profit margin	Gross profit margin	46.2		%	44.0		%	45.6		%	43.9		%	48.3		%	Gross profit margin	52.8		%	54.7		%	51.8		%	49.9		%	55.5		%
End-of-period backlog	End-of-period backlog	$	21,000		$	19,200		$	25,500		$	39,600		$	43,500		End-of-period backlog	$	34,000		$	35,800		$	45,700		$	44,200		$	48,100
Book-to-bill ratio	Book-to-bill ratio	0.88			0.88			1.30			1.56			1.14			Book-to-bill ratio	1.18			1.08			1.56			0.98			1.27
Inventory turnover	Inventory turnover	2.13			2.67			2.54			2.64			2.32			Inventory turnover	1.92			2.18			1.68			1.90			1.68

Net revenues for the third quarter of ~~2021~~2022 increased ~~8.8%~~1.6% from the second quarter of ~~2021~~2022 mainly due to increased volume in ~~Forces Sensor~~the Weighing Solutions and ~~Weighing and Control~~Measurement Systems reporting ~~segments.~~segments partially offset by decreased volume in the Sensors reporting segment. Net revenues increased ~~21.4%~~9.9% from the third quarter of ~~2020~~2021 with increased volume primarily from the ~~Force~~ Sensors reporting ~~segment and the Weighing and Control Systems~~ segment. ~~The increase in the Weighing and Control Systems reporting segment was aided by the addition of revenues from the acquisition of DTS.~~

Net revenues in the ~~Foil Technology Products~~Sensors reporting segment decreased ~~1.6%~~6.0% compared to the second quarter of ~~2021~~2022 and ~~decreased 0.4%~~increased 23.3% from the third quarter of ~~2020. The sequential decline~~2021. Excluding the unfavorable impact of foreign currency exchange rates, revenue increased 35.1% from the third quarter of 2021. Excluding the unfavorable impact of foreign currency exchange rates, revenue decreased 4.2% from the second quarter of 2022. Sequentially, the decrease primarily reflected lower ~~revenue of~~ advanced sensors ~~to our~~revenue in Other markets ~~which was mainly the result of the transition to our new advanced sensors facility. Compared to a year ago, higher~~(mainly for consumer applications) and lower revenue of precision ~~foil~~ resistors in the Test and Measurements market was offset by lower revenue of precision foil resistors and Pacific Instruments systems in the Avionics, Military and Space market and by lower revenue of advanced sensors to our Other markets which was mainly the result of the transition to our new advanced sensors facility.

Net revenues in the Force Sensors reporting segment increased 2.8% from the second quarter of 2021 and increased 27.7% from the third quarter of 2020. The sequential increase was primarily due to higher revenue in our Industrial Weighing markets, partially offset by lower revenue for precision agriculture. market.The year-over-year increase in revenues was primarily ~~reflected operational limitations~~attributable to higher sales of precision resistors in the ~~third fiscal quarter~~Test and

-27-

Measurements market and higher revenue of ~~2020 from the COVID pandemic at~~ our ~~facility~~advanced sensors products primarily in ~~India.~~Other markets (mainly for consumer applications).

Net revenues in the Weighing ~~and Control Systems~~Solutions reporting segment increased ~~26.9%~~10.3% from the second quarter of ~~2021~~2022 and increased ~~51.7%~~2.4% from the third quarter of ~~2020.~~ 2021. The year-over-year and sequential increases in revenues were primarily attributable to increases in our Other markets for precision agriculture and construction applications.

Net revenues in the Measurement Systems reporting segment increased 4.5% from the second quarter of 2022 and increased 1.0% from the third quarter of 2021. Sequentially, the increase in ~~net revenues~~revenue was primarily due to the ~~addition of revenue forDTS, and~~ higher revenue ofDynamic Systems Inc. ("DSI") ~~and KELK~~ products toin the Steel market and our Diversified Technical Systems Inc. ("DTS") products in the Transportation market. The year-over-year increase ~~in revenue~~ was primarily attributable to ~~the addition of~~increased revenue ~~for DTS, which was acquired on June 1, 2021, higher revenue of our onboard weighing products for the Transportation market, and higher revenue of our DSI products for~~in the Steel market.

Overall gross profit margin in the third quarter of ~~2021~~2022 decreased ~~0.8%~~0.7% as compared to the second quarter of ~~2021~~2022 and ~~decreased 1.7%~~increased 2.6% from the third quarter of ~~2020.~~2021.

Sequentially, the decrease in the gross profit margin in the Sensors and Weighing Solutions reporting segments was partially offset by an increase in the gross profit margin in the ~~Weighing and Controls~~Measurement Systems reporting ~~segment was completely offset by a decrease in~~segments. In the ~~gross profit margin in the Foil Technology Products reporting segment, while the Force~~ Sensors reporting segment, ~~gross profit margin remained flat. In~~ the ~~Weighing and Control Systems reporting segment, the sequential increase was mainly due to higher revenue, the addition of DTS, and favorable product mix. The Foil Technology Products~~

~~-29-~~

~~reporting segment~~ gross profit margins decreased sequentially due to lower volume, one-time inventory adjustments, and unfavorable foreign currency exchange rates. In the Weighing Solutions reporting segment, the sequential decrease in gross profit margins was primarily due to higher materials costs and reduction of inventories partially offset by higher volume and selling price increases. The sequential increase in the gross profit margins in the Measurement Systems reporting segment was a result of favorable product mix ~~a reduction in inventory, labor inefficiencies,~~ and ~~unfavorable exchange rates.~~higher volume.

Compared to the third quarter of ~~2020,~~2021, the ~~Foil Technology Products~~Sensors and Measurement Systems reporting segments had higher gross profit margins, while the Weighing Solutions reporting segment gross profit margin was lower.

The Sensors reporting segment had a ~~lower~~higher gross profit margin due to ~~impacts from charges related to start-up costs in our new advanced sensors facility~~higher volume and ~~the impact of COVID-19 in conjunction with~~selling price increases partially offset by unfavorable foreign currency exchange rates and wage increases. In the Measurement Systems reporting segment, the gross profit margin was higher ~~rent and manufacturing overhead~~as compared to the third quarter of 2021 primarily due to lower purchase accounting adjustments related to the ~~new advanced sensors facility, and a reduction in inventory.~~DTS acquisition, partially offset by unfavorable product mix. The ~~Force Sensors~~Weighing Solutions reporting segment ~~increase in gross profit margin as compared to 2020 was primarily due to higher revenue.In the Weighing and Control Systems reporting segment, the~~ decrease in gross profit margin as compared to ~~the third quarter of 2020~~2021 was primarily due to ~~the impact~~higher materials costs, unfavorable product mix, unfavorable foreign currency exchange rates, and reduction of ~~charges related to purchase accounting adjustments from the DTS acquisition and the impact of COVID-19, which were~~inventories, partially offset by higher ~~revenue coming from DTS~~.volume and selling price increases.

Optimize Core Competence

The Company’s core ~~competency~~competencies include our innovative, deep technical and ~~key~~applications-specific expertise that adds value ~~proposition is providing customers with proprietary foil technology~~to our customers' products, our strong brands and ~~precision measurement sensors~~customer relationships, our focus on operational excellence, our ability to select and sensor-based systems. Our foil technology resistors and strain gages are recognized as global market leading products that provide high precision and high stability over extreme temperature ranges, and long life. Our force sensor productsdevelop our management teams, and our ~~weighing and control systems products are also certified to meet some of the highest levels of precision measurements of force, weight, pressure, torque, tilt, motion, and acceleration.~~proven M&A strategy. We continue to optimize all aspects of our development, manufacturing and sales processes, including by increasing our technical sales efforts; continuing to innovate in product performance and design; and refining our manufacturing ~~processes~~processes.

Our ~~foil technology~~Sensors segment research group developed innovations that enhance the capability and performance of our strain gages, while simultaneously reducing their size and power consumption as part of our advanced sensors product line. We believe this unique foil technology will create new markets as customers “design in” these next generation products in existing and new applications. Our development engineering team is also responsible for creating new processes to further automate manufacturing, and improve productivity and quality. Our advanced sensors manufacturing technology also offers us the capability to produce high-quality foil strain gages in a highly automated environment, which we believe results in reduced manufacturing and lead times, improved quality and increased margins. As a sign of our commitment to these businesses, we signed a long-term lease for a ~~state of the art~~state-of-the-art facility ~~which~~that has been constructed in Israel. ~~The transition of our advanced sensors business~~We fully transitioned to ~~that~~this facility ~~was completed~~ in the third quarter of fiscal 2021.

Our design, research, and product development teams, in partnership with our marketing teams, drive our efforts to bring innovations to market. We intend to leverage our insights into customer demand to continually develop and roll out new, innovative products within our existing lines and to modify our existing core products in ways that make them more appealing, addressing changing customer needs and industry trends in terms of form, fit, and function.

We also seek to achieve significant production cost savings through the transfer, expansion, and construction of manufacturing operations in countries such as India, China, and Israel, where we can benefit from ~~lower labor costs,~~ improved efficiencies or available tax and other government-sponsored incentives. ~~For example in 2019,~~In the past several years, we incurred restructuring expense related to closing and

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downsizing of facilities as part of the manufacturing transitions of our ~~force sensor~~load cell products to facilities in India and China, which marked key milestones in our ongoing strategic initiatives to align and consolidate our manufacturing footprint.

Acquisition Strategy

We expect to continue to make strategic acquisitions where opportunities present themselves to grow and expand our segments. Historically, our growth and acquisition strategy ~~has~~had been largely focused on vertical product integration, using our foil strain gages in our ~~force sensor~~load cell products, and incorporating those products into our weighing ~~and control systems. The acquisitions~~solutions. In recent years, we widened our acquisition strategy to include a broader set of Stress-Tek and KELK, each of which employs our foil strain gages to manufacture load cells for its systems, continued this strategy. Additionally, the KELK acquisition resulted in the acquisition of certain optical sensor technology. The Pacific Instruments acquisition significantly broadened our existing data acquisition offerings and opened new markets for us. The acquisition of DSI expanded our position in the steel market. On June 1, 2021, we completed the acquisition of California-based Diversified Technical Systems, Inc., a manufacturer of data acquisitionprecision measurement systems and ~~sensors for~~ product safety and testing, DTS is an established niched-market leader with a strong brand in automotive, avionics, military and defense markets. DTS adds complementary technology to our platform and brings unique engineering capabilities, centered on miniaturized data acquisition and systems integration with sensor technology for critical testing applications. companies.

We expect to expand our expertise, and our acquisition focus, outside our traditional vertical approach to other precision ~~sensor~~measurement solutions, including in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration. We believe acquired businesses will benefit from improvements we implement to reduce redundant functions and from our current global manufacturing and distribution footprint.

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Research and Development

Research and development will continue to play a key role in our efforts to introduce innovative products to generate new sales and to improve profitability. We expect to continue to expand our position as a leading supplier of precision foil technology products. We believe our R&D efforts should provide us with a variety of opportunities to leverage technology, products, and our manufacturing base in order to ultimately improve our financial performance.

Cost Management

To be successful, we believe we must seek new strategies for controlling operating costs. Through automation in our plants, we believe we can optimize our capital and labor resources in production, inventory management, quality control, and warehousing. We are in the process of moving some manufacturing to more cost effective locations. This may enable us to become more efficient and cost competitive, and also maintain tighter controls of the operation.

Production transfers, facility consolidations, and other long-term cost-cutting measures require us to initially incur significant severance and other exit costs. We are realizing the benefits of our restructuring through lower labor costs and other operating expenses, and expect to continue reaping these benefits in future periods. However, these programs to improve our profitability also involve certain risks which could materially impact our future operating results, as further detailed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March ~~11, 2021.~~4, 2022.

We are evaluating plans to further reduce our costs by consolidating additional manufacturing operations. These plans may require us to incur restructuring and severance costs in future periods. While streamlining and reducing fixed overhead, we are exercising caution so that we will not negatively impact our customer service or our ability to further develop products and processes.

Goodwill

We test the goodwill in each of our reporting units for impairment at least annually, as of the first day of our fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have been incurred. Determining whether to test goodwill for impairment, and the application of goodwill impairment tests, require significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Changes in these estimates could materially affect the determination of fair value for each reporting unit. A slowdown or deferral of orders for a business, with which we have goodwill associated, could impact our valuation of that goodwill.

Foreign Currency

We are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functional currencies of certain subsidiaries. U.S. GAAP requires that entities identify the “functional currency” of each of their subsidiaries and measure all elements of the financial statements in that functional currency. A subsidiary’s functional currency is the currency of the primary economic environment in which it operates. In cases where a subsidiary is relatively self-contained within a particular country, the local currency is generally deemed to be the functional currency. However, a foreign subsidiary that is a direct and integral component or extension of the parent company’s operations generally would have the parent company’s currency as its functional currency. We have subsidiaries that fall into each of these categories.

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Foreign Subsidiaries which use the Local Currency as the Functional Currency

Our operations in Europe, Canada, and certain locations in Asia primarily generate and expend cash using local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. For those subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated condensed balance sheets have been translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the results of operations and are reported as a separate component of equity.

For those subsidiaries where the local currency is the functional currency, revenues and expenses are translated at the average exchange rate for the period. While the translation of revenues and expenses into U.S. dollars does not directly impact the consolidated condensed statement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expenses incurred in those foreign currencies.

Foreign Subsidiaries which use the U.S. Dollar as the Functional Currency

Our operations in Israel and certain locations in Asia primarily generate cash in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency. For those foreign subsidiaries where the U.S. dollar is the functional

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currency, all foreign currency financial statement amounts are remeasured into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the results of operations. While these subsidiaries transact most business in U.S. dollars, they may have significant costs, particularly related to payroll, which are incurred in the local currency and significant lease assets and liabilities.

Effects of Foreign Currency Exchange Rate on Operations

For the fiscal quarter ended October ~~2, 2021,~~1, 2022, exchange rates ~~increased~~decreased net revenues by ~~$0.9~~$5.3 million, and ~~increased~~decreased costs of products sold and selling, general, and administrative expenses by ~~$1.8~~$4.2 million, when compared to the comparable prior year period.

For the nine fiscal months ended October ~~2, 2021,~~1, 2022, exchange rates ~~increased~~decreased net revenues by ~~$5.8~~$10.8 million, and ~~increased~~decreased costs of products sold and selling, general, and administrative expenses by ~~$7.6~~$7.7 million, when compared to the comparable prior year period.

~~Off-Balance Sheet Arrangements~~

~~As of October 2, 2021 and December 31, 2020, we did not have any off-balance sheet arrangements.~~

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Results of Operations

Results of operations by reporting segments for the fiscal quarter and nine fiscal months ended October 2, 2021 have been recast to reflect the new reporting segments as described under Item 7. Overview of Financial Results of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 4, 2022.

Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows:


		Fiscal quarter ended				Nine fiscal months ended					Fiscal quarter ended				Nine fiscal months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020			October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Costs of products sold	Costs of products sold	61.2	%	59.5	%	60.4	%	61.1	%	Costs of products sold	58.6	%	61.2	%	58.7	%	60.4	%
Gross profit	Gross profit	38.8	%	40.5	%	39.6	%	38.9	%	Gross profit	41.4	%	38.8	%	41.3	%	39.6	%
Selling, general, and administrative expenses	Selling, general, and administrative expenses	30.0	%	28.4	%	30.4	%	29.9	%	Selling, general, and administrative expenses	28.1	%	30.0	%	29.2	%	30.4	%
Operating income	Operating income	8.9	%	12.0	%	8.2	%	8.6	%	Operating income	13.2	%	8.9	%	11.5	%	8.2	%
Income before taxes	Income before taxes	8.7	%	11.5	%	8.0	%	7.8	%	Income before taxes	13.8	%	8.7	%	12.9	%	8.0	%
Net earnings	Net earnings	6.6	%	8.4	%	6.3	%	5.5	%	Net earnings	11.3	%	6.6	%	10.4	%	6.3	%
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	6.6	%	8.3	%	6.3	%	5.5	%	Net earnings attributable to VPG stockholders	11.2	%	6.6	%	10.2	%	6.3	%

Effective tax rate	Effective tax rate	23.4	%	27.1	%	20.3	%	29.0	%	Effective tax rate	18.6	%	23.4	%	19.4	%	20.3	%

Net Revenues

Net revenues were as follows (dollars in thousands):


		Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended					Nine fiscal months ended
		October 2, 2021			September 26, 2020		October 2, 2021			September 26, 2020			October 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021
Net revenues	Net revenues	$	81,974		$	67,525	$	227,902		$	194,367	Net revenues	$	90,057		$	81,974	$	266,340		$	227,902
Change versus comparable prior year period	Change versus comparable prior year period	$	14,449				$	33,535				Change versus comparable prior year period	$	8,083				$	38,438
Percentage change versus prior year period	Percentage change versus prior year period	21.4		%			17.3		%			Percentage change versus prior year period	9.9		%			16.9		%

Changes in net revenues were attributable to the following:


		vs. prior year quarter		vs. prior year- to-date			vs. prior year quarter		vs. prior year- to-date
Change attributable to:	Change attributable to:					Change attributable to:
Change in volume	Change in volume	7.6	%	8.1	%	Change in volume	13.7	%	14.2	%
Change in average selling prices	Change in average selling prices	0.8	%	0.2	%	Change in average selling prices	2.9	%	2.5	%
Foreign currency effects	Foreign currency effects	1.7	%	3.5	%	Foreign currency effects	(6.7)	%	(4.8)	%
Acquisitions	Acquisitions	11.3	%	5.5	%	Acquisitions	0.0	%	5.0	%

Net change	Net change	21.4	%	17.3	%	Net change	9.9	%	16.9	%

During the fiscal quarter and nine fiscal months ended October ~~2, 2021,~~1, 2022, net revenues increased ~~21.4%~~9.9% and ~~17.3%~~16.9%, respectively, as compared to the comparable prior year periods, with increased volume primarily from the ~~Force~~ Sensors reporting ~~segment and the Weighing and Control Systems~~ segment. ~~The increase in the Weighing and Control Systems reporting segment was aided by the addition of revenues from the acquisition of DTS.~~

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Gross Profit Margin

Gross profit as a percentage of net revenues was as follows:

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Gross profit margin 38.8 % 40.5 % 39.6 % 38.9 %


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Gross profit margin	41.4	%	38.8	%	41.3	%	39.6	%

The gross profit margin for the fiscal quarter and nine fiscal months ended October ~~2, 2021 decreased~~1, 2022 increased 2.6% and 1.7%, respectively, as compared to the comparable prior year periods. For the fiscal quarter period, ~~with~~the Sensors and Measurement Systems reporting segments reported higher gross profit margins inwhile the ~~Force~~Weighing Solutions reporting segment reported lower gross profit margins when compared to the prior year period. For the nine fiscal month period, the Sensors and ~~Weighing and Control~~Measurement Systems reporting segments ~~being offset by lower margin in the Foil Technology Products reporting segment.~~

~~The gross profit margin for the nine fiscal months ended October 2, 2021 increased 0.7% as compared to the comparable prior year period, mainly from~~reported higher gross profit margins inwhile the ~~Force Sensors~~Weighing Solutions reporting segment ~~partially offset by~~reported lower gross profit margins inwhen compared to the ~~Foil Technology and Weighing and Controls Systems reporting segments.~~prior year period.

Segments

Analysis of revenues and gross profit margins for each of our reportable segments is provided below.

~~Foil Technology Products~~Sensors

Net revenues of the ~~Foil Technology Products~~Sensors segment were as follows (dollars in thousands):


		Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended					Nine fiscal months ended
		October 2, 2021			September 26, 2020		October 2, 2021			September 26, 2020			October 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021
Net revenues	Net revenues	$	32,790		$	32,906	$	98,809		$	95,168	Net revenues	$	37,879		$	30,721	$	115,909		$	93,712
Change versus comparable prior year period	Change versus comparable prior year period	$	(116)				$	3,641				Change versus comparable prior year period	$	7,158				$	22,197
Percentage change versus prior year period	Percentage change versus prior year period	(0.4)		%			3.8		%			Percentage change versus prior year period	23.3		%			23.7		%

Changes in ~~Foil Technology Products~~Sensors segment net revenues were attributable to the following:


		vs. prior year quarter		vs. prior year- to-date			vs. prior year quarter		vs. prior year- to-date
Change attributable to:	Change attributable to:					Change attributable to:
Change in volume	Change in volume	(1.2)	%	1.8	%	Change in volume	32.1	%	28.3	%
Change in average selling prices	Change in average selling prices	0.9	%	0.6	%	Change in average selling prices	1.7	%	1.9	%
Foreign currency effects	Foreign currency effects	(0.1)	%	1.4	%	Foreign currency effects	(10.5)	%	(6.5)	%

Net change	Net change	(0.4)	%	3.8	%	Net change	23.3	%	23.7	%

Net revenues ~~decreased 0.4%~~increased 23.3% for the fiscal quarter ended October ~~2, 2021,~~1, 2022, as compared to the comparable prior year period and increased 23.7% for the nine fiscal months ended October 1, 2022, as compared to the comparable prior year period. ~~Compared~~The year-over-year increase in revenues was primarily attributable to ~~a year ago,~~ higher ~~revenue~~sales of precision ~~foil~~ resistors in the Test and Measurements market ~~was offset by lower~~and higher revenue of precision foil resistors and Pacific Instruments systems in the Avionics, Military and Space market and by lower revenue of advanced sensors to our Other markets which was mainly the result of the transition to our new advanced sensors facility.

~~Net revenues increased 3.8% for the nine fiscal months ended October 2, 2021, as compared to the comparable prior year period.~~ ~~Increases in net revenues are primarily attributable to~~ our advanced sensors ~~product line~~products primarily in ~~other~~Other markets ~~test and measurement markets, and general industrial markets, in addition to favorable exchange rate impacts.~~(mainly for consumer applications).

Gross profit as a percentage of net revenues for the ~~Foil Technology Products~~Sensors segment was as follows:

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Gross profit margin 32.1 % 41.1 % 37.0 % 39.9 %


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Gross profit margin	40.5	%	31.1	%	40.9	%	36.8	%

The gross profit margin increased 9.4% for the fiscal quarter ended October 1, 2022, when compared to the comparable prior year period due to higher volume and selling price increases partially offset by unfavorable foreign currency exchange rates and wage increases. Additionally, there were higher start-up costs associated with our new advanced sensors facility in 2021.

~~-34-~~-32-

The gross profit margin ~~decreased 9.0%~~increased 4.1% for the nine fiscal ~~quarter~~months ended October ~~2, 2021, when~~1, 2022 as compared to the comparable prior year ~~period due to~~period. Volume increases were partially offset by impacts from charges related to start-up costs in our new advanced sensors facility, wage increase, and ~~the impact of COVID-19 in conjunction with unfavorable foreign exchange rates, higher rent and manufacturing overhead related to the new advanced sensors facility, and a reduction in inventory.~~labor inefficiencies.

The gross profit margin decreased 2.9% for the nine fiscal months ended October 2, 2021 as compared to the comparable prior year period. Impacts from charges related to start-up costs in our new advanced sensors facility and the impact COVID-19 completely offset the higher volume in our foil resisters products.

~~Force Sensors~~Weighing Solutions

Net revenues of the ~~Force Sensors~~Weighing Solutions segment were as follows (dollars in thousands):


		Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended					Nine fiscal months ended
		October 2, 2021			September 26, 2020		October 2, 2021			September 26, 2020			October 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021
Net revenues	Net revenues	$	17,704		$	13,862	$	51,853		$	37,473	Net revenues	$	31,399		$	30,676	$	92,626		$	93,319
Change versus comparable prior year period	Change versus comparable prior year period	$	3,842				$	14,380				Change versus comparable prior year period	$	723				$	(693)
Percentage change versus prior year period	Percentage change versus prior year period	27.7		%			38.4		%			Percentage change versus prior year period	2.4		%			(0.7)		%

Changes in ~~Force Sensors~~Weighing Solutions segment net revenues were attributable to the following:


		vs. prior year quarter		vs. prior year- to-date			vs. prior year quarter		vs. prior year- to-date
Change attributable to:	Change attributable to:					Change attributable to:
Change in volume	Change in volume	25.6	%	35.9	%	Change in volume	4.5	%	0.2	%
Change in average selling prices	Change in average selling prices	0.2	%	(0.9)	%	Change in average selling prices	5.3	%	4.0	%
Foreign currency effects	Foreign currency effects	1.9	%	3.4	%	Foreign currency effects	(7.4)	%	(4.9)	%

Net change	Net change	27.7	%	38.4	%	Net change	2.4	%	(0.7)	%

Net revenues increased ~~27.7%~~2.4% for the fiscal quarter ended October ~~2, 2021,~~1, 2022, and ~~38.4%~~decreased 0.7% for the nine fiscal months ended October ~~2, 2021~~1, 2022 as compared to the comparable prior year periods. The increase in fiscal quarter net revenues was primarily attributable to increases ~~primarily~~in our Other markets for precision agriculture and construction applications, while the same market reflected ~~operational limitations in 2020 from~~a decrease for the ~~COVID pandemic at our facility in India.~~nine fiscal month period. Both the fiscal quarter and nine fiscal month periods were negatively impacted by foreign currency exchange rate effects.

Gross profit as a percentage of net revenues for the ~~Force Sensors~~Weighing Solutions segment was as follows:

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Gross profit margin 34.5 % 30.5 % 34.9 % 23.6 %


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Gross profit margin	33.3	%	37.2	%	34.7	%	37.5	%

The gross profit margin for the fiscal quarter ended October ~~2, 2021 increased 4.0%~~1, 2022 decreased 3.9% as compared to the comparable prior year period ~~primarily due to higher revenue.~~

~~The gross profit margin~~and decreased 2.8% for the nine fiscal months ended October ~~2, 2021 increased 11.3% as~~1, 2022 when compared to the prior year ~~period~~period. The decrease for the fiscal quarter was primarily due to higher ~~revenue, favorable~~materials costs, unfavorable product mix, unfavorable foreign currency exchange ~~rate impacts~~rates, and ~~an increase in inventory.~~reduction of inventories, partially offset by higher volume and selling price increases. The decrease for the nine fiscal month period was primarily due to lower volume, higher materials costs, unfavorable product mix, unfavorable foreign currency exchange rates, and reduction of inventories, partially offset by selling price increases.

~~Weighing and Control~~

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Measurement Systems

Net revenues of the ~~Weighing and Control~~Measurement Systems segment were as follows (dollars in thousands):

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Net revenues $ 31,480 $ 20,757 $ 77,240 $ 61,726
Change versus comparable prior year period $ 10,723 $ 15,514
Percentage change versus prior year period 51.7 % 25.1 %

~~-35-~~


	Fiscal quarter ended					Nine fiscal months ended
	October 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021
Net revenues	$	20,779		$	20,577	$	57,805		$	40,871
Change versus comparable prior year period	$	202				$	16,934
Percentage change versus prior year period	1.0		%			41.4		%

Changes in ~~Weighing and Control~~Measurement Systems segment net revenues were attributable to the following:


		vs. prior year quarter		vs. prior year- to-date			vs. prior year quarter		vs. prior year- to-date
Change attributable to:	Change attributable to:					Change attributable to:
Change in volume	Change in volume	8.3	%	4.4	%	Change in volume	1.3	%	14.3	%
Change in average selling prices	Change in average selling prices	1.0	%	0.5	%	Change in average selling prices	1.8	%	1.2	%
Foreign currency effects	Foreign currency effects	5.6	%	6.4	%	Foreign currency effects	(2.1)	%	(2.1)	%
Acquisitions	Acquisitions	36.8	%	13.8	%	Acquisitions	0.0	%	28.0	%

Net change	Net change	51.7	%	25.1	%	Net change	1.0	%	41.4	%

Net revenues increased ~~51.7%~~1.0% for the fiscal quarter ended October ~~2, 2021~~1, 2022 as compared to the comparable prior year period and increased 41.4% for the nine fiscal months ended October 1, 2022 as compared to the comparable prior year period. The ~~year-over-year~~increase for the fiscal quarter was primarily due to increased revenue in the Steel market. The increase in revenue for the nine fiscal months period was primarily attributable to the addition of revenue for DTS, which was acquired on June 1, 2021, ~~higher revenue of our onboard weighing products for the Transportation market,~~ and higher revenue of our KELK and DSI ~~products for the Steel market.~~

Net revenues increased 25.1% for the nine fiscal months ended October 2, 2021 as compared to the comparable prior year period primarily due to the addition of revenue for DTS, higher revenue of our onboard weighing products for the transportation market and favorable exchange rate impacts.steel-related businesses.

Gross profit as a percentage of net revenues for the ~~Weighing and Control~~Measurement Systems segment were as follows:

Fiscal quarter ended Nine fiscal months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Gross profit margin 48.3 % 46.2 % 46.1 % 46.5 %


	Fiscal quarter ended				Nine fiscal months ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Gross profit margin	55.5	%	52.8	%	52.5	%	50.8	%

The gross profit margin for the fiscal quarter ended October ~~2, 2021 of 48.3%~~1, 2022 increased ~~from~~2.7% compared to the third quarter of ~~2020~~2021. The increase was primarily due to ~~higher revenue coming from DTS.~~lower purchase accounting adjustments related to the DTS acquisition partially offset by an unfavorable product mix.

The gross profit margin for the nine fiscal months ended October ~~2, 2021 of 46.1%, decreased~~1, 2022 increased 1.7% from the prior year ~~period due to the impacts of charges related to purchase accounting adjustments from the DTS acquisition and an unfavorable product mix, partially offset by the higher~~period. Higher revenues coming from DTS and ~~favorable~~our KELK and DSI steel-related businesses and lower purchase accounting adjustment related to the DTS acquisition were partially offset by an unfavorable product mix and an unfavorable foreign currency exchange rate ~~impacts.~~impact. Additionally, COVID-19 subsidies were received in 2021 that did not continue in 2022.

Selling, General, and Administrative Expenses

Selling, general, and administrative (“SG&A”) expenses are summarized as follows (dollars in thousands):


		Fiscal quarter ended						Nine fiscal months ended							Fiscal quarter ended						Nine fiscal months ended
		October 2, 2021			September 26, 2020			October 2, 2021			September 26, 2020				October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Total SG&A expenses	Total SG&A expenses	$	24,580		$	19,144		$	69,216		$	58,075		Total SG&A expenses	$	25,271		$	24,580		$	77,824		$	69,216

As a percentage of net revenues	As a percentage of net revenues	30.0		%	28.4		%	30.4		%	29.9		%	As a percentage of net revenues	28.1		%	30.0		%	29.2		%	30.4		%

SG&A expenses for the fiscal quarter ended October 1, 2022 increased $0.7 million compared to the comparable prior year period due to increases in wages, travel costs and other fees, partially offset by favorable foreign currency exchange rate impacts.

-34-

SG&A expenses for the nine fiscal months ended October ~~2, 2021~~1, 2022 increased $8.6 million compared to the comparable prior year periods with $6.1 million of the increase driven by SG&A expenses from DTS. The remaining increase is from additional SG&A expenses related to ~~personnel~~wage increases, travel costs, and ~~unfavorable foreign currency impacts and SG&A expenses from the acquisition of DTS.~~

~~-36-~~

other fees.

Impairment of Goodwill and Indefinite-lived Intangible Assets

InFor the ~~second~~nine fiscal ~~quarter of~~months ended October 2, 2021, as a result of our interim impairment test, we recorded a $1.2 million pre-tax, non-cash impairment charge which reduced the carrying value of our goodwill and indefinite-lived intangible assets. ~~See Note 4 for further discussion.~~

Acquisition Costs

For the nine fiscal months ended October 2, 2021, we recorded Acquisition ~~costs~~Costs associated with the acquisition of DTS ~~were~~ as follows (in thousands):


	~~Fiscal quarter ended~~		Nine fiscal months ended
	~~October 2, 2021~~			October 2, 2021
Legal fees	$	—		$	341
Appraisal fees	—			18
Other (investment banker and insurance costs)	—				839
	$	—				$	1,198

Restructuring Costs

Restructuring costs reflect the cost reduction programs implemented by the Company. Restructuring costs are expensed during the period in which the Company determines it will incur those costs and all requirements for accrual are met. Because these costs are recorded based upon estimates, actual expenditures for the restructuring activities may differ from the initially recorded costs. If the initial estimates are too low or too high, the Company could be required to either record additional expense in future periods or to reverse part of the previously recorded charges.

The Company recorded ~~$0.0~~$0.2 million and ~~$0.1~~$0.0 million of restructuring costs during the fiscal quarter ended October 1, 2022 and October 2, 2021, ~~and September 26, 2020,~~ respectively, and ~~$0.0~~$1.3 million and ~~$0.7~~$0.0 million of restructuring costs during the nine fiscal months ended October 1, 2022 and October 2, 2021, ~~and September 26, 2020,~~ respectively. Restructuring costs ~~recorded in the prior year~~ were comprised primarily of employee ~~terminations~~termination costs, including severance and statutory retirement allowances, ~~and were incurred~~ in ~~connections~~connection with various cost reduction programs.

Other Income (Expense)

Interest expense for the fiscal quarter ended October 2, 2021 was higher when compared with interest expense in the comparable prior year period reflecting the impact of increased borrowings on the Company's revolving credit facility in conjunction with the acquisition of DTS. Interest expense for theand nine fiscal months ended October ~~2, 2021~~1, 2022 was ~~lower~~higher when compared with the comparable prior year ~~period~~periods mainly due to ~~more favorable~~higher borrowing rates in ~~2021.~~2022.

~~-37-~~-35-

The following table analyzes the components of the line “Other” on the consolidated condensed statements of operations (in thousands):


		Fiscal quarter ended							Fiscal quarter ended
		October 2, 2021		September 26, 2020		Change			October 1, 2022		October 2, 2021		Change
Foreign exchange loss		$	(38)	$	162	$	(200)
Foreign currency exchange gain (loss)								Foreign currency exchange gain (loss)	$	1,261	$	(38)	$	1,299

Interest income	Interest income	151		29		122		Interest income	91		151		(60)
Pension expense	Pension expense	(151)		(159)		8		Pension expense	(81)		(151)		70
Other	Other	212		(71)		283		Other	(48)		212		(260)
		$	174	$	(39)	$	213		$	1,223	$	174	$	1,049


		Nine fiscal months ended							Nine fiscal months ended
		October 2, 2021		September 26, 2020		Change			October 1, 2022		October 2, 2021		Change
Foreign exchange gain (loss)		$	522	$	(123)	$	645
Foreign currency exchange gain								Foreign currency exchange gain	$	5,195	$	522	$	4,673
Interest income	Interest income	216		205		11		Interest income	235		216		19
Pension expense	Pension expense	(431)		(482)		51		Pension expense	(261)		(431)		170
Other	Other	114		(229)		343		Other	(163)		114		(277)
		$	421	$	(629)	$	1,050		$	5,006	$	421	$	4,585

Foreign currency exchange gains ~~and losses~~ represent the impact of changes in foreign currency exchange rates. For the fiscal quarter and nine fiscal months ended October ~~2, 2021,~~1, 2022, the change in foreign currency exchange gains and losses during the period, as compared to the prior year ~~period,~~periods, is largely due to exposure to currency fluctuations with the Israeli shekel, the Japanese yen, the Canadian dollar, ~~the euro, the Israeli shekel~~ and the British pound. The change in the dollar-shekel exchange rate resulted in a favorable foreign currency exchange impact primarily related to the shekel-denominated lease liability for the Sensors facility in Israel.

~~For~~Included in Other for the nine fiscal months ended October ~~2, 2021,~~1, 2022 is a $0.2 million loss on the ~~change in foreign exchange gains and losses during~~liquidation of two of the ~~period as compared to the prior year period is largely due to exposure to currency fluctuations with the euro, the Israeli shekel, and the Japanese yen.~~Company's European subsidiaries.

Income Taxes

VPG calculates the tax provision for interim periods using an estimated annual effective tax rate methodology based on projected full-year pre-tax earnings among the taxing jurisdictions in which we operate with adjustments for discrete items. The effective tax rate for the fiscal quarter ended October ~~2, 2021~~1, 2022 was ~~23.4%~~18.6% compared to ~~27.1%~~23.4% for the fiscal quarter ended ~~September 26, 2020~~October 2, 2021. The effective tax rate for the fiscal quarter ended October 1, 2022 was lower than the prior year period primarily due to foreign currency exchange gains and ~~the~~losses, tax rate changes and a reduction in our valuation allowance on deferred tax assets. The effective tax rate for the nine fiscal months ended October ~~2, 2021~~1, 2022 was ~~20.3%~~19.4% compared to ~~29.0%~~20.3% for the nine fiscal months ended ~~September 26, 2020.~~October 2, 2021. The effective tax rate for ~~both periods presented in 2021 is~~the nine fiscal months ended October 1, 2022 was lower than the prior year ~~periods~~period primarily due to ~~the acquisition of DTS, which enabled the Company to reduce its valuation allowance against deferred tax assets, tax rate changes in certain foreign jurisdictions, and~~ changes in the mix of worldwide ~~income.~~income and foreign currency exchange gains and losses, tax rate changes and a reduction in our valuation allowance on deferred tax assets.

The Company and its subsidiaries are subject to income taxes imposed by the U.S., various states, and the foreign jurisdictions in which we operate. Each jurisdiction establishes rules that set forth the years which are subject to examination by its tax authorities. While the Company believes the tax positions taken on its tax returns for each jurisdiction are supportable, they may still be challenged by the jurisdiction's tax authorities. In anticipation of such challenges, the Company has established reserves for tax-related uncertainties. These liabilities are based on the Company’s best estimate of the potential tax exposures in each respective jurisdiction. It may take a number of years for a final tax liability in a jurisdiction to be determined, particularly in the event of an audit. If an uncertain matter is determined favorably, there could be a reduction in the Company’s tax expense. An unfavorable determination could increase tax expense and could require a cash payment, including interest and penalties.

~~-38-~~-36-

Financial Condition, Liquidity, and Capital Resources

We believe that our current cash and cash equivalents, credit facilities and projected cash from operations will be sufficient to meet our liquidity needs for at least the next 12 months.

InOn March 20, 2020, wethe Company entered into a ~~third amended~~Third Amended and ~~restated credit agreement. The~~Restated Credit Agreement (the “2020 Credit Agreement”) among the Company, the lenders named therein, Citizens Bank, National Association and Wells Fargo Bank, National Association as joint lead arrangers and JPMorgan Chase Bank, National Association as agent for such lenders (the “Agent”), pursuant to which the terms of ~~our~~the Company’s multi-currency, secured credit ~~agreement~~facility were revised to provide ~~for the following facilities: (1)~~a secured revolving facility (the “2020 Revolving Facility”) in an aggregate principal amount of $75.0 million, with a sublimit of $10.0 million which can be used for letters of credit for the account of the Company or its subsidiaries that are parties to the Credit ~~Agreement, the~~Agreement. The proceeds of ~~which~~the 2020 Revolving Facility may be used on an ongoing basis for working capital and general corporate purposes. The aggregate principal amount of the 2020 Revolving Facility may be increased by a maximum of $25.0 million upon the request of the Company, subject to the terms of the 2020 Credit Agreement. The 2020 Credit Agreement terminates on March 20, 2025.

Interest payable on amounts borrowed under the 2020 Revolving Facility is based upon, at the Company’s option, (1) the greatest of: the Agent’s prime rate, the Federal Funds rate, or a LIBOR floor (the “Base Rate”), or (2) LIBOR or CDOR plus a specified margin. An interest margin of 0.25% is added to Base Rate loans. Depending upon the Company’s leverage ratio, an interest rate margin ranging from 1.50% to 2.75% per annum is added to the applicable LIBOR or CDOR rate to determine the interest payable on the ~~Libor~~LIBOR or CDOR loans. The Company is required to pay a quarterly fee of 0.25% per annum to 0.40% per annum on the unused portion of the 2020 Revolving Facility, which is determined based on the Company’s leverage ratio each quarter. Additional customary fees apply with respect to letters of credit.

The obligations of the Company under the 2020 Credit Agreement are secured by pledges of stock in certain domestic and foreign subsidiaries, as well as guarantees by substantially all of the Company’s domestic subsidiaries. The obligations of the Company and the guarantors under the 2020 Credit Agreement are secured by substantially all the assets (excluding real estate) of the Company and such guarantors. The 2020 Credit Agreement restricts the Company from paying cash dividends and requires the Company to comply with other customary covenants, representations, and warranties, including the maintenance of specific financial ratios. The financial maintenance covenants include an interest coverage ratio and a leverage ratio. ~~We were~~The Company was in compliance with ~~these~~its financial maintenance covenants at October ~~2, 2021.~~1, 2022. If the Company is not in compliance with any of these covenant restrictions, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable.

Our business has historically generated significant cash flow. For the nine fiscal months ended October ~~2, 2021,~~1, 2022, cash provided by operating activities was ~~$18.1~~$20.5 million compared to ~~$22.8~~cash provided by operations of $18.1 million in the comparable prior year period. Our net cash used in investing activities for the nine fiscal months ended October ~~2, 2021~~1, 2022 was ~~higher~~lower compared to the prior year period mainly due to the acquisition of ~~DTS.~~DTS which took place in the second quarter of 2021. Our net cash ~~provided by~~used in financing activities for the nine fiscal months ended October ~~2, 2021~~1, 2022 was ~~higher compared~~lower than the comparable to prior year ~~mainly~~period due to the 2021 borrowings ~~on the 2020 credit facility for~~in connection with the acquisition of DTS.

Adjusted free cash flow generated during the nine fiscal months ended October 2, 2021, was $7.1 million. We refer to the amount of cash provided by operating activities ($18.1 million) in excess of our capital expenditures ($11.2 million)Approximately 91% and ~~net of proceeds from the sale of assets ($0.2 million) as “adjusted free cash flow.”~~

~~The following table summarizes the components of net cash at October 2, 2021 and December 31, 2020~~ ~~(in thousands)~~:

October 2, 2021 December 31, 2020
Cash and cash equivalents $ 75,544 $ 98,438
Third-party debt, including current and long-term:
Revolving debt 61,000 41,000
Third-party debt held by Japanese subsidiary — 18
Deferred financing costs (308) (374)
Total third-party debt 60,692 40,644
Net cash $ 14,852 $ 57,794

Measurements such as “adjusted free cash flow” and “net cash" do not have uniform definitions and are not recognized in accordance with U.S. GAAP. Such measures should not be viewed as alternatives to GAAP measures of performance or liquidity. However, management believes that “adjusted free cash flow” is a meaningful measure of our ability to fund acquisitions, and that an analysis of “net cash” assists investors in understanding aspects of our cash and debt management. These measures, as calculated by us, may not be comparable to similarly titled measures used by other companies.

~~Approximately 90%~~87% of our cash and cash equivalents balance at October ~~2, 2021~~1, 2022 and December 31, ~~2020~~2021, respectively, was held by our non-U.S. subsidiaries.

~~-39-~~

See the following table for the percentage of cash and cash equivalents, by region, at October ~~2, 2021~~1, 2022 and December 31, ~~2020:~~2021:


		October 2, 2021		December 31, 2020			October 1, 2022		December 31, 2021
Israel	Israel	24	%	26	%	Israel	24	%	25	%
Asia	Asia	25	%	18	%	Asia	27	%	24	%
Europe	Europe	20	%	16	%	Europe	15	%	18	%
United States	United States	10	%	10	%	United States	9	%	13	%
United Kingdom	United Kingdom	14	%	18	%	United Kingdom	11	%	12	%
Canada	Canada	7	%	12	%	Canada	14	%	8	%
		100	%	100	%		100	%	100	%

We earn a significant amount of our operating income outside the United States, and we consider the majority of ~~which is deemed~~the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, ~~in the foreign jurisdictions.~~as of October 1, 2022. As a result, as discussed above, a significant portion of our cash and short-term investments are held by foreign subsidiaries. The Company will continue to evaluate its cash ~~needs, however~~needs. However, we currently do not intend, nor do we foresee a need, to repatriate funds in excess of what

-37-

is already planned. The Company will evaluate the possibility of repatriating future cash provided such repatriation can be accomplished in a tax efficient manner. In addition, we expect existing domestic cash, short-term investments, and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.

If we should require more capital in the United States than is generated by our domestic operations, for example, to fund significant discretionary activities, such as business acquisitions, we could elect to repatriate future earnings from foreign jurisdictions or raise capital in the United States through debt or equity issuances. These alternatives could result in higher tax expense, increased interest expense, or dilution of our earnings.

Adjusted free cash flow generated during the nine fiscal months ended October 1, 2022, was $5.4 million. We ~~consider~~refer to the ~~majority~~amount of ~~the undistributed earnings~~cash provided by operating activities ($20.5 million) in excess of our ~~foreign subsidiaries,~~capital expenditures ($15.5 million) and net of proceeds from the sale of assets ($0.4 million) as “adjusted free cash flow.”

The following table summarizes the components of net cash at October 2,1, 2022 and December 31, 2021 (in thousands):


	October 1, 2022		December 31, 2021
Cash and cash equivalents	$	79,910	$	84,335

Third-party debt, including current and long-term:
Revolving debt	61,000		61,000
Deferred financing costs	(220)		(286)
Total third-party debt	60,780		60,714
Net cash	$	19,130	$	23,621

Measurements such as “adjusted free cash flow” and “net cash" do not have uniform definitions and are not recognized in accordance with U.S. GAAP. Such measures should not be viewed as alternatives to GAAP measures of performance or liquidity. However, management believes that “adjusted free cash flow” is a meaningful measure of our ability to fund acquisitions, and that an analysis of “net cash” assists investors in understanding aspects of our cash and debt management. These measures, as calculated by us, may not be ~~indefinitely reinvested.~~comparable to similarly titled measures used by other companies.

Our financial condition as of October ~~2, 2021~~1, 2022 remains strong, with a current ratio (current assets to current liabilities) of 4.1 to 1.0, as compared to a ratio of ~~4.7~~3.6 to 1.0 at December 31, ~~2020.~~2021.

Cash paid for property and equipment for the nine fiscal months ended October ~~2, 2021~~1, 2022 was ~~$11.2~~$15.5 million compared to ~~$15.8~~$11.2 million in the comparable prior year period.

As of October 1, 2022 and December 31, 2021, we did not have any off-balance sheet arrangements.

~~-40-~~-38-

Safe Harbor Statement

From time to time, information provided by us, including, but not limited to, statements in this report, or other statements made by or on our behalf, may contain or constitute "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from those anticipated.

Such statements are based on current expectations only, and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, expected, estimated, or projected. Among the factors that could cause actual results to materially differ include: general business and economic conditions; impact of inflation, global labor and supply chain challenges; difficulties or delays in identifying, negotiating and completing acquisitions and integrating acquired companies; the inability to realize anticipated synergies and expansion possibilities; difficulties in new product development; changes in competition and technology in the markets that we serve and the mix of our products required to address these changes; changes in foreign currency exchange rates; political, economic, health (including the COVID-19 pandemic) and military instability in the countries in which we operate; difficulties in implementing our cost reduction strategies, such as underutilization of production facilities, labor unrest or legal challenges to our lay-off or termination plans, operation of redundant facilities due to difficulties in transferring production to achieve efficiencies; compliance issues under applicable laws, such as export control laws, including the outcome of our voluntary self-disclosure of export control non-compliance; significant developments from the recent and potential changes in tariffs and trade regulation; our efforts and efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, shelter-in-place orders and business closures and the related impact on resource allocations, manufacturing and supply chains; ~~the Company’s~~our status as a “critical”, “essential” or “life-sustaining” business in light of COVID-19 business closure laws, orders and guidance being challenged by a governmental body or other applicable authority; ~~the Company’s~~our ability to execute ~~its~~our new corporate strategy and business continuity, operational and budget ~~plans in light of the COVID-19 pandemic;~~plans; and other factors affecting our operations, markets, products, services, and prices that are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020 and~~2021. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this report or as of the dates otherwise indicated in ~~our Quarterly Report on Form 10-Q for the fiscal quarter ended October 2, 2021.~~such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

~~-41-~~-39-

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risks previously disclosed in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, filed with the SEC on March ~~11, 2021.~~4, 2022.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act are: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our CEO and CFO, believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. While the design of any system of controls is to provide reasonable assurance of the effectiveness of disclosure controls, such design is also based in part upon certain assumptions about the likelihood of future events, and such assumptions, while reasonable, may not take into account all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and may not be prevented or detected.

Changes in Internal Control over Financial Reporting

During our last fiscal quarter ended October ~~2, 2021,~~1, 2022, there was no change in our internal control over financial reporting that materially affected, or is reasonable likely to materially affect, internal control over financial reporting.

~~-42-~~-40-

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

~~None.~~The Company is subject to various legal proceedings that constitute ordinary, routine litigation incidental to its business. In addition, the Company has determined that certain export shipments of products from one of its subsidiaries did not comply with the filing requirements of U.S. export administration and foreign trade regulations, and the Company voluntarily self-disclosed such non-compliance to the U.S. government. Non-compliance with the filing requirements may result in fines and penalties.

The Company believes that the foregoing matters will not have a material adverse effect on the Company’s business or its financial condition, results of operations, and cash flows.

Item 1A. RISK FACTORS

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, filed with the SEC on March ~~11, 2021.~~4, 2022. There have been no material changes in reported risk factors from the information reported in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020 except as follows:~~

~~A shortage of qualified labor could have a material adverse effect on our business and results of operations.~~

Labor is a significant component of operating our business. A number of factors may adversely affect the labor force available to us or increase labor costs, including general macroeconomic conditions, high employment levels, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, increased wages offered by other employers, vaccine mandates and other government regulations and our responses thereto. We are currently experiencing a shortage of qualified labor in certain geographies, particularly with manufacturing plant production workers in the United States, Israel and Japan. Outside suppliers that we rely on have also experienced shortages of qualified labor. A prolonged shortage of qualified labor could, among other things, decrease our ability to effectively produce and meet customer demand, and could have a material adverse effect on our business and results of operations.

2021.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~The following table provides information about repurchases of the Company's common stock during the three-month period ended October 1, 2022.


	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans (a)
July 3, 2022 - August 3, 2022	—	—		—	—
August 4, 2022 - September 4, 2022	6,085	$	34.60	6,085	593,915
September 5, 2022 - October 1, 2022	26,516	32.05		26,516	567,399
Total	32,601			32,601	567,399
(a) On August 8, 2022, the Board of Directors (the “Board”) of the Company authorized the repurchase of up to 600,000 shares of the Company’s outstanding common stock (the “Stock Repurchase Plan”). The Stock Repurchase Plan will expire on August 11, 2023, and the Board authorized purchases thereunder to be made through an issuer repurchase plan adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), open market purchases or private transactions, in accordance with the applicable federal securities laws, including Rule 10b-18 under the Exchange Act. As of October 1, 2022, the Company had repurchased 32,601 shares under the Stock Repurchase Plan.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

Not applicable.

~~-43-~~-41-

Item 6. EXHIBITS


10.1						First Amendment to Vishay Precision Group, Inc. 2017 Non-Employee Director Compensation Plan.
31.1						Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Ziv Shoshani, Chief Executive Officer.
31.2						Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – William M. Clancy, Chief Financial Officer.
32.1						Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Ziv Shoshani, Chief Executive Officer.
32.2						Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – William M. Clancy, Chief Financial Officer.
101						Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended October ~~2, 2021,~~1 2022, furnished in XBRL (eXtensible Business Reporting Language).

~~-44-~~-42-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			VISHAY PRECISION GROUP, INC.

			/s/ William M. Clancy
			William M. Clancy
			Executive Vice President and Chief Financial Officer
			(as a duly authorized officer and principal financial and accounting officer)

Date: November ~~12, 2021~~8, 2022

~~-45-~~-43-


	Total		Weighing and Control Systems Segment								Foil Technology Products Segment
			KELK Acquisition		DSI Acquisition		DTS Acquisition		Stress-Tek Acquisition		Pacific Acquisition
Balance at December 31, 2020	$	31,105	$	6,726	$	16,942			$	6,311	$	1,126
Goodwill acquired	15,587						15,587
Impairment charges	(1,126)										(1,126)
Foreign currency translation adjustment	(6)		17		(23)				—		—

Balance at October 2, 2021	$	45,560	$	6,743	$	16,919	$	15,587	$	6,311	$	—


	October 2, 2021		December 31, 2020
Intangible assets subject to amortization
(Definite-lived):
Patents and acquired technology	$	32,938	$	19,804
Customer relationships	34,117		26,061
Trade names	1,684		1,747
Non-competition agreements	11,576		12,259
	80,315		59,871
Accumulated amortization:
Patents and acquired technology	(6,960)		(5,895)
Customer relationships	(14,497)		(13,363)
Trade names	(1,684)		(1,747)
Non-competition agreements	(11,569)		(12,250)
	(34,710)		(33,255)
Net intangible assets subject to amortization	$	45,605	$	26,616

Intangible assets not subject to amortization
(Indefinite-lived):
Trade names	7,722		5,423

	$	53,327	$	32,039