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 1, 2022~~September 30, 2023

☐ 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 ~~8, 2022,~~7, 2023, the registrant had ~~12,550,775~~12,510,296 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 1, 2022~~September 30, 2023

CONTENTS


		Page Number
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets – ~~October 1, 2022~~September 30, 2023 (Unaudited) and December 31, ~~2021~~2022	3

	Consolidated Condensed Statements of Operations (Unaudited) – Fiscal Quarters Ended September 30, 2023 and October 1, 2022 ~~and October 2, 2021~~	5

	Consolidated Condensed Statements of Operations (Unaudited) – Nine Fiscal Months Ended September 30, 2023 and October 1, 2022 ~~and October 2, 2021~~	6

	Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) – Fiscal Quarters Ended September 30, 2023 and October 1, 2022 ~~and October 2, 2021~~	7

	Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) – Nine Fiscal Months Ended September 30, 2023 and October 1, 2022 ~~and October 2, 2021~~	8

	Consolidated Condensed Statements of Cash Flows (Unaudited) –Nine Fiscal Months Ended September 30, 2023 and October 1, 2022 ~~and October 2, 2021~~	9

	Consolidated Condensed Statements of Equity (Unaudited) – Fiscal Quarters Ended September 30, 2023 and October 1, 2022 ~~and October 2, 2021~~	10

	Consolidated Condensed Statements of Equity (Unaudited) – Nine Fiscal Months Ended September 30, 2023 and October 1, 2022 ~~and October 2, 2021~~	11

	Notes to Unaudited Consolidated Condensed Financial Statements	12

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2423

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4039

Item 4.	Controls and Procedures	4039

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	4140

Item 1A.	Risk Factors	4140

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4140

Item 3.	Defaults Upon Senior Securities	4140

Item 4.	Mine Safety Disclosures	4140

Item 5.	Other Information	4140

Item 6.	Exhibits	4241

	SIGNATURES	4342

-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 1, 2022		December 31, 2021			September 30, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	79,910	$	84,335	Cash and cash equivalents	$	94,632	$	88,562
Short term investment						Short term investment	1,000		—
Accounts receivable, net	Accounts receivable, net	55,151		58,265		Accounts receivable, net	57,240		60,068
Inventories:	Inventories:					Inventories:
Raw materials	Raw materials	31,036		25,464		Raw materials	34,952		31,852
Work in process	Work in process	27,903		23,851		Work in process	28,368		26,401
Finished goods	Finished goods	26,384		27,112		Finished goods	27,088		26,407
Inventories, net	Inventories, net	85,323		76,427		Inventories, net	90,408		84,660

Prepaid expenses and other current assets	Prepaid expenses and other current assets	16,160		15,916		Prepaid expenses and other current assets	16,454		18,516

Total current assets	Total current assets	236,544		234,943		Total current assets	259,734		251,806

Property and equipment:	Property and equipment:					Property and equipment:
Land	Land	4,029		4,241		Land	4,104		4,117
Buildings and improvements	Buildings and improvements	69,769		68,778		Buildings and improvements	71,379		71,613
Machinery and equipment	Machinery and equipment	122,412		122,202		Machinery and equipment	126,582		125,301
Software	Software	9,136		8,871		Software	9,141		9,539
Construction in progress	Construction in progress	6,364		7,747		Construction in progress	10,872		10,075
Accumulated depreciation	Accumulated depreciation	(129,225)		(130,619)		Accumulated depreciation	(135,366)		(133,518)
Property and equipment, net	Property and equipment, net	82,485		81,220		Property and equipment, net	86,712		87,127

Goodwill	Goodwill	45,460		45,830		Goodwill	45,579		45,544
Intangible assets, net	Intangible assets, net	49,081		52,437		Intangible assets, net	45,492		48,217
Operating lease right-of-use assets	Operating lease right-of-use assets	24,737		27,764		Operating lease right-of-use assets	27,440		24,342
Other assets	Other assets	15,890		19,695		Other assets	19,349		19,706
Total assets	Total assets	$	454,197	$	461,889	Total assets	$	484,306	$	476,742

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)
							September 30, 2023		December 31, 2022
		October 1, 2022		December 31, 2021
Liabilities and equity	Liabilities and equity	(Unaudited)				Liabilities and equity	(Unaudited)
Current liabilities:	Current liabilities:					Current liabilities:
Trade accounts payable	Trade accounts payable	$	10,234	$	14,876	Trade accounts payable	$	11,875	$	13,792
Payroll and related expenses	Payroll and related expenses	20,658		23,772		Payroll and related expenses	18,169		21,966
Other accrued expenses	Other accrued expenses	21,863		17,596		Other accrued expenses	24,077		20,306
Income taxes	Income taxes	818		3,774		Income taxes	1,774		4,064
Current portion of operating lease liabilities	Current portion of operating lease liabilities	4,119		4,610		Current portion of operating lease liabilities	3,814		4,208

Total current liabilities	Total current liabilities	57,692		64,628		Total current liabilities	59,709		64,336

Long-term debt, less current portion	Long-term debt, less current portion	60,780		60,714		Long-term debt, less current portion	53,827		60,799
Deferred income taxes	Deferred income taxes	4,585		5,848		Deferred income taxes	4,098		4,212
Operating lease liabilities	Operating lease liabilities	20,422		25,140		Operating lease liabilities	22,587		20,043
Other liabilities	Other liabilities	13,959		16,264		Other liabilities	12,900		13,053
Accrued pension and other postretirement costs	Accrued pension and other postretirement costs	10,259		12,253		Accrued pension and other postretirement costs	7,028		7,777
Total liabilities	Total liabilities	167,697		184,847		Total liabilities	160,149		170,220

Commitments and contingencies

Equity:	Equity:					Equity:
Common stock	Common stock	1,325		1,322		Common stock	1,330		1,325
Class B convertible common stock	Class B convertible common stock	103		103		Class B convertible common stock	103		103
Treasury stock	Treasury stock	(9,826)		(8,765)		Treasury stock	(12,700)		(11,504)
Capital in excess of par value	Capital in excess of par value	200,308		199,151		Capital in excess of par value	202,267		201,164
Retained earnings	Retained earnings	147,525		120,296		Retained earnings	177,839		156,359
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(52,995)		(35,008)		Accumulated other comprehensive loss	(44,729)		(40,900)
Total Vishay Precision Group, Inc. stockholders' equity	Total Vishay Precision Group, Inc. stockholders' equity	286,440		277,099		Total Vishay Precision Group, Inc. stockholders' equity	324,110		306,547
Noncontrolling interests	Noncontrolling interests	60		(57)		Noncontrolling interests	47		(25)
Total equity	Total equity	286,500		277,042		Total equity	324,157		306,522
Total liabilities and equity	Total liabilities and equity	$	454,197	$	461,889	Total liabilities and equity	$	484,306	$	476,742

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 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022
Net revenues	Net revenues	$	90,057	$	81,974	Net revenues	$	85,854	$	90,057
Costs of products sold	Costs of products sold	52,737		50,129		Costs of products sold	49,919		52,737
Gross profit	Gross profit	37,320		31,845		Gross profit	35,935		37,320

Selling, general, and administrative expenses	Selling, general, and administrative expenses	25,271		24,580		Selling, general, and administrative expenses	26,558		25,271

Restructuring costs	Restructuring costs	165		—		Restructuring costs	1,153		165
Operating income	Operating income	11,884		7,265		Operating income	8,224		11,884

Other income (expense):	Other income (expense):					Other income (expense):
Interest expense	Interest expense	(636)		(328)		Interest expense	(1,119)		(636)
Other	Other	1,223		174		Other	1,671		1,223
Other income (expense)		587		(154)
Other income						Other income	552		587

Income before taxes	Income before taxes	12,471		7,111		Income before taxes	8,776		12,471

Income tax expense	Income tax expense	2,323		1,662		Income tax expense	2,419		2,323

Net earnings	Net earnings	10,148		5,449		Net earnings	6,357		10,148
Less: net earnings attributable to noncontrolling interests	Less: net earnings attributable to noncontrolling interests	30		70		Less: net earnings attributable to noncontrolling interests	77		30
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	$	10,118	$	5,379	Net earnings attributable to VPG stockholders	$	6,280	$	10,118

Basic earnings per share attributable to VPG stockholders	Basic earnings per share attributable to VPG stockholders	$	0.74	$	0.39	Basic earnings per share attributable to VPG stockholders	$	0.46	$	0.74
Diluted earnings per share attributable to VPG stockholders	Diluted earnings per share attributable to VPG stockholders	$	0.74	$	0.39	Diluted earnings per share attributable to VPG stockholders	$	0.46	$	0.74

Weighted average shares outstanding - basic	Weighted average shares outstanding - basic	13,649		13,626		Weighted average shares outstanding - basic	13,600		13,649
Weighted average shares outstanding - diluted	Weighted average shares outstanding - diluted	13,708		13,664		Weighted average shares outstanding - diluted	13,686		13,708

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 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022
Net revenues	Net revenues	$	266,340	$	227,902	Net revenues	$	265,520	$	266,340
Costs of products sold	Costs of products sold	156,436		137,637		Costs of products sold	153,674		156,436
Gross profit	Gross profit	109,904		90,265		Gross profit	111,846		109,904

Selling, general, and administrative expenses	Selling, general, and administrative expenses	77,824		69,216		Selling, general, and administrative expenses	80,472		77,824
Acquisition costs		—		1,198
Impairment of goodwill and indefinite-lived intangibles		—		1,223

Restructuring costs	Restructuring costs	1,330		—		Restructuring costs	1,431		1,330
Operating income	Operating income	30,750		18,628		Operating income	29,943		30,750
Other income (expense):	Other income (expense):					Other income (expense):
Interest expense	Interest expense	(1,393)		(906)		Interest expense	(3,195)		(1,393)
Other	Other	5,006		421		Other	2,965		5,006
Other income (expense)	Other income (expense)	3,613		(485)		Other income (expense)	(230)		3,613

Income before taxes	Income before taxes	34,363		18,143		Income before taxes	29,713		34,363

Income tax expense	Income tax expense	6,651		3,688		Income tax expense	8,023		6,651

Net earnings	Net earnings	27,712		14,455		Net earnings	21,690		27,712
Less: net earnings attributable to noncontrolling interests	Less: net earnings attributable to noncontrolling interests	483		195		Less: net earnings attributable to noncontrolling interests	210		483
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	$	27,229	$	14,260	Net earnings attributable to VPG stockholders	$	21,480	$	27,229

Basic earnings per share attributable to VPG stockholders	Basic earnings per share attributable to VPG stockholders	$	2.00	$	1.05	Basic earnings per share attributable to VPG stockholders	$	1.58	$	2.00

Diluted earnings per share attributable to VPG stockholders	Diluted earnings per share attributable to VPG stockholders	$	1.99	$	1.04	Diluted earnings per share attributable to VPG stockholders	$	1.57	$	1.99

Weighted average shares outstanding - basic	Weighted average shares outstanding - basic	13,645		13,612		Weighted average shares outstanding - basic	13,596		13,645

Weighted average shares outstanding - diluted	Weighted average shares outstanding - diluted	13,692		13,647		Weighted average shares outstanding - diluted	13,670		13,692

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 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022
Net earnings	Net earnings	$	10,148	$	5,449	Net earnings	$	6,357	$	10,148

Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:					Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	Foreign currency translation adjustment	(8,479)		(2,116)		Foreign currency translation adjustment	(3,653)		(8,479)
Pension and other postretirement actuarial items	Pension and other postretirement actuarial items	65		113		Pension and other postretirement actuarial items	—		65
Other comprehensive loss	Other comprehensive loss	(8,414)		(2,003)		Other comprehensive loss	(3,653)		(8,414)

Comprehensive income	Comprehensive income	1,734		3,446		Comprehensive income	2,704		1,734

Less: comprehensive income attributable to noncontrolling interests	Less: comprehensive income attributable to noncontrolling interests	30		70		Less: comprehensive income attributable to noncontrolling interests	77		30

Comprehensive income attributable to VPG stockholders	Comprehensive income attributable to VPG stockholders	$	1,704	$	3,376	Comprehensive income attributable to VPG stockholders	$	2,627	$	1,704

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 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022
Net earnings	Net earnings	$	27,712	$	14,455	Net earnings	$	21,690	$	27,712

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	(18,214)		(3,309)		Foreign currency translation adjustment	(3,831)		(18,214)
Pension and other postretirement actuarial items, net of tax		227		431
Pension and other postretirement actuarial items						Pension and other postretirement actuarial items	2		227
Other comprehensive loss	Other comprehensive loss	(17,987)		(2,878)		Other comprehensive loss	(3,829)		(17,987)

Comprehensive income	Comprehensive income	9,725		11,577		Comprehensive income	17,861		9,725

Less: comprehensive income attributable to noncontrolling interests	Less: comprehensive income attributable to noncontrolling interests	483		195		Less: comprehensive income attributable to noncontrolling interests	210		483

Comprehensive income attributable to VPG stockholders	Comprehensive income attributable to VPG stockholders	$	9,242	$	11,382	Comprehensive income attributable to VPG stockholders	$	17,651	$	9,242

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 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022
Operating activities	Operating activities					Operating activities
Net earnings	Net earnings	$	27,712	$	14,455	Net earnings	$	21,690	$	27,712
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		—		1,223

Depreciation and amortization	Depreciation and amortization	11,519		11,033		Depreciation and amortization	11,559		11,519

Gain on sale of property and equipment	Gain on sale of property and equipment	(182)		(35)		Gain on sale of property and equipment	38		(182)
Reclassification of foreign currency translation adjustment related to disposal of subsidiary	Reclassification of foreign currency translation adjustment related to disposal of subsidiary	191		—		Reclassification of foreign currency translation adjustment related to disposal of subsidiary	—		191
Share-based compensation expense	Share-based compensation expense	1,583		1,328		Share-based compensation expense	1,885		1,583
Inventory write-offs for obsolescence	Inventory write-offs for obsolescence	1,451		1,613		Inventory write-offs for obsolescence	1,567		1,451
Deferred income taxes	Deferred income taxes	(72)		(1,412)		Deferred income taxes	691		(72)
Other		(4,319)		(2,022)
Foreign currency impacts and other items						Foreign currency impacts and other items	(2,755)		(3,550)
Net changes in operating assets and liabilities:	Net changes in operating assets and liabilities:					Net changes in operating assets and liabilities:
Accounts receivable, net		(2,077)		(3,078)
Inventories, net		(14,151)		(9,624)

Accounts receivable						Accounts receivable	1,604		(2,077)
Inventories						Inventories	(7,811)		(14,151)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(984)		(3,591)		Prepaid expenses and other current assets	1,990		(984)
Trade accounts payable	Trade accounts payable	(1,459)		3,695		Trade accounts payable	(1,151)		(1,459)
Other current liabilities	Other current liabilities	1,303		4,496		Other current liabilities	(1,082)		1,303
Other non current assets and liabilities, net						Other non current assets and liabilities, net	(170)		(326)
Accrued pension and other postretirement costs, net						Accrued pension and other postretirement costs, net	(945)		(443)
Net cash provided by operating activities	Net cash provided by operating activities	20,515		18,081		Net cash provided by operating activities	27,110		20,515

Investing activities	Investing activities					Investing activities
Capital expenditures	Capital expenditures	(15,545)		(11,191)		Capital expenditures	(9,848)		(15,545)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	397		181		Proceeds from sale of property and equipment	50		397
Purchase of short term investment						Purchase of short term investment	(1,000)		—

Purchase of business, net of cash acquired		—		(47,216)
Net cash used in investing activities	Net cash used in investing activities	(15,148)		(58,226)		Net cash used in investing activities	(10,798)		(15,148)

Financing activities	Financing activities					Financing activities

Principal payments on long-term debt		—		(18)

Proceeds from revolving facility		—		20,000

Payments on revolving facility						Payments on revolving facility	(7,000)		—

Purchase of treasury stock	Purchase of treasury stock	(1,061)		—		Purchase of treasury stock	(1,196)		(1,061)

Distributions to noncontrolling interests	Distributions to noncontrolling interests	(366)		(244)		Distributions to noncontrolling interests	(138)		(366)
Payments of employee taxes on certain share-based arrangements	Payments of employee taxes on certain share-based arrangements	(435)		(853)		Payments of employee taxes on certain share-based arrangements	(825)		(435)
Net cash (used in) provided by financing activities		(1,862)		18,885
Net cash used in financing activities						Net cash used in financing activities	(9,159)		(1,862)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(7,930)		(1,634)		Effect of exchange rate changes on cash and cash equivalents	(1,083)		(7,930)
Decrease in cash and cash equivalents		(4,425)		(22,894)
Increase (decrease) in cash and cash equivalents						Increase (decrease) in cash and cash equivalents	6,070		(4,425)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	84,335		98,438		Cash and cash equivalents at beginning of period	88,562		84,335
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	79,910	$	75,544	Cash and cash equivalents at end of period	$	94,632	$	79,910

Supplemental disclosure of investing transactions:	Supplemental disclosure of investing transactions:					Supplemental disclosure of investing transactions:
Capital expenditures purchased		$	(13,198)	$	(9,368)
Capital expenditures accrued but not yet paid	Capital expenditures accrued but not yet paid	$	720	$	738	Capital expenditures accrued but not yet paid	$	1,204	$	720

See accompanying notes.

-9-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Equity

(Unaudited - In thousands, except share amounts)


		Fiscal quarter ended October 1, 2022																			Fiscal quarter ended September 30, 2023
		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 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
Balance at July 1, 2023																				Balance at July 1, 2023	$	1,330	$	103	$	(11,924)	$	201,611	$	171,559	$	(41,076)	$	321,603	$	62	$	321,665
Net earnings	Net earnings	—		—		—		—		10,118		—		10,118		30		10,148		Net earnings	—		—		—		—		6,280		—		6,280		77		6,357
Other comprehensive loss	Other comprehensive loss	—		—		—		—		—		(8,414)		(8,414)		—		(8,414)		Other comprehensive loss	—		—		—		—		—		(3,653)		(3,653)		—		(3,653)
Share-based compensation expense	Share-based compensation expense	—		—		—		559		—		—		559		—		559		Share-based compensation expense	—		—		—		656		—		—		656		—		656

Purchase of treasury stock. (32,601 shares)		—		—		(1,061)		—		—		—		(1,061)		—		(1,061)
Purchase of treasury stock. (22,894 shares)																				Purchase of treasury stock. (22,894 shares)	—		—		(776)		—		—		—		(776)		—		(776)

Distributions to noncontrolling interests	Distributions to noncontrolling interests	—		—		—		—		—		—		—		(82)		(82)		Distributions to noncontrolling interests	—		—		—		—		—		—		—		(92)		(92)
Balance at October 1, 2022		$	1,325	$	103	$	(9,826)	$	200,308	$	147,525	$	(52,995)	$	286,440	$	60	$	286,500
Balance at September 30, 2023																				Balance at September 30, 2023	$	1,330	$	103	$	(12,700)	$	202,267	$	177,839	$	(44,729)	$	324,110	$	47	$	324,157

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)
Distribution 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 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)


Distribution 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

See accompanying notes.

-10-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Equity

(Unaudited - In thousands, except share amounts)


		Nine Fiscal Months Ended October 1, 2022																			Nine Fiscal Months Ended September 30, 2023
		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 Loss		Total VPG Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2021		$	1,322	$	103	$	(8,765)	$	199,151	$	120,296	$	(35,008)	$	277,099	$	(57)	$	277,042
Balance at December 31, 2022																				Balance at December 31, 2022	$	1,325	$	103	$	(11,504)	$	201,164	$	156,359	$	(40,900)	$	306,547	$	(25)	$	306,522
Net earnings	Net earnings	—		—		—		—		27,229		—		27,229		483		27,712		Net earnings	—		—		—		—		21,480		—		21,480		210		21,690
Other comprehensive loss	Other comprehensive loss	—		—		—		—		—		(17,987)		(17,987)		—		(17,987)		Other comprehensive loss	—		—		—		—		—		(3,829)		(3,829)		—		(3,829)
Share-based compensation expense	Share-based compensation expense	—		—		—		1,583		—		—		1,583		—		1,583		Share-based compensation expense	—		—		—		1,885		—		—		1,885		—		1,885
Restricted stock issuances (28,368 shares)		3		—		—		(426)		—		—		(423)		—		(423)
Restricted stock issuances (47,189 shares)																				Restricted stock issuances (47,189 shares)	5		—		—		(782)		—		—		(777)		—		(777)

Purchase of treasury stock (32,601 shares)		—		—		(1,061)		—		—		—		(1,061)		—		(1,061)
Purchase of treasury stock (35,206 shares)																				Purchase of treasury stock (35,206 shares)	—		—		(1,196)		—		—		—		(1,196)		—		(1,196)

Distributions to noncontrolling interests	Distributions to noncontrolling interests	—		—		—		—		—		—		—		(366)		(366)		Distributions to noncontrolling interests	—		—		—		—		—		—		—		(138)		(138)
Balance at October 1, 2022		$	1,325	$	103	$	(9,826)	$	200,308	$	147,525	$	(52,995)	$	286,440	$	60	$	286,500
Balance at September 30, 2023																				Balance at September 30, 2023	$	1,330	$	103	$	(12,700)	$	202,267	$	177,839	$	(44,729)	$	324,110	$	47	$	324,157


		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 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)

Distribution to noncontrolling interests	Distribution to noncontrolling interests	—		—		—		—		—		—		—		(244)		(244)		Distribution 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

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 a global, diversified company focused on precision measurement and sensing technologies ~~including~~that help power the future by bridging the physical world with the digital one. Many of our specialized sensors, weighing solutions, and measurement ~~systems. Many of our precision measurement sensing products and solutions~~systems are “designed-in” by our customers, and address growing applications across a diverse array of industries and 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, ~~2021~~2022 and ~~2020~~2021 and for each of the three years in the period ended December 31, ~~2021,~~2022, included in VPG’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, filed with the SEC on March ~~4, 2022.~~1, 2023. The results of operations for the fiscal quarter ended ~~October 1, 2022~~September 30, 2023 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 ~~2022~~2023 and ~~2021~~2022 end on the following dates:

2022

2021

2023

2022

Quarter 1

April 2,

April 3,

Quarter 1

April 1,

April 2,

Quarter 2

July 2,

July 3,

Quarter 2

July 1,

July 2,

Quarter 3

October 1,

October 2,

Quarter 3

September 30,

October 1,

Quarter 4

December 31,

Quarter 4

December 31,

Reclassifications

Certain prior year amounts have been reclassified to conform to the current financial statement presentation.

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 1, 2022								Fiscal quarter ended October 2, 2021									Fiscal quarter ended September 30, 2023								Fiscal quarter ended October 1, 2022
		Sensors		Weighing Solutions		Measurement Systems		Total		Sensors		Weighing Solutions		Measurement Systems		Total			Sensors		Weighing Solutions		Measurement Systems		Total		Sensors		Weighing Solutions		Measurement Systems		Total
United States	United States	$	12,992	$	14,671	$	13,065	$	40,728	$	9,640	$	12,729	$	13,914	$	36,283	United States	$	11,860	$	12,622	$	15,520	$	40,002	$	12,992	$	14,671	$	13,065	$	40,728
United Kingdom	United Kingdom	752		4,090		55		4,897		746		4,366		129		5,241		United Kingdom	1,119		4,128		90		5,337		752		4,090		55		4,897
Other Europe	Other Europe	7,740		8,714		986		17,440		6,063		9,681		1,194		16,938		Other Europe	7,176		9,077		703		16,956		7,740		8,714		986		17,440
Israel	Israel	7,447		101		—		7,548		4,711		232		—		4,943		Israel	4,773		89		—		4,862		7,447		101		—		7,548
Asia	Asia	8,948		3,815		2,462		15,225		9,561		3,668		1,933		15,162		Asia	7,604		3,054		2,899		13,557		8,948		3,815		2,462		15,225
Canada	Canada	—		8		4,211		4,219		—		—		3,407		3,407		Canada	—		—		5,140		5,140		—		8		4,211		4,219
Total	Total	$	37,879	$	31,399	$	20,779	$	90,057	$	30,721	$	30,676	$	20,577	$	81,974	Total	$	32,532	$	28,970	$	24,352	$	85,854	$	37,879	$	31,399	$	20,779	$	90,057

		Nine Fiscal Months Ended October 1, 2022								Nine Fiscal Months Ended October 2, 2021									Nine Fiscal Months Ended September 30, 2023								Nine Fiscal Months Ended October 1, 2022
		Sensors		Weighing Solutions		Measurement Systems		Total		Sensors		Weighing Solutions		Measurement Systems		Total			Sensors		Weighing Solutions		Measurement Systems		Total		Sensors		Weighing Solutions		Measurement Systems		Total
United States	United States	$	39,467	$	41,212	$	34,838	$	115,517	$	28,783	$	38,241	$	24,771	$	91,795	United States	$	39,089	$	40,729	$	39,053	$	118,871	$	39,467	$	41,212	$	34,838	$	115,517
United Kingdom	United Kingdom	2,562		12,283		514		15,359		2,350		13,141		525		16,016		United Kingdom	2,845		11,961		261		15,067		2,562		12,283		514		15,359
Other Europe	Other Europe	23,556		28,065		3,985		55,606		19,640		29,511		1,916		51,067		Other Europe	25,134		29,144		5,109		59,387		23,556		28,065		3,985		55,606
Israel	Israel	22,828		401		—		23,229		16,436		623		—		17,059		Israel	12,867		215		—		13,082		22,828		401		—		23,229
Asia	Asia	27,496		10,657		4,283		42,436		26,503		11,794		3,815		42,112		Asia	25,589		10,041		6,446		42,076		27,496		10,657		4,283		42,436
Canada	Canada	—		8		14,185		14,193		—		9		9,844		9,853		Canada	—		—		17,037		17,037		—		8		14,185		14,193
Total	Total	$	115,909	$	92,626	$	57,805	$	266,340	$	93,712	$	93,319	$	40,871	$	227,902	Total	$	105,524	$	92,090	$	67,906	$	265,520	$	115,909	$	92,626	$	57,805	$	266,340

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 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Test & Measurement	Test & Measurement	$	20,659	$	15,883	$	60,115	$	46,578	Test & Measurement	$	17,080	$	20,659	$	54,449	$	60,115
Avionics, Military & Space	Avionics, Military & Space	6,523		7,542		21,563		19,444		Avionics, Military & Space	8,294		6,523		28,285		21,563
Transportation	Transportation	13,912		13,668		41,061		35,152		Transportation	15,490		13,912		40,993		41,061
Other Markets	Other Markets	20,110		17,453		59,295		52,487		Other Markets	16,402		20,110		54,124		59,295
Industrial Weighing	Industrial Weighing	12,473		12,254		38,626		36,301		Industrial Weighing	10,533		12,473		33,586		38,626
General Industrial	General Industrial	4,981		4,069		16,172		12,324		General Industrial	4,643		4,981		14,858		16,172
Steel	Steel	11,399		11,105		29,508		25,616		Steel	13,412		11,399		39,225		29,508

Total	Total	$	90,057	$	81,974	$	266,340	$	227,902	Total	$	85,854	$	90,057	$	265,520	$	266,340

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, 2021 $ 3,570 $ 4,765
Balance at October 1, 2022 3,621 8,867
Increase $ 51 $ 4,102


	Contract Asset		Contract Liability
	Unbilled Revenue		Accrued Customer Advances
Balance at December 31, 2022	$	3,990	$	7,983
Balance at September 30, 2023	3,449		8,766
(Decrease) increase	$	(541)	$	783

The amount of revenue recognized during the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 that was included in the contract liability balance at December 31, ~~2021~~2022 was $~~3.2~~7.3 million.

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. 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 Measurement Systems segment. The following table summarizes the final fair values assigned to the assets and liabilities of DTS as of June 1, 2021 (in thousands):


	~~June 1, 2021~~
~~Working capital~~	$	~~12,494~~
~~Property and equipment~~	~~1,209~~
~~Deferred income tax liability~~	~~(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~~	~~31,183~~
~~Purchase price~~	$	~~47,216~~
~~Goodwill~~	$	~~16,033~~

The Company utilizes certain valuations and studies to determine the fair value of the tangible and intangible assets acquired. The 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 is deductible for income tax purposes. The Company recorded acquisition costs associated with this transaction of $1.2 million in the second quarter of 2021, which included legal fees, appraisal fees, investments banker fees and insurance costs.

Included in the results of the operations of the Company for the fiscal quarter ended October 1, 2022, are net revenues of $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 1, 2022 are net revenues of $22.5 million from DTS and a net loss of $0.3 million from DTS. DTS results include amortization of the inventory step-up of $1.3 million and amortization of intangible assets of $1.1 million for the nine fiscal months ended October 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, 2021:~~

~~-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

The Company tests the goodwill in each of its goodwill reporting units for impairment at least annually, as of the first day of its fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have been incurred.

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

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


	Total		Measurement Systems						Weighing Solutions
			KELK Acquisition		DSI Acquisition		DTS Acquisition		Stress-Tek Acquisition
Balance at December 31, 2022	$	45,544	$	6,313	$	16,887	$	16,033	$	6,311


Foreign currency translation adjustment	35		39		(4)		—		—
Balance at September 30, 2023	$	45,579	$	6,352	$	16,883	$	16,033	$	6,311

Note 54 – Leases

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

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


Leases	Leases	October 1, 2022		December 31, 2021		Leases	September 30, 2023		December 31, 2022
Assets	Assets					Assets
Operating lease right of use asset	Operating lease right of use asset	$	24,737	$	27,764	Operating lease right of use asset	$	27,440	$	24,342

Liabilities	Liabilities					Liabilities
Operating lease - current	Operating lease - current	$	4,119	$	4,610	Operating lease - current	$	3,814	$	4,208
Operating lease - non-current	Operating lease - non-current	$	20,422	$	25,140	Operating lease - non-current	$	22,587	$	20,043

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


	~~October 1, 2022~~September 30, 2023
Operating leases weighted average remaining lease term (in years)	~~7.94~~8.11 years
Operating leases weighted average discount rate	~~3.12~~4.83	%

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

~~-15-~~-14-

Note 54 - Leases (continued)


		Fiscal quarter ended				Nine Fiscal Months Ended					Fiscal quarter ended				Nine Fiscal Months Ended
		October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Operating lease cost	Operating lease cost	$	1,267	$	1,407	$	3,876	$	3,847	Operating lease cost	$	1,331	$	1,267	$	3,822	$	3,876
Short-term lease cost	Short-term lease cost	30		30		72		98		Short-term lease cost	24		30		115		72
Sublease income	Sublease income	(104)		(78)		(321)		(106)		Sublease income	(95)		(104)		(293)		(321)
Total net lease cost	Total net lease cost	$	1,193	$	1,359	$	3,627	$	3,839	Total net lease cost	$	1,260	$	1,193	$	3,644	$	3,627

Right of use assets obtained in exchange for new operating lease liability during ~~2022~~the nine fiscal months ended September 30, 2023 were ~~$0.7~~$6.4 million. The Company paid ~~$3.9~~$3.8 million and ~~$3.8~~$3.9 million for its operating leases for each of the nine fiscal months ended September 30, 2023 and October 1, 2022, ~~and October 2, 2021,~~ which are included in operating cash flows on the consolidated condensed statements of cash flows.

Undiscounted maturities of operating lease payments as of ~~October 1, 2022~~September 30, 2023 are summarized as follows (in thousands):


2022 (excluding the nine months ended October 1, 2022)		$	1,172
2023		4,432
2023 (excluding the nine months ended September 30, 2023)				2023 (excluding the nine months ended September 30, 2023)	$	1,259
2024	2024	3,809		2024	4,586
2025	2025	3,223		2025	4,197
2026	2026	2,886		2026	3,568
2027				2027	3,363
Thereafter	Thereafter	12,123		Thereafter	14,926
Total future minimum lease payments	Total future minimum lease payments	$	27,645	Total future minimum lease payments	$	31,899
Less: amount representing interest	Less: amount representing interest	(3,104)		Less: amount representing interest	(5,498)
Present value of future minimum lease payments	Present value of future minimum lease payments	$	24,541	Present value of future minimum lease payments	$	26,401

Note 65 – 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 was 27.6% and 18.6% for the fiscal quarter ended September 30, 2023, and October 1, 2022, respectively. The effective tax rate for the fiscal quarter ended September 30, 2023 differs from the federal statutory rate of 21% due to foreign income taxed at different tax rates and changes in our valuation allowance on deferred tax assets. The effective tax rate for the fiscal quarter ended October 1, 2022 ~~was 18.6% compared~~differs from the federal statutory rate of 21% due to ~~23.4% for the fiscal quarter ended October 2, 2021. The effective~~foreign income taxed at different tax ~~rate for the nine fiscal months ended October 1, 2022 was 19.4% compared to 20.3% for the nine fiscal months ended October 2, 2021.~~rates and changes 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.

Note 76 – Long-Term Debt

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


		October 1, 2022		December 31, 2021			September 30, 2023		December 31, 2022
2020 Credit Agreement - Revolving Facility	2020 Credit Agreement - Revolving Facility	$	61,000	$	61,000	2020 Credit Agreement - Revolving Facility	$	54,000	$	61,000

Deferred financing costs	Deferred financing costs	(220)		(286)		Deferred financing costs	(173)		(201)
Total long-term debt	Total long-term debt	$	60,780	$	60,714	Total long-term debt	$	53,827	$	60,799

~~-16-~~-15-

Note 6 - Long-Term Debt (continued)

Wells Fargo Bank, National Association as joint lead arrangers and JPMorgan Chase Bank, National Association as agent for such lenders. The Credit Agreement Amendment amends the Third Amended and Restated Credit Agreement, dated March 20, 2020, by and 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 primary purpose of the changes made in the Credit Agreement Amendment were to update the interest rate provisions to replace LIBOR with SOFR for U.S. dollar denominated loans as well as update the other applicable reference borrowing rates for foreign currency loans which took effect on June 15, 2023. There was no material impact in interest expense or the loan balance as a result of the rate change.

Note 87 – 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			Foreign Currency Translation Adjustment		Pension and Other Postretirement Actuarial Items		Total
Balance at January 1, 2022		$	(30,276)	$	(4,732)	$	(35,008)
Balance at January 1, 2023								Balance at January 1, 2023	$	(41,489)	$	589	$	(40,900)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	(18,405)		—		(18,405)		Other comprehensive loss before reclassifications	(3,831)		—		(3,831)
Amounts reclassified from accumulated other comprehensive income	Amounts reclassified from accumulated other comprehensive income	191		227		418		Amounts reclassified from accumulated other comprehensive income	—		2		2
Balance at October 1, 2022		$	(48,490)	$	(4,505)	$	(52,995)
Balance at September 30, 2023								Balance at September 30, 2023	$	(45,320)	$	591	$	(44,729)


		Foreign Currency Translation Adjustment		Pension and Other Postretirement Actuarial Items		Total			Foreign Currency Translation Adjustment		Pension and Other Postretirement Actuarial Items		Total
Balance at January 1, 2021		$	(25,591)	$	(7,080)	$	(32,671)
Balance at January 1, 2022								Balance at January 1, 2022	$	(30,276)	$	(4,732)	$	(35,008)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	(3,309)		—		(3,309)		Other comprehensive loss before reclassifications	(18,405)		—		(18,405)
Amounts reclassified from accumulated other comprehensive income	Amounts reclassified from accumulated other comprehensive income	—		431		431		Amounts reclassified from accumulated other comprehensive income	191		227		418
Balance at October 2, 2021		$	(28,900)	$	(6,649)	$	(35,549)
Balance at October 1, 2022								Balance at October 1, 2022	$	(48,490)	$	(4,505)	$	(52,995)

Reclassification of foreign currency translation adjustment for the loss on liquidation of subsidiaries is included in other income and expense other (see Note ~~13)~~12). 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)8).

Note 98 – 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):

~~-17-~~-16-

Note 98 - Pension and Other Postretirement Benefits ( continued)


		Fiscal quarter ended October 1, 2022				Fiscal quarter ended October 2, 2021					Fiscal quarter ended September 30, 2023				Fiscal quarter ended October 1, 2022
		Pension Plans		OPEB Plans		Pension Plans		OPEB Plans			Pension Plans		OPEB Plans		Pension Plans		OPEB Plans
Net service cost	Net service cost	$	79	$	7	$	96	$	9	Net service cost	$	67	$	4	$	79	$	7
Interest cost	Interest cost	117		17		102		17		Interest cost	193		28		117		17
Expected return on plan assets	Expected return on plan assets	(116)				(97)		—		Expected return on plan assets	(216)				(116)		—
Amortization of actuarial losses		69		1		102		5
Amortization of actuarial losses (gains)										Amortization of actuarial losses (gains)	7		(6)		69		1
Net periodic benefit cost	Net periodic benefit cost	$	149	$	25	$	203	$	31	Net periodic benefit cost	$	51	$	26	$	149	$	25

											Nine Fiscal Months Ended September 30, 2023				Nine Fiscal Months Ended October 1, 2022
											Pension Plans		OPEB Plans		Pension Plans		OPEB Plans
Net service cost										Net service cost	$	204	$	12	$	244	$	21
Interest cost										Interest cost	$	575	$	84	$	360	$	51
Expected return on plan assets										Expected return on plan assets	$	(642)	$	—	$	(358)	$	—
Amortization of actuarial losses (gains)										Amortization of actuarial losses (gains)	$	22	$	(18)	$	215	$	3
Net periodic benefit cost										Net periodic benefit cost	$	159	$	78	$	461	$	75

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

Note 109 – Share-Based Compensation

~~On May 26, 2022, the Company’s stockholders voted to approve the adoption of the~~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 (the "previous plan"). The 2022 plan~~ permits issuance of up to 608,000 shares of common 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.stock. At ~~October 1, 2022,~~September 30, 2023, the Company had reserved ~~590,034~~525,239 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the 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 3, 2022~~February 28, 2023 and in accordance with their respective employment agreements, VPG’s three 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 ~~$1.5~~$1.9 million and were comprised of ~~47,831~~43,243 RSUs. Fifty percent of these awards will vest on January 1, ~~2025,~~2026, subject to the executives’ continued employment. The performance-based portion of the RSUs will also vest on January 1, ~~2025,~~2026, 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 9, ~~2022,~~2023, 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 ~~$0.5~~$0.6 million and were comprised of ~~16,324~~14,338 RSUs. The non-performance portion of these awards (twenty-five percent for certain employees and fifty percent for certain employees) will vest on January 1, ~~2025~~2026, subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, ~~2025,~~2026, 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 ~~26, 2022, the date of the 2022 Annual Stockholders Meeting.~~

~~-18-~~

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

~~On May 26, 2022~~24, 2023, and in accordance with the Company's 2017 Non-Employee Director Compensation Plan, the Board of Directors approved the issuance of an aggregate of ~~16,534~~13,923 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 $0.5 million and will vest on the earlier of the ~~2023~~2024 Annual Stockholders Meeting or May ~~26, 2023,~~24, 2024, subject to ~~the directors'~~each applicable director's 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.

-17-

Note 9 - 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 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
Restricted stock units $ 559 $ 386 $ 1,583 $ 1,328


	Fiscal quarter ended				Nine fiscal months ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Share-based compensation expense	$	656	$	559	$	1,885	$	1,583

During the second quarter of 2023, a net adjustment of $0.1 million decreasing share-based compensation expense was recorded based on the evaluation of performance objectives associated with awards granted in 2021 and 2022. It was determined that certain objectives were not likely to be fully met necessitating a reversal of certain compensation expenses associated with those awards. The result of the evaluation of performance objectives as of the end of the third quarter of 2023 was consistent with the prior quarter's evaluation and therefore there was no further adjustment required during the third quarter of 2023.

Note 1110 – Segment Information

VPG reports in three product segments: the Sensors segment, the Weighing Solutions segment, and the Measurement Systems segment. The Sensors reporting segment is comprised of the foil resistor and strain gage operating segments. The Weighing Solutions segment is comprised of specialized modules and systems used to precisely measure weight, force torque, and pressure. The Measurement Systems reporting segment is comprised of highly specialized systems for steel production, materials development, and safety testing.

The chief operating decision maker ("CODM") is our chief executive officer. The CODM evaluates each operating segment's performance. The evaluation of the segment's performance is based on multiple performance measures including 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 they relate to occurrences or events that are outside of our core operations, and management believes that the use of these measures provides a consistent basis to evaluate our operating 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):

~~-19-~~-18-

Note 1110 - Segment Information (continued)


		Fiscal quarter ended				Nine fiscal months ended					Fiscal quarter ended				Nine fiscal months ended
		October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Net revenues:	Net revenues:									Net revenues:
Sensors	Sensors	$	37,879	$	30,721	$	115,909	$	93,712	Sensors	$	32,532	$	37,879	$	105,524	$	115,909
Weighing Solutions	Weighing Solutions	31,399		30,676		92,626		93,319		Weighing Solutions	28,970		31,399		92,090		92,626
Measurement Systems	Measurement Systems	20,779		20,577		57,805		40,871		Measurement Systems	24,352		20,779		67,906		57,805
Total	Total	$	90,057	$	81,974	$	266,340	$	227,902	Total	$	85,854	$	90,057	$	265,520	$	266,340

Gross profit:	Gross profit:									Gross profit:
Sensors	Sensors	$	15,324	$	9,568	$	47,441	$	34,521	Sensors	$	11,681	$	15,324	$	41,374	$	47,441
Weighing Solutions	Weighing Solutions	10,470		11,422		32,134		34,988		Weighing Solutions	11,207		10,470		34,443		32,134
Measurement Systems	Measurement Systems	11,526		10,855		30,329		20,756		Measurement Systems	13,047		11,526		36,029		30,329
Total	Total	$	37,320	$	31,845	$	109,904	$	90,265	Total	$	35,935	$	37,320	$	111,846	$	109,904

Reconciliation of segment operating income to consolidated results:	Reconciliation of segment operating income to consolidated results:									Reconciliation of segment operating income to consolidated results:
Sensors	Sensors	$	10,703	$	5,070	$	32,721	$	20,217	Sensors	$	6,543	$	10,703	$	26,043	$	32,721
Weighing Solutions	Weighing Solutions	5,392		5,917		15,783		17,831		Weighing Solutions	5,393		5,392		16,894		15,783
Measurement Systems	Measurement Systems	4,876		4,659		10,350		7,046		Measurement Systems	5,605		4,876		14,246		10,350
Unallocated G&A expenses	Unallocated G&A expenses	(8,922)		(8,381)		(26,774)		(24,045)		Unallocated G&A expenses	(8,164)		(8,922)		(25,809)		(26,774)
Acquisition costs		—		—		—		(1,198)
Impairment of goodwill and indefinite-lived intangibles		—		—		—		(1,223)

Restructuring costs	Restructuring costs	(165)		—		(1,330)		—		Restructuring costs	(1,153)		(165)		(1,431)		(1,330)
Operating income	Operating income	$	11,884	$	7,265	$	30,750	$	18,628	Operating income	$	8,224	$	11,884	$	29,943	$	30,750

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)	$	—

Restructuring costs:										Restructuring costs:
Sensors										Sensors	$	—	$	(165)	$	—	$	(1,272)
Weighing Solutions										Weighing Solutions	(1,153)		—		(1,349)		—
Measurement Systems										Measurement Systems	—		—		(32)		(58)
Corporate/Other										Corporate/Other	—		—		(50)		—
											$	(1,153)	$	(165)	$	(1,431)	$	(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					Fiscal quarter ended				Nine fiscal months ended
		October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Sensors to Weighing Solutions	Sensors to Weighing Solutions	$	542	$	824	$	1,364	$	2,730	Sensors to Weighing Solutions	$	417	$	542	$	1,178	$	1,364

Sensors to Measurement Systems	Sensors to Measurement Systems	32		51		191		66		Sensors to Measurement Systems	4		32		52		191

~~-20-~~-19-

Note 1211 – 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					Fiscal quarter ended				Nine fiscal months ended
		October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Numerator:	Numerator:									Numerator:
Numerator for basic earnings per share:	Numerator for basic earnings per share:									Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	$	10,118	$	5,379	$	27,229	$	14,260	Net earnings attributable to VPG stockholders	$	6,280	$	10,118	$	21,480	$	27,229

Denominator:	Denominator:									Denominator:
Denominator for basic earnings per share:	Denominator for basic earnings per share:									Denominator for basic earnings per share:
Weighted average shares	Weighted average shares	13,649		13,626		13,645		13,612		Weighted average shares	13,600		13,649		13,596		13,645

Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:

Restricted stock units	Restricted stock units	59		38		47		35		Restricted stock units	86		59		74		47
Dilutive potential common shares	Dilutive potential common shares	59		38		47		35		Dilutive potential common shares	86		59		74		47

Denominator for diluted earnings per share:	Denominator for diluted earnings per share:									Denominator for diluted earnings per share:
Adjusted weighted average shares	Adjusted weighted average shares	13,708		13,664		13,692		13,647		Adjusted weighted average shares	13,686		13,708		13,670		13,692

Basic earnings per share attributable to VPG stockholders	Basic earnings per share attributable to VPG stockholders	$	0.74	$	0.39	$	2.00	$	1.05	Basic earnings per share attributable to VPG stockholders	$	0.46	$	0.74	$	1.58	$	2.00

Diluted earnings per share attributable to VPG stockholders	Diluted earnings per share attributable to VPG stockholders	$	0.74	$	0.39	$	1.99	$	1.04	Diluted earnings per share attributable to VPG stockholders	$	0.46	$	0.74	$	1.57	$	1.99

Note 1312 – 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 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Foreign currency exchange gain (loss)		$	1,261	$	(38)	$	5,195	$	522
Foreign currency exchange gain										Foreign currency exchange gain	$	1,283	$	1,261	$	2,138	$	5,195
Interest income	Interest income	91		151		235		216		Interest income	543		91		1,265		235
Pension expense	Pension expense	(81)		(151)		(261)		(431)		Pension expense	(72)		(81)		(217)		(261)
Other	Other	(48)		212		(163)		114		Other	(83)		(48)		(221)		(163)
		$	1,223	$	174	$	5,006	$	421		$	1,671	$	1,223	$	2,965	$	5,006

~~-21-~~

Foreign currency exchange gains represent the impact of changes in foreign currency exchange rates. For the fiscal quarter and nine fiscal months ended ~~October 1, 2022,~~September 30, 2023, the change in foreign currency exchange gains and losses during the ~~period,~~periods, as compared to the prior year periods, iswas largely due to exposure ofto currency fluctuations with the Israeli shekel, the Canadian dollar, the EURO and the British pound.

-20-

Note 12 – Additional Financial Statement Information ( continued)

For the fiscal quarter and nine fiscal months ended October 1, 2022, the change in foreign exchange gains and losses during the periods, as compared to the prior year periods, was largely due to exposure to currency fluctuations with the Israeli shekel, the Japanese yen, the Canadian dollar, 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.

Included in Other for the nine fiscal months ended October 1, 2022 is a $0.2 million loss on the liquidation of two of the Company's European subsidiaries.

Other Accrued Expenses

Other accrued expenses consist of the following (in thousands):


	September 30, 2023		December 31, 2022
Customer advance payments	$	8,766	$	7,983
Accrued restructuring	911		183
Goods received, not yet invoiced	2,632		2,523
Accrued taxes, other than income taxes	1,829		1,141
Accrued commissions	3,991		3,217
Accrued professional fees	1,847		1,360
Accrued technical warranty	771		740
Current accrued pensions and other post retirement costs	505		505
Other	2,825		2,654
	$	24,077	$	20,306

Note 1413 – 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 1, 2022
September 30, 2023										September 30, 2023
Assets	Assets									Assets
Assets held in rabbi trusts	Assets held in rabbi trusts	$	5,282	$	79	$	5,203	$	—	Assets held in rabbi trusts	$	5,571	$	85	$	5,486	$	—

December 31, 2021
December 31, 2022										December 31, 2022
Assets	Assets									Assets
Assets held in rabbi trusts	Assets held in rabbi trusts	$	6,158	$	49	$	6,109	$	—	Assets held in rabbi trusts	$	5,427	$	53	$	5,374	$	—

-21-

Note 13 – Fair Value Measurements (continued)

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 1, 2022~~September 30, 2023 and December 31, ~~2021,~~2022, and company-owned life insurance assets. The marketable securities 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 1, 2022~~September 30, 2023 and December 31, ~~2021~~2022 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 1514 – 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 either to ~~either~~ record additional expense in future periods or to reverse part of the previously recorded charges.

The Company recorded ~~$0.2~~$1.2 million and ~~$0.0~~$0.2 million of restructuring costs during the fiscal quarter ended September 30, 2023 and October 1, 2022, ~~and October 2, 2021,~~ respectively and ~~$1.3~~$1.4 million and ~~$0.0~~$1.3 million of restructuring costs during the nine fiscal months ended September 30, 2023 and October 1, 2022, ~~and October 2, 2021,~~ respectively. Restructuring costs were comprised primarily of employee termination costs, including severance and statutory retirement allowances, and were incurred in 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 1, 2022~~September 30, 2023 and December 31, ~~2021,~~2022, respectively, is included in Other accrued expenses in the accompanying consolidated condensed balance sheets (in thousands):






Balance at December 31, ~~2021~~2022	$	—183
Restructuring charges in ~~2022~~2023	~~1,330~~1,431

Cash payments	~~(1,338)~~(705)
Foreign currency translation	82
Balance at ~~October 1, 2022~~September 30, 2023	$	—911

Note 1615 – 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~~was originally set to expire on August 11, 2023. On August 8, 2023, ~~and~~ the Company announced that its Board ~~authorized purchases thereunder to be made through an issuer~~of Directors extended the term of the previously approved stock 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.to August 9, 2024. From August 8, 2022 to At September 30, 2023~~October 1, 2022,~~, the Company had repurchased ~~32,601~~an aggregate of 120,419 shares of its common stock under the ~~Stock Repurchase Plan.~~stock repurchase plan for consideration of $3.9 million.

~~-23-~~

-22-

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

Overview

VPG is a global, diversified company focused on precision measurement and sensing technologies ~~including~~that help power the future by bridging the physical world with the digital one. Many of our specialized sensors, weighing solutions, and measurement ~~systems. Many of our precision measurement sensing products and solutions~~systems are “designed-in” by our customers, and address growing applications across a diverse array of industries and 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.

Driven by the continued proliferation of data generated by the expanding use of sensors across a widening array of industrial and non-industrial applications, precision measurement and sensing technologies help ensure and deliver required levels of quality of mission-critical or high-value data. VPG’s products are often at the first stage of a data value chain (i.e., the process of converting the physical world into a digital format that can be used for a specific purpose) and as such impact the effectiveness of vast number of critical, high-value downstream processes. Over the past few years, we have seen a broadening of precision sensing applications in both our traditional industrial markets and new markets, due to the development of 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, agriculture, avionics, military and space, and consumer product applications. The Company has a long heritage of innovation in sensor technologies that provide accuracy, reliability and repeatability that make our customers' products safer, smarter, and more productive. As the functionality of ~~customers~~customers' products ~~increases,~~continues to increase, and they integrate more precision measurement sensors and related systems into their solutions, ~~in order to link the mechanical and physical world with digital control and/or response,~~ we believe this will offer substantial growth opportunities for our products and expertise.

The impact of the recent Israel-Hamas war

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks.

As of November 7, 2023 (date of filing), our operations in Israel have operated at near normal levels. The extent and duration of the current war, as well as the possibility of further spread of the conflict to other countries in the region as well as involving other political and military entities in the Middle East, poses risks to our operations and may lead to disruptions which could adversely affect our business, prospects, financial condition and results of operations.

While sales to customers in Israel account for a relatively small portion of our revenues, our operations in Israel include executive offices, which are the workplace for key executives including our chief executive officer, as well as two manufacturing facilities located in the central part of Israel which represent approximately 25 percent of our total worldwide revenues. As of November 7, 2023, these facilities remain open and operational. We have implemented a contingency plan that we believe will secure supply of materials and logistics, build safety stock of finished goods and transfer these goods to our distribution centers outside of Israel, and we continue to take measures with regards to the safety of our employees. We may, however, determine to temporarily discontinue production in Israel for the safety of our employees. We could also face future production slowdowns or interruptions at either manufacturing location in Israel due to the impacts of the war, including personnel absences as a number of our employees have been called to active military duty, or due to other resource constraints such as the inability to source materials for production.

Overview of Financial Results

Net revenues for the fiscal quarter ended ~~October 1, 2022~~September 30, 2023 were ~~$90.1~~$85.9 million versus ~~$82.0~~$90.1 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the fiscal quarter ended ~~October 1, 2022~~September 30, 2023 were $6.3 million, or $0.46 per diluted share, versus $10.1 million, or $0.74 ~~per diluted share, versus $5.4 million, or $0.39~~ per diluted share, for the comparable prior year period.

Net revenues for the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 were ~~$266.3~~$265.5 million versus ~~$227.9~~$266.3 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the nine fiscal months ended ~~October 1, 2022~~September 30,

-23-

2023 were $21.5 million, or $1.57 per diluted share, versus $27.2 million, or $1.99 ~~per diluted share, versus $14.3 million, or $1.04~~ per diluted share, for the comparable prior year period.

The results of operations for the fiscal ~~quarter~~quarters ended September 30, 2023 and ~~nine fiscal months ended~~ October 1, 2022 ~~and October 2, 2021~~ 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 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 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.



	Gross Profit						Operating Income						Net Earnings Attributable to VPG Stockholders				Diluted Earnings Per share
Three months ended	September 30, 2023			October 1, 2022			September 30, 2023			October 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
As reported - GAAP	$	35,935		$	37,320		$	8,224		$	11,884		$	6,280	$	10,118	$	0.46	$	0.74
As reported - GAAP Margins	41.9		%	41.4		%	9.6		%	13.2		%
Acquisition purchase accounting adjustments (a)	214			260			214			260			214		260		0.02		0.02




Restructuring costs	—			—			1,153			165			1,153		165		0.08		0.01
Foreign currency exchange gain (d)	—			—			—			—			(1,283)		(1,261)		(0.09)		(0.09)
Less: Tax effect of reconciling items and discrete tax items	—			—			—			—			(77)		(194)		—		(0.01)
As Adjusted - Non GAAP	$	36,149		$	37,580		$	9,591		$	12,309		$	6,441	$	9,476	$	0.47	$	0.69
As Adjusted - Non GAAP Margins	42.1		%	41.7		%	11.2		%	13.7		%

-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
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
Nine fiscal months ended																						Nine fiscal months ended	September 30, 2023			October 1, 2022			September 30, 2023			October 1, 2022			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
As reported - GAAP	As reported - GAAP	$	37,320		$	31,845		$	11,884		$	7,265		$	10,118	$	5,379	$	0.74	$	0.39	As reported - GAAP	111,846			109,904			29,943			30,750			$	21,480	$	27,229	$	1.57	$	1.99
As reported - GAAP Margins	As reported - GAAP Margins	41.4		%	38.8		%	13.2		%	8.9		%									As reported - GAAP Margins	42.1		%	41.3		%	11.3		%	11.5		%
Acquisition purchase accounting adjustments (a)	Acquisition purchase accounting adjustments (a)	260			1,329			260			1,329			260		1,329		0.02		0.10		Acquisition purchase accounting adjustments (a)	304			1,310			304			1,310			304		1,310		0.02		0.10

COVID-19 impact (b)	COVID-19 impact (b)	—			111			—			111			—		111		—		0.01		COVID-19 impact (b)	—			138			—			138			—		138		—		0.01
Start-up costs (c)	Start-up costs (c)	—			970			—			970			—		970		—		0.07		Start-up costs (c)	—			150			—			150			—		150		—		0.01

Restructuring costs	Restructuring costs				—			165			—			165		—		0.01		—		Restructuring costs	—			—			1,431			1,330			1,431		1,330		0.11		0.10
Foreign currency exchange (gain)/loss (d)					—						—			(1,261)		38		(0.09)		0.01
Foreign currency exchange gain (d)																						Foreign currency exchange gain (d)	—			—			—			—			(2,139)		(5,195)		(0.16)		(0.38)
Less: Tax effect of reconciling items and discrete tax items	Less: Tax effect of reconciling items and discrete tax items				—						—			(194)		754		(0.01)		0.06		Less: Tax effect of reconciling items and discrete tax items	—			—			—			—			(357)		(496)		(0.03)		(0.03)
As Adjusted - Non GAAP	As Adjusted - Non GAAP	$	37,580		$	34,255		$	12,309		$	9,675		$	9,476	$	7,073	$	0.69	$	0.52	As Adjusted - Non GAAP	$	112,150		$	111,502		$	31,678		$	33,678		$	21,433	$	25,458	$	1.57	$	1.86
As Adjusted - Non GAAP Margins	As Adjusted - Non GAAP Margins	41.7		%	41.8		%	13.7		%	11.8		%									As Adjusted - Non GAAP Margins	42.2		%	41.9		%	11.9		%	12.6		%

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							Fiscal quarter ended						Nine fiscal months ended
		October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021				September 30, 2023			October 1, 2022			September 30, 2023			October 1, 2022
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	$	10,118		$	5,379		$	27,341		$	14,260		Net earnings attributable to VPG stockholders	$	6,280		$	10,118		$	21,480		$	27,229
Interest Expense	Interest Expense	636			328			1,393			906			Interest Expense	1,119			636			3,195			1,393
Income tax expense	Income tax expense	2,323			1,662			6,539			3,688			Income tax expense	2,419			2,323			8,023			6,651
Depreciation	Depreciation	2,937			2,955			8,622			8,691			Depreciation	2,954			2,937			8,806			8,622
Amortization	Amortization	960			970			2,897			2,342			Amortization	880			960			2,753			2,897
EBITDA	EBITDA	16,974			$	11,294		46,792			$	29,887		EBITDA	13,652			$	16,974		44,257			$	46,792
EBITDA MARGIN	EBITDA MARGIN	18.8		%	13.8		%	17.6		%	13.1		%	EBITDA MARGIN	15.9		%	18.8		%	16.7		%	17.6		%
Impairment of goodwill and indefinite-lived intangibles		—			—			—			1,223

Acquisition purchase accounting adjustments (a)	Acquisition purchase accounting adjustments (a)	260			1,329			1,310			2,259			Acquisition purchase accounting adjustments (a)	214			260			304			1,310
Acquisition costs		—			—			—			1,198

Restructuring costs	Restructuring costs	165			—			1,330			—			Restructuring costs	1,153			165			1,431			1,330
COVID-19 impact (b)	COVID-19 impact (b)	—			111			138			(574)			COVID-19 impact (b)	—			—			—			138
Start-up costs (c)	Start-up costs (c)	—			970			150			2,258			Start-up costs (c)	—			—			—			150
Foreign currency exchange (gain)/loss (d)		(1,261)			38			(5,195)			(523)
Foreign currency exchange gain (d)														Foreign currency exchange gain (d)	(1,283)			(1,261)			(2,139)			(5,195)
ADJUSTED EBITDA	ADJUSTED EBITDA	$	16,138		$	13,742		$	44,525		$	21,986		ADJUSTED EBITDA	$	13,736		$	16,138		$	43,853		$	44,525
ADJUSTED EBITDA MARGIN	ADJUSTED EBITDA MARGIN	17.9		%	16.8		%	16.7		%	9.6		%	ADJUSTED EBITDA MARGIN	16.0		%	17.9		%	16.5		%	16.7		%

(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 in 2022 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.

-25-

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 ~~2021~~2022 through the third quarter of ~~2022~~ 2023.


	3rd Quarter			4th Quarter			1st Quarter			2nd Quarter			3rd Quarter
(dollars in thousands)	2022			2022			2023			2023			2023
Net revenues	$	90,057		$	96,240		$	88,864		$	90,802		$	85,854

Gross profit margin	41.4		%	41.2		%	41.9		%	42.6		%	41.9		%

End-of-period backlog	$	168,100		$	151,400		$	146,800		$	139,700		$	128,800

Book-to-bill ratio	1.08			0.76			0.94			0.94			0.90

Inventory turnover	2.47			2.63			2.39			2.34			2.20

~~(dollars in thousands)~~:

3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter
2021 2021 2022 2022 2022
Net revenues $ 81,974 $ 90,017 $ 87,665 $ 88,618 $ 90,057
Gross profit margin 38.8 % 38.7 % 40.2 % 42.1 % 41.4 %
End-of-period backlog $ 146,700 $ 150,500 $ 170,600 $ 171,400 $ 171,700
Book-to-bill ratio 1.21 1.06 1.25 1.08 1.08
Inventory turnover 2.55 2.82 2.69 2.52 2.47

3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter
2021 2021 2022 2022 2022
Sensors
Net revenues $ 30,721 $ 34,149 $ 37,750 $ 40,280 $ 37,879
Gross profit margin 31.1 % 32.1 % 37.8 % 44.3 % 40.5 %
End-of-period backlog $ 70,100 $ 72,900 $ 81,300 $ 84,200 $ 80,600
Book-to-bill ratio 1.37 1.11 1.27 1.17 0.99
Inventory turnover 3.14 3.53 3.54 3.20 3.04
Weighing Solutions
Net revenues $ 30,676 $ 32,071 $ 32,768 $ 28,459 $ 31,399
Gross profit margin 37.2 % 34.0 % 36.9 % 33.7 % 33.3 %
End-of-period backlog $ 42,600 $ 41,800 $ 43,600 $ 43,000 $ 43,000
Book-to-bill ratio 1.06 0.98 1.06 1.03 1.05
Inventory turnover 2.47 2.63 2.61 2.33 2.48
Measurement Systems
Net revenues $ 20,577 $ 23,797 $ 17,147 $ 19,879 $ 20,779
Gross profit margin 52.8 % 54.7 % 51.8 % 49.9 % 55.5 %
End-of-period backlog $ 34,000 $ 35,800 $ 45,700 $ 44,200 $ 48,100
Book-to-bill ratio 1.18 1.08 1.56 0.98 1.27
Inventory turnover 1.92 2.18 1.68 1.90 1.68

-26-


	3rd Quarter			4th Quarter			1st Quarter			2nd Quarter			3rd Quarter
(dollars in thousands)	2022			2022			2023			2023			2023
Sensors
Net revenues	$	37,879		$	36,312		$	36,726		$	36,266		$	32,532
Gross profit margin	40.5		%	37.6		%	41.2		%	40.1		%	35.9		%
End-of-period backlog	$	77,000		$	72,300		$	66,200		$	58,900		$	52,400
Book-to-bill ratio	0.99			0.76			0.82			0.84			0.83
Inventory turnover	3.04			2.91			2.62			2.55			2.38

Weighing Solutions
Net revenues	$	31,399		$	33,089		$	31,859		$	31,261		$	28,970
Gross profit margin	33.3		%	33.4		%	34.9		%	38.7		%	38.7		%
End-of-period backlog	$	43,000		$	38,300		$	35,400		$	34,300		$	30,800
Book-to-bill ratio	1.05			0.82			0.90			0.97			0.89
Inventory turnover	2.48			2.72			2.63			2.41			2.18

Measurement Systems
Net revenues	$	20,779		$	26,839		$	20,279		$	23,275		$	24,352
Gross profit margin	55.5		%	55.9		%	53.9		%	51.8		%	53.6		%
End-of-period backlog	$	48,100		$	40,800		$	45,200		$	46,500		$	45,600
Book-to-bill ratio	1.27			0.70			1.21			1.06			0.98
Inventory turnover	1.68			2.11			1.70			1.94			1.94

Net revenues for the third fiscal quarter of 2023 decreased 5.4% from the second fiscal quarter of 2023 mainly due to decreased revenues in the Sensors and Weighing Solutions reporting segments. Net revenues decreased 4.7% from the third fiscal quarter of 2022 ~~increased 1.6% from~~with decreased volume, primarily in the ~~second quarter of 2022 mainly due to increased~~Sensors and Weighing Solutions reporting segments, respectively, partially offset by higher volume in the ~~Weighing Solutions and~~ Measurement Systems reporting ~~segments partially offset by decreased volume in the Sensors reporting segment. Net revenues increased 9.9% from the third quarter of 2021 with increased volume primarily from the Sensors reporting~~ segment.

Net revenues in the Sensors reporting segment decreased ~~6.0%~~10.3% compared to the second fiscal quarter of ~~2022~~2023, and ~~increased 23.3%~~decreased 14.1% from the third quarter of 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 secondfiscal quarter of 2022. Sequentially, the decrease primarily reflected lower ~~advanced sensors~~ revenue of precision resistors in ~~Other~~the Avionics, Military and Space ("AMS") market and Test and Measurement end markets ~~(mainly for consumer applications)~~ and lower ~~revenue~~sales of strain gages in the General Industrial end market. The year-over-year decrease in revenues was primarily attributable to lower sales of precision resistors in the Test and ~~Measurements market.The year-over-year increase in revenues was primarily attributable to higher~~Measurement market, and lower sales of ~~precision resistors in the Test and~~

~~-27-~~

~~Measurements market and higher revenue of our~~ advanced sensors products primarily in our Other markets (mainly for consumer applications)., partially offset by increases in precision resistor sales in the AMS market.

Net revenues in the Weighing Solutions reporting segment ~~increased 10.3%~~decreased 7.3% from the second fiscal quarter of ~~2022~~2023, and ~~increased 2.4%~~decreased 7.7% from the third fiscal quarter of ~~2021.~~ 2022. The sequential and year-over-year ~~and sequential increases~~decreases in revenues were ~~primarily~~mainly attributable to ~~increases~~lower sales of load cells in our Other markets for precision agriculture and construction ~~applications.~~ applications and lower sales of load cells in our Industrial Weighing market, partially offset by increased sales in the Transportation market.

Net revenues in the Measurement Systems reporting segment increased ~~4.5%~~4.6% from the second fiscal quarter of ~~2022~~2023 and increased ~~1.0%~~17.2% from the third fiscal quarter of ~~2021.~~ 2022. Sequentially, the increase in revenue was primarily due to the higher ~~revenue~~sales of ~~Dynamic Systems Inc. ("DSI") products in the Steel market and our~~ Diversified Technical Systems Inc. ("DTS")products in the AMS and Transportation markets, partially offset by lower sales in the Steel market. The year-over-year increase was primarily attributable to increased revenue in the Steel market and higher sales of DTSproducts in the AMS market.

~~Overall~~Total Company gross profit margin in the third fiscal quarter of ~~2022~~2023 decreased 0.7% as compared to the second fiscal quarter of ~~2022~~2023 and increased ~~2.6%~~0.5% from the third fiscal quarter of ~~2021.~~2022.

Sequentially, the decrease in the gross profit margin in the Sensors ~~and Weighing Solutions~~ reporting ~~segments~~segment was partially offset by anthe increase in the gross profit margin in the Measurement Systems segment, while the Weighing Solutions reporting segment gross profit margin remained unchanged. In the Sensors reporting segment, the gross profit margin decreased sequentially due to lower volume and temporary labor inefficiencies. In the Weighing Solutions reporting segment, there was no sequential change in gross profit

-27-

margins as lower operating costs offset the impact of lower volume. The sequential increase in the gross profit margin in the Measurement Systems reporting ~~segments. In the Sensors reporting~~ segment the 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 and~~ higher volume.

Compared to the third fiscal quarter of ~~2021,~~2022, the ~~Sensors and Measurement Systems~~Weighing Solutions reporting segments had higher gross profit margins, while the ~~Weighing Solutions~~Sensors and Measurement Systems reporting ~~segment~~segments gross profit ~~margin was~~margins were lower.

The Sensors reporting segment had a ~~higher~~lower gross profit margin due to ~~higher~~lower volume and ~~selling price increases~~temporary labor inefficiencies, partially offset by ~~unfavorable~~favorable foreign currency exchange rates and ~~wage increases.~~cost reduction programs. The Weighing Solutions reporting segment increase in gross profit margin as compared to 2022 was primarily due to cost reductions, lower logistics costs, and favorable foreign currency rates, which offset the impact of lower volume. In the Measurement Systems reporting segment, the gross profit margin was ~~higher~~lower as compared to the third fiscal quarter of ~~2021~~2022 primarily due to higher volume and higher average selling prices and lower purchase accounting adjustments related to the DTS acquisition, partially offset by unfavorable product mix. The Weighing Solutions reporting segment decrease in gross profit margin as compared to 2021 was primarily due to higher materials costs, unfavorable product mix, unfavorable foreign currency exchange rates, and reduction of inventories, partiallybeing offset by higher ~~volume and selling price increases.~~labor costs.

Optimize Core Competence

The Company’s core competencies include our innovative deep technical and applications-specific expertise ~~that adds~~to add value to our customers' products, our strong brands and customer relationships, our focus on operational excellence, our ability to select and develop our management teams, and our 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.

Our 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 facility that has been constructed in Israel. We fully transitioned to this facility 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,~~Japan, and Israel, where we can benefit from improved efficiencies or available tax and other government-sponsored incentives. In the past several years, we incurred restructuring expense related to closing and

~~-28-~~

downsizing of facilities as part of the manufacturing transitions of our 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 had been largely focused on vertical product integration, using our foil strain gages in our load cell products, and incorporating those products into our weighing solutions. In recent years, we widened our acquisition strategy to include a broader set of precision measurement systems and product companies.

We expect to expand our expertise, and our acquisition focus, outside our traditional vertical approach to other precision 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.

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.

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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 ~~4, 2022.~~1, 2023.

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.

~~-29-~~

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 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.

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Effects of Foreign Currency Exchange Rate on Operations

For the fiscal quarter ended ~~October 1, 2022,~~September 30, 2023, exchange rates ~~decreased~~increased net revenues by ~~$5.3~~$0.5 million, and decreased costs of products sold and selling, general, and administrative expenses by ~~$4.2~~$1.6 million, when compared to the comparable prior year period.

For the nine fiscal months ended ~~October 1, 2022,~~September 30, 2023, exchange rates decreased net revenues by ~~$10.8~~$2.7 million, and decreased costs of products sold and selling, general, and administrative expenses by ~~$7.7~~$7.6 million, when compared to the comparable prior year period.

-30-

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 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021			September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Costs of products sold	Costs of products sold	58.6	%	61.2	%	58.7	%	60.4	%	Costs of products sold	58.1	%	58.6	%	57.9	%	58.7	%
Gross profit	Gross profit	41.4	%	38.8	%	41.3	%	39.6	%	Gross profit	41.9	%	41.4	%	42.1	%	41.3	%
Selling, general, and administrative expenses	Selling, general, and administrative expenses	28.1	%	30.0	%	29.2	%	30.4	%	Selling, general, and administrative expenses	30.9	%	28.1	%	30.3	%	29.2	%
Operating income	Operating income	13.2	%	8.9	%	11.5	%	8.2	%	Operating income	9.6	%	13.2	%	11.3	%	11.5	%
Income before taxes	Income before taxes	13.8	%	8.7	%	12.9	%	8.0	%	Income before taxes	10.2	%	13.8	%	11.2	%	12.9	%
Net earnings	Net earnings	11.3	%	6.6	%	10.4	%	6.3	%	Net earnings	7.4	%	11.3	%	8.2	%	10.4	%
Net earnings attributable to VPG stockholders	Net earnings attributable to VPG stockholders	11.2	%	6.6	%	10.2	%	6.3	%	Net earnings attributable to VPG stockholders	7.3	%	11.2	%	8.1	%	10.2	%

Effective tax rate	Effective tax rate	18.6	%	23.4	%	19.4	%	20.3	%	Effective tax rate	27.6	%	18.6	%	27.0	%	19.4	%

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 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021			September 30, 2023			October 1, 2022		September 30, 2023			October 1, 2022
Net revenues	Net revenues	$	90,057		$	81,974	$	266,340		$	227,902	Net revenues	$	85,854		$	90,057	$	265,520		$	266,340
Change versus comparable prior year period	Change versus comparable prior year period	$	8,083				$	38,438				Change versus comparable prior year period	$	(4,203)				$	(820)
Percentage change versus prior year period	Percentage change versus prior year period	9.9		%			16.9		%			Percentage change versus prior year period	(4.7)		%			(0.3)		%

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	13.7	%	14.2	%	Change in volume	(6.2)	%	(0.8)	%
Change in average selling prices	Change in average selling prices	2.9	%	2.5	%	Change in average selling prices	1.2	%	1.5	%
Foreign currency effects	Foreign currency effects	(6.7)	%	(4.8)	%	Foreign currency effects	0.3	%	(1.0)	%
Acquisitions		0.0	%	5.0	%

Net change	Net change	9.9	%	16.9	%	Net change	(4.7)	%	(0.3)	%

During the fiscal quarter and nine fiscal months ended ~~October 1, 2022,~~September 30, 2023, net revenues ~~increased 9.9%~~decreased 4.7% and ~~16.9%~~0.3%, respectively, as compared to the comparable prior year ~~periods, with increased~~periods. For the fiscal quarter period, decreased volume, primarily from the Sensors and Weighing Solutions reporting segments, was partially offset by higher volume in the Measurement Systems reporting segment.

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For the nine fiscal month period, higher volume in the Measurement Systems reporting segment was completely offset by lower volume in the Sensors and Weighing Solutions reporting segments.

Gross Profit Margin

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

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 %


	Fiscal quarter ended				Nine fiscal months ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Gross profit margin	41.9	%	41.4	%	42.1	%	41.3	%

The gross profit margin for the fiscal quarter and nine fiscal months ended ~~October 1, 2022~~September 30, 2023 increased ~~2.6%~~0.5% and ~~1.7%~~0.8%, respectively, as compared to the comparable prior year periods. For the fiscal quarter period, the Weighing Solutions reporting segments had higher gross profit margins, while the Sensors and Measurement Systems reporting segments ~~reported higher~~ gross profit margins ~~while the Weighing Solutions reporting segment reported lower gross profit margins when compared to the prior year period.~~

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were lower. For the nine fiscal month period, the ~~Sensors~~Weighing Solutions and Measurement Systems reporting segments ~~reported~~had higher gross profit ~~margins~~margin, while the ~~Weighing Solutions~~Sensors reporting segment ~~reported~~had lower gross profit ~~margins when compared to the prior year period.~~margin.

Segments

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

Sensors

Net revenues of the Sensors segment were as follows (dollars in thousands):


		Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended					Nine fiscal months ended
		October 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021			September 30, 2023			October 1, 2022		September 30, 2023			October 1, 2022
Net revenues	Net revenues	$	37,879		$	30,721	$	115,909		$	93,712	Net revenues	$	32,532		$	37,879	$	105,524		$	115,909
Change versus comparable prior year period	Change versus comparable prior year period	$	7,158				$	22,197				Change versus comparable prior year period	$	(5,347)				$	(10,385)
Percentage change versus prior year period	Percentage change versus prior year period	23.3		%			23.7		%			Percentage change versus prior year period	(14.1)		%			(9.0)		%

Changes in 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	32.1	%	28.3	%	Change in volume	(15.5)	%	(8.9)	%
Change in average selling prices	Change in average selling prices	1.7	%	1.9	%	Change in average selling prices	0.9	%	0.9	%
Foreign currency effects	Foreign currency effects	(10.5)	%	(6.5)	%	Foreign currency effects	0.5	%	(1.0)	%

Net change	Net change	23.3	%	23.7	%	Net change	(14.1)	%	(9.0)	%

Net revenues ~~increased 23.3%~~decreased 14.1% and 9.0% for the fiscal quarter and nine fiscal months ended ~~October 1, 2022,~~September 30, 2023, respectively, 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.~~periods. The ~~year-over-year increase~~decrease in revenues was primarily attributable to ~~higher~~lower sales of precision resistors in the Test and ~~Measurements~~Measurement market, and ~~higher revenue~~lower sales of ~~our~~ advanced sensors products primarily in our Other markets (mainly for consumer applications)., partially offset by increases in precision resistor sales in the AMS market.

Gross profit as a percentage of net revenues for the Sensors segment was as follows:

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 %


	Fiscal quarter ended				Nine fiscal months ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Gross profit margin	35.9	%	40.5	%	39.2	%	40.9	%

The gross profit margin ~~increased 9.4%~~decreased 4.6% and 1.7% for the fiscal quarter and nine fiscal months ended ~~October 1, 2022,~~September 30, 2023, respectively, when compared to the comparable prior year ~~period~~periods due to ~~higher~~lower volume and ~~selling price increases~~temporary labor inefficiencies, partially offset by ~~unfavorable~~favorable foreign currency exchange rates and ~~wage increases. Additionally, there were higher start-up costs associated with our new advanced sensors facility in 2021.~~

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The gross profit margin increased 4.1% for the nine fiscal months ended October 1, 2022 as compared to the comparable prior year period. Volume increases were partially offset by impacts from charges related to start-up costs in our new advanced sensors facility, wage increase, and labor inefficiencies.

cost reduction programs.

Weighing Solutions

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


		Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended					Nine fiscal months ended
		October 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021			September 30, 2023			October 1, 2022		September 30, 2023			October 1, 2022
Net revenues	Net revenues	$	31,399		$	30,676	$	92,626		$	93,319	Net revenues	$	28,970		$	31,399	$	92,090		$	92,626
Change versus comparable prior year period	Change versus comparable prior year period	$	723				$	(693)				Change versus comparable prior year period	$	(2,429)				$	(536)
Percentage change versus prior year period	Percentage change versus prior year period	2.4		%			(0.7)		%			Percentage change versus prior year period	(7.7)		%			(0.6)		%

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Changes in 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	4.5	%	0.2	%	Change in volume	(9.4)	%	(2.0)	%
Change in average selling prices	Change in average selling prices	5.3	%	4.0	%	Change in average selling prices	0.9	%	1.8	%
Foreign currency effects	Foreign currency effects	(7.4)	%	(4.9)	%	Foreign currency effects	0.8	%	(0.4)	%

Net change	Net change	2.4	%	(0.7)	%	Net change	(7.7)	%	(0.6)	%

Net revenues ~~increased 2.4%~~decreased 7.7% for the fiscal quarter ended ~~October 1, 2022, and decreased 0.7% for the nine fiscal months ended October 1, 2022~~September 30, 2023, as compared to the comparable prior year ~~periods.~~period. The ~~increase~~decrease in ~~fiscal quarter net~~ revenues ~~was primarily~~were mainly attributable to ~~increases~~lower sales of load cells in our Other markets for precision agriculture and construction applications ~~while~~and lower sales of load cells in our Industrial Weighing market, partially offset by increased sales in the ~~same market reflected a decrease~~Transportation market.

Net revenues decreased 0.6% for the nine fiscal ~~month~~months ended September 30, 2023 as compared to the comparable prior year period. ~~Both the fiscal quarter~~Increased sales of load cells in our Other markets for precision agriculture and ~~nine fiscal month periods~~construction applications and transducer systems in our Industrial Weighing market were ~~negatively impacted~~offset by ~~foreign currency exchange rate effects.~~lower sales of our load cell products in our Industrial weighing market.

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

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 %


	Fiscal quarter ended				Nine fiscal months ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Gross profit margin	38.7	%	33.3	%	37.4	%	34.7	%

The gross profit margin for the fiscal quarter and nine fiscal months ended ~~October 1, 2022 decreased 3.9%~~September 30, 2023 increased 5.4% and 2.7%, respectively, as compared to the comparable prior year ~~period and decreased 2.8% for the nine fiscal months ended October 1, 2022 when compared to the prior year period. The decrease for the fiscal quarter was~~periods primarily due to ~~higher materials~~cost reductions, lower logistics costs, ~~unfavorable product mix, unfavorable~~and favorable foreign currency ~~exchange~~ rates, ~~and reduction~~which offset the impact 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.~~

~~-33-~~

volume.

Measurement Systems

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


		Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended					Nine fiscal months ended
		October 1, 2022			October 2, 2021		October 1, 2022			October 2, 2021			September 30, 2023			October 1, 2022		September 30, 2023			October 1, 2022
Net revenues	Net revenues	$	20,779		$	20,577	$	57,805		$	40,871	Net revenues	$	24,352		$	20,779	$	67,906		$	57,805
Change versus comparable prior year period	Change versus comparable prior year period	$	202				$	16,934				Change versus comparable prior year period	$	3,573				$	10,101
Percentage change versus prior year period	Percentage change versus prior year period	1.0		%			41.4		%			Percentage change versus prior year period	17.2		%			17.5		%

Changes in 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	1.3	%	14.3	%	Change in volume	15.8	%	17.5	%
Change in average selling prices	Change in average selling prices	1.8	%	1.2	%	Change in average selling prices	1.9	%	1.9	%
Foreign currency effects	Foreign currency effects	(2.1)	%	(2.1)	%	Foreign currency effects	(0.5)	%	(1.9)	%
Acquisitions		0.0	%	28.0	%

Net change	Net change	1.0	%	41.4	%	Net change	17.2	%	17.5	%

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Net revenues increased ~~1.0%~~17.2% for the fiscal quarter ended ~~October 1, 2022~~September 30, 2023 as compared to the comparable prior year period, and increased ~~41.4%~~17.5% for the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 as compared to the comparable prior year period. ~~The increase for~~For the fiscal quarter period, the increase was primarily ~~due~~attributable to increased revenue in the Steel market and higher sales of DTS products in the AMS market. ~~The increase in revenue for~~For the nine fiscal ~~months~~month period, the increase was primarily attributable to increased revenue in the ~~addition of revenue for DTS, which was acquired on June 1, 2021, and higher revenue of our KELK and DSI steel-related businesses~~.Steel market.

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

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 %


	Fiscal quarter ended				Nine fiscal months ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Gross profit margin	53.6	%	55.5	%	53.1	%	52.5	%

The gross profit margin for the fiscal quarter and nine fiscal month ended ~~October 1, 2022~~September 30, 2023 decreased by 1.9% and increased ~~2.7%~~by 0.6%, respectively, compared to the ~~third~~comparable prior year periods. For the fiscal quarter ~~of 2021. The increase~~period, the decrease was primarily due to higher volume and higher average selling prices and lower purchase accounting adjustments, ~~related to~~being offset by higher labor costs. For the ~~DTS acquisition~~nine fiscal month period, the higher volume and higher average selling prices and lower purchase accounting adjustments were only partially offset by ~~an unfavorable product mix.~~

~~The gross profit margin for~~ the nine fiscal months ended October 1, 2022 increased 1.7% from the prior year period. Higher revenues coming from DTS and 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 impact. Additionally, COVID-19 subsidies were received in 2021 that did not continue in 2022.higher labor costs.

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 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021				September 30, 2023			October 1, 2022			September 30, 2023			October 1, 2022
Total SG&A expenses	Total SG&A expenses	$	25,271		$	24,580		$	77,824		$	69,216		Total SG&A expenses	$	26,558		$	25,271		$	80,472		$	77,824

As a percentage of net revenues	As a percentage of net revenues	28.1		%	30.0		%	29.2		%	30.4		%	As a percentage of net revenues	30.9		%	28.1		%	30.3		%	29.2		%

SG&A expenses for the fiscal quarter and nine fiscal months ended ~~October 1, 2022~~September 30, 2023 increased ~~$0.7~~$1.3 million and $2.6 million, respectively, compared to the comparable prior year ~~period~~periods due to increases in wages, travel costs, commissions and other fees, partially offset by favorable foreign currency exchange rate impacts.

~~-34-~~

SG&A expenses for the nine fiscal months ended October 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 wage increases, travel costs, and other fees.

~~Impairment of Goodwill and Indefinite-lived Intangible Assets~~

For the nine fiscal 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.

~~Acquisition Costs~~

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

~~Nine fiscal months ended~~

~~October 2, 2021~~

~~Legal fees~~

~~341~~

~~Appraisal fees~~

~~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 either to ~~either~~ record additional expense in future periods or to reverse part of the previously recorded charges.

The Company recorded ~~$0.2~~$1.2 million and ~~$0.0~~$0.2 million of restructuring costs during the fiscal quarter ended September 30, 2023 and October 1, 2022, ~~and October 2, 2021,~~ respectively, and ~~$1.3~~$1.4 million and ~~$0.0~~$1.3 million of restructuring costs during the nine fiscal months ended September 30, 2023 and October 1, 2022, ~~and October 2, 2021,~~ respectively. Restructuring costs were comprised primarily of employee termination costs, including severance and statutory retirement allowances, in connection with various cost reduction programs.

Other Income (Expense)

Interest expense for the fiscal quarter and nine fiscal months ended ~~October 1, 2022~~September 30, 2023 was higher when compared with the comparable prior year periods mainly due to higher borrowing rates in ~~2022.~~2023.

~~-35-~~-34-

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 1, 2022		October 2, 2021		Change			September 30, 2023		October 1, 2022		Change
Foreign currency exchange gain (loss)		$	1,261	$	(38)	$	1,299
Foreign currency exchange gain								Foreign currency exchange gain	$	1,283	$	1,261	$	22

Interest income	Interest income	91		151		(60)		Interest income	543		91		452
Pension expense	Pension expense	(81)		(151)		70		Pension expense	(72)		(81)		9
Other	Other	(48)		212		(260)		Other	(83)		(48)		(35)
		$	1,223	$	174	$	1,049		$	1,671	$	1,223	$	448

Nine fiscal months ended
October 1, 2022 October 2, 2021 Change
Foreign currency exchange gain $ 5,195 $ 522 $ 4,673
Interest income 235 216 19
Pension expense (261) (431) 170
Other (163) 114 (277)
$ 5,006 $ 421 $ 4,585



	Nine fiscal months ended
	September 30, 2023		October 1, 2022		Change
Foreign currency exchange gain	$	2,138	$	5,195	$	(3,057)
Interest income	1,265		235		1,030
Pension expense	(217)		(261)		44
Other	(221)		(163)		(58)
	$	2,965	$	5,006	$	(2,041)

Foreign currency exchange gains represent the impact of changes in foreign currency exchange rates. For the fiscal quarter and nine fiscal months ended ~~October 1, 2022,~~September 30, 2023, the change in foreign currency exchange gains and losses during the ~~period,~~periods, as compared to the prior year periods, iswas largely due to exposure to currency fluctuations with the Israeli shekel, the Canadian dollar, the EURO and the British pound.

Included in Other for the fiscal quarter and nine fiscal months ended October 1, 2022 iswas a $0.2 million loss on the liquidation of two of the 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 1, 2022~~September 30, 2023 was ~~18.6%~~27.6% compared to ~~23.4%~~18.6% for the fiscal quarter ended October ~~2, 2021.~~1, 2022. The effective tax rate for the fiscal quarter ended ~~October 1, 2022~~September 30, 2023 was ~~lower~~higher than the prior year period primarily due to ~~foreign currency exchange gains~~changes in the mix of worldwide income and ~~losses, tax rate changes and a reduction~~an increase in our valuation allowance on deferred tax assets. The effective tax rate for the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 was ~~19.4%~~27.0% compared to ~~20.3%~~19.4% for the nine fiscal months ended October ~~2, 2021.~~1, 2022. The effective tax rate for the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 was ~~lower~~higher than the prior year period primarily due to changes in the mix of worldwide income and ~~foreign currency exchange gains and losses, tax rate changes and a reduction~~an increase in our valuation allowance on deferred tax assets.

~~-36-~~-35-

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.

On March 20, 2020, the Company entered into a Third Amended and 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 the Company’s multi-currency, secured credit facility were revised to provide 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 proceeds of 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.

On May 5, 2023, the Company entered into Amendment No. 1 to Third Amended and Restated Credit Agreement (the “Credit Agreement Amendment”), by and among the Company, the lenders named therein, Citizens Bank, National Association and Wells Fargo Bank, National Association as joint lead arrangers and the Agent, as agent for such lenders. The Credit Agreement Amendment amended the 2020 Credit Agreement. The primary purpose of the changes made in the Credit Agreement Amendment were to update the interest rate provisions to replace LIBOR with SOFR for U.S. dollar denominated loans as well as update the other applicable reference borrowing rates for foreign currency loans which took effect on June 15, 2023. Interest payable on amounts borrowed under the 2020 Revolving Facility is based upon the following: (a) for revolving credit loans denominated in US Dollars, the SOFR rate plus applicable credit spread; and (b) for revolving credit loans denominated in foreign currencies, 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~~other applicable local reference rates plus ~~a specified~~an interest 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~~SOFR rate to determine the interest payable on the ~~LIBOR or CDOR~~SOFR 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. The Company was in compliance with its financial maintenance covenants at ~~October 1, 2022.~~September 30, 2023. 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 1, 2022,~~September 30, 2023, cash provided by operating activities was ~~$20.5~~$27.1 million compared to ~~cash provided by operations of $18.1~~$20.5 million in the comparable prior year period. Our net cash used in investing activities for the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 was lower compared to the prior year period mainly due to ~~the acquisition of DTS which took place in the second quarter of 2021.~~lower capital spending. Our net cash used in financing activities for the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 was ~~lower than~~higher when compared with the ~~comparable to~~ prior year period mainly due to a repayment on our revolving credit facility of $7.0 million during the ~~2021 borrowings in connection with the acquisition~~third quarter of ~~DTS.~~2023.

Approximately 91% and ~~87%~~83% of our cash and cash equivalents balance at ~~October 1, 2022~~September 30, 2023 and December 31, ~~2021,~~2022, respectively, was held by our non-U.S. subsidiaries.

See the following table for the percentage of cash and cash equivalents, by region, at ~~October 1, 2022~~September 30, 2023 and December 31, ~~2021:~~2022:

October 1, 2022 December 31, 2021
Israel 24 % 25 %
Asia 27 % 24 %
Europe 15 % 18 %
United States 9 % 13 %
United Kingdom 11 % 12 %
Canada 14 % 8 %
100 % 100 %

-36-


	September 30, 2023		December 31, 2022
Israel	41	%	28	%
Asia	16	%	27	%
Europe	15	%	13	%
United States	9	%	17	%
United Kingdom	10	%	10	%
Canada	9	%	5	%
	100	%	100	%

We earn a significant amount of our operating income outside the United States, ~~and we consider~~ the majority of ~~the undistributed earnings of our foreign subsidiaries~~which is deemed to be indefinitely reinvested ~~as of October 1, 2022.~~in foreign jurisdictions. 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. We consider the majority of the undistributed earnings of our foreign subsidiaries, as of September 30, 2023, to be indefinitely reinvested.

Adjusted free cash flow generated during the nine fiscal months ended ~~October 1, 2022,~~September 30, 2023 was ~~$5.4~~$17.3 million. We refer to the amount of cash provided by operating activities ($~~20.5~~27.1 million) in excess of our capital expenditures ($~~15.5~~9.8 million) and net of proceeds from the sale of assets ($~~0.4~~0.0 million) as “adjusted free cash flow.”

The following table summarizes the components of net cash at ~~October 1, 2022~~September 30, 2023 and December 31, ~~2021~~2022 (in thousands):


		October 1, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	79,910	$	84,335	Cash and cash equivalents	$	94,632	$	88,562

Third-party debt, including current and long-term:	Third-party debt, including current and long-term:					Third-party debt, including current and long-term:
Revolving debt	Revolving debt	61,000		61,000		Revolving debt	54,000		61,000
Deferred financing costs	Deferred financing costs	(220)		(286)		Deferred financing costs	(173)		(201)
Total third-party debt	Total third-party debt	60,780		60,714		Total third-party debt	53,827		60,799
Net cash	Net cash	$	19,130	$	23,621	Net cash	$	40,805	$	27,763

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.

Our financial condition as of ~~October 1, 2022~~September 30, 2023 remains strong, with a current ratio (current assets to current liabilities) of ~~4.1~~4.3 to 1.0, as compared to a ratio of ~~3.6~~3.9 to 1.0 at December 31, ~~2021.~~2022.

Cash paid for property and equipment for the nine fiscal months ended ~~October 1, 2022~~September 30, 2023 was ~~$15.5~~$9.8 million compared to ~~$11.2~~$15.5 million in the comparable prior year period.

As of ~~October 1, 2022~~September 30, 2023 and December 31, ~~2021,~~2022, we did not have any off-balance sheet arrangements.

~~-38-~~-37-

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,~~inflation; potential issues respecting the United States federal government debt ceiling; 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, and health (including ~~the COVID-19 pandemic) and~~pandemics) instabilities; instability caused by military ~~instability~~hostilities in the countries in which we ~~operate;~~operate (including Israel); 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; 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; our ability to execute our new corporate strategy and business continuity, operational and budget 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, ~~2021.~~2022. 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 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.

~~-39-~~-38-

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, ~~2021,~~2022, filed with the SEC on March ~~4, 2022.~~1, 2023.

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 1, 2022,~~September 30, 2023, 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.

~~-40-~~-39-

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

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, ~~2021,~~2022, filed with the SEC on March ~~4, 2022.~~1, 2023. 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, ~~2021.~~2022.

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

The following table provides information about repurchases of the Company's common stock during the three-month period ended ~~October 1, 2022.~~September 30, 2023.

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.


	Total Number of Shares Purchased (a)	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 2, 2023 - August 2, 2023	—	—		—	502,475
August 3, 2023 - September 3, 2023	5,646	$	34.79	5,646	496,829
September 4, 2023- September 30, 2023	17,248	33.574		17,248	479,581
Total	22,894			22,894	479,581
(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 was originally set to 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. On August 8, 2023, the Company announced that its Board of Directors extended the term of the previously approved stock repurchase plan to August 9, 2024. From August 8, 2022 to September 30, 2023, the Company had repurchased an aggregate of 120,419 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.~~

During the fiscal quarter ended September 30, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

~~-41-~~-40-

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 1 2022,~~September 30, 2023, furnished in XBRL (eXtensible Business Reporting Language).

~~-42-~~-41-

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 ~~8, 2022~~7, 2023

~~-43-~~-42-


	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.