What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-25 · 85 added, 109 removed, 390 unchanged (33% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND A NALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

VPG is a global leader in precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one.

Many of our specialized sensors, weighing solutions, and measurement systems are “designed-in” by our customers, and address growing applications across a diverse array of industries and markets.

Our products are marketed under 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.

Our products are marketed under brand names that we believe are characterized as having a very high level of precision and quality.

Driven by the continued proliferation of data generated by the expanding use of sensors across a widening array of industrial and technology-driven applications, precision measurement and sensing technologies help ensure and deliver required levels of quality of mission-critical or high-value data.

4 unchanged sentences

As the functionality of customers' products continues to increase, and they integrate more precision measurement sensors and related systems into their solutions, 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.

resulting in extensive casualties and military engagement.

In addition, Hezbollah, another terrorist organization based in Lebanon began attacking Israel.

While Israel has entered into ceasefire agreements with Hamas and Hezbollah, the threat of new attacks remains, including from additional extremist groups.

As of February 25, 2025 (the date of this filing), our operations in Israel have operated at 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 manufacture products representing approximately 26 percent of our total worldwide revenues.

As of February 25, 2025, 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.

As of February 27, 2026 (the date of this filing), following the recent war in Isarel, our operations in Israel have operated at normal levels, 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.

The impact of recent changes in tariffs have had an impact on VPG as we have manufacturing operations in India, China, Japan, Europe, Canada, Israel, and the United States, as well as in other countries.

Beginning in the second quarter of 2025, new tariffs were announced on imports into the U.S.

In response several countries have imposed reciprocal tariffs on import from the U.S.

and other retaliatory measures.

The tariffs have been set at various rates, with exemptions applicable to certain categories of imports and exports.

VPG continues to actively monitor and evaluate the ongoing situation, focusing on quickly responding to cost and price adjustments.

Overview of Financial Results

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The results of operations for the years ended December 31, 2025 and 2024 include items affecting comparability as listed in the reconciliations below.

The reconciliations below include certain financial measures which are not recognized in accordance

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.

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The items affecting comparability are (dollars in thousands, except per share amounts) :

Gross Profit Operating Income Net Earnings Attributable to VPG Stockholders Diluted Earnings Per share

Net Earnings Attributable to

Operating Income

VPG Stockholders

Diluted Earnings Per share

Fiscal Year Ended December 31,

1 unchanged sentence

As reported - GAAP Margins

Acquisition purchase accounting adjustments (a)

79 335 79 335 79 335 0.01 0.02

Acquisition costs (b)

— — 101 — 101 — 0.01 —

Start-up costs (a)

Acquisition purchase accounting adjustments (b)

Acquisition costs (c)

Restructuring costs

Foreign exchange (gain)/loss (c )

— — — — (1,879) 822 (0.14) 0.06

Severance cost

Foreign exchange loss/(gain) (d)

Gain on asset held for sale (e)

Tax effect of reconciling items and discrete tax items

1 unchanged sentence

As Adjusted - Non GAAP Margins

December 31, 2024 December 31, 2023

December 31, 2025

December 31, 2024

Net earnings attributable to VPG stockholders

1 unchanged sentence

Income tax expense

Depreciation 12,022 11,798

Amortization 3,783 3,752

EBITDA $ 35,958 $ 57,657

EBITDA MARGIN 11.7 % 16.2 %

Acquisition purchase accounting adjustments (a) 79 335

Acquisition costs (b) 101 —

Restructuring costs

Severance cost

Foreign exchange (gain) loss (c) (1,879) 822

Start-up costs (a)

Acquisition purchase accounting adjustments (b)

Acquisition costs (c)

Foreign exchange loss (gain)(d)

Gain on asset held for sale (e)

ADJUSTED EBITDA

ADJUSTED EBITDA MARGIN

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

(b) Acquisition costs associated with the acquisition of Nokra in September 2024

(a) Start-up cost 2025

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

(d) Impact of foreign currency exchange rates on assets and liabilities.

(e) Gain on Sale of Manufacturing Facility in Kent, Washington.

Financial Metrics

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The following table shows net revenues, gross profit margin, the end-of-period backlog, the book-to-bill ratio, and the inventory turnover for our business as a whole during the five quarters beginning with the fourth quarter of 2024 and through the fourth quarter of 2025 (dollars in thousands) :

4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

2023 2024 2024 2024 2024

Net revenues $ 89,528 $ 80,783 $ 77,359 $ 75,727 $ 72,653

Gross profit margin

2 unchanged sentences

Inventory turnover

4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

2023 2024 2024 2024 2024

Net revenues $ 34,259 $ 29,414 $ 28,869 $ 28,201 $ 25,755

Gross profit margin

3 unchanged sentences

Weighing Solutions

Net revenues $ 30,438 $ 28,845 $ 27,447 $ 25,174 $ 25,739

Gross profit margin

3 unchanged sentences

Measurement Systems

Net revenues $ 24,831 $ 22,524 $ 21,043 $ 22,352 $ 21,160

Gross profit margin

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Inventory turnover

Net revenues of $72.7 million for the fourth quarter of 2024 decreased 4.1% from the net revenues of $75.7 million reported in the third quarter of 2024, and decreased 18.8% from $89.5 million for the comparable prior year period.

Net revenues in the Sensors segment of $25.8 million in the fourth quarter of 2024 decreased 8.7% from $28.2 million in the third quarter of 2024, and decreased 24.8% from $34.3 million in the fourth quarter of 2023.

Sequentially, the decline in revenues primarily reflected lower sales of advanced sensors in our Other markets for consumer applications and lower precision resistor sales in the Test and Measurement market.

The year-over-year decrease in revenues was primarily attributable to lower sales of precision resistors in the Test & Measurement market and lower sales of advanced sensors in our Other markets for consumer applications.

Fourth-Quarter Year-Over-Year Analysis:

Net revenues of $80.6 million for the fourth quarter of 2025 increased 1.1% from the net revenues of $79.7 reported in the third quarter of 2025 and increased 10.9% from $72.7 for the comparable prior year period.

Net revenues in the Sensors segment of $30.4 million in the fourth quarter of 2025 increased 18.0% from $25.8 million in the fourth quarter of 2024.

The year-over-year increase in revenues was primarily attributable to higher sales of precision resistors and strain gages in the Test and Measurement and in our Other markets.

The Sensors segment gross profit margin of 28.5% declined from 32.0% primarily due to unfavorable foreign exchange rates, unfavorable product mix, and discrete inventory adjustments, partially offset by higher volume.

Net revenues in the Weighing Solutions segment of $27.7 million in the fourth quarter of 2025 increased 7.8% compared to $25.7 million in the fourth quarter of 2024 mainly due to higher revenues in the transportation markets mainly from OEM customers.

The Weighing Solutions segment gross profit margin of 33.0% declined from 34.1% a year ago, primarily due to higher discrete manufacturing fixed costs, partially offset by favorable product mix.

Net revenues in the Measurement Systems segment of $22.4 million in the fourth quarter of 2025 increased 6.0% from $21.2 million in the fourth quarter of 2024.

The year-over-year increase was primarily attributable to higher revenue in the Steel and AMS markets, which offset lower sales in the Transportation market.

The higher year-over-year Measurement Systems segment gross profit margin reflected higher volume partially offset by discrete inventory adjustments.

Fourth-Quarter Sequential Analysis:

Net revenues in the Sensors segment of $30.4 million in the fourth quarter of 2025 decreased 3.9% from $31.6 million in the third quarter of 2025.

The sequential decrease primarily reflected lower sales of precision resistors in the AMS market and lower sales of strain gages in the General Industrial market, which offset higher sales of precision resistors in the Test and Measurement markets.

The Sensors segment adjusted gross profit margin of 28.5% in the fourth quarter of 2025 declined from the third quarter of 2025 reflecting lower volume, unfavorable product mix and unfavorable foreign exchange rates.

Net revenues in the Weighing Solutions segment of $27.7 million in the fourth quarter of 2025 increased 0.7% compared to revenues of $27.5 million in the third quarter of 2025.

The sequential increase in revenues reflected higher revenue in our Industrial Weighing market and in our Other markets, which offset lower revenue in the Transportation market.

Net revenues in the fourth quarter of 2024 decreased 15.4% compared to $30.4 million in the fourth quarter of 2023 mainly due to lower revenues in our Other markets from OEM customers for precision agriculture and construction applications and lower revenues in the Transportation and General Industrial markets.

Net revenues in the Measurement Systems segment of $21.2 million in the fourth quarter of 2024 decreased 5.3% from $22.4 million in the third quarter of 2024 and decreased 14.8% from $24.8 million in the fourth quarter of 2023.

The sequential decline in revenue was primarily attributable to lower sales of DSI products, which was partially offset by the added revenues related to the acquisition of Nokra on September 30, 2024.

The year-over-year decline in revenues was primarily attributable to lower sales of DTS products, which offset the added revenue related to the acquisition of Nokra on September 30, 2024.

The gross profit margin for the fourth quarter of 2024 decreased 1.8% compared to the third quarter of 2024, and decreased 4.8% from the fourth quarter of 2023.

Sequentially, gross profit margins improved in the Sensors segment, decreased in the Weighing Solutions segment, and decreased in the Measurement Systems segments.

Sequentially, the increase in gross profit margin in the Sensors segment was primarily due to improved manufacturing efficiencies, which offset the impact of lower volume.

The decrease in gross margin for the Weighing Solutions segment was primarily due to higher material costs and the reduction in inventory which offset higher volume.

In the Measurement Systems segment, the lower adjusted gross profit margin in the fourth quarter of 2024 reflected lower volume and unfavorable product mix.

Compared to the fourth quarter of 2023, gross profit margins decreased in all of the reporting segments.

In the Sensors segment, the decreased in gross profit margin was primarily due to lower volume and unfavorable product mix, which was partially offset by improved manufacturing efficiencies.

In the Weighing Solutions segment, the decreased in g ross profit margin was primarily due to lower volume.

In the Measurement Systems segment, gross profit margin decreased reflecting lower volume and unfavorable product mix.

Operationally Diversified

The sequential increase in revenues reflected higher revenue in our Industrial Weighing market, which partially offset lower revenue in the Transportation market.

The Weighing Solutions segment gross profit margin for the fourth quarter of 2025 of 33.0% decreased from 40.3% in the third quarter of 2025, primarily reflected discrete manufacturing items, reduction of inventory, and higher logistics costs.

Net revenues in the Measurement Systems segment of $22.4 million in the fourth quarter of 2025 increased 9.1% from $20.6 million in the third quarter of 2025.

The sequential increase in revenue was primarily due to higher sales in the Steel and AMS markets.

The Measurement Systems segment gross profit margin of 52.8% increased from 50.5% in the third quarter of 2025 due to higher volume, partially offset by discrete inventory adjustments.

Growth-Focused Strategy

Each of VPG's business segments maintains and deploys distinct go-to-market strategies, technical expertise, capital requirements, and acquisition opportunities.

We use an operationally diversified strategy and structure to be close to our customers and to leverage our high-level engineering expertise to optimize and enhance the performance of our customers' solutions.

We seek to maximize the performance and value of our businesses by leveraging our accumulated experience, methodologies, and expertise in driving operational excellence across our functional areas, as well as in the allocation of capital and investment.

In the fourth quarter of 2025, we refined our business strategy to support the next phase on our path to achieve accelerated growth.

This strategic shift follows significant investments over the past several years to streamline and improve our operational and functional efficiencies and capabilities, positioning us to pursue fast growing, higher-volume opportunities driven by macro technological and industrial trends.

As part of this change in strategy, on November 4, 2025, we announced the expansion of our senior management team with two newly created executive positions:

Chief Business and Product Officer and Chief Operating Officer , both reporting to the Chief Executive Officer.

We believe these roles, along with related organizational changes, will enable us to accelerate growth by leveraging sales and operational capabilities across our business units through increased standardization of business processes, systems, and oversight.

We believe that these changes, combined with a company culture which emphasizes business execution, accountability and operational excellence, will lead to the development of higher added value products, faster time to market, and improved customer service, which in turn will contribute to growth in revenue and profits.

Optimize Core Competence

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Effects of Foreign Exchange Rate on Operations

For the year ended December 31, 2024, foreign exchange rate impacts decreased net revenues by $0.9 million and decrease costs of products sold and selling, general, and administrative expenses by $1.1 million.

For the year ended December 31, 2023, foreign exchange rate impacts decreased net revenues by $2.2 million and decreased costs of products sold and selling, general, and administrative expenses by $9.1 million.

For the year ended December 31, 2025, foreign exchange rate impacts increased net revenues by $2.8 million and increase costs of products sold and selling, general, and administrative expenses by $7.4 million.

For the year ended December 31, 2024, foreign exchange rate impacts decreased net revenues by $0.9 million and increased costs of products sold and selling, general, and administrative expenses by $1.1 million.

Critical Accounting Policies and Estimates

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We utilize published long-term high-quality bond indices to determine the discount rate at the measurement date.

We utilize bond yields at various maturity dates to reflect

the timing of expected future benefit payments.

We utilize bond yields at various maturity dates to reflect the timing of expected future benefit payments.

We believe the discount rates selected are the rates at which these obligations could effectively be settled.

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Costs of products sold

Gross profit 41.0 % 42.3 %

Selling, general, and administrative expenses

1 unchanged sentence

Income before taxes

Net earnings 3.2 % 7.3 %

Net earnings attributable to VPG stockholders

2 unchanged sentences

Years ended December 31,

Net revenues $ 306,522 $ 355,048

Change versus prior year

5 unchanged sentences

Foreign currency effects

Net change (13.7) %

During the year ended December 31, 2024, net revenues decreased 13.7% over the prior year in all three reporting segments.

During the year ended December 31, 2025, net revenues increased 0.2% over the prior year due to higher volume in the Sensors and Weighing solution reporting segments and partially offset by lower volume in the Measurement Systems reporting segment.

Gross Profit Margin

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The gross profit margin for the year ended December 31, 2025 decreased 2.1% over the prior year.

The decrease in gross profit margin was primarily due to decreased gross profit margins in the Weighing Solutions and Sensors reporting segments partially offset by increased gross profit margin in the Measurement Systems reporting segment.

The decrease in gross profit margin was primarily due to decreased gross profit margins in the Sensors and Measurement Systems segments, which was partially offset by increased gross profit margin in the Weighing Solutions.

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

1 unchanged sentence

Years ended December 31,

Net revenues $ 112,238 $ 139,783

Change versus prior year

5 unchanged sentences

Foreign currency effects

Net change (19.7) %

For the year ended December 31, 2024, net revenues decreased 19.7% as compared to the prior year, due to lower sales of precision resistors in the Test and Measurement and the AMS markets, and lower sales of advanced sensors products primarily in the AMS market.

For the year ended December 31, 2025, net revenues increased 3.0% as compared to the prior year, the increase in revenues was primarily attributable to higher sales of precision resistors and advanced sensors in the Test and Measurement markets and in our AMS markets partially offset by lower sales to other markets.

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

1 unchanged sentence

Gross profit margin

For the year ended December 31, 2024, the gross profit margin decreased 4.9% as compared to the prior year primarily due to lower volume.

For the year ended December 31, 2025, the gross profit margin decreased 3.4% as compared to the prior year primarily due to unfavorable foreign exchange rates and discrete inventory adjustments, partially offset by higher volume.

Weighing Solutions

1 unchanged sentence

Years ended December 31,

Net revenues $ 107,205 $ 122,528

Change versus prior year

5 unchanged sentences

Foreign currency effects

Net change (12.5) %

For the year ended December 31, 2024, net revenues decreased 12.5% from the prior year.

For the year ended December 31, 2025, net revenues increased 3.7% from the prior year.

The year-over-year increase in revenues was mainly attributable to higher sales in the Transportation market partially offset by lower sales in the Industrial Weighing market.

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

1 unchanged sentence

Gross profit margin

For the year ended December 31, 2024, the gross profit margin decreased 0.4% as compared to the prior year, due to lower volume.

For the year ended December 31, 2025, the gross profit margin increased 0.9% as compared to the prior year, due to favorable product mix, partially offset by higher one-time manufacturing fixed costs.

Measurement Systems

1 unchanged sentence

Years ended December 31,

Net revenues $ 87,079 $ 92,737

Change versus prior year

Percentage change versus prior year

Changes in Measurement Systems segment net revenues were attributable to the following:

Changes in the Measurement Systems segment net revenues were attributable to the following:

Change attributable to:

2 unchanged sentences

Foreign currency effects

Net change (6.1) %

For the year ended December 31, 2024, net revenues decreased 6.1% as compared to the prior year, primarily attributable to lower sales of DSI and DTS products partially offset by the added revenue related to the acquisition of Nokra on September 30, 2024.

For the year ended December 31, 2025, net revenues decreased 7.7% as compared to the prior year, the decrease was primarily attributable to decreased revenue in the Steel and AMS markets, partially offset by higher revenues in the Transportation market.

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

1 unchanged sentence

Gross profit margin

For the year ended December 31, 2024, the gross profit margin increased 0.8% from the prior year mostly due to favorable product mix partially offset by lower volume.

For the year ended December 31, 2025, the gross profit margin decreased 2.5% from the prior year mostly due to lower volume and discrete inventory adjustments.

Selling, General, and Administrative Expenses

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as a percentage of net revenues

SG&A expenses for the year ended December 31, 2024 increased $0.7 million as compared to the prior year mostly due to added personnel costs related to the acquisition of Nokra on September 30, 2024.

SG&A expenses for the year ended December 31, 2025 increased $2.1 million as compared to the prior year mainly due to unfavorable foreign exchange rates, wage increases partially offset by lower sales commissions, headcount and travels costs

Impairment of Goodwill and Indefinite-lived Intangible Assets

8 unchanged sentences

Acquisition Costs

For the year ended December 31, 2024, we recorded acquisition costs in our consolidated statements of operations of $0.1 million in connection with the acquisition of Nokra.

There were no acquisition costs recorded in our consolidated statements of operations for the year ended December 31, 2023.

For the year ended December 31, 2025, there were no acquisition costs recorded in our consolidated statements of operations.

We recorded acquisition costs in our consolidated statements of operations of $0.1 million in connection with the acquisition of Nokra for the year ended December 31, 2024.

Other Income (Expense)

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The Company recorded interest expense of $1.9 million, and $2.5 million for the years ended December 31, 2025 and 2024, respectively.

Interest expense was lower in 2024 compared to 2023 mainly due to partial repayment of loans that occurred in the second half of 2023 and lower borrowing rates during 2024.

Interest expense was lower in 2025 compared to 2024 mainly due to lower borrowing rates during 2025.and the repayment of $11 million on the Company's credit facility in July 2025.

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

Years ended December 31,

2024 2023 Change

Foreign currency exchange gain/(loss)

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Pension expense

Other (284) (321) 37

$ 3,212 $ 456 $ 2,756

Foreign currency exchange gains and losses represent the impact of changes in foreign currency exchange rates.

The change in foreign currency exchange gains / (losses) for the year ended December 31, 2024, as compared to the prior year period, is primarily due to fluctuations in the Japanese Yen, Israeli shekel and the Canadian dollar.

The change in foreign currency exchange gains / (losses) for the year ended December 31, 2025, as compared to the prior year period, is primarily due to fluctuations in the Israeli shekel, Japanese Yen and the Canadian dollar.

Our effective tax rate for the year ended December 31, 2025 was 39.3%, as compared to 44.0% for the year ended December 31, 2024.

Our effective tax rate was higher in 2024 compared to 2023 primarily due to increases in valuation allowances and changes in our geographical mix of income.

Our effective tax rate was lower in 2025 compared to 2024 primarily due to lower change in valuation allowances and changes in our geographical mix of income.

We reassessed our ability to realize our U.S.

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statutory rate and foreign tax rates

• 7.6% increase related to changes in valuation allowances

• 1.0% increase related to statutory tax rate changes

3.0% increase related to Other nontaxable or nondeductible items

5.5% decrease related to changes in valuation allowances

3.1% decrease related to specialty tax credits, such as research credits

2 unchanged sentences

7.6% increase related to changes in valuation allowances

• 2.3% increase related to residual U.S.

tax on foreign earnings

• 1.2% increase related to changes in reserves for uncertain tax positions

1.0% increase related to statutory tax rate changes

2.9% decrease related to specialty tax credits, such as research credits

23 unchanged sentences

Our cash provided by operating activities for the year ended December 31, 2025 was $14.4 million as compared to $19.8 million for the year ended December 31, 2024.

Our net cash used in investing activities for the year ended December 31, 2024 was $12.9 million, compared to $15.1 million for the year ended December 31, 2023.

Our net cash used in financing activities for the year ended December 31, 2024 was $9.4 million, which included a pay down on the 2020 credit facility of $0.0 million, as compared to $35.9 million for the year ended December 31, 2023.

Our net cash provided by investing activities for the year ended December 31, 2025 was $2.9 million, compared to $12.9 million used for the year ended December 31, 2024.

Our net cash used in financing activities for the year ended December 31, 2025 was $11.4 million, as compared to $9.4 million for the year ended December 31, 2024 which included a partial repayment of our revolving debt in the amount of $11.0 million.

Approximately 91% and 94% of our cash and cash equivalents balance at December 31, 2025 and 2024, respectively, was held by our non-U.S.

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See the following table for the percentage of cash and cash equivalents, by region of subsidiary, at December 31, 2025 and December 31, 2024:

Asia 21 % 22 %

United States

Israel 56 % 36 %

Europe 14 % 23 %

Canada 3 % 11 %

Total 100 % 100 %

We earn a significant amount of our operating income outside the United States, the majority of which is deemed to be indefinitely reinvested in the foreign jurisdictions.

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Revolving debt

Repayment of credit facility

Deferred financing costs

Total third-party debt

Net cash $ 47,831 $ 52,109

Measurements such as “adjusted free cash flow” and “net cash" do not have uniform definitions and are not recognized in accordance with U.S.

18 unchanged sentences

general business and economic conditions;

significant developments from the recent and potential changes in tariffs and trade regulation;

impact of inflation;

7 unchanged sentences

political, economic, and health (including pandemics) instabilities;

instability caused by military hostilities in the regions or countries in which we operate (including Israel);

instability or disruption caused by military hostilities in the regions or countries in which we 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 ability to execute our new corporate strategy and business continuity, operational and budget plans;

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis