What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-08-04 compared with 2020-05-05 · 303 added, 123 removed, 414 unchanged (51% of the section changed)

3 unchanged sentences

(In thousands)

March 28, 2020

December 31, 2019

June 27, 2020 December 31, 2019

Current assets:

8 unchanged sentences

Property and equipment, at cost:

Land 4,191 4,243

Buildings and improvements 52,200 52,708

Machinery and equipment 112,888 111,492

Software 9,586 9,384

Construction in progress 10,028 2,485

1 unchanged sentence

Property and equipment, net 66,000 61,270

Goodwill 34,588 35,018

Intangible assets, net 32,611 34,198

Operating lease right-of-use assets 22,401 8,691

Other assets 18,329 18,675

Total assets $ 384,650 $ 370,413

Continues on the following page.

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Balance Sheets (continued)

Consolidated Condensed Balance Sheets

(In thousands)

March 28, 2020

December 31, 2019

June 27, 2020 December 31, 2019

Liabilities and equity

3 unchanged sentences

Other accrued expenses 16,984 16,126

Income taxes 1,766 261

Current portion of operating lease liabilities 3,924 2,827

Current portion of long-term debt 85 44,516

2 unchanged sentences

Deferred income taxes 3,477 3,478

Operating lease liabilities 19,032 5,811

Other liabilities 14,409 14,775

2 unchanged sentences

Commitments and contingencies

Common stock 1,317 1,312

Class B convertible common stock 103 103

6 unchanged sentences

Noncontrolling interests 176 392

Total equity 244,240 241,752

Total liabilities and equity $ 384,650 $ 370,413

4 unchanged sentences

Fiscal quarter ended

March 28, 2020

March 30, 2019

June 27, 2020 June 29, 2019

Net revenues $ 59,146 $ 70,870

Costs of products sold 36,036 42,261

Gross profit 23,110 28,609

Selling, general, and administrative expenses 18,640 19,896

Executive severance costs — 611

Restructuring costs 499 —

2 unchanged sentences

Interest expense ( 267 ) ( 359 )

Other ( 1,273 ) ( 160 )

Other income (expense) ( 1,540 ) ( 519 )

1 unchanged sentence

Income tax expense 684 2,003

Net earnings 1,747 5,580

net (loss) earnings attributable to noncontrolling interests ( 12 ) 15

6 unchanged sentences

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Operations

(Unaudited - In thousands, except per share amounts)

Six fiscal months ended

June 27, 2020 June 29, 2019

Net revenues $ 126,842 $ 147,395

Costs of products sold 78,667 85,735

Gross profit 48,175 61,660

Selling, general, and administrative expenses 38,931 40,344

Executive severance costs — 611

Restructuring costs 629 —

Operating income 8,615 20,705

Other income (expense):

Interest expense ( 728 ) ( 747 )

Other ( 590 ) ( 932 )

Other income (expense) ( 1,318 ) ( 1,679 )

Income before taxes 7,297 19,026

Income tax expense 2,258 5,120

Net earnings 5,039 13,906

net (loss) earnings attributable to noncontrolling interests ( 32 ) 98

Net earnings attributable to VPG stockholders $ 5,071 $ 13,808

Basic earnings per share attributable to VPG stockholders $ 0.37 $ 1.02

Diluted earnings per share attributable to VPG stockholders $ 0.37 $ 1.02

Weighted average shares outstanding - basic 13,556 13,506

Weighted average shares outstanding - diluted 13,598 13,579

See accompanying notes.

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

1 unchanged sentence

Fiscal quarter ended

March 28, 2020

March 30, 2019

June 27, 2020 June 29, 2019

Net earnings $ 1,747 $ 5,580

Other comprehensive income (loss):

2 unchanged sentences

Other comprehensive (loss) income 3,119 450

Total comprehensive (loss) income

Comprehensive income 4,866 6,030

comprehensive (loss) income attributable to noncontrolling interests ( 12 ) 15

2 unchanged sentences

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited - In thousands)

Six fiscal months ended

June 27, 2020 June 29, 2019

Net earnings $ 5,039 $ 13,906

Other comprehensive income (loss):

Foreign currency translation adjustment ( 2,070 ) 951

Pension and other postretirement actuarial items, net of tax ( 311 ) 185

Other comprehensive (loss) income ( 2,381 ) 1,136

Comprehensive income 2,658 15,042

comprehensive income (loss) attributable to noncontrolling interests ( 32 ) 98

Comprehensive income attributable to VPG stockholders $ 2,690 $ 14,944

See accompanying notes.

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Cash Flows

(Unaudited - In thousands)

Three fiscal months ended

March 28, 2020

March 30, 2019

Six fiscal months ended

June 27, 2020 June 29, 2019

Operating activities

Net earnings $ 5,039 $ 13,906

Adjustments to reconcile net earnings to net cash provided by operating activities:

1 unchanged sentence

Loss from extinguishment of debt 30 —

(Gain) loss on disposal of property and equipment

Gain on disposal of property and equipment ( 143 ) ( 50 )

Share-based compensation expense 757 1,086

1 unchanged sentence

Deferred income taxes ( 146 ) 379

Other 25 ( 2,753 )

Net changes in operating assets and liabilities:

8 unchanged sentences

Proceeds from sale of property and equipment 378 214

Adjustment to purchase price of a business 156 —

Net cash used in investing activities ( 10,484 ) ( 5,550 )

3 unchanged sentences

Debt issuance costs ( 402 ) —

Distributions to noncontrolling interests

Purchase of noncontrolling interest ( 253 ) —

Contributions from noncontrolling interests 117 2

Payments of employee taxes on certain share-based arrangements ( 813 ) ( 854 )

6 unchanged sentences

Capital expenditures purchased $ ( 10,290 ) $ ( 4,992 )

Capital expenditures accrued but not yet paid $ 455 $ 1,077

Supplemental disclosure of financing transactions:

1 unchanged sentence

Non-cash refinancing of revolving facility (see Note 7) $ 7,020 $ —

Capital expenditures accrued but not yet paid as of March 28, 2020 were $1,016 .

See accompanying notes.

2 unchanged sentences

(Unaudited - In thousands, except share amounts)

Three Fiscal Months Ended March 28, 2020

Treasury Stock

Fiscal quarter ended

June 27, 2020

Stock Class B

Common Stock Treasury Stock Capital in

Par Value Retained

Earnings Accumulated

Comprehensive

Income (Loss)

Total VPG, Inc.

Income (Loss) Total VPG Inc.

Stockholders'

Noncontrolling

Balance at December 31, 2019

Equity Noncontrolling

Interests Total

Balance at March 28, 2020

$ 1,316 $ 103 $ ( 8,765 ) $ 196,709 $ 92,600 $ ( 43,203 ) $ 238,760 $ 347 $ 239,107

Net earnings (loss)

— — — — 1,759 — 1,759 ( 12 ) 1,747

Other comprehensive loss

— — — — — 3,119 3,119 — 3,119

Share-based compensation expense

— — — 378 — — 378 — 378

Restricted stock issuances ( 8,244 shares)

Distributions to noncontrolling interests

1 — — ( 1 ) — — — — —

Purchase of noncontrolling interest — — — 48 — — 48 ( 301 ) ( 253 )

Contributions from noncontrolling interests

— — — — — — — 142 142

Balance at June 27, 2020

$ 1,317 $ 103 $ ( 8,765 ) $ 197,134 $ 94,359 $ ( 40,084 ) $ 244,064 $ 176 $ 244,240

Fiscal quarter ended

June 29, 2019

Stock Class B

Common Stock Treasury Stock Capital in

Par Value Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total VPG Inc.

Stockholders'

Equity Noncontrolling

Interests Total

Balance at March 30, 2019

Three Fiscal Months Ended March 30, 2019

Treasury Stock

$ 1,311 $ 103 $ ( 8,765 ) $ 196,578 $ 75,343 $ ( 36,779 ) $ 227,791 $ 87 $ 227,878

— — — 5,565 5,565 15 5,580

Other comprehensive income

— — — — — 450 450 — 450

Share-based compensation expense

— — — 572 — — 572 — 572

Restricted stock issuances ( 11,295 shares)

1 — — ( 275 ) — — ( 274 ) — ( 274 )

Contributions from noncontrolling interests

— — — — — — — 36 36

Balance at June 29, 2019

$ 1,312 $ 103 $ ( 8,765 ) $ 196,875 $ 80,908 $ ( 36,329 ) $ 234,104 $ 138 $ 234,242

See accompanying notes.

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Equity

(Unaudited - In thousands, except share amounts)

Six Fiscal Months Ended June 27, 2020

Stock Class B

Common Stock Treasury Stock Capital in

Par Value Retained

Earnings Accumulated

Comprehensive

Income (Loss)

Total VPG, Inc.

Income (Loss) Total VPG, Inc.

Stockholders'

Noncontrolling

Equity Noncontrolling

Interests Total

Balance at December 31, 2019 $ 1,312 $ 103 $ ( 8,765 ) $ 197,125 $ 89,288 $ ( 37,703 ) $ 241,360 $ 392 $ 241,752

Net earnings (loss)

— — — — 5,071 — 5,071 ( 32 ) 5,039

Other comprehensive loss

— — — — — ( 2,381 ) ( 2,381 ) — ( 2,381 )

Share-based compensation expense

— — — 757 — — 757 — 757

Restricted stock issuances ( 52,433 shares)

5 — — ( 796 ) — — ( 791 ) — ( 791 )

Purchase of noncontrolling interest — — — 48 — — 48 ( 301 ) ( 253 )

Contributions from noncontrolling interests

— — — — — — — 117 117

Balance at June 27, 2020 $ 1,317 $ 103 $ ( 8,765 ) $ 197,134 $ 94,359 $ ( 40,084 ) $ 244,064 $ 176 $ 244,240

Six Fiscal Months Ended June 29, 2019

Stock Class B

Common Stock Treasury Stock Capital in

Par Value Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total VPG, Inc.

Stockholders'

Equity Noncontrolling

Interests Total

Balance at December 31, 2018 $ 1,307 $ 103 $ ( 8,765 ) $ 196,666 $ 66,569 $ ( 37,465 ) $ 218,415 $ 38 $ 218,453

— — — — 13,808 — 13,808 98 13,906

Other comprehensive income

— — — — — 1,136 1,136 — 1,136

Share-based compensation expense

— — — 1,086 — — 1,086 — 1,086

Restricted stock issuances ( 48,482 shares)

5 — — ( 877 ) — — ( 872 ) — ( 872 )

Cumulative effect adjustment for adoption of ASU 2016-02

Distributions to noncontrolling interests

Balance at March 30, 2019

— — — — 531 — 531 — 531

Contributions from noncontrolling interests

— — — — — — — 2 2

Balance at June 29, 2019 $ 1,312 $ 103 $ ( 8,765 ) $ 196,875 $ 80,908 $ ( 36,329 ) $ 234,104 $ 138 $ 234,242

See accompanying notes.

9 unchanged sentences

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of December 31, 2019 and 2018 and for each of the three years in the period ended December 31, 2019, included in VPG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 11, 2020.

The results of operations for the fiscal quarter ended March 28, 2020 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the fiscal quarter ended June 27, 2020 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 2020 and 2019 end on the following dates:

September 26,

September 28,

Quarter 1 March 28, March 30,

Quarter 2 June 27, June 29,

Quarter 3 September 26, September 28,

Quarter 4 December 31, December 31,

Recently Adopted Accounting Pronouncements

13 unchanged sentences

2018-14, "Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU amends Accounting Standards Codification ("ASC") 715 to add, remove and clarify disclosure requirements related to defined benefit and pension and other postretirement plans.

The amendments in this ASU are effective

The amendments in this ASU are

Note 1 – Basis of Presentation (continued)

for annual periods beginning after December 15, 2020 and early adoption is permitted.

effective for annual periods beginning after December 15, 2020 and early adoption is permitted.

The Company is evaluating the standard to determine the impact on the consolidated condensed financial statements.

4 unchanged sentences

The Company is evaluating the standard to determine the impact on the consolidated condensed financial statements.

Reclassifications

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

Note 2 – Revenues

2 unchanged sentences

Fiscal quarter ended

March 28, 2020

Fiscal quarter ended

March 30, 2019

June 27, 2020 Fiscal quarter ended

June 29, 2019

Foil Technology

Control Systems

Products Force

Sensors Weighing and

Control Systems Total Foil Technology

Products Force

Sensors Weighing and

Control Systems Total

United States $ 10,789 $ 4,113 $ 6,010 $ 20,912 $ 13,102 $ 8,497 $ 5,894 $ 27,493

United Kingdom 586 1,711 1,722 4,019 833 2,534 4,234 7,601

Other Europe 6,974 1,434 3,430 11,838 8,847 2,957 4,273 16,077

Israel 5,691 92 — 5,783 3,272 84 — 3,356

Asia 7,745 1,566 1,859 11,170 6,945 2,277 2,316 11,538

Canada — — 5,424 5,424 — — 4,805 4,805

Total $ 31,785 $ 8,916 $ 18,445 $ 59,146 $ 32,999 $ 16,349 $ 21,522 $ 70,870

Six Fiscal Months Ended June 27, 2020 Six Fiscal Months Ended June 29, 2019

Foil Technology

Control Systems

Products Force

Sensors Weighing and

Control Systems Total Foil Technology

Products Force

Sensors Weighing and

Control Systems Total

United States $ 22,723 $ 12,505 $ 14,898 $ 50,126 $ 30,011 $ 16,549 $ 10,927 $ 57,487

United Kingdom 1,537 3,691 5,435 10,663 1,674 5,711 8,578 15,963

Other Europe 14,686 3,808 7,174 25,668 16,950 5,981 8,815 31,746

Israel 8,646 190 — 8,836 6,251 203 — 6,454

Asia 14,670 3,417 3,530 21,617 15,162 4,637 4,890 24,689

Canada — — 9,932 9,932 — — 11,056 11,056

Total $ 62,262 $ 23,611 $ 40,969 $ 126,842 $ 70,048 $ 33,081 $ 44,266 $ 147,395

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

1 unchanged sentence

Prior year data has been reclassified to reflect the current market sectors.

Fiscal quarter ended

March 28, 2020

March 30, 2019

Note 2 – Revenues (continued)

Fiscal quarter ended Six fiscal months ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Test & Measurement $ 14,027 $ 17,980 $ 28,372 $ 35,601

4 unchanged sentences

General Industrial 3,623 5,244 7,662 10,866

Steel 8,806 6,533 18,119 14,720

Total $ 59,146 $ 70,870 $ 126,842 $ 147,395

Contract Assets & Liabilities

4 unchanged sentences

The term between invoicing and when payment is due is not significant.

Note 2 – Revenues (continued)

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

Contract Asset

Contract Liability

Unbilled Revenue

Accrued Customer Advances

Contract Asset Contract Liability

Unbilled Revenue Accrued Customer Advances

Balance at December 31, 2019 $ 3,937 $ 4,561

Balance at March 28, 2020

The amount of revenue recognized during the three fiscal months ended March 28, 2020 that was included in the contract liability balance at December 31, 2019 was $2.3 million .

Balance at June 27, 2020 3,511 5,795

(Decrease)/increase $ ( 426 ) $ 1,234

The amount of revenue recognized during the six fiscal months ended June 27, 2020 that was included in the contract liability balance at December 31, 2019 was $ 3.7 million.

Practical Expedients

4 unchanged sentences

On November 1, 2019, VPG completed the acquisition of New York-based Dynamic Systems Inc.

("DSI"), a provider of specialized dynamic thermal-mechanical test and simulation systems used to develop new metal alloys and optimize production processes, for a purchase price of $40.5 million , subject to customary adjustments, plus a potential earn out of up to an additional $3.0 million .

During the second quarter of 2020, the Company received $ 0.2 million from escrow as a purchase price adjustment, resulting in a reduction of goodwill.

Additionally, it was determined that an earn out, which was part of the purchase price, was not achieved.

DSI reports into the Company's Weighing and Control Systems segment.

The following table summarizes the preliminary fair values assigned to the assets and liabilities of DSI as of November 1, 2019 (in thousands):

Note 3 - Acquisitions ( continued)

November 1, 2019 Adjustments Adjusted

Working capital (a)

$ 6,874 $ 6,874

Property and equipment 1,727 1,727

4 unchanged sentences

Customer relationships 4,344 4,344

Trade names 3,300 3,300

Total intangible assets 17,894 — 17,894

1 unchanged sentence

Purchase price $ 40,481 $ ( 156 ) $ 40,325

Goodwill $ 18,606 $ ( 156 ) $ 18,450

(a) Working capital accounts include accounts receivable, inventory, prepaid expenses, accounts payable, accrued expenses, and accrued payroll.

The fair value of the contingent consideration as of November 1, 2019 and March 28, 2020 was zero .

The weighted average useful lives for the patents and acquired technology and customer relationships are 16 years, and 15 years, respectively.

2 unchanged sentences

Following is the supplemental consolidated financial results for the Company on an unaudited pro forma basis, as if the DSI acquisition had been consummated on January 1, 2019:

Note 3 - Acquisitions ( continued)

Fiscal quarter ended

March 30, 2019

Fiscal quarter ended Six fiscal months ended

June 29, 2019 June 29, 2019

Pro forma net revenues

$ 74,199 $ 157,821

Pro forma net earnings attributable to VPG stockholders

$ 5,304 $ 17,135

Pro forma basic earnings per share attributable to VPG stockholders

$ 0.39 $ 1.27

Pro forma diluted earnings per share attributable to VPG stockholders

$ 0.39 $ 1.26

Note 4 – Goodwill

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

Weighing and Control Systems Segment

Foil Technology Products Segment

KELK Acquisition

DSI Acquisition

Stress-Tek Acquisition

Pacific Acquisition

Total Weighing and Control Systems Segment Foil Technology Products Segment

KELK Acquisition DSI Acquisition Stress-Tek Acquisition Pacific Acquisition

Balance at December 31, 2019 $ 35,018 $ 6,559 $ 18,606 $ 6,311 $ 3,542

Adjustment to purchase price $ ( 156 ) — ( 156 ) — —

Foreign currency translation adjustment ( 274 ) ( 275 ) 1 — —

Balance at March 28, 2020

Balance at June 27, 2020 $ 34,588 $ 6,284 $ 18,451 $ 6,311 $ 3,542

Note 5 – Leases

2 unchanged sentences

The arrangement is or contains a lease if the contract conveys the right to control the use of the identified asset for a period in exchange for consideration.

Note 5 - Leases (continued)

Lease right of use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected term at commencement date.

10 unchanged sentences

The Company has no finance leases.

Note 5 - Leases (continued)

One of the Company's indirect wholly-owned subsidiaries entered into a lease agreement as tenant related to a property in Israel.

Such lease agreement provides that we will lease a new building containing approximately 121,400 square feet.

The facility was made available to the Company during the second quarter of 2020, at which time the Company established an operating right of use asset and operating lease liability, with a lease term of 12.5 years, of $ 14.8 million, in accordance with the terms of the lease agreement.

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

Classification on Balance Sheet

March 28, 2020

December 31, 2019

Leases June 27, 2020 December 31, 2019

Operating lease right of use asset $ 22,401 $ 8,691

Operating lease - current $ 3,924 $ 2,827

Other Accrued Expenses

Operating lease - non-current $ 19,032 $ 5,811

Other Liabilities

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

March 28, 2020

Operating leases weighted average remaining lease term (in years)

June 27, 2020

Operating leases weighted average remaining lease term (in years) 9.24 years

Operating leases weighted average discount rate 3.71 %

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

Fiscal quarter ended

March 28, 2020

March 30, 2019

Fiscal quarter ended Six Fiscal Months Ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Operating lease cost $ 1,139 $ 812 $ 2,013 $ 1,635

3 unchanged sentences

Right of use assets obtained in exchange for new operating lease liability during 2020 were $ 15.3 million.

The cash paid for amounts included in the measurement of lease liabilities approximates our operating lease cost for the three months ended March 28, 2020 .

Undiscounted maturities of operating lease payments as of March 28, 2020 are summarized as follows (in thousands) :

2020 (excluding the three months ended March 28, 2020)

The Company paid $ 1.7 million for its operating leases for each of the six fiscal months ended June 27, 2020 and June 29, 2019, which are included in operating cash flows on the consolidated condensed statements of cash flows.

Undiscounted maturities of operating lease payments as of June 27, 2020 are summarized as follows (in thousands) :

Note 5 - Leases (continued)

2020 (excluding the six months ended June 27, 2020) $ 2,113

Thereafter 12,050

Total future minimum lease payments $ 26,791

1 unchanged sentence

Present value of future minimum lease payments $ 22,956

One of the Company's indirect wholly-owned subsidiaries entered into a lease agreement as tenant related to a property in Israel.

Such lease agreement provides that we will lease a new building containing approximately 121,400 square feet.

The Company expects to commence occupancy in the second half of 2020.

Note 6 – 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 March 28, 2020 was 32.3% compared to 27.2% for the fiscal quarter ended March 30, 2019 .

Note 6 - Income Taxes (continued)

The effective tax rate for the fiscal quarter ended June 27, 2020 was 28.1 % compared to 26.4 % for the fiscal quarter ended June 29, 2019.

The effective tax rate for the six fiscal months ended June 27, 2020 was 30.9 % compared to 26.9 % for the six fiscal months ended June 29, 2019.

The tax rate in the current fiscal quarter is higher than the prior year fiscal quarter, primarily due to changes in the mix of worldwide income.

9 unchanged sentences

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

March 28, 2020

December 31, 2019

June 27, 2020 December 31, 2019

2020 Credit Agreement - Revolving Facility $ 41,000 $ —

5 unchanged sentences

2015 Credit Agreement - Canadian Term Facility — 3,476

Other debt 85 149

Deferred financing costs ( 408 ) ( 112 )

5 unchanged sentences

(1) the “2015 U.S.

Closing Date Term Facility” in an aggregate principal amount of $2.0 million ;

Closing Date Term Facility” in an aggregate principal amount of $ 2.0

Note 7 - Long-Term Debt (continued)

and (2) the "2015 U.S.

10 unchanged sentences

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

Note 7 - Long-Term Debt (continued)

financial ratios.

The financial maintenance covenants include interest coverage ratio and a leverage ratio.

2 unchanged sentences

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

Foreign Currency Translation Adjustment

Foreign Currency Translation Adjustment Pension

Postretirement

Actuarial Items

Actuarial Items Total

Balance at January 1, 2020 $ ( 30,761 ) $ ( 6,942 ) $ ( 37,703 )

1 unchanged sentence

Amounts reclassified from accumulated other comprehensive income (loss) — ( 311 ) ( 311 )

Balance at March 28, 2020

Foreign Currency Translation Adjustment

Balance at June 27, 2020 $ ( 32,831 ) $ ( 7,253 ) $ ( 40,084 )

Foreign Currency Translation Adjustment Pension

Postretirement

Actuarial Items

Actuarial Items Total

Balance at January 1, 2019 $ ( 31,319 ) $ ( 6,146 ) $ ( 37,465 )

1 unchanged sentence

Amounts reclassified from accumulated other comprehensive income (loss) — 185 185

Balance at March 30, 2019

Balance at June 29, 2019 $ ( 30,368 ) $ ( 5,961 ) $ ( 36,329 )

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).

2 unchanged sentences

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) :

Fiscal quarter ended

March 28, 2020

Note 9 - Pension and Other Postretirement Benefits ( continued)

Fiscal quarter ended

March 30, 2019

June 27, 2020 Fiscal quarter ended

June 29, 2019

Plans Pension

Net service cost $ 99 $ 31 $ 82 $ 31

3 unchanged sentences

Net periodic benefit cost $ 193 $ 98 $ 157 $ 115

Six fiscal months ended June 27, 2020 Six fiscal months ended June 29, 2019

Plans Pension

Net service cost $ 198 $ 62 $ 165 $ 62

Interest cost 256 $ 66 $ 314 $ 90

Expected return on plan assets ( 220 ) $ — $ ( 265 ) $ —

Amortization of actuarial losses 153 $ 68 $ 100 $ 78

Net periodic benefit cost $ 387 $ 196 $ 314 $ 230

Note 10 – Share-Based Compensation

1 unchanged sentence

2010 Stock Incentive Program (as amended and restated, the “Plan”) permits the issuance of up to 1,000,000 shares of common stock.

At March 28, 2020 , the Company had reserved 387,201 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the Plan.

At June 27, 2020, the Company had reserved 371,637 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the Plan.

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.

Note 10 - Share-Based Compensation (continued)

On March 5, 2020, VPG’s three current executive officers were granted annual equity awards in the form of RSUs, of which 75 % are performance-based.

6 unchanged sentences

The performance-based portion of the RSUs will also vest on January 1, 2023, 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 may be subject to acceleration under certain circumstances.

On May 21, 2020, the Board of Directors approved the issuance of an aggregate of 15,564 RSUs to the independent board members of the Board of Directors and to the non-executive Chairman of the Board of Directors.

The awards have an aggregate grant-date fair value of $ 0.3 million and will vest on the earlier of the 2021 Annual Stockholders Meeting or May 21, 2021, subject to the directors' continued service on the Board of Directors.

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

Note 10 - Share-Based Compensation (continued)

The amount of compensation cost related to share-based payment transactions is measured based on the grant-date fair value of the equity instruments issued.

2 unchanged sentences

The following table summarizes share-based compensation expense recognized (in thousands) :

Fiscal quarter ended

March 28, 2020

March 30, 2019

Fiscal quarter ended Six fiscal months ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Restricted stock units $ 378 $ 512 $ 757 $ 1,086

8 unchanged sentences

The following table sets forth reporting segment information (in thousands) :

Note 11 - Segment Information (continued)

Fiscal quarter ended

March 28, 2020

March 30, 2019

Fiscal quarter ended Six fiscal months ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Net revenues:

2 unchanged sentences

Weighing and Control Systems 18,445 21,522 40,969 44,266

Total $ 59,146 $ 70,870 $ 126,842 $ 147,395

Gross profit:

2 unchanged sentences

Weighing and Control Systems 8,786 9,823 19,078 21,234

Total $ 23,110 $ 28,609 $ 48,175 $ 61,660

Reconciliation of segment operating income to consolidated results:

3 unchanged sentences

Unallocated G&A expenses ( 6,606 ) ( 6,988 ) ( 13,088 ) ( 13,801 )

Executive severance costs — ( 611 ) — ( 611 )

Restructuring costs ( 499 ) — ( 629 ) —

2 unchanged sentences

Foil Technology Products $ ( 341 ) $ — $ ( 443 ) $ —

Force Sensors $ ( 80 ) $ — $ ( 108 ) $ —

Corporate/Other ( 78 ) — ( 78 ) —

$ ( 499 ) $ — $ ( 629 ) $ —

Executive severance costs:

Corporate/Other $ — $ ( 611 ) $ — $ ( 611 )

$ — $ ( 611 ) $ — $ ( 611 )

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

March 28, 2020

March 30, 2019

Note 11 - Segment Information (continued)

Fiscal quarter ended Six fiscal months ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Foil Technology Products to Force Sensors and Weighing and Control Systems $ 868 $ 1,074 $ 1,592 $ 2,007

3 unchanged sentences

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

March 28, 2020

March 30, 2019

Fiscal quarter ended Six fiscal months ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Numerator for basic earnings per share:

8 unchanged sentences

Basic earnings per share attributable to VPG stockholders

$ 0.13 $ 0.41 $ 0.37 $ 1.02

Diluted earnings per share attributable to VPG stockholders

$ 0.13 $ 0.41 $ 0.37 $ 1.02

Note 13 – Additional Financial Statement Information

1 unchanged sentence

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

Fiscal quarter ended

March 28, 2020

March 30, 2019

Fiscal quarter ended Six fiscal months ended

June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019

Foreign exchange gain (loss) $ ( 1,185 ) $ ( 318 ) $ ( 285 ) $ ( 1,054 )

1 unchanged sentence

Pension expense ( 164 ) ( 159 ) ( 323 ) ( 317 )

Other ( 33 ) 134 ( 158 ) 101

$ ( 1,273 ) $ ( 160 ) $ ( 590 ) $ ( 932 )

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

For the fiscal quarter ended March 28, 2020, the change in foreign exchange gains and losses during the period, as compared to the prior year period, is largely due to exposure to currency fluctuations with the Canadian dollar and the British pound.

For the fiscal quarter and six fiscal months ended June 27, 2020, the change in foreign exchange gains and losses during the period, as compared to the prior year period, is largely due to exposure to currency fluctuations with the Canadian dollar, the Israeli Shekel, and the British pound.

Executive Severance Costs

During the second fiscal quarter of 2019, the Company recorded $ 0.6 million of severance costs associated with the resignation of an executive office of the Company.

The severance costs consisted of payments and other benefits as specified in the executive officer's resignation agreement.

Note 14 – Fair Value Measurements

9 unchanged sentences

Fair value measurements at reporting date using:

March 28, 2020

Fair Value Level 1

Inputs Level 2

Inputs Level 3

June 27, 2020

Assets held in rabbi trusts $ 5,047 $ 99 $ 4,948 $ —

1 unchanged sentence

Assets held in rabbi trusts $ 5,169 $ 53 $ 5,116 $ —

Note 14 - 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 March 28, 2020 and December 31, 2019 , and company-owned life insurance assets.

Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale money market funds at June 27, 2020 and December 31, 2019, 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.

1 unchanged sentence

The fair value measurement of the marketable securities held in the rabbi trust is 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.

Note 14 - Fair Value Measurements (continued)

The fair value of the long-term debt, excluding capitalized deferred financing costs, at March 28, 2020 and December 31, 2019 approximates its carrying value.

The fair value of the long-term debt, excluding capitalized deferred financing costs, at June 27, 2020 and December 31, 2019 approximates its carrying value.

The revolving debt and term loans are reset on a quarterly basis based on current market rates, plus a base rate as specified in the corresponding debt agreements.

6 unchanged sentences

If the initial estimates are too low or too high, the Company could be required to either record additional expense in future periods or to reverse part of the previously recorded charges.

The Company recorded $0.1 million and $0.0 million of restructuring costs during the fiscal quarter ended March 28, 2020 and March 30, 2019 , respectively.

The Company recorded $ 0.5 million and $ 0.0 million of restructuring costs during the fiscal quarter ended June 27, 2020 and June 29, 2019, respectively, and $ 0.6 million and $ 0.0 million for the six fiscal months ended June 27, 2020 and June 29, 2019, respectively.

Restructuring costs were comprised primarily of employee terminations costs, including severance and statutory retirement allowances, and were incurred in connections with various cost reduction programs.

The following table summarizes recent activity related to all restructuring programs.

The accrued restructuring liability balance as of March 28, 2020 and December 31, 2019, respectively, is included in Other accrued expenses in the accompanying consolidated condensed balance sheets (in thousands) :

The accrued restructuring liability balance as of June 27, 2020 and December 31, 2019, respectively, is included in Other accrued expenses in the accompanying consolidated condensed balance sheets (in thousands) :

Balance at December 31, 2019 $ 604

2 unchanged sentences

Foreign currency translation ( 7 )

Balance at March 28, 2020

Balance at June 27, 2020 $ 403

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-Q

Item 1. Financial Statements