17 unchanged sentences
Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.
−Removed: Our evaluation of internal control over financial reporting did not include the internal controls of the business acquired upon the purchase of Dynamic Systems, Inc., which is included in our 2019 consolidated financial statements beginning November 1, 2019 and constituted 4.3% of our total assets at December 31, 2019 and 1.4% of our net revenues for the year ended December 31, 2019.
−Removed: We are currently in the process of integrating Dynamic Systems, Inc.
−Removed: into our internal control over financial reporting process.
Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, has issued an attestation report on the effectiveness of our internal control over financial reporting, as stated in their report which is set forth on the next page.
6 unchanged sentences
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2020 consolidated financial statements of the Company and our report dated March 11, 2021 expressed an unqualified opinion thereon.
−Removed: As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Dynamic Systems, Inc., which was acquired on November 1, 2019.
−Removed: And whose financial statements constitute 4.3% of total assets and 1.4% of revenues as of and for the year ended December 31, 2019.
−Removed: Accordingly, our audit did not include the internal control over financial reporting at Dynamic Systems, Inc.
Basis for Opinion
33 unchanged sentences
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
−Removed: Documents Filed as part of Form 10-K
−Removed: Financial Statements
+Added: (a) Documents Filed as part of Form 10-K
+Added: i) Financial Statements
The Consolidated Financial Statements for the year ended December 31, 2020 are filed herewith.
See index to the Consolidated Financial Statements on page F-1 of this report.
−Removed: Financial Statement Schedules
+Added: ii) Financial Statement Schedules
All financial statement schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.
−Removed: Asset Purchase Agreement, dated December 18, 2012, by and among Vishay Precision Group, Inc., Vishay Precision Group Canada ULC, George Kelk Corporation, Endevor Corporation and Peter Kelk (previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on December 19, 2012 and incorporated herein by reference).
+Added: iii) Exhibits
2.1 Stock Purchase Agreement, dated November 1, 2019, by and among Vishay Precision Group, Inc., DSI Holdings DE Inc., the sellers identified therein, and HCI Equity Partners III, L.P., not individually but solely in its capacity as the representative of the Sellers (previously filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on November 4, 2019 and incorporated herein by reference).
3 unchanged sentences
3.3 Second Amended and Restated Bylaws of Vishay Precision Group, Inc., adopted as of June 2, 2011 (previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on June 6, 2011 and incorporated herein by reference).
−Removed: Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
+Added: 4.1 Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (previously filed as an exhibit to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 11, 2020 and incorporated herein by reference) .
10.1 Master Separation and Distribution Agreement, dated June 22, 2010, between Vishay Precision Group, Inc.
62 unchanged sentences
10.30 Stock Purchase Agreement, dated December 14, 2015, by and among VPG Systems U.S., Inc., Stress-Tek, Inc., the shareholders of Stress-Tek, Inc., and Keith Reichow, as Representative (previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on December 15, 2015 and incorporated herein by reference).
−Removed: Second Amended and Restated Credit Agreement, dated December 30, 2015, by and among Vishay Precision Group, Inc., Vishay Precision Group Canada ULC, JPMorgan Chase Bank, National Association, as agent, and lenders party thereto (previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on January 4, 2016 and incorporated herein by reference).
+Added: 10.31 Third Amended and Restated Credit Agreement, dated March 20, 2020, by and among Vishay Precision Group, Inc., the lenders party thereto, Citizens Bank, National Association, Wells Fargo Bank, National Association, and JPMorgan Chase Bank, National Association (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 23, 2020 and incorporated herein by reference).
10.32 Stock Purchase Agreement, dated March 30, 2016, by and among Vishay Precision Group, Inc., Pacific Instruments, Inc., the shareholders of Pacific Instruments, Inc., John Hueckel and Norman Hueckel as Owners, and John Hueckel, as Representative (previously filed as an exhibit to the Registrant's Current Report on Form 8-K filed with the SEC on April 5, 2016 and incorporated herein by reference).
10.33† Form of Indemnification Agreement with directors (previously filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 11, 2016 and incorporated herein by reference).
−Removed: Employment agreement, dated January 1, 2016, by and among Vishay Precision Group, Inc.
−Removed: and Roland Desilets ( previously filed as an exhibit to the Registrants' Quarterly Report on Form 10-Q filed with the SEC on August 10, 2016 and incorporated herein by reference).
+Added: 10.34† Employment Agreement, dated March 15, 2020, by and between Vishay Advanced Technologies, Ltd.
+Added: and Amir Tal (previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 5, 2020 and incorporated herein by reference).
10.35 Lease agreement, dated July 7, 2016, by and among between Vishay Advanced Technologies, Ltd.
4 unchanged sentences
Clancy (previously filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 9, 2017 and incorporated herein by reference).
−Removed: Amendment to Employment Agreement, dated May 8, 2017, by and among Vishay Precision Group, Inc.
−Removed: and Roland Desilets (previously filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 9, 2017 and incorporated herein by reference).
10.37† Amendment to Employment Agreement, dated August 7, 2017, by and among Vishay Advanced Technologies, Ltd.
2 unchanged sentences
2017 Non-Employee Director Compensation Plan (previously filed as Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 9, 2018 and incorporated herein by reference).
−Removed: Amendment to Employment Agreement, dated May 4, 2018, by and between Vishay Precision Group, Inc.
−Removed: and Roland Desilets (previously filed as Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 9, 2018 and incorporated herein by reference).
10.39† Amendment to Employment Agreement,dated March 10, 2019, by and among Vishay Advanced Technologies Ltd.
−Removed: and Ziv Shoshani.
+Added: and Ziv Shoshani (previously file d as Exhibit 10.45 to the Registrant ' s Annual Report on Form 10-K filed with the SEC on March 14, 2019 and inco rporated her e in by reference) .
10.40† Amendment to Employment Agreement, dated March 11, 2019, by and among Vishay Precision Group, Inc.
−Removed: and William Clancy.
−Removed: Separation and Release Agreement, dated April 26, 2019, by and between Vishay Precision Group and Roland B.
−Removed: Desilets (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 1, 2019 and incorporated herein by reference).
−Removed: Amendment No.
−Removed: 2 to Seconded Amended & Restated Credit Agreement, dated October 23, 2019, by and among Vishay Precision Group, Inc., Vishay Precision Group Canada ULC and JPMorgan Chase Bank, National Association, as agent (previously filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2019 and incorporated herein by reference).
+Added: and William Clancy (previously filed as Exhibit 10.46 to the Registrant ' s Annual Report on Form 10-K filed with the SEC on March 14, 2019 and incorporated herein by reference) .
16.1 Letter of Ernst & Young LLP, dated May 31, 2019 (previously filed as Exhibit 16.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 31, 2019 and incorporated herein by reference).
18 unchanged sentences
/s/ Ziv Shoshani
−Removed: March 11, 2020
−Removed: President and Chief Executive Officer
+Added: March 11, 2021 President and Chief Executive Officer
P OWER OF A TTORNEY
2 unchanged sentences
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Form 10-K has been signed by the following persons on behalf of the Registrant in the capacities and on the date indicated below.
−Removed: /s/ Ziv Shoshani
−Removed: Chief Executive Officer and Director
−Removed: March 11, 2020
−Removed: (Principal Executive Officer)
+Added: Signature Title Date
+Added: /s/ Ziv Shoshani Chief Executive Officer and Director March 11, 2021
+Added: Ziv Shoshani (Principal Executive Officer)
/s/ William M.
−Removed: Executive Vice President & Chief Financial Officer
−Removed: March 11, 2020
−Removed: (Principal Financial and Accounting Officer)
−Removed: /s/ Marc Zandman
−Removed: March 11, 2020
−Removed: March 11, 2020
+Added: Clancy Executive Vice President & Chief Financial Officer March 11, 2021
+Added: Clancy (Principal Financial and Accounting Officer)
+Added: /s/ Marc Zandman Director March 11, 2021
+Added: Reibstein Director March 11, 2021
/s/ Timothy V.
−Removed: March 11, 2020
−Removed: /s/ Janet Clarke
−Removed: March 11, 2020
−Removed: /s/ Bruce Lerner
−Removed: March 11, 2020
−Removed: /s/ Wesley Cummins
−Removed: March 11, 2020
+Added: Talbert Director March 11, 2021
+Added: /s/ Janet Clarke Director March 11, 2021
+Added: /s/ Bruce Lerner Director March 11, 2021
+Added: /s/ Wesley Cummins Director March 11, 2021
Wesley Cummins
11 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of Vishay Precision Group, Inc.
−Removed: (the "Company") as of December 31, 2019, the related consolidated statements of operations, comprehensive income, equity, and cash flows for the year ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 11, 2020 expressed an unqualified opinion thereon.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases.
+Added: We have audited the accompanying consolidated balance sheets of Vishay Precision Group, Inc.
+Added: (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the "financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 11, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audit.
+Added: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
+Added: We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audit provide a reasonable basis for our opinion.
−Removed: We have served as the Company’s auditor since 2019.
+Added: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates
+Added: Goodwill and Indefinite-lived Intangible Assets – Instrumentation and DSI Reporting Units — Refer to Note 4 to the Financial Statements
+Added: Critical Audit Matter Description
+Added: The Company's quantitative goodwill and indefinite-lived intangible assets impairment test involves the comparison of the fair value of each reporting unit or asset to its carrying value.
+Added: In estimating the fair value of the Instrumentation and DSI reporting units, the Company used the income approach to evaluate the estimated fair value of the reporting units.
+Added: The income approach to valuation requires management to make significant estimates and assumptions related to future revenues, profitability, working capital requirements and selection of discount and long term growth rates.
+Added: Changes in these estimates and assumptions could have a significant impact on the fair value of the reporting units.
+Added: In estimating the fair value of the indefinite-lived trade names, the Company compares the carrying value to the fair value based on current revenue projections of the related operations, under the relief from royalty method.
+Added: Any excess carrying value over the applicable fair value is recognized as impairment.
+Added: During 2020, the Company recognized an impairment loss of $2.4 million for the Instrumentation reporting unit’s goodwill and indefinite-lived trade name.
+Added: After considering the impact of the impairment charges, the carrying amount of goodwill and indefinite-lived trade name as of December 31, 2020, is $1.1 million and $0.4 million, respectively.
+Added: The carrying amount of goodwill and indefinite-lived trade name as of December 31, 2020, for the DSI reporting unit is $16.9 million and $3.3 million, respectively.
+Added: The fair value of the DSI reporting unit and indefinite-lived trade name exceeds the carrying value by approximately 12% and 16%, respectively.
+Added: We identified goodwill and indefinite-lived trade names for the Instrumentation and DSI reporting units as a critical audit matter because of the significant judgments made by management to estimate fair value and the sensitivity to changes in management estimates and assumptions.
+Added: This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future revenues, profitability, working capital requirements and selection of the discount and long term growth rates.
+Added: How the Critical Audit Matter Was Addressed in the Audit
+Added: Our audit procedures related to forecasts of future revenues, profitability, working capital requirements and selection of discount and long term growth rates used by management to estimate the fair value of the Instrumentation and DSI reporting units and indefinite-lived trade names included the following, among others:
+Added: • We tested the effectiveness of controls over management’s impairment evaluation, including those over the determination of the fair value of the Instrumentation and DSI reporting units and indefinite-lived trade names, such as controls related to management’s forecasts of future revenues, profitability, working capital requirements and selection of discount and long term growth rates.
+Added: • We evaluated management’s ability to accurately forecast operating performance by comparing actual results to management’s historical forecasts.
+Added: • We evaluated the reasonableness of management’s forecasts of future revenues, profitability and working capital requirements by comparing the forecasts to:
+Added: – Historical revenues, profitability and working capital requirements.
+Added: – Internal communications to management and the Board of Directors.
+Added: • With the assistance of our fair value specialists, we evaluated the valuation methodologies and the reasonableness of the discount and long term growth rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount and long term growth rates selected by management.
/s/ Brightman Almagor Zohar & Co.
2 unchanged sentences
March 11, 2021
+Added: We have served as the Company’s auditor since 2019.
Report of Independent Registered Public Accounting Firm
1 unchanged sentence
Opinion on the Financial Statements
−Removed: We have audited the consolidated balance sheet of Vishay Precision Group, Inc.
−Removed: (the Company) as of December 31, 2018, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018, in conformity with U.S.
+Added: We have audited the accompanying consolidated statements of operations, comprehensive income, equity and cash flows of Vishay Precision Group, Inc.
+Added: (the Company) for the year ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the year ended December 31, 2018, in conformity with U.S.
generally accepted accounting principles.
1 unchanged sentence
These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: Our responsibility is to express an opinion on the Company’s financial statements based on our audit.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audits provide a reasonable basis for our opinion.
+Added: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audit provides a reasonable basis for our opinion.
/s/ Ernst & Young LLP
5 unchanged sentences
(In thousands, except share amounts)
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
Current assets:
Cash and cash equivalents $ 98,438 $ 86,910
−Removed: Accounts receivable, net of allowances for doubtful accounts of $555 and $517, respectively
+Added: Accounts receivable, net of allowances for credit losses of $ 879 and $ 555 , respectively
+Added: 45,339 43,198
Raw materials 21,894 21,701
1 unchanged sentence
Finished goods 18,920 22,066
+Added: Inventories 62,348 66,895
Prepaid expenses and other current assets 15,761 15,558
1 unchanged sentence
Property and equipment, at cost:
+Added: Land 4,282 4,243
Buildings and improvements 67,581 52,708
Machinery and equipment 115,717 111,492
+Added: Software 10,026 9,384
Construction in progress 6,341 2,485
1 unchanged sentence
Property and equipment, net 75,016 61,270
+Added: Goodwill 31,105 35,018
Intangible assets, net 32,039 34,198
+Added: Operating lease right-of-use assets 21,788 8,691
+Added: Other assets 20,053 18,675
+Added: Total assets $ 401,887 $ 370,413
Continues on the following page
2 unchanged sentences
(In thousands, except share amounts)
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
Liabilities and equity
3 unchanged sentences
Other accrued expenses 13,843 16,126
+Added: Income taxes 1,593 261
+Added: Current portion of operating lease liabilities 4,011 2,827
Current portion of long-term debt 18 44,516
2 unchanged sentences
Deferred income taxes 3,403 3,478
+Added: Operating lease liabilities 19,504 5,811
Other liabilities 16,263 14,775
9 unchanged sentences
authorized - 3,000,000 shares;
−Removed: 1,022,887 shares outstanding as of December 31, 2019 and 1,025,158 shares outstanding December 31, 2018
+Added: 1,022,887 shares outstanding as of December 31, 2020 and December 31, 2019
Treasury stock, at cost - 619.667 shares held at December 31, 2020 and December 31, 2019
+Added: ( 8,765 ) ( 8,765 )
Capital in excess of par value
+Added: 197,764 197,125
Retained earnings
+Added: 100,075 89,288
Accumulated other comprehensive loss
+Added: ( 32,671 ) ( 37,703 )
Total Vishay Precision Group, Inc.
stockholders' equity
+Added: 257,823 241,360
Noncontrolling interests
+Added: 257,857 241,752
Total liabilities and equity
+Added: $ 401,887 $ 370,413
See accompanying notes.
3 unchanged sentences
Years ended December 31,
+Added: 2020 2019 2018
+Added: Net revenues $ 269,812 $ 283,958 $ 299,794
Costs of products sold 165,541 172,341 178,527
+Added: Gross profit 104,271 111,617 121,267
Selling, general, and administrative expenses 78,256 79,622 80,935
6 unchanged sentences
Interest expense ( 1,366 ) ( 1,507 ) ( 1,738 )
+Added: Other ( 2,982 ) ( 701 ) ( 1,496 )
Other expenses - net ( 4,348 ) ( 2,208 ) ( 3,234 )
1 unchanged sentence
Income tax expense 7,509 4,145 10,344
+Added: Net earnings 10,800 22,295 23,645
net earnings (loss) attributable to noncontrolling interests
Net earnings attributable to VPG stockholders
+Added: $ 10,787 $ 22,188 $ 23,646
Basic earnings per share attributable to VPG stockholders
+Added: $ 0.80 $ 1.64 $ 1.76
Diluted earnings per share attributable to VPG stockholders
+Added: $ 0.79 $ 1.63 $ 1.75
Weighted average shares outstanding - basic
+Added: 13,566 13,515 13,439
Weighted average shares outstanding - diluted
+Added: 13,623 13,597 13,535
See accompanying notes.
3 unchanged sentences
Years ended December 31,
+Added: 2020 2019 2018
+Added: Net earnings $ 10,800 $ 22,295 $ 23,645
Other comprehensive income (loss), net of tax:
10 unchanged sentences
Years ended December 31,
+Added: 2020 2019 2018
Operating activities
+Added: Net earnings $ 10,800 $ 22,295 $ 23,645
Adjustments to reconcile net earnings to net cash provided by operating activities:
1 unchanged sentence
Depreciation and amortization 12,507 11,795 10,631
+Added: Loss from extinguishment of debt 30 — —
(Gain) loss on disposal of property and equipment ( 130 ) 34 ( 120 )
3 unchanged sentences
Deferred income taxes 1,153 ( 2,556 ) 1,011
+Added: Other 1,735 358 819
Net changes in operating assets and liabilities, net of acquisition:
Accounts receivable ( 753 ) 11,369 ( 7,757 )
+Added: Inventories 2,986 ( 619 ) ( 5,095 )
Prepaid expenses and other current assets 67 ( 5,087 ) 588
9 unchanged sentences
Principal payments on long-term debt ( 3,493 ) ( 4,618 ) ( 5,603 )
+Added: Debt issuance costs ( 402 ) — —
Proceeds from revolving facility — 22,000 22,000
Payments on revolving facility — — ( 19,000 )
+Added: Purchase of non-controlling interest ( 253 ) — —
Distributions to noncontrolling interests ( 70 ) ( 52 ) ( 109 )
Payments of employee taxes on certain share-based arrangements ( 813 ) ( 854 ) ( 801 )
−Removed: Net cash provided by (used in) financing activities
+Added: Net cash (used in) provided by financing activities ( 5,031 ) 16,476 ( 3,513 )
Effect of exchange rate changes on cash and cash equivalents 3,056 405 ( 1,610 )
−Removed: (Decrease) increase in cash and cash equivalents
+Added: Increase (decrease) in cash and cash equivalents 11,528 ( 3,249 ) 15,867
Cash and cash equivalents at beginning of year 86,910 90,159 74,292
2 unchanged sentences
Capital expenditures purchased $ ( 24,327 ) $ ( 10,529 ) $ ( 13,239 )
−Removed: Supplemental disclosure of non-cash financing transactions:
+Added: Capital expenditures accrued but not yet paid $ 2,561 $ 1,183
+Added: Supplemental disclosure of financing transactions:
Conversion of exchangeable notes to common stock $ — $ — $ ( 2,794 )
−Removed: Capital expenditures accrued but not yet paid as of December 31, 2019 were $1,183
See accompanying notes.
2 unchanged sentences
(In thousands, except share amounts)
−Removed: Treasury Stock
+Added: Stock Class B
+Added: Common Stock Treasury Stock Capital in
+Added: Par Value Retained
+Added: Earnings Accumulated
Comprehensive
−Removed: Income (Loss)
−Removed: Stockholders' Equity
−Removed: Noncontrolling
+Added: Income (Loss) Total VPG
+Added: Stockholders' Equity Noncontrolling
+Added: Interests Total
Balance at January 1, 2018 $ 1,288 $ 103 $ ( 8,765 ) $ 192,904 $ 43,076 $ ( 35,450 ) $ 193,156 $ 148 $ 193,304
+Added: — — — — 23,646 — 23,646 ( 1 ) 23,645
Other comprehensive loss
+Added: — — — — — ( 2,015 ) ( 2,015 ) — ( 2,015 )
Share-based compensation expense
+Added: — — — 1,799 — — 1,799 — 1,799
Restricted stock issuances ( 59,038 shares)
+Added: 7 — — ( 819 ) — — ( 812 ) — ( 812 )
Common stock issuance from conversion of exchangeable notes ( 123,808 shares)
+Added: 12 — — 2,782 — — 2,794 — 2,794
+Added: Cumulative effect adjustment for adoption of ASU 2016-16 — — — — ( 153 ) — ( 153 ) — ( 153 )
Distributions to noncontrolling interests
+Added: — — — — — — — ( 109 ) ( 109 )
Balance at December 31, 2018 $ 1,307 $ 103 $ ( 8,765 ) $ 196,666 $ 66,569 $ ( 37,465 ) $ 218,415 $ 38 $ 218,453
+Added: — — — — 22,188 — 22,188 107 22,295
Other comprehensive income
+Added: — — — — — ( 238 ) ( 238 ) — ( 238 )
Share-based compensation expense
+Added: — — — 1,336 — — 1,336 — 1,336
Restricted stock issuances ( 48.482 shares)
−Removed: Common stock issuance from conversion of exchangeable notes ( 123,808 shares)
−Removed: Cumulative effect adjustment for adoption of ASU 2016-16
+Added: 5 — — ( 877 ) — — ( 872 ) — ( 872 )
+Added: Cumulative effect adjustment for adoption of ASC 842 — — — — 531 — 531 — 531
+Added: Conversion from Class B to common stock ( 2,271 shares)
+Added: — — — — — — — — —
+Added: Impact due to DSI acquisition — — — — — — — 299 299
Distributions to noncontrolling interests
+Added: — — — — — — — ( 52 ) ( 52 )
Balance at December 31, 2019 $ 1,312 $ 103 $ ( 8,765 ) $ 197,125 $ 89,288 $ ( 37,703 ) $ 241,360 $ 392 $ 241,752
+Added: — — — — 10,787 — 10,787 13 10,800
Other comprehensive income
+Added: — — — — — 5,032 5,032 — 5,032
Share-based compensation expense
+Added: — — — 1,387 — — 1,387 — 1,387
Restricted stock issuances ( 52,433 shares)
−Removed: Cumulative effect adjustment for adoption of ASC 842
−Removed: Conversion from Class B to common stock (2,271shares)
−Removed: Impact due to DSI acquisition
+Added: 5 — — ( 796 ) — — ( 791 ) — ( 791 )
+Added: Purchase of noncontrolling interest — — — 48 — — 48 ( 301 ) ( 253 )
Distributions to noncontrolling interests — — — — — — — ( 70 ) ( 70 )
37 unchanged sentences
The amount charged to expense for research and development was $ 12.6 million, $ 12.1 million, and $ 11.8 million for the years ended December 31, 2020, 2019, and 2018, respectively.
−Removed: The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
Note 1 – Background and Summary of Significant Accounting Policies (continued)
−Removed: method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
+Added: The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
+Added: Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income tax expense in the period that includes the enactment date.
14 unchanged sentences
There were no investments classified as short-term investments at December 31, 2020 or 2019.
−Removed: Allowance for Doubtful Accounts
−Removed: The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments.
−Removed: The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends and an evaluation of the impact of current and projected economic conditions.
−Removed: The Company evaluates the past-due status of its trade receivables based on contractual terms of sale.
−Removed: If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.
−Removed: The allowance for doubtful accounts was $0.6 million and $0.5 million at December 31, 2019 and 2018 , respectively.
−Removed: Bad debt expense was $0.1 million , $0.0 million , and $0.1 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively.
+Added: Allowance for Credit Losses
+Added: The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments.
+Added: In determining the amount of the allowance for credit losses, the Company considers historical loss data, customer specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.
+Added: The allowance for credit losses was $ 0.9 million and $ 0.6 million at December 31, 2020 and 2019, respectively.
+Added: The credit loss was $ 0.3 million, $ 0.1 million, and $ 0.0 million for the years ended December 31, 2020, 2019, and 2018, respectively.
Inventories are stated at the lower of cost, determined by the first-in, first-out method, or market based on net realizable value.
2 unchanged sentences
Property and equipment is carried at cost and is depreciated principally by the straight-line method based upon the estimated useful lives of the assets.
−Removed: Machinery and equipment are being depreciated over useful lives of seven to ten years .
+Added: Machinery and equipment are being depreciated over useful lives of seven to fifteen years .
Buildings and building improvements are being depreciated over useful lives of twenty to forty years or the lease term.
11 unchanged sentences
Goodwill and indefinite-lived trademarks are tested for impairment at least annually, and whenever events or changes in circumstances occur indicating that it is "more likely than not" impairment may have been incurred.
−Removed: We have the option to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining if it is necessary to perform the quantitative goodwill impairment test.
−Removed: However, if we conclude otherwise, then we are required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing it against its carrying amount.
−Removed: We estimate the fair value of our steel and on-board weighing reporting units using the income approach and a market approach to valuation.
−Removed: The income approach to valuation uses our estimates of the future cash flows of the reporting unit discounted to their net present value using a discount rate determined using the capital asset pricing model and adjusted for the forecast risk inherent in our projections of future cash flows.
−Removed: The income approach to valuation is dependent on inputs from management such as expected revenue growth, profitability, capital expenditures, and working capital requirements.
−Removed: The market approach to valuation uses the market capitalization of public companies similar to the reporting unit to calculate an implied EBITDA multiple, and we apply that calculated EBITDA multiple to the expected EBITDA of the reporting unit to estimate the fair value of the reporting unit, after consideration of appropriate control premiums.
−Removed: We weigh the results of the income approach and the market approach to arrive at the estimated fair value of the reporting unit.
−Removed: We estimate the fair value of our instrumentation reporting unit using the income approach.
+Added: The Company has the option to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining if it is necessary to perform the quantitative goodwill impairment test.
+Added: However, if the Company concludes otherwise, then it is required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing it against its carrying amount.
If the fair value exceeds the carrying value, no further evaluation is required and no impairment loss is recognized.
An impairment charge would be recognized to the extent the carrying amount of goodwill exceeds the reporting unit fair value.
−Removed: The Company's required goodwill annual impairment test is completed as of the first day of the fourth fiscal quarter each year.
−Removed: As more fully described in Note 4 to the consolidated financial statements, the 2019 annual impairment test resulted in no impairment.
−Removed: The 2018 annual impairment test resulted in an impairment charge in the fourth quarter of 2018.
−Removed: The 2017 annual impairment test resulted in no impairment.
−Removed: The indefinite-lived trade names are tested for impairment by comparing the carrying value to the fair value based on current revenue projections of the related operations, under the relief from royalty method.
+Added: The indefinite-lived trade names are tested for impairment either by employing the qualitative approach outlined above, or by comparing the carrying value to the fair value based on current revenue projections of the related operations, under the relief from royalty method.
Any excess carrying value over the applicable fair value is recognized as impairment.
Any impairment would be recognized in the reporting period in which it has been identified.
−Removed: As more fully described in Note 4, the annual impairment test for 2019 resulted in no impairment.
−Removed: The 2018 annual impairment test resulted in the Company recording an impairment charge in the fourth quarter of 2018.
+Added: The Company's required goodwill and indefinite-lived asset annual impairment test is completed as of the first day of the fourth fiscal quarter each year.
+Added: As more fully described in Note 4 to the consolidated financial statements, the 2020 annual impairment test resulted in an impairment charge in the fourth quarter of 2020.
The 2019 annual impairment test resulted in no impairment.
+Added: The 2018 annual impairment test resulted in an impairment charge in the fourth quarter of 2018.
Definite-lived intangible assets, such as customer relationships, patents and acquired technology, non-competition agreements, and certain trade names are amortized on a straight-line method over their estimated useful lives.
9 unchanged sentences
In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset group.
−Removed: Fair market value is determined primarily using present value techniques based
−Removed: Note 1 – Background and Summary of Significant Accounting Policies (continued)
−Removed: on projected cash flows from the asset group.
+Added: Fair market value is determined primarily using present value techniques based on projected cash flows from the asset group.
Losses on long-lived assets held-for-sale, other than goodwill and indefinite-lived intangible assets, are determined in a similar manner, except that fair market values are reduced for disposal costs.
5 unchanged sentences
dollar as their functional currency.
+Added: Note 1 – Background and Summary of Significant Accounting Policies (continued)
For those subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated balance sheets have been translated at the rate of exchange as of the balance sheet date.
12 unchanged sentences
For options and restricted stock units subject to graded vesting, the Company recognizes expense over the service period for each separately vesting portion of the award as if the award was comprised of multiple awards.
+Added: The Company determines if an arrangement is or contains a lease at inception or modification of such agreement.
+Added: 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.
+Added: 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.
+Added: As the implicit rate is not determinable in most of the Company's leases, the Company's incremental borrowing rate is used as the basis to determine the present value of future lease payments.
+Added: The expected lease terms include options to extend or terminate.
+Added: The period which is subject to an option to extend the lease is included in the lease term if it is reasonably certain that the option will be exercised.
+Added: Some of these leases contain variable payment provisions that depend on an index or rate, initially measured using the index or rate at the lease commencement date and are therefore not included in our future minimum lease payments.
+Added: Variable payments are expensed in the periods incurred.
+Added: Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.
+Added: The Company uses the practical expedients to exclude from balance sheet reporting leases with initial terms of 12 months or less and to exclude non-lease components from lease right of use assets and corresponding liabilities.
Commitments and Contingencies
1 unchanged sentence
Recently Adopted Accounting Pronouncements
−Removed: In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
−Removed: 2016-02, “ Leases (Topic 842) ,” a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases.
−Removed: The core principle of this ASU requires lessees to present the assets and liabilities that arise from leases on their balance sheets.
−Removed: The Company adopted this ASU effective January 1, 2019 using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.
−Removed: See Note 12- Leases.
−Removed: In February 2018, the FASB issued ASU No.
−Removed: 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220):
−Removed: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This ASU gives entities the option to reclassify to retained earnings the tax effects resulting from the Tax Cuts and Jobs Act ("2017 Tax Act") related to items in accumulated other comprehensive income ("AOCI") that the FASB refers to as having been stranded in AOCI.
−Removed: The Company adopted ASU 2018-02 effective January 1, 2019, and elected not to reclassify the income tax effects from AOCI to retained earnings.
−Removed: Recently Issued Accounting Pronouncements
−Removed: In June 2016, the FASB issued ASU No.
+Added: In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
2016-13, Financial Instruments - Credit Losses (Topic 326):
1 unchanged sentence
ASU 2016-13, and subsequent related amendments to ASU 2016-13, replace the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates.
−Removed: It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.
−Removed: These changes will result in earlier recognition of credit losses.
−Removed: The amendments in this ASU are effective for annual periods beginning after December 15, 2019 and early adoption is permitted.
−Removed: The effect on the Company's consolidated financial statements and related disclosures is not expected to be material.
−Removed: Note 1 – Background and Summary of Significant Accounting Policies (continued)
−Removed: In August 2018, the FASB issued ASU No.
−Removed: 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.
−Removed: The amendments in this ASU are effective for annual periods beginning after December 15, 2020 and early adoption is permitted.
−Removed: The Company is evaluating the standard to determine the impact on the consolidated financial statements.
+Added: The Company adopted this ASU, effective January 1, 2020, using the modified retrospective approach, and the effect on the Company's consolidated condensed financial statements and related disclosures was not material.
In August 2018, the FASB issued ASU No.
1 unchanged sentence
The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income.
−Removed: The amendments in this ASU are effective for interim and annual reporting periods beginning after December 15, 2019 and early adoption is permitted.
−Removed: The Company is evaluating the standard to determine the impact on the consolidated financial statements.
+Added: The Company adopted this ASU effective January 1, 2020, and the effect on the Company's disclosures in its consolidated financial statements was not material.
+Added: Note 1 – Background and Summary of Significant Accounting Policies (continued)
+Added: In August 2018, the FASB issued ASU No.
+Added: 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.
+Added: The Company adopted this ASU effective January 1, 2020, and determined that the effect on the Company's disclosures in its consolidated financial statements was not material.
+Added: Recently Issued Accounting Pronouncements
+Added: In December 2019, the FASB issued ASU No.
+Added: ASU 2019-12, "Simplifying the Accounting for Income Taxes".
+Added: This ASU amends Accounting Standards Codification ("ASC") 740 by removing certain exceptions to the general principles, clarifying and amending existing guidance.
+Added: This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020 and early adoption is permitted.
+Added: The Company has not yet adopted this ASU.
Note 2 – Revenues
2 unchanged sentences
Foil Technology
−Removed: Control Systems
+Added: Products Force
+Added: Sensors Weighing and
+Added: Control Systems Total
United States $ 49,713 $ 27,699 $ 30,849 $ 108,261
United Kingdom 3,276 8,491 11,375 23,142
+Added: Other Europe 30,046 9,020 15,618 54,684
+Added: Israel 21,432 384 — 21,816
+Added: Asia 27,178 8,130 8,122 43,430
+Added: Canada — — 18,479 18,479
+Added: $ 131,645 $ 53,724 $ 84,443 $ 269,812
Year Ended December 31, 2019
Foil Technology
−Removed: Control Systems
+Added: Products Force
+Added: Sensors Weighing and
+Added: Control Systems Total
United States $ 56,393 $ 33,695 $ 24,227 $ 114,315
United Kingdom 3,181 10,450 15,576 29,207
−Removed: Note 2 – Revenues (continued)
+Added: Other Europe 32,328 10,811 16,860 59,999
+Added: Israel 12,401 415 — 12,816
+Added: Asia 27,500 8,986 8,331 44,817
+Added: Canada — — 22,804 22,804
+Added: $ 131,803 $ 64,357 $ 87,798 $ 283,958
Year Ended December 31, 2018
Foil Technology
−Removed: Control Systems
+Added: Products Force
+Added: Sensors Weighing and
+Added: Control Systems Total
United States $ 61,132 $ 39,955 $ 23,818 $ 124,905
United Kingdom 3,666 11,787 14,296 29,749
+Added: Other Europe 31,431 10,678 18,741 60,850
+Added: Israel 11,028 517 — 11,545
+Added: Asia 33,752 10,249 7,442 51,443
+Added: Canada — — 21,302 21,302
+Added: $ 141,009 $ 73,186 $ 85,599 $ 299,794
+Added: Note 2 – Revenues (continued)
The following table disaggregates net revenue by market sector (in thousands) :
Years Ended December 31,
+Added: 2020 2019 2018
Test & Measurement $ 53,633 $ 64,982 $ 72,728
Avionics, Military & Space 32,607 23,653 29,221
−Removed: Precision Weighing
−Removed: Force Measurement
+Added: Transportation 29,483 36,914 39,107
+Added: Other Markets 58,256 50,169 48,665
+Added: Industrial Weighing 43,441 54,678 59,214
+Added: General Industrial 15,351 20,466 24,696
+Added: Steel 37,041 33,096 26,163
+Added: $ 269,812 $ 283,958 $ 299,794
Contract Assets & Liabilities
5 unchanged sentences
The outstanding contract assets and liability accounts were as follows (in thousands) :
−Removed: Contract Asset
−Removed: Contract Liability
−Removed: Unbilled Revenue
−Removed: Accrued Customer Advances
+Added: Contract Asset Contract Liability
+Added: Unbilled Revenue Accrued Customer Advances
December 31, 2019 $ 3,937 $ 4,561
1 unchanged sentence
Increase ( decrease) $ ( 332 ) $ ( 1,688 )
−Removed: Included in the contract asset at December 31, 2019 is $ 2.1 million attributable to the acquisition of DSI.
The amount of revenue recognized during the year ended December 31, 2020 that was included in the contract liability balance at December 31, 2019 was $ 4.2 million.
5 unchanged sentences
On November 1, 2019, VPG completed the acquisition of New York-based Dynamic Systems Inc.
−Removed: ("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 .
+Added: ("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 $ 40.3 million, subject to customary adjustments.
+Added: 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.
+Added: 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.
−Removed: The following table summarizes the preliminary fair values assigned to the assets and liabilities of DSI as of November 1, 2019 (in thousands):
+Added: The following table summarizes the final fair values assigned to the assets and liabilities of DSI as of November 1, 2019 (in thousands):
+Added: November 1, 2019 Adjustments Adjusted
Working capital (a)
+Added: $ 6,874 $ ( 134 ) $ 6,740
Property and equipment 1,727 1,727
4 unchanged sentences
Customer relationships 4,344 4,344
+Added: Trade names 3,300 3,300
Total intangible assets 17,894 — 17,894
1 unchanged sentence
Purchase price 40,481 ( 156 ) 40,325
+Added: Goodwill $ 18,606 $ ( 1,700 ) $ 16,906
(a) Working capital accounts include accounts receivable, inventory, prepaid expenses, accounts payable, accrued expenses, and accrued payroll.
1 unchanged sentence
The weighted average useful lives for the patents and acquired technology and customer relationships are 16 years, and 15 years, respectively.
−Removed: Most of the goodwill associated with DSI will be deductible for income tax purposes.
+Added: Most of the goodwill associated with DSI is deductible for income tax purposes.
The Company recorded acquisition costs of associated with this transaction in its consolidated statements of operation as follows (in thousands) :
2 unchanged sentences
Appraisal fees 13
−Removed: Following are the supplemental consolidated financial results for the Company on a unaudited pro forma basis, as if the DSI acquisition had been consummated on January 1, 2018 (unaudited):
+Added: Note 3 – Acquisition Activity ( continued)
+Added: Following are 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 (unaudited):
Year ended December 31,
4 unchanged sentences
Note 4 – Goodwill and Other Intangible Assets
−Removed: The Company performed the first step of the impairment test as of the first day of the fiscal 2019 fourth quarter by calculating the fair value of the reporting units and comparing it against its carrying amount.
−Removed: The Company estimated the fair value of our steel and on-board weighing reporting units using the income approach and a market approach to valuation.
−Removed: The income approach to valuation uses our estimates of the future cash flows of the reporting unit discounted to their net present value using a discount rate determined using the capital asset pricing model and adjusted for the forecast risk inherent in our projections of future cash flows.
−Removed: The income approach to valuation is dependent on inputs from management such as expected revenue growth, profitability, capital expenditures, and working capital requirements.
−Removed: The market approach to valuation uses the market capitalization of public companies similar to the reporting unit to calculate an implied EBITDA multiple, and we apply that calculated EBITDA multiple to the expected EBITDA of the reporting unit to estimate the fair value of the reporting unit, after consideration of appropriate control premiums.
−Removed: We weigh the results of the income approach and the market approach to arrive at the estimated fair value of the reporting unit.
−Removed: We estimate the fair value of our instrumentation reporting unit using the income approach.
−Removed: If the fair value exceeds the carrying value, no further evaluation is required and no impairment loss is recognized.
−Removed: An impairment charge would be recognized to the extent the carrying amount of goodwill exceeds the reporting unit fair value.After completing the impairment test, the Company determined the fair value exceeded the carrying value for all reporting units.
−Removed: For the year ended December 31, 2018, the carrying value of the instrumentation reporting unit exceeded the fair value and the Company recorded an impairment charge of $2.5 million .
−Removed: The impairment was primarily from lower margins on the forecasted projections due to product mix related to the Pacific acquisition.
−Removed: The impairment test for the remaining reporting units resulted in the fair value exceeding the carrying value, passing the quantitative impairment test.
+Added: The Company has four reporting units to which goodwill is allocated:
+Added: steel, on-board weighing, instrumentation, and DSI.
+Added: For the steel and on-board weighing goodwill reporting units, the Company performed the qualitative assessment, which included assessment of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other entity specific events which could impact the reporting unit.
+Added: Based on this review, it was determined that the fair value of each of those reporting units was in excess of its carrying value and therefore no quantitative impairment test was required.
+Added: For the instrumentation and DSI goodwill reporting units, the Company performed the quantitative impairment test.
+Added: In estimating the fair value of our instrumentation and DSI reporting units the Company used the income approach.
+Added: It further uses the market approach to evaluate the estimated fair value of the reporting units that was obtained by using the income approach.
+Added: The income approach to valuation requires management to make significant estimates and assumptions related to future revenues, profitability, working capital requirements and selection of discount rate and long term growth rate.
+Added: Changes in these estimates and assumptions could have a significant impact on the fair value of the reporting units.
+Added: The Company's required goodwill and indefinite-lived asset annual impairment test is completed as of the first day of the fourth fiscal quarter each year.
+Added: In 2020, the results of the quantitative impairment test for the DSI reporting unit indicated no impairment, with the fair value exceeding the carrying value by approximately 12 % for goodwill and 16 % for the indefinite-lived trade name.
+Added: The results of the quantitative impairment test for the instrumentation reporting unit's goodwill and indefinite-lived trade name indicated an impairment, and in the fourth quarter of 2020, the Company recognized a non-cash impairment loss of $ 2.4 million.
+Added: The impairment was driven mainly by changes in forecasted projections including a slower growth rate in revenues.
+Added: After considering the impact of the impairment charges, the carrying amount of goodwill and indefinite-lived trade names as of December 31, 2020 was $ 1.1 million and $ 0.4 million, respectively.
The Company's analysis in 2019 resulted in the fair value exceeding the carrying value for all reporting units.
−Removed: The determination of the fair value of the reporting unit and the allocation of that value to individual assets and liabilities within the reporting unit requires the Company to make significant estimates and assumptions.
−Removed: These estimates and assumptions include the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, the discount rate, terminal growth rates, and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures.
−Removed: Due to the inherent uncertainty involved in making these estimates, actual financial results could differ from those estimates.
−Removed: Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment charges.
+Added: In 2019, the Company did not recognize an impairment for the instrumentation reporting unit, as the fair value exceeded its carrying value by approximately 12 %.
+Added: During 2018, the Company recognized a non-cash impairment loss associated with the goodwill and indefinite lived intangible assets in the instrumentation reporting unit of $ 2.5 million.
+Added: The impairment was primarily from lower margins on the forecasted projections due to product mix.
+Added: The impairment test for the remaining reporting units resulted in the fair value exceeding the carrying value, passing the quantitative impairment test.
The change in the carrying amount of goodwill by segment is as follows ( in thousands) :
−Removed: Weighing and Control Systems Segment
−Removed: Foil Technology Products Segment
−Removed: KELK Acquisition
−Removed: DSI Acquisition
−Removed: Stress-Tek Acquisition
−Removed: Pacific Instruments
+Added: Note 4 – Goodwill and Other Intangible Assets (continued)
+Added: Total Weighing and Control Systems Segment Foil Technology Products Segment
+Added: KELK Acquisition DSI Acquisition Stress-Tek Acquisition Pacific Instruments
Balance at January 1, 2019 $ 16,141 $ 6,288 $ 6,311 $ 3,542
−Removed: Impairment charges
+Added: Goodwill acquired 18,606 — 18,606 — —
Foreign currency translation adjustment 271 271 — — —
Balance at December 31, 2019 35,018 6,559 18,606 6,311 3,542
−Removed: Goodwill acquired
+Added: Adjustments to purchase price ( 1,700 ) — ( 1,700 ) — —
+Added: Impairment charges ( 2,416 ) — — — ( 2,416 )
Foreign currency translation adjustment 203 167 36 — —
Balance at December 31, 2020 $ 31,105 $ 6,726 $ 16,942 $ 6,311 $ 1,126
−Removed: Note 4 – Goodwill and Other Intangible Assets (continued)
Intangible assets were as follows (in thousands) :
3 unchanged sentences
Customer relationships 26,061 25,690
+Added: Trade names 1,747 1,690
Non-competition agreements 12,259 11,745
+Added: 59,871 58,629
Accumulated amortization:
1 unchanged sentence
Customer relationships ( 13,363 ) ( 11,727 )
+Added: Trade names ( 1,747 ) ( 1,690 )
Non-competition agreements ( 12,250 ) ( 11,717 )
+Added: ( 33,255 ) ( 29,852 )
Net intangible assets subject to amortization $ 26,616 $ 28,777
1 unchanged sentence
(Indefinite-lived):
+Added: Trade names 5,423 5,421
+Added: $ 32,039 $ 34,198
Certain intangible assets are subject to foreign currency translation.
−Removed: In conjunction with the acquisition of DSI on November 1, 2019 (See Note 3), the Company allocated $14.6 million for the purchase price to definite-lived intangibles assets and $3.3 million to indefinite-lived intangible assets at December 31, 2019.
−Removed: The Company has determined that the trade name is an indefinite-lived intangibles asset.
−Removed: The Company performed an impairment test on the indefinite-lived trade names as of the first day of the fiscal 2019 fourth quarter and determined there was no impairment.
−Removed: In 2018, the Company recorded an impairment charge of $0.3 million related to the Pacific acquisition.
−Removed: The impairment was primarily from lower margins on the forecasted projections due to product mix.
−Removed: The value of the trade names was determined using an income approach, where the Company estimated the future cash flows associated with the trade names and discounted those cash flows back to their net present value.
−Removed: Due to the decline in cash flows as a result of the lower margins, the Company reduced the royalty rate, under the relief of royalty method, when performing the income approach valuation.
−Removed: The Company's annual impairment test on the indefinite-lived trade names in 2017 resulted in no impairment.
Amortization expense was $ 2.4 million, $ 1.7 million, and $ 1.7 million, for the years ended December 31, 2020, 2019, and 2018, respectively.
−Removed: Amortization expense in 2019 included $0.2 million related to the DSI acquisition.
Estimated annual amortization expense for each of the next five years is as follows (in thousands) :
5 unchanged sentences
The Company recorded restructuring costs of $ 0.9 million, $ 2.3 million, and $ 0.3 million during the years ended December 31, 2020, 2019, and 2018, respectively.
−Removed: In 2019, restructuring costs included $1.2 million of employee termination costs, including severance and statutory retirement allowances incurred in connection with various cost reduction programs, and $1.1 million of other exit costs, including asset write downs and an impairment of a right of use asset associated with the closure and downsizing of facilities as part of the manufacturing transitions of the Company's force sensors products to facilities in India and China.
In 2020 and 2018, 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.
+Added: In 2019, restructuring costs included $ 1.2 million of employee termination costs, including severance and statutory retirement allowances incurred in connection with various cost reduction programs, and $ 1.1 million of other exit costs, including asset write downs and an impairment of a right of use asset associated with the closure and downsizing of facilities as part of the manufacturing transitions of the Company's force sensors products to facilities in India and China.
The following table summarizes the activity to date related to these programs in the accrued restructuring liability, which is comprised of the activity associated primarily with the employee termination costs.
9 unchanged sentences
Years ended December 31,
+Added: 2020 2019 2018
+Added: Domestic $ ( 9,476 ) $ ( 7,405 ) $ ( 7,897 )
+Added: Foreign 27,785 33,845 41,886
+Added: $ 18,309 $ 26,440 $ 33,989
The expense (benefit) for income taxes is comprised of (in thousands) :
Years ended December 31,
+Added: 2020 2019 2018
+Added: Federal $ 106 $ 453 $ 189
State and local ( 18 ) ( 130 ) 162
+Added: Foreign 6,268 6,378 8,982
+Added: 6,356 6,701 9,333
+Added: Federal 1,718 ( 2,638 ) 197
State and local ( 422 ) ( 123 ) ( 35 )
+Added: Foreign ( 143 ) 205 849
+Added: 1,153 ( 2,556 ) 1,011
Total income tax expense $ 7,509 $ 4,145 $ 10,344
2 unchanged sentences
Years ended December 31,
+Added: 2020 2019 2018
Tax at statutory rate $ 3,845 $ 5,553 $ 7,138
11 unchanged sentences
Excess tax benefits related to share based compensation (a)
+Added: ( 168 ) ( 357 ) —
2017 Tax Act:
Effects of U.S.
+Added: tax reform — — ( 135 )
Change in valuation allowance — — 945
+Added: Other 6 ( 315 ) 117
Total income tax expense $ 7,509 $ 4,145 $ 10,344
Note 6 – Income Taxes (continued)
−Removed: (a) Amounts for 2017 and 2018 are included in Other and fell below the 5% threshold.
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act ("2017 Tax Act") was enacted.
−Removed: The 2017 Tax Act significantly changed U.S.
−Removed: tax law by, among other things, lowering the corporate tax rate, implementing a modified territorial tax system, and imposing a one-time transition tax on post 1986 undistributed foreign earnings as of December 31, 2017.
−Removed: The 2017 Tax Act permanently reduces the U.S.
−Removed: tax rate from a maximum of 35% to a flat 21%, effective January 1, 2018.
−Removed: GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate expected to apply to taxable income in the years in which the temporary differences are expected to recover or be settled.
−Removed: Also on December 22, 2017, the SEC staff issued SAB 118 which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the 2017 Tax Act.
+Added: (a) Amounts for 2018 are included in Other and fell below the 5% threshold.
+Added: On December 22, 2017, the SEC staff issued SAB 118 which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the 2017 Tax Act.
Consistent with that guidance, the Company had provisionally determined the tax cost of the one-time transition tax under the 2017 Tax Act to be approximately $ 2.2 million.
−Removed: This amount included the tax benefit from the net operating loss of approximately $3.9 million .
−Removed: As a result of the implementation of a modified territorial tax system, the Company reassessed its assertion with respect to certain subsidiaries that the earnings of those subsidiaries are indefinitely reinvested and in 2017 recorded a deferred tax liability of $1.8 million withholding tax associated with a planned cash distribution of approximately $25.5 million of previously unremitted earnings.
−Removed: The deferred tax liability of $1.8 million was included in the provisional tax of $2.2 million for 2017.
−Removed: As of December 31, 2019, the remaining planned cash distribution amount is approximately $14.1 million with a remaining deferred tax liability of approximately $1.5 million .
In accordance with SAB 118, the financial reporting impact of the 2017 Tax Act was completed in the fourth quarter of 2018 resulting in a net $ 0.8 million increase in tax expense caused by a decrease in the transition tax and an increase in the valuation allowance.
12 unchanged sentences
Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands) :
−Removed: Note 6 – Income Taxes (continued)
Deferred tax assets:
Pension and other postretirement costs $ 4,296 $ 3,770
+Added: Inventories 2,327 2,095
Net operating/capital loss and interest carryforwards 13,082 11,895
5 unchanged sentences
valuation allowance ( 16,946 ) ( 14,867 )
+Added: 11,196 10,551
Deferred tax liabilities:
9 unchanged sentences
The most significant negative evidence is continuing cumulative operating losses in the U.S.
−Removed: The impact of the acquisitions of Stress-Tek, Pacific and DSI was also considered in determining the realization of the U.S.
+Added: The impact of the acquisitions of Stress-Tek, Pacific Instruments and DSI was also considered in determining the realization of the U.S.
deferred tax assets.
2 unchanged sentences
However, there was insufficient positive evidence to overcome the negative evidence.
+Added: Note 6 – Income Taxes (continued)
In November 2019, the Company acquired Dynamic Systems, Inc.
1 unchanged sentence
DSI's opening balance sheet included $ 17 million of gross deferred tax liabilities, including $ 4.1 million of indefinite-lived liabilities.
−Removed: The acquisition contributed to a $2.5 million net reduction in valuation allowance and current tax benefit for the Company.
−Removed: This reduction in the valuation allowance will be adjusted going forward.
+Added: The acquisition contributed to a $ 2.5 million net reduction in valuation allowance and current tax benefit for the Company in 2019.
+Added: In the fourth quarter of 2020, the Company completed the purchase accounting for the acquisition of DSI, which resulted in the recognition of additional deferred tax assets of $ 1.7 million and a corresponding increase in valuation allowance.
Overall, the cumulative losses and the acquisition impacts still indicate that realization of our U.S.
7 unchanged sentences
The Company also has valuation allowances of $ 2.0 million and $ 3.1 million at December 31, 2020 and 2019, respectively, with respect to certain foreign net operating loss and capital loss carryforwards.
−Removed: Note 6 – Income Taxes (continued)
Significant valuation allowances are as follows (in thousands) :
+Added: Jurisdiction 2020 2019
+Added: federal $ 5,816 $ 3,395
state (net of U.S.
2 unchanged sentences
The following table summarizes significant net operating losses and credit carryforwards as of December 31, 2020 (in thousands):
+Added: Jurisdiction 2020 Expiring
+Added: federal net operating losses $ 5,548 No expiration
+Added: federal net operating loss 315 2036
+Added: federal interest expense carryover 5,191 No expiration
foreign tax credit 1,734 2026 - 2040
−Removed: U.S state net operating losses
−Removed: Israel capital losses
−Removed: No expiration
+Added: state net operating losses 102,090 2024 - 2040
+Added: Israel capital losses 6,042 No expiration
+Added: federal net operating losses shown above are pre-acquisition losses of DSI.
+Added: The utilization of these losses is limited to $ 765 thousand per year pursuant to Internal Revenue Code ("IRC") Section 382.
+Added: In addition, utilization of U.S.
+Added: federal net operating losses is taken into account before the GILTI deduction allowable by IRC Section 250.
Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $ 178.2 million at December 31, 2020 compared to $ 159.0 million at December 31, 2019.
4 unchanged sentences
In addition to the $ 1.5 million, additional withholding taxes of approximately $ 18.0 million are estimated to be payable upon remittance of the remaining previously unremitted earnings as of December 31, 2020.
+Added: Note 6 – Income Taxes (continued)
Net income taxes paid were $ 4.3 million, $ 11.1 million, and $ 7.3 million for the years ended December 31, 2020, 2019, and 2018, respectively.
7 unchanged sentences
An unfavorable determination could increase tax expense and could require a cash payment, including interest and penalties.
−Removed: Note 6 – Income Taxes (continued)
The following table summarizes changes in the Company's gross liabilities, excluding interest and penalties, associated with unrecognized tax benefits (in thousands) :
+Added: 2020 2019 2018
Balance at beginning of year $ 1,355 $ 912 $ 823
3 unchanged sentences
Currency translation adjustments 92 3 ( 28 )
+Added: Reduction for settled tax examinations ( 73 ) — —
Reduction for payments made ( 22 ) ( 134 ) —
Reduction for lapses of statute of limitations ( 102 ) ( 206 ) ( 156 )
−Removed: Balance before indemnification receivable
−Removed: Receivable from Vishay Intertechnology for indemnification
Balance at end of year $ 1,244 $ 1,355 $ 912
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.
−Removed: Related to the unrecognized tax benefits noted above, for the years ended December 31, 2019, December 31, 2018 and December 31, 2017, the Company accrued total penalties and interest of $0.0 million , $0.1 million and $0.1 million , respectively, none of which was included in the indemnification receivable.
+Added: Related to the unrecognized tax benefits noted above, for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, the Company accrued total penalties and interest of $ 0.0 million, $ 0.0 million and $ 0.1 million, respectively.
As of December 31, 2020, December 31, 2019 and December 31, 2018, accrued penalties and interest were $ 0.1 million, $ 0.1 million and $ 0.1 million, respectively.
1 unchanged sentence
The Company believes that it is reasonably possible that an increase in unrecognized tax benefits related to foreign exposures of between $ 0.1 million and $ 0.2 million may be necessary in 2020.
−Removed: As of December 31, 2019 , the Company anticipates that it is reasonably possible that it will reverse up to $0.1 million of its current unrecognized tax benefits within the calendar year due to the expiration of the statute of limitations in certain jurisdictions.
+Added: As of December 31, 2020, the Company anticipates that it is reasonably possible that it will reverse less than $ 0.1 million of its current unrecognized tax benefits within the next calendar year due to the expiration of the statute of limitations in certain jurisdictions.
None of the unrecognized tax benefits the Company expects to reverse in 2021 due to statute lapses are covered by the Tax Matters Agreement.
4 unchanged sentences
Additionally, the Company's foreign subsidiaries file income tax returns in the countries in which they have operations and the statutes of limitations in those jurisdictions generally range from 3 to 10 years.
−Removed: During the 2nd and 3rd quarters of 2019, the Company concluded tax examinations in Taiwan and Belgium, respectively, for two of its subsidiaries, covering the years 2016 and 2017.
+Added: During the fourth quarter of 2020, the Company concluded a tax examination in Israel for one of its subsidiaries covering 2015.
+Added: The conclusion of the audit resulted in no significant change in tax and a release of $ 0.1 million of reserves for uncertain tax positions for that year, including accrued interest.
+Added: During the second and third quarters of 2019, the Company concluded tax examinations in Taiwan and Belgium, respectively, for two of its subsidiaries, covering the years 2016 and 2017.
The conclusion of the tax examinations resulted in no significant change in tax.
1 unchanged sentence
The conclusion of the tax examination resulted in no significant change in tax.
−Removed: During the fourth quarter of 2017, the Company concluded a tax examination in Japan for one of its subsidiaries, covering the years 2014 through 2016.
−Removed: The conclusion of the tax examination resulted in no significant change in tax.
The Company is subject to ongoing income tax audits, administrative appeals and judicial proceedings in India spanning a number of years.
2 unchanged sentences
2020 Credit Agreement - Revolving Facility $ 41,000 $ —
+Added: 2015 Credit Agreement - Revolving Facility — 34,000
2015 Credit Agreement - U.S.
3 unchanged sentences
2015 Credit Agreement - Canadian Term Facility — 3,476
+Added: Other debt 18 149
Deferred financing costs ( 374 ) ( 112 )
+Added: 40,644 44,533
current portion 18 44,516
+Added: $ 40,626 $ 17
2020 Credit Agreement
−Removed: On December 30, 2015, the Company entered into a Second Amended and Restated Credit Agreement (the “2015 Credit Agreement”) among the Company, VPG Canada, the lenders, Citizens Bank, National Association and Wells Fargo Bank, National Association as joint book-runners 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 and expanded to provide for the following facilities:
−Removed: (1) a secured revolving facility (the “2015 Revolving Facility”) in an aggregate principal amount of $30.0 million , with a sublimit of $10.0 million which can be used for letters of credit for the account of the Company or its U.S.
−Removed: and Canadian subsidiaries, the proceeds of which may be used for working capital and general corporate purposes, and a portion of which was used to fund the Stress-Tek and Pacific acquisitions ;
−Removed: (2) a secured closing date term facility for the Company (the “2015 U.S.
−Removed: Closing Date Term Facility”) in an aggregate principal amount of $4.5 million , the proceeds of which were used by the Company to refinance indebtedness under its existing term loan;
−Removed: (3) a secured delayed draw term facility for the Company (the "2015 U.S.
−Removed: Delayed Draw Term Facility") in an aggregate principal amount of $11.0 million , the proceeds of which were used to fund a portion of the Stress-Tek acquisition;
−Removed: and (4) a secured term facility for VPG Canada (the “2015 Canadian Term Facility”) in an aggregate principal amount of $9.5 million , the proceeds of which were used by VPG Canada to refinance indebtedness under its existing term loan.
+Added: 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.
+Added: The proceeds of the 2020 Revolving Facility may be used for working capital and general corporate purposes, and a portion of such proceeds was used to refinance the Company’s existing revolving credit facility in the amount of $ 34.0 million and the Company’s existing term loans as follows:
+Added: (1) the “2015 U.S.
+Added: Closing Date Term Facility” in an aggregate principal amount of $ 2.0 million;
+Added: and (2) the "2015 U.S.
+Added: Delayed Draw Term Facility" in an aggregate principal amount of $ 5.0 million.
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.
−Removed: The 2015 Credit Agreement terminates on December 30, 2020 .
−Removed: The term loans are being repaid in quarterly installments.
−Removed: Interest payable on amounts borrowed under the 2015 Revolving Facility, the 2015 U.S.
−Removed: Closing Date Term Facility, the 2015 U.S.
−Removed: Delayed Draw Term Facility, and the 2015 Canadian Term Facility (collectively, the “Facilities”) is based upon, at the Company’s option, (1) the greatest of:
−Removed: the Agent’s prime rate, the Federal Funds rate, or a LIBOR floor (the “Base Rate”), or (2) LIBOR plus a specified margin.
+Added: The 2020 Credit Agreement terminates on March 20, 2025.
+Added: The 2020 Credit Agreement replaced the 2015 Credit Agreement.
+Added: Interest payable on amounts borrowed under the 2020 Revolving Facility is based upon, at the Company’s option, (1) the greatest of:
+Added: the Agent’s prime rate, the Federal Funds rate, or a LIBOR floor (the “Base Rate”), or (2) LIBOR or CDOR plus a specified margin.
An interest margin of 0.25 % is added to Base Rate loans.
−Removed: Depending upon the Company’s leverage ratio, an interest rate margin ranging from 2.00% to 3.50% per annum is added to the applicable LIBOR rate to determine the interest payable on the Facilities.
−Removed: The Company is required to pay a quarterly commitment fee of 0.30% per annum to 0.50% per annum on the unused portion of the 2015 Revolving Facility, which is determined based on the Company’s leverage ratio each quarter.
+Added: Depending upon the Company’s leverage ratio, an interest rate margin ranging from 1.50 % to 2.75 % per annum is added to the applicable LIBOR or CDOR rate to determine the interest payable on the LIBOR or CDOR loans.
+Added: 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.
−Removed: The total interest rates at December 31, 2019 and December 31, 2018, were 3.97% and 4.82% , respectively, for the 2015 Revolving and U.S.
−Removed: Delayed Draw Term Facilities and 3.97% and 4.82% , respectively, for the 2015 U.S.
−Removed: Closing Date Term and 2015 Canadian Term Facilities.
−Removed: The obligations of the Company and VPG Canada under the 2015 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 and of the Company (with respect to the 2015 Canadian Term Facility).
+Added: 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.
−Removed: The 2015 Canadian Term Facility is secured by substantially all the assets of VPG Canada and by a secured guarantee by the Company and its domestic subsidiaries.
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.
−Removed: The financial maintenance covenants include a tangible net worth ratio, a leverage ratio, and a fixed charges coverage ratio.
+Added: The financial maintenance covenants include an interest coverage ratio and a leverage ratio.
The Company was in compliance with its financial maintenance covenants at December 31, 2020.
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.
−Removed: Note 7 – Long-Term Debt (continued)
−Removed: Accordion Exercise
−Removed: On October 23, 2019, VPG exercised all of the $15.0 million accordion feature (the “Accordion”) of its revolving credit facility (the “Revolving Credit Facility”).
−Removed: The exercise of the Accordion increases the aggregate principal amount available under the Revolving Credit Facility to $45.0 million .
Other Lines of Credit
1 unchanged sentence
The Company had outstanding letters of credit under these short-term lines of credit of $ 0.4 million and $ 0.9 million at December 31, 2020 and 2019, respectively.
−Removed: Other debt consists of debt held by VPG’s Japanese subsidiary and is payable monthly over the next 2 years at a zero percent interest rate.
+Added: Note 7 – Long-Term Debt (continued)
+Added: Other debt consists of debt held by VPG’s Japanese subsidiary and is payable monthly over the next 1 year at a zero interest rate.
Aggregate annual maturities of long-term debt are as follows (in thousands) :
16 unchanged sentences
The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows (in thousands) :
+Added: Balance Before-Tax
+Added: Effect Net-of-Tax
+Added: Amount Ending
December 31, 2018
Pension and other postretirement actuarial items
+Added: $ ( 8,060 ) $ 1,392 $ ( 18 ) $ 1,374 $ ( 6,686 )
Reclassification adjustment for recognition of actuarial items
+Added: 685 ( 145 ) 540 540
Foreign currency translation adjustment
+Added: ( 27,390 ) ( 3,857 ) ( 72 ) ( 3,929 ) ( 31,319 )
+Added: $ ( 35,450 ) $ ( 1,780 ) $ ( 235 ) $ ( 2,015 ) $ ( 37,465 )
December 31, 2019
Pension and other postretirement actuarial items
+Added: $ ( 6,146 ) $ ( 1,310 ) $ 194 $ ( 1,116 ) $ ( 7,262 )
Reclassification adjustment for recognition of actuarial items
+Added: 359 ( 39 ) 320 320
Foreign currency translation adjustment
+Added: ( 31,319 ) ( 290 ) 21 ( 269 ) ( 31,588 )
+Added: Reclassification adjustment for foreign currency translation
+Added: $ 827 827 827
+Added: $ ( 37,465 ) $ ( 414 ) $ 176 $ ( 238 ) $ ( 37,703 )
December 31, 2020
Pension and other postretirement actuarial items
+Added: $ ( 6,942 ) $ ( 920 ) $ 319 $ ( 601 ) $ ( 7,543 )
Reclassification adjustment for recognition of actuarial items
+Added: 537 ( 73 ) 464 464
Foreign currency translation adjustment
−Removed: Reclassification adjustment for foreign currency translation
−Removed: Reclassification of foreign currency translation adjustment for gain on liquidation of a subsidiary is included in other income (expense) other ( See Note 15).
+Added: ( 30,761 ) 5,070 99 5,169 ( 25,592 )
+Added: $ ( 37,703 ) $ 4,687 $ 345 $ 5,032 $ ( 32,671 )
+Added: In 2019, Reclassification of foreign currency translation adjustment for gain on liquidation of a subsidiary is included in other income (expense) other (See Note 15).
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).
12 unchanged sentences
pension plan will be paid to employees upon retirement, and the Company will likely need to make additional cash contributions to the rabbi trust to fund this accumulated benefit obligation.
−Removed: Note 9 – Pensions and Other Postretirement Benefits (continued)
Pension Plans
2 unchanged sentences
Pension benefits earned are generally based on years of service and compensation during active employment.
+Added: Note 9 – Pensions and Other Postretirement Benefits (continued)
In 2018, the Company undertook several measures to de-risk the UK pension plan.
1 unchanged sentence
The second measure was to execute an enhanced transfer value exercise to transfer pension benefits outside of the plan.
−Removed: As s result, the Company incurred $0.7 million of expense related to these de-risking measures.
−Removed: Other Postretirement Benefit Plans
−Removed: In the U.S., the Company maintains two unfunded non-pension other postretirement benefit plans (“OPEB”) which are funded as costs are incurred.
−Removed: These plans provide medical and death benefits to retirees.
−Removed: The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to pension and other postretirement benefit plans (in thousands) :
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: As a result, the Company incurred $ 0.7 million of expense related to these de-risking measures.
+Added: The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to pension plans (in thousands) :
+Added: December 31, 2020 December 31, 2019
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
Change in benefit obligation:
2 unchanged sentences
Interest cost 70 442 85 535
−Removed: Contributions by participants
Actuarial (gains) losses 338 1,863 248 1,922
8 unchanged sentences
Company contributions 75 919 79 953
−Removed: Contributions by participants
Benefits paid ( 75 ) ( 659 ) ( 79 ) ( 777 )
Curtailments and settlements — — — ( 25 )
−Removed: Plan amendments and other
Currency translation — 743 — 430
1 unchanged sentence
Funded status at end of year $ ( 2,747 ) $ ( 9,931 ) $ ( 2,414 ) $ ( 8,437 )
+Added: Actuarial losses incurred in 2020 related to our U.S.
+Added: plans are primarily the result of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2020 compared to December 31, 2019.
+Added: Actuarial losses incurred in 2019 related to our U.S.
+Added: plans are primarily the result of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2019 compared to December 31, 2018.
Amounts recognized in the consolidated balance sheets consist of the following pre-tax amounts (in thousands) :
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
+Added: Other accrued expenses $ ( 105 ) $ ( 240 ) $ ( 98 ) $ ( 325 )
Accrued pension and other postretirement costs $ ( 2,642 ) $ ( 9,691 ) $ ( 2,316 ) $ ( 8,112 )
−Removed: Note 9 – Pensions and Other Postretirement Benefits (continued)
+Added: Accumulated other comprehensive loss $ 823 $ 9,068 $ 594 $ 5,969
+Added: $ ( 1,924 ) $ ( 863 ) $ ( 1,820 ) $ ( 2,468 )
Unrecognized actuarial gains and losses arise from several factors, including experience and assumption changes with respect to the obligations and from the difference between expected returns and actual returns on plan assets.
Actuarial items consist of the following (in thousands) :
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: Note 9 – Pensions and Other Postretirement Benefits (continued)
+Added: December 31, 2020 December 31, 2019
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
Unrecognized net actuarial loss $ 823 $ 9,008 $ 594 $ 5,906
1 unchanged sentence
Unamortized transition obligation — — — 1
+Added: $ 823 $ 9,068 $ 594 $ 5,969
The following table sets forth additional information regarding the projected and accumulated benefit obligations for the pension plans (in thousands) :
+Added: December 31, 2020
+Added: Plans Non-U.S.
Accumulated benefit obligation, all plans
+Added: $ 2,747 $ 25,148
Plans for which the accumulated benefit obligation exceeds plan assets:
Projected benefit obligation
+Added: $ 2,747 $ 25,107
Accumulated benefit obligation
+Added: $ 2,747 $ 24,099
Fair value of plan assets
+Added: December 31, 2019
+Added: Plans Non-U.S.
+Added: Accumulated benefit obligation, all plans
+Added: $ 2,414 $ 23,686
+Added: Plans for which the accumulated benefit obligation exceeds plan assets:
+Added: Projected benefit obligation
+Added: $ 2,414 $ 23,386
+Added: Accumulated benefit obligation
+Added: $ 2,414 $ 22,743
+Added: Fair value of plan assets
Unrecognized gains and losses are amortized into future net periodic pension cost using the 10% corridor method over the expected remaining service life of the employee group.
−Removed: The following table sets forth the components of net periodic cost of pension and other postretirement benefit plans (in thousands) :
+Added: The following table sets forth the components of net periodic cost of pension (in thousands) :
Years ended December 31,
+Added: 2020 2019 2018
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
Annual service cost
+Added: $ — $ 402 $ — $ 336 $ — $ 498
employee contributions
Net service cost
+Added: — 402 — 336 — 477
Interest cost
+Added: 70 442 85 535 76 610
Expected return on plan assets
+Added: — ( 442 ) — ( 517 ) — ( 549 )
Amortization of actuarial losses
+Added: 109 286 38 164 70 437
Amortization of transition obligation
Curtailment and settlement losses
+Added: — — — — — 708
Net periodic benefit cost
+Added: $ 179 $ 693 $ 123 $ 519 $ 146 $ 1,684
See Note 8 for the pre-tax, tax effect, and after tax amounts included in other comprehensive income during the years ended December 31, 2020, 2019, and 2018.
−Removed: The estimated actuarial items that will be amortized from accumulated other comprehensive loss into net periodic pension cost during 2020 is $0.4 million .
+Added: Note 9 – Pensions and Other Postretirement Benefits (continued)
The following weighted-average assumptions were used to determine benefit obligations at December 31 of the respective years:
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
Discount rate 2.11 % 1.29 % 2.97 % 1.86 %
−Removed: Rate of compensation increase
−Removed: Expected return on plan assets
−Removed: Note 9 – Pensions and Other Postretirement Benefits (continued)
+Added: Rate of compensation increase N/A 2.77 % N/A 1.20 %
+Added: Expected return on plan assets N/A 2.66 % N/A 3.56 %
The following weighted-average assumptions were used to determine the net periodic pension costs for the years ended December 31, 2020 and 2019:
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
Discount rate 2.97 % 1.86 % 3.99 % 2.47 %
−Removed: Rate of compensation increase
−Removed: Expected return on plan assets
−Removed: Health care trend rate
−Removed: The health care trend ultimate rate is 3.90% per the terms of the plan.
−Removed: The impact of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirement benefit obligation is not material.
+Added: Rate of compensation increase N/A 1.20 % N/A 3.08 %
+Added: Expected return on plan assets N/A 3.56 % N/A 2.70 %
The plans’ expected return on assets is based on management’s expectation of long-term average rates of return to be achieved by the underlying investment portfolios.
3 unchanged sentences
Plan assets are comprised of:
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
+Added: Plans Non-U.S.
+Added: Plans Non-U.S.
Equity securities — 48 % — 48 %
1 unchanged sentence
Cash and cash equivalents — 13 % — 10 %
+Added: Total — 100 % — 100 %
The Company maintains defined benefit retirement plans in certain of its subsidiaries.
8 unchanged sentences
Note 9 – Pensions and Other Postretirement Benefits (continued)
−Removed: As of December 31, 2019
−Removed: Fair value measurements at reporting date using:
−Removed: Total Fair Value
−Removed: Level 1 Inputs
−Removed: Level 2 Inputs
−Removed: Level 3 Inputs
+Added: As of December 31, 2020 Fair value measurements at reporting date using:
+Added: Total Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs
Defined benefit pension plan assets
2 unchanged sentences
Cash and cash equivalents 1,678 1,678 — —
−Removed: As of December 31, 2018
−Removed: Fair value measurements at reporting date using:
−Removed: Total Fair Value
−Removed: Level 1 Inputs
−Removed: Level 2 Inputs
−Removed: Level 3 Inputs
+Added: $ 18,157 $ 1,678 $ 16,479 $ —
+Added: As of December 31, 2019 Fair value measurements at reporting date using:
+Added: Total Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs
Defined benefit pension plan assets
2 unchanged sentences
Cash and cash equivalents 921 921 — —
+Added: $ 16,420 $ 921 $ 15,499 $ —
Estimated future benefit payments are as follows (in thousands) :
−Removed: The Company anticipates making contributions to its funded and unfunded pension and postretirement benefit plans of approximately $1.5 million during 2020 .
+Added: 2021 $ 105 $ 1,068
+Added: 2023 135 1,334
+Added: 2025 135 1,358
+Added: 2025 - 2028 757 4,993
+Added: The Company anticipates making contributions to its funded and unfunded pension of approximately $ 1.4 million during 2021.
+Added: Other Postretirement Benefit Plans
+Added: In the U.S., the Company maintains two unfunded non-pension other postretirement benefit plans (“OPEB”) which are funded as costs are incurred.
+Added: These plans provide medical and death benefits to retirees.
+Added: Note 9 – Pensions and Other Postretirement Benefits (continued)
+Added: The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to other postretirement benefit plans (in thousands) :
+Added: Change in benefit obligation:
+Added: Benefit obligation at beginning of year $ 4,633 $ 4,645
+Added: Service cost (adjusted for actual employee contributions) 123 126
+Added: Interest cost 133 180
+Added: Contributions by participants 25 —
+Added: Actuarial gains ( 1,498 ) ( 131 )
+Added: Benefits paid ( 249 ) ( 187 )
+Added: Plan amendments and other 410 —
+Added: Benefit obligation at end of year $ 3,577 $ 4,633
+Added: Change in plan assets:
+Added: Fair value of plan assets at beginning of year $ — $ —
+Added: Company contributions 224 187
+Added: Contributions by participants 25 —
+Added: Benefits paid ( 249 ) ( 187 )
+Added: Fair value of plan assets at end of year $ — $ —
+Added: Funded status at end of year $ ( 3,577 ) $ ( 4,633 )
+Added: Actuarial gains incurred in 2020 related to our post-retirement plans are primarily the result of a prior year adjustment of $ 763 , changes in medical claims and age variance assumptions, net of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2020 compared to December 31, 2019.
+Added: Actuarial gains incurred in 2019 related to our post-retirement plans are primarily the result of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2019 compared to December 31, 2018.
+Added: Amounts recognized in the consolidated balance sheets consist of the following pre-tax amounts (in thousands) :
+Added: Other accrued expenses $ ( 266 ) $ ( 290 )
+Added: Accrued pension and other postretirement costs $ ( 3,311 ) $ ( 4,343 )
+Added: Accumulated other comprehensive loss $ 583 $ 1,808
+Added: $ ( 2,994 ) $ ( 2,825 )
+Added: Actuarial items consist of the following (in thousands) :
+Added: Unrecognized net actuarial loss $ 583 $ 1,808
+Added: $ 583 $ 1,808
+Added: Unrecognized gains and losses are amortized into future net periodic benefit cost using the 10% corridor method over the expected remaining service life of the employee group.
+Added: The following table sets forth the components of net periodic benefit costs (in thousands) :
+Added: Note 9 – Pensions and Other Postretirement Benefits (continued)
+Added: Years ended December 31,
+Added: 2020 2019 2018
+Added: Net service cost
+Added: Interest cost
+Added: Amortization of actuarial losses
+Added: Net periodic benefit cost
+Added: $ 393 $ 462 $ 437
+Added: See Note 8 for the pre-tax, tax effect, and after tax amounts included in other comprehensive income during the years ended December 31, 2020, 2019, and 2018.
+Added: The following weighted-average assumptions were used to determine benefit obligations at December 31 of the respective years:
+Added: Discount rate 1.99 % 2.97 %
+Added: The following weighted-average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2020 and 2019:
+Added: Discount rate 2.97 % 3.99 %
+Added: Health care trend rate 5.40 % 5.27 %
+Added: The health care trend ultimate rate is 4.04 % per the terms of the plan.
+Added: The impact of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirement benefit obligation is not material.
+Added: Estimated future benefit payments are as follows (in thousands) :
+Added: 2025 - 2028 $ 1,044
+Added: As the plans are unfunded, the Company's anticipated contributions for 2021 are equal to the estimated benefit payment.
+Added: Note 9 – Pensions and Other Postretirement Benefits (continued)
Other Retirement Obligations
24 unchanged sentences
The Company recognizes compensation cost for RSUs that are expected to vest and for which performance criteria are expected to be met.
−Removed: On March 13, 2019, VPG’s three then- current executive officers were granted annual equity awards in the form of RSUs, of which 75% are performance-based.
+Added: 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.
The awards have an aggregate target grant-date fair value of $ 1.2 million were comprised of 44,269 RSUs.
9 unchanged sentences
Vesting of equity awards may be subject to acceleration under certain circumstances.
+Added: Note 10 – Share-Based Compensation (continued)
RSU activity is presented below (number of RSUs in thousands) :
Years ended December 31,
+Added: 2020 2019 2018
+Added: RSUs Weighted
+Added: Fair Value Number
+Added: RSUs Weighted
+Added: Fair Value Number
+Added: RSUs Weighted
Beginning of year 212 $ 25.97 265 $ 17.64 417 $ 14.57
−Removed: Note 10 – Share-Based Compensation (continued)
+Added: Granted 79 24.16 73 35.27 74 28.20
+Added: Vested ( 81 ) 19.02 ( 75 ) 15.27 ( 86 ) 16.75
+Added: Forfeited ( 5 ) 15.75 ( 51 ) 11.49 ( 140 ) 14.70
+Added: End of year 205 $ 28.23 212 $ 25.97 265 $ 17.64
The fair value of the RSUs vested during 2020 is $ 2.3 million.
2 unchanged sentences
RSUs with performance-based vesting criteria are expected to vest as follows (number of RSUs in thousands) :
−Removed: Expected to Vest
−Removed: Not Expected to Vest
+Added: Vesting Date Expected to Vest Not Expected to Vest Total
January 1, 2021 46 3 49
4 unchanged sentences
Years ended December 31,
+Added: 2020 2019 2018
Restricted stock units $ 1,387 $ 1,336 $ 1,799
Share-based compensation expense is recognized ratably over the vesting period of the awards and for RSUs with performance criteria, is recognized for RSU's that are expected to vest and for which performance criteria are expected to be met.
−Removed: During 2019, it was also determined that certain performance objectives associated with awards granted in 2017, 2018 and 2019 were not likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards.
+Added: During the fourth quarter of 2020, a net adjustment reducing share-based compensation expense by $ 0.1 million was recorded, based on the evaluation of performance objectives associated with awards granted in 2018, 2019 and 2020.
+Added: It was determined that certain objectives were not likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards.
+Added: This was partially offset by additional share based compensation expense being recorded for certain objectives being fully met, which had been reversed in the prior year.
+Added: During 2019, it was determined that certain performance objectives associated with awards granted in 2017, 2018 and 2019 were not likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards.
As a net result, adjustments decreasing share based compensation expense totaling $ 0.8 million were recorded during the year based on anticipated performance levels.
−Removed: During 2017, it was determined that certain performance objectives associated with awards granted in 2015 were likely to be met, when share based compensation expense related to these performance objectives had been reduced in prior years.
−Removed: This necessitated an increase to share-based compensation expense associated with those awards in 2017.
−Removed: However, it was also determined that certain performance objectives associated with awards granted in 2016 and 2017 were not likely to be fully met, necessitating a reversal of certain compensations expense associated with those awards.
−Removed: As a net result, adjustments increasing share based compensation expense totaling $0.4 million were recorded during the year based on anticipated performance levels.
The deferred tax benefit on share-based compensation expense was $ 0.0 million , $ 0.1 million, and $ 0.0 million for the years ended December 31, 2020, 2019, and 2018, respectively.
3 unchanged sentences
The Company is of the opinion that the disposition of these proceedings will not have a material adverse effect on its business or its financial condition, results of operations, and cash flows.
+Added: Note 11 – Commitments, Contingencies, and Concentrations (continued)
Executive Employment Agreements
3 unchanged sentences
Although most materials incorporated in the Company’s products are available from a number of sources, certain materials are available only from a relatively limited number of suppliers.
−Removed: Note 11 – Commitments, Contingencies, and Concentrations (continued)
Some of the most highly specialized materials for the Company’s sensors are sourced from a single vendor.
13 unchanged sentences
See the following table for the percentage of cash and cash equivalents by region at December 31, 2020 and December 31, 2019:
+Added: Asia 18 % 23 %
United States 10 % 7 %
+Added: Israel 26 % 28 %
+Added: Europe 16 % 14 %
United Kingdom 18 % 17 %
+Added: Canada 12 % 11 %
+Added: Total 100 % 100 %
Note 12 - Leases
−Removed: Effective January 1, 2019 the Company adopted the new lease accounting standard using the modified retrospective method of applying the new standard at the adoption date.
−Removed: The Company determines if an arrangement is or contains a lease at inception or modification of such agreement.
−Removed: 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.
−Removed: 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.
−Removed: As the implicit rate is not determinable in most of the Company's leases, the Company's incremental borrowing rate is used as the basis to determine the present value of future lease payments.
−Removed: Refer to Note 7 for discussion of the Company's borrowing rate.
−Removed: The expected lease terms include options to extend or terminate.
−Removed: The period which is subject to an option to extend the lease is included in the lease term if it is reasonably certain that the option will be exercised.
−Removed: Some of these leases contain variable payment provisions that depend on an index or rate, initially measured using the index or rate at the lease commencement date and are therefore not included in our future minimum lease payments.
−Removed: Variable payments are expensed in the periods incurred.
−Removed: Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.
−Removed: Additionally, the Company elected the package of practical expedients permitted under the transition guidance, which allows the carryforward the historical lease classification.
−Removed: The Company also made an election to exclude from balance sheet reporting leases with initial terms of 12 months or less and to exclude non-lease components from lease right of use assets and corresponding liabilities.
−Removed: The Company primarily leases office and manufacturing facilities in addition to vehicles, which have remaining terms of less than one year to seven years .
+Added: The Company primarily leases office and manufacturing facilities in addition to vehicles, which have remaining terms of less than one year to twelve years .
The Company has no finance leases.
−Removed: The Company recorded a $0.5 million adjustment to opening retained earnings related to the remaining deferred gain recorded as part of the Karmiel, Israel sale leaseback.
+Added: In 2019, one of the Company's indirect wholly-owned subsidiaries entered into a lease agreement as tenant related to a property in Israel.
+Added: 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 $ 14.4 million, in accordance with the terms of the lease agreement.
Leases recorded on the balance sheet consist of the following (in thousands) :
−Removed: Classification on Balance Sheet
−Removed: December 31, 2019
+Added: Leases December 31, 2020 December 31, 2019
Operating lease right of use asset $ 21,788 $ 8,691
Operating lease - current $ 4,011 $ 2,827
−Removed: Other Accrued Expenses
Operating lease - non-current $ 19,504 $ 5,811
−Removed: Other Liabilities
Other information related to lease term and discount rate is as follows:
December 31, 2020
−Removed: Operating leases weighted average remaining lease term (in years)
+Added: Operating leases weighted average remaining lease term (in years) 9.1 years
Operating leases weighted average discount rate 3.59 %
The components of lease expense are as follows (in thousands) :
−Removed: December 31, 2019
+Added: December 31, 2020 December 31, 2019
Operating lease cost $ 4,389 $ 3,376
2 unchanged sentences
Total lease cost $ 4,513 $ 3,507
−Removed: Right of use assets obtained in exchange for new operating lease liability during 2019 were $0.3 million .
−Removed: The cash paid for amounts included in the measurement of lease liabilities approximates our operating lease cost for the year ended December 31, 2019 .
−Removed: Note 12 - Leases ( continued)
+Added: Right of use assets obtained in exchange for new operating lease liability during 2020 were $ 16.3 million and in 2019 were $ 0.3 million.
+Added: The Company paid $ 4.0 million for its operating leases for the year ended December 31, 2020 and $ 3.4 million for the year ended December 31, 2019, which are included in operating cash flows on the consolidated statements of cash flows.
Undiscounted maturities of operating lease payments as of December 31, 2020 are summarized as follows (in thousands) :
+Added: Thereafter 11,132
Total future minimum lease payments $ 27,237
1 unchanged sentence
Present value of future minimum lease payments $ 23,515
−Removed: One of the Company's indirect wholly-owned subsidiaries enter into a lease agreement as tenant related to a property in Israel.
−Removed: Such lease agreement provides that we will lease a new building of approximately 121,400 square feet.
−Removed: The Company expects to commence occupancy in the second half of 2020.
−Removed: Rent expense on operating leases prior to adoption of ASC 842 was $3.6 million and $3.6 million for the years ended December 31, 2018 and 2017, respectively.
−Removed: The following are the future minimum lease payments (excluding related party leases as described in Note 17) with initial or remaining noncancellable lease terms in excess of one year as of December 31, 2018 ( in thousands) :
−Removed: Total lease payments
+Added: Rent expense on operating leases prior to adoption of ASC 842 was $ 3.6 million for the year ended December 31, 2018.
Note 13 – Segment and Geographic Data
12 unchanged sentences
Foil Technology
−Removed: Control Systems
+Added: Products Force
+Added: Sensors Weighing and
+Added: Control Systems Corporate/
Net third-party revenues $ 131,645 $ 53,724 $ 84,443 $ — $ 269,812
Intersegment revenues 3,183 — 446 ( 3,629 ) —
+Added: Gross profit 52,025 13,582 38,664 — 104,271
Segment operating income (loss) 29,870 4,756 18,768 ( 30,737 ) 22,657
−Removed: Acquisition costs
−Removed: Executive severance costs
+Added: Impairment of goodwill and indefinite-lived intangibles
+Added: 2,440 — — — 2,440
Restructuring costs 572 108 156 82 918
1 unchanged sentence
Capital expenditures 22,032 1,211 1,071 13 24,327
+Added: Total assets 157,120 63,461 157,840 23,466 401,887
Net third-party revenues $ 131,803 $ 64,357 $ 87,798 $ — $ 283,958
Intersegment revenues 4,067 1,068 463 ( 5,598 ) —
+Added: Gross profit 53,292 18,022 40,303 — 111,617
Segment operating income (loss) 29,873 8,643 21,058 ( 30,926 ) 28,648
−Removed: Impairment of goodwill and indefinite-lived intangibles
+Added: Acquisition costs — — 443 — 443
+Added: Executive severance costs — — — 611 611
Restructuring costs 86 2,041 — 166 2,293
1 unchanged sentence
Capital expenditures 7,011 2,237 1,243 38 10,529
+Added: Total assets 116,920 75,885 158,597 19,011 370,413
Net third-party revenues $ 141,009 $ 73,186 $ 85,599 $ — $ 299,794
Intersegment revenues 3,878 1,365 577 ( 5,820 ) —
+Added: Gross profit 61,562 20,001 39,704 — 121,267
Segment operating income (loss) 38,404 10,514 20,508 ( 32,203 ) 37,223
+Added: Impairment of goodwill and indefinite-lived intangibles 2,820 — — — 2,820
Restructuring costs — 289 — — 289
1 unchanged sentence
Capital expenditures 9,239 2,483 1,370 147 13,239
+Added: Total assets 132,918 82,637 95,954 14,874 326,383
Note 13 – Segment and Geographic Data (continued)
1 unchanged sentence
Years ended December 31,
+Added: 2020 2019 2018
Unallocated selling, general, and administrative expenses $ ( 27,379 ) $ ( 27,579 ) $ ( 29,094 )
3 unchanged sentences
Restructuring costs ( 918 ) ( 2,293 ) ( 289 )
+Added: $ ( 30,737 ) $ ( 30,926 ) $ ( 32,203 )
The following geographic data includes property and equipment based on physical location (in thousands) :
2 unchanged sentences
United Kingdom 4,153 4,011
+Added: Other Europe 1,813 1,498
+Added: Israel 38,339 22,903
+Added: Asia 17,953 19,118
Canada and Other 1,722 1,731
+Added: $ 75,016 $ 61,270
Note 14 – Earnings Per Share
1 unchanged sentence
Diluted earnings per share is computed using the weighted average number of common shares outstanding, adjusted to include the potentially dilutive effect of stock options and restricted stock units (see Note 10), and other potentially dilutive securities.
−Removed: Note 14 – Earnings Per Share (continued)
The following table sets forth the computation of basic and diluted earnings per share attributable to VPG stockholders (in thousands, except earnings per share) :
Years ended December 31,
+Added: 2020 2019 2018
Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders
+Added: $ 10,787 $ 22,188 $ 23,646
Adjustment to the numerator for net earnings:
2 unchanged sentences
Net earnings attributable to VPG stockholders
+Added: $ 10,787 $ 22,188 $ 23,652
Denominator for basic earnings per share:
Weighted average shares
+Added: 13,566 13,515 13,439
Effect of dilutive securities:
4 unchanged sentences
Adjusted weighted average shares
+Added: 13,623 13,597 13,535
Basic earnings per share attributable to VPG stockholders
+Added: $ 0.80 $ 1.64 $ 1.76
Diluted earnings per share attributable to VPG stockholders
+Added: $ 0.79 $ 1.63 $ 1.75
Note 15 – Additional Financial Statement Information
1 unchanged sentence
Years ended December 31,
+Added: 2020 2019 2018
Foreign exchange loss $ ( 2,246 ) $ ( 1,638 ) $ ( 279 )
1 unchanged sentence
Pension expense ( 738 ) ( 643 ) ( 1,682 )
+Added: Other ( 244 ) 958 ( 41 )
+Added: $ ( 2,982 ) $ ( 701 ) $ ( 1,496 )
Note 15 – Additional Financial Statement Information (continued)
Foreign currency exchange gains and losses represent the impact of changes in foreign currency exchange rates.
−Removed: The change in foreign exchange gains/(losses) during the period, as compared to the prior year period, is primarily due to fluctuations in the Israeli shekel, the Euro, India Rupee and the Canadian dollar.
+Added: The change in foreign exchange gains / (losses) during the period, as compared to the prior year period, is primarily due to fluctuations in the Israeli shekel.
+Added: The change in the dollar-shekel exchange rate, particularly in the fourth quarter of 2020, resulted in an unfavorable foreign exchange impact primarily related to the shekel-denominated lease liability for a new Foil Technology Products facility in Israel .
Pension expense represents the net periodic benefit cost excluding the service cost.
1 unchanged sentence
Included in Other for the year ended December 31, 2019, is a one-time $ 0.8 million gain on liquidation of one of the Company's subsidiaries.
−Removed: Included within Other, for the year ended December 31, 2017, is net proceeds of $1.5 million related to a lease termination payment at the Company's Tianjin, People's Republic of China location.
−Removed: The relocation of operation in Tianjin was completed in 2018.
Other accrued expenses consist of the following (in thousands) :
5 unchanged sentences
Accrued professional fees 638 1,082
−Removed: Lease liability - current
+Added: Other 4,349 5,002
+Added: $ 13,843 $ 16,126
Israeli Severance Pay
23 unchanged sentences
The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis (in thousands) :
−Removed: As of December 31, 2019
−Removed: Fair value measurements at reporting date using:
−Removed: Total Fair Value
−Removed: Level 1 Inputs
−Removed: Level 2 Inputs
−Removed: Level 3 Inputs
+Added: As of December 31, 2020 Fair value measurements at reporting date using:
+Added: Total Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs
Assets held in rabbi trusts $ 5,601 $ 61 $ 5,540 $ —
−Removed: As of December 31, 2018
−Removed: Fair value measurements at reporting date using:
−Removed: Total Fair Value
−Removed: Level 1 Inputs
−Removed: Level 2 Inputs
−Removed: Level 3 Inputs
+Added: As of December 31, 2019 Fair value measurements at reporting date using:
+Added: Total Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs
Assets held in rabbi trusts $ 5,169 $ 53 $ 5,116 $ —
4 unchanged sentences
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.
−Removed: The fair value of the long-term debt, excluding capitalized deferred financing costs at December 31, 2019 and December 31, 2018 approximates its carrying value, as the revolving debt and term loans are reset quarterly based on current market rates, plus a base rate as specified in the 2015 Credit Agreement.
+Added: The fair value of the long-term debt, excluding capitalized deferred financing costs at December 31, 2020 and December 31, 2019 approximates its carrying value, as the revolving debt and term loans are reset monthly based on current market rates, plus a base rate as specified in the 2020 Credit Agreement.
The fair value measurement of long-term debt is considered a Level 2 measurement.
10 unchanged sentences
Executive RSU grant
−Removed: 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.
+Added: On March 4 2021, VPG’s three current executive officers were granted annual equity awards in the form of RSUs, of which 50 % are performance-based and 50 % are time-based.
The awards have an aggregate target grant-date fair value of $ 1.7 million and were comprised of 52,486 RSUs.
−Removed: Twenty-five percent of these awards will vest on January 1, 2023, subject to the executives continued employment.
−Removed: The performance-based portion of the RSUs will also vest on January 1, 2023, 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.
−Removed: Note 19 – Summary of Quarterly Financial Information (Unaudited)
−Removed: (in thousands, except per share amounts)
−Removed: Statement of Operations data:
−Removed: Operating income
−Removed: net earnings attributable to noncontrolling interests
−Removed: Net earnings attributable to VPG stockholders
−Removed: Per Share Data:
−Removed: Basic earnings per share
−Removed: Diluted earnings per share
−Removed: Certain Items Recorded during the Quarters:
−Removed: Acquisition purchase accounting adjustments
−Removed: Acquisition costs
−Removed: Executive severance costs
−Removed: Impairment of goodwill and indefinite-lived intangibles
−Removed: UK pension settlement
−Removed: Restructuring costs
−Removed: Tax effect of reconciling items and discrete tax items
−Removed: The Company reports interim financial information for the 13-week periods beginning on a Sunday and ending on a Saturday, except for the first fiscal quarter, which always begins on January 1, and the fourth fiscal quarter, which always ends on December 31.
−Removed: The first, second, third, and fourth quarters of 2019 ended on March 30 , June 29 , September 28 , and December 31 , respectively.
−Removed: The first, second, third, and fourth quarters of 2018 ended on March 31 , June 30 , September 29 , and December 31 , respectively.
−Removed: Quarterly amounts may not agree in total to the corresponding annual amounts due to rounding.
+Added: The time-based awards will vest on January 1, 2024, subject to the executives continued employment.
+Added: The performance-based awards will also vest on January 1, 2024, 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.
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.