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Item 1. Business

2022-03-04 compared with 2021-03-11 · 156 added, 167 removed, 175 unchanged (65% of the section changed)

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Vishay Precision Group, Inc.

(“VPG,” the “Company,” “we,” “us” or “our”) is an internationally recognized designer, manufacturer and marketer of sensors, and sensor-based measurement systems, as well as specialty resistors and strain gages based upon our proprietary technology.

We provide precision products and solutions, many of which are “designed-in” by our customers, specializing in the growing markets of stress, force, weight, pressure, and current measurements.

A significant portion of our products and solutions are primarily based upon our proprietary foil technology and are produced as part of our vertically integrated structure.

We believe this strategy results in higher quality, more cost effective and focused solutions for our customers.

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

Our global operations enable us to produce a wide variety of products in strategically effective geographic locations that also optimize our resources for specific technologies, sensors, assemblies, and systems.

The Company also has a long heritage of innovation in precision foil resistors, foil strain gages, and sensors that convert mechanical inputs into an electronic signal for display, processing, interpretation, or control by our instrumentation and systems products.

Our advanced sensor product line continues this heritage by offering high-quality foil strain gages produced in a proprietary, highly automated environment.

Precision sensors are essential to the accurate measurement, resolution and display of force, weight, pressure, torque, tilt, motion, or acceleration, especially in the legal-for-trade, commercial, and industrial marketplaces.

This expertise served as a foundation for our expansion into strain gage instrumentation, load cells, transducers, weighing modules, and complete systems for process control and on-board weighing.

Although our products are typically used in the industrial market, our advanced sensors have been used in a consumer electronics product and are being evaluated for other non-industrial applications.

The precision sensor market is integral to the development of intelligent products across a wide variety of end markets upon which we focus, including medical, agricultural, transportation, industrial, avionics, military, and space applications.

We believe that as original equipment manufacturers (“OEMs”) continue a drive to make products “smarter,” they will integrate more sensors and related systems into their solutions to link the mechanical/physical world with digital control and/or response.

We believe this offers a substantial growth opportunity for our products and expertise.

Felix Zandman founded Vishay Intertechnology Inc.

(“Vishay Intertechnology”) to develop and manufacture the first generation of Bulk Metal® foil resistors and later, foil strain gages.

Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current.

They vary widely in precision and cost, and are manufactured from numerous materials and in many forms.

Bulk Metal foil resistors, developed by Dr.

Zandman in the 1950’s, are the most precise and stable type of resistors currently available.

A strain gage is a resistive sensor that is attached to the surface of an object to determine the surface strain caused by an applied force.

Beginning in the 1960’s, Vishay Intertechnology established itself as a technical and market leader in precision foil resistors, and foil strain gages.

These innovations were the genesis of the foil technology that is a unique strategic competitive advantage of VPG.

The subsequent innovations and advancement of foil resistance and strain gage technology opened the door to numerous commercial applications, such as force sensors and control systems on a vertical market basis.

On July 6, 2010, Vishay Intertechnology spun off its precision measurement and foil technology businesses through a tax-free stock dividend of VPG stock to Vishay Intertechnology’s stockholders, and we became a publicly-traded company.

In the decade prior to the spin-off, Vishay Intertechnology expanded our sensor and measurement business through acquisitions, extending our business from its initial focus on precision foil resistors and foil strain gages to include an array of sensor-based solutions.

These solutions include transducers/load cells, which are force sensors combining strain gages and the metallic structures to which they are bonded;

load cell modules that utilize electronic instrumentation and software for measuring the load cell output;

and measurement instrumentation and complete systems for process control and on-board weighing.

In 2013, we completed our first acquisition as an independent public company when we acquired substantially all of the assets of the George Kelk Corporation ("KELK").

KELK engineers, designs and manufactures highly accurate optical and electronic roll force measurement and control equipment primarily used by metals rolling mills and mining applications throughout the world.

As a part of our acquisition, we acquired a leased manufacturing, engineering, sales, and administrative facility in Toronto, Canada.

On December 30, 2015, we completed the acquisition of Stress-Tek, Inc.

("Stress-Tek") based in Kent, Washington.

Stress-Tek designs and manufactures state-of-the-art, rugged and reliable strain gage-based load cells and force measurement systems.

Stress-Tek primarily operates in North America, where their sensors and display systems are used in a wide range of industries, predominantly in transportation and trucking, for timber, refuse, aggregate, mining, and general trucking applications.

Stress-Tek products are marketed under the Vulcan brand as part of the VPG Onboard Weighing offerings for our Weighing and Control Systems reporting segment.

As a part of the Stress-Tek acquisition, we acquired ownership of a manufacturing, engineering, sales, administrative, and warehouse facility in Kent, Washington.

On April 6, 2016, we completed the acquisition of Pacific Instruments, Inc.

("Pacific Instruments") based in Concord, California.

Pacific Instruments designs and manufactures high-performance signal conditioning, data acquisition and control systems and has extensive experience integrating these systems.

Pacific Instruments sells primarily to the aerospace, commercial aviation and defense markets in the United States.

Pacific Instruments products expanded the offerings of our Foil Technology Products reporting segment, which already offered data acquisition systems, primarily in the field of strain measurement.

As a result of our acquisition, we acquired a leased manufacturing, engineering, sales and administrative facility in Concord, California.

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

("DSI"), a provider of specialized dynamic thermal-mechanical test and simulation systems used to develop new metal alloys and optimize production processes.

DSI is an established, high margin business, with a strong brand and has the largest installed base of products of its type in the world, according to market estimates.

DSI expands our position in the steel market and offers opportunities for growth by leveraging our sales capabilities and market presence, and by expanding DSI’s product line to address new opportunities.

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

Our acquisitions added to our strong, diverse, global manufacturing, sales and distribution network, which includes facilities in Canada, China, France, Germany, India, Israel, Japan, Sweden, Taiwan, the United Kingdom, and the United States.

(“VPG,” the “Company,” “we,” “us” or “our”) is a global, diversified company focused on precision measurement sensing technologies, including specialized sensors, weighing solutions, and measurement systems.

Many of our precision measurement sensing products and solutions are “designed-in” by our customers, and address growing applications across a diverse array of industries and markets.

Our products are marketed under a variety of brand names that we believe are characterized as having a very high level of precision and quality, and we employ an operationally diversified structure to manage our businesses.

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

Over the past few years, we have seen a broadening of precision sensing applications in both our traditional industrial markets and new markets, due to the development of higher functionality in our customers' end products.

Our precision measurement solutions are used across a wide variety of end markets upon which we focus, including industrial, test and measurement, transportation, steel, medical, agriculture, avionics, military and space, and consumer product applications.

The Company has a long heritage of innovation in sensor technologies that provide accuracy, reliability and repeatability that make our customers' products safer, smarter, and more productive.

As the functionality of customers products increases, and they integrate more precision measurement sensors and related systems into their solutions in order to link the mechanical and physical world with digital control and/or response, we believe this will offer substantial growth opportunities for our products and expertise.

On July 6, 2010, our company was spun off by Vishay Intertechnology, Inc.

(“Vishay Intertechnology”) through a tax-free stock dividend of VPG stock to Vishay Intertechnology’s stockholders, and we became a publicly-traded company.

Vishay Intertechnology was founded in 1962 by Dr.

Felix Zandman to develop and manufacture the first generation of Bulk Metal® foil resistors and later, foil strain gages.

Shortly after its founding, Vishay Intertechnology established itself as a technical and market leader in precision foil resistors, and foil strain gages.

These innovations were the genesis of the products and technology that provide a unique strategic competitive advantage for VPG, as these products were transitioned to VPG from Vishay Intertechnology as part of the spin off.

Since becoming an independent company, we have made several acquisitions that have added to our strong, diverse, global manufacturing, sales and distribution network, which includes facilities in Canada, China, France, Germany, India, Israel, Japan, Sweden, Taiwan, the United Kingdom, and the United States.

We were incorporated in Delaware on August 28, 2009.

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Our main telephone number is 484-321-5300.

Leverage Global Brand

While our acquisitions provided us an array of strong brand names, in addition to our historical resistor and strain gage brands, we believe the continued success of our strategy is best served by the establishment of a strong overall global brand.

The “VPG” brand leverages the strength of these historical brands under the umbrella of a unified, globally recognizable VPG name.

We continue to broaden and emphasize the VPG brand in the markets we serve under the following brands for each of our business segments:

Foil Technology Products Force Sensors Weighing and Control Systems

VPG Foil Resistors VPG Transducers BLH Nobel

- Alpha Electronics - Celtron KELK

- Powertron - Revere VPG Onboard Weighing

- Vishay Foil Resistors - Sensortronics Dynamic Systems Inc.

Micro-Measurements - Tedea-Huntleigh

Pacific Instruments

Key Business Vision and Strategies

Our vision is to be the leading provider of sensors, and sensor-based systems with the highest precision, quality, value, and service for measuring force (weight, pressure, torque, acceleration) and current.

As part of that vision, we are a leading provider of foil specialty resistors and strain gages, which are particularly effective in precision measurement applications.

Our strategy is to achieve corporate growth and shareholder value by expanding our existing product portfolio organically, as well as by acquiring complementary precision measurement products.

Our vision is to be a leading provider of precision measurement sensing technologies, which include sensors, weighing solutions and measurement systems that deliver accuracy, reliability and repeatability that make our customers' products safer, smarter, and more productive.

VPG delivers in-depth, deep engineering expertise to the design and manufacture of non-commodity sensors, weighing solutions and precision measurement systems that optimize and enhance our customers’ solutions performance across a broad array of end markets

Our strategy is to leverage our core technologies and competitive positions in our home markets, establishing an accelerated organic growth, as well as by acquiring complementary precision measurement sensing products.

Specifically, we are focused on the following strategic initiatives:

Operationally Diversified

In the fourth quarter of fiscal 2021, we formally adopted an operationally diversified structure and strategy, through which each of VPG's business segments maintains and deploys distinct go-to-market strategies, technical expertise, capital requirements, and acquisition opportunities.

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

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

Optimize Core Competence

The Company’s core competency and key value proposition is providing customers with proprietary foil technology products and precision measurement sensors and sensor-based systems.

Our foil technology resistors and strain gages are recognized as global market leading products that provide high precision and high stability over extreme temperature ranges, and long life.

Our force sensor products and our weighing and control systems products are also certified to meet some of the highest levels of precision measurements of force, weight, pressure, torque, tilt, motion, and acceleration.

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

We continue to optimize all aspects of our development, manufacturing and sales processes, including by increasing our technical sales efforts;

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and refining our manufacturing processes.

Our foil technology research group developed innovations that enhance the capability and performance of our strain gages, while simultaneously reducing their size and power consumption as part of our advanced sensors product line.

Our Sensors segment research group developed innovations that enhance the capability and performance of our strain gages, while simultaneously reducing their size and power consumption as part of our advanced sensors product line.

We believe this unique foil technology will create new markets as customers “design in” these next generation products in existing and new applications.

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Our advanced sensors manufacturing technology also offers us the capability to produce high-quality foil strain gages in a highly automated environment, which we believe results in reduced manufacturing and lead times, improved quality and increased margins.

As a sign of our commitment to these businesses, we signed a long-term lease for a state of the art facility which has been constructed in Israel.

Our administrative personnel have moved to the new facility, and we have begun the transition of our advanced sensors business to that facility.

We also seek to achieve significant production cost savings through the transfer, expansion, and construction of manufacturing operations in countries such as India, China, and Israel, where we can benefit from lower labor costs, improved efficiencies, or available tax and other government-sponsored incentives.

For example, in 2019 we incurred restructuring expense related to closing and downsizing of facilities as part of the manufacturing transitions of our force sensor products to facilities in India and China, which marked key milestones in our ongoing strategic initiatives to align and consolidate our manufacturing footprint.

As a sign of our commitment to these businesses, we signed a long-term lease for a state-of-the-art facility that has been constructed in Israel.

We fully transitioned to this facility in the third quarter of fiscal 2021.

We also seek to achieve significant production cost savings through the transfer, expansion, and construction of manufacturing operations in countries such as India, China, and Israel, where we can benefit from improved efficiencies or available tax and other government-sponsored incentives.

In the past several years, we incurred restructuring expense related to closing and downsizing of facilities as part of the manufacturing transitions of our load cell products to facilities in India and China, which marked key milestones in our ongoing strategic initiatives to align and consolidate our manufacturing footprint.

Organic Growth

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Growth from Acquisitions

We expect to continue to make strategic acquisitions where opportunities present themselves to grow our segments.

Historically, our growth and acquisition strategy has been largely focused on vertical product integration, using our foil strain gages in our force sensor products, and incorporating those products into our weighing and control systems.

The acquisitions of Stress-Tek and KELK, each of which employ our foil strain gages to manufacture load cells for their systems, continued this strategy.

Additionally, the KELK acquisition resulted in the acquisition of certain optical sensor technology.

The Pacific Instruments acquisition significantly broadened our existing data acquisition offerings and opened new markets for us.

Our most recent acquisition, DSI, expands our position in the steel market.

We expect to expand our expertise, and our acquisition focus, outside our traditional vertical approach to other precision sensor solutions in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration.

We expect to continue to make strategic acquisitions where opportunities present themselves to grow and expand our segments.

Historically, our growth and acquisition strategy had been largely focused on vertical product integration, using our foil strain gages in our load cell products, and incorporating those products into our weighing solutions.

In recent years, we widened our acquisition strategy to include a broader set of precision measurement systems and product companies.

In 2013, we completed our first acquisition as an independent public company when we acquired substantially all of the assets of the George Kelk Corporation ("KELK").

On December 30, 2015, we completed the acquisition of Stress-Tek, Inc.

("Stress-Tek") based in Kent, Washington.

Stress-Tek designs and manufactures state-of-the-art, rugged and reliable strain gage-based load cells and force measurement systems.

On April 6, 2016, we completed the acquisition of Pacific Instruments, Inc.

("Pacific Instruments") based in Concord, California.

Pacific Instruments designs and manufactures high-performance signal conditioning, data acquisition and control systems and has extensive experience integrating these systems.

Pacific Instruments sells primarily to the aerospace, commercial aviation and defense markets in the United States.

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

("DSI"), a provider of specialized dynamic thermal-mechanical test and simulation systems used to develop new metal alloys and optimize production processes.

DSI is an established, high margin business, with a strong brand and has the largest installed base of products of its type in the world, according to market estimates.

On June 1, 2021, we completed the acquisition of California-based Diversified Technical Systems, Inc.

(“DTS”), a leading manufacturer of data acquisition systems and sensors for product and safety testing.

DTS's embedded data acquisition and data logging products expands our offerings to the automotive and avionics, military, and space markets.

We believe DTS will continue to benefit from the global need for specialized safety testing that is expanding from the automotive and avionics sectors to sports applications.

As a result of our acquisition, we acquired a leased manufacturing, engineering, sales and administrative facility in Seal Beach, California.

We expect to expand our expertise, and our acquisition focus, outside our traditional vertical approach to other precision measurement solutions, including in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration.

We believe acquired businesses will benefit from improvements we implement to reduce redundant functions and from our current global manufacturing and distribution footprint.

Product Segments

Foil Technology Products

The Foil Technology Products ("FTP") segment includes our foil resistor and strain gage operating segments.

Foil resistor products offer superior precision, stability, and reliability.

Leverage Global Brand

The “VPG” brand leverages the strength of these historical brands under the umbrella of a unified, globally recognizable VPG name.

We continue to broaden and emphasize the VPG brand in the markets we serve under the following brands for each of our business segments:

Sensors Weighing Solutions Measurement Systems

VPG Foil Resistors VPG Transducers KELK

- Alpha Electronics - Celtron Dynamic Systems Inc.

- Powertron - Revere DTS

- Vishay Foil Resistors - Sensortronics Pacific Instruments

Micro-Measurements - Tedea-Huntleigh

VPG Onboard Weighing

Business Segments and Products

In the fourth quarter of fiscal 2021, we formally adopted an operationally diversified structure and strategy, by which each of VPG's business segments maintains and deploys specific go-to-market strategies, technical expertise, capital requirements, and acquisition opportunities.

As a result, we realigned our businesses into new reporting segments as follows (with affected businesses in bold and italics):

Former Reporting Segments New Reporting Segments

Foil Technology Products Sensors

Precision Resistors Precision Resistors

Strain gages Strain gages

Data acquisition systems - avionics

Force Sensors Weighing Solutions

Load Cells Load cells

On-board weighing systems

Process weighing

Weighing and Control Systems Measurement Systems

Process weighing Data acquisition systems - avionics

Measurement systems for steel production Measurement systems for steel production

On-board weighing systems

Material testing and simulation systems Material testing and simulation systems

Data acquisition systems for auto safety testing Data acquisition systems for auto safety testing

The Sensors segment is comprised of our precision resistor and strain gage businesses.

Precision resistor products offer superior precision, stability, and reliability.

Our resistor portfolio encompasses a wide variety of configurations and packages designed to meet the requirements of even the most demanding applications.

Typical applications for foil

resistors include high end test equipment and electronics for the aviation, military and space, semiconductor, process control, oil and gas, and medical markets.

Typical applications for strain gages, which include advanced sensor gages, are stress analysis for structural testing in the aviation, military and space, infrastructure, and construction markets, along with force measurement and weighing markets.

Our innovative advanced sensors product line enhances the capability and performance of our strain gages, while simultaneously reducing their size and power consumption.

This segment also includes our data acquisition systems business.

The products in these segments are primarily based on our resistive foil technology, which continues to evolve and enables many products in both segments to be suited for new and varied applications.

The manufacturing of the foil material is a critical and common component of the Company’s strain gage and precision foil resistor operating segments, and as a result, we experience synergies between our foil resistor and strain gage operating segments.

The production cycles for foil resistors and strain gages are similar and many of the same raw materials are utilized in the manufacturing processes for both operating segments.

The foil resistor and strain gage products require a similar level of labor and capital.

However, the advanced sensors’ manufacturing technology offers us the capability to produce high-quality foil strain gages in a highly automated environment, which we believe results in reduced manufacturing costs and lead times, higher quality, and increased margins.

Our Pacific Instruments business offers a broad range of high performance signal conditioning, data acquisition and control systems, many of which reach customers outside our traditional commercial customer base, such as U.S.

government related customers.

A significant portion of products from the strain gage operating segment are sold to third parties as “standard catalog items”;

the remainder of this operating segment's products are sold as non-standard and/or custom products to third parties and to our Force Sensors segment.

Force Sensors

The Force Sensors segment includes a broad line of load cells and force measurement transducers that are offered as precision sensors for industrial and commercial use.

Typical applications for force sensors are in construction machinery (for stability control, overload protection), agricultural equipment (for precision force measurement), and medical devices (such as hospital beds and medication dosing).

The heavy equipment market has begun to adopt force sensors technology as process control and equipment control features for their products.

These sensors use our foil technology products, which serve as sensing elements and components within each unit.

Further integration of our load cells technology is also offered as part of our weighing module products, which provide customers with a complete sensor assembly that may be used within a wide variety of digital transducers.

A majority of products from the Force Sensors segment are sold to third parties as “standard catalog items,” but a growing sector of this segment’s products are sold as non-standard and/or custom products to third parties.

In addition, we sell products from this segment to our Weighing and Control Systems segment as well as to OEM manufacturers.

Our sales teams act as direct sales channels (field application engineers (“FAEs”)) utilizing the primary customer interface relating to initial design specifications, development of prototypes, and pricing/delivery of this segment’s products.

Distributors are also used for those customers that desire standard products.

Weighing and Control Systems

The Weighing and Control Systems segment designs and manufactures complete systems comprised of mainly load cells and instrumentation for weighing and force control/measurement for a variety of uses, including process weighing, steel manufacturing, on-board weighing and overload monitoring.

Typical applications for our weighing and control systems products are:

process weighing of chemicals, food and pharmaceuticals;

aircraft and truck weighing and overload protections;

weight, force and process optimization and simulation in steel and paper mills;

and force measurement for offshore oil and gas exploration.

Other major components that comprise our systems are:

load cells, electronic displays;

optical gages;

laser systems;

signal processors;

MEMS sensors;

system software;

and communication software/hardware.

The end use for the majority of these products is the precision measurement of force, weight, pressure, torque, tilt, motion, and acceleration.

FAEs are utilized as the primary customer interface relating to initial design specifications, development of prototypes, and pricing/delivery of this segment’s products.

Distributors and sales agents are also used, as appropriate, to market, sell, and support certain products in this segment.

Our precision sensor and sensor-based systems include products such as load cells, transducers, weighing modules, and complete systems for process control and on-board weighing applications.

Our precision foil resistors and strain gages are based on our proprietary foil technology, which we invented.

We manufacture and sell high precision foil resistors, foil strain gages, and data acquisition systems.

Our product portfolio includes:

• Foil resistors – Foil resistors are the most precise and stable type of resistors currently available.

Precision resistors are the most precise and stable type of resistors currently available.

Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current.

Our current sense resistors were developed with a low absolute TCR and Kelvin connections to meet the demand of stable resistive products.

Our foil resistors are used in applications requiring a high degree of precision and stability, such as in the following market segments:

Our precision resistors are used in applications requiring a high degree of precision and stability, such as in the following market segments:

Avionics/Military/Aerospace applications, Precision Weighing, Medical applications, Test & Measurements/ Semiconductors, Oil & Gas and Process Control.

We sell our foil resistors under the Vishay Foil Resistors, Alpha Electronics, and Powertron brands, including under our well-known Bulk Metal® trademark.

The ultra-precision technology also provides extremely low temperature coefficient resistance and exceptional long term stability through temperature extremes.

To complement our extensive portfolio of high-performance foil resistors, we also offer decade boxes, standard resistors, exceptional precision thin film and power resistors including special construction configurations to meet the requirements of high temperature applications.

We sell our foil resistors under the VPG Foil Resistors, Alpha Electronics, and Powertron brands, including under our well-known Bulk Metal® trademark.

To complement our extensive portfolio of high-performance precision resistors, we also offer decade boxes, standard resistors, exceptional precision thin film and power resistors including special construction configurations to meet the requirements of high temperature applications.

We have a road map of new technology products to meet the required needs of our customers.

• Foil strain gages – Strain gages, including our advanced sensors, are resistive sensors that are attached to the surface of an object to determine the surface strain caused by an applied force.

Typical uses of strain gages include test and measurement applications where the strength of the object is the main consideration and the object under test is a structural component in a machine or device, such as an automobile, an aircraft, or a highway bridge.

Our strain gage products, which include our advanced sensors, are resistive sensors that are attached to the surface of an object to determine the surface strain caused by an applied force.

Marketed under the well-known Micro-Measurements brand, our strain gages are used for OEM and in stress analysis applications for structural testing in the aviation, military and space, infrastructure, and construction markets, along with force measurement and weighing markets.

Typical applications of strain gages include test and measurement applications where the strength of the object is the main consideration and the object under test is a structural component in a machine or device, such as an automobile, an aircraft, or a highway bridge.

Strain gages are also used inside precision transducers where the magnitude of an applied force is the focus of the measurement.

A variety of physical measurements can be made using strain gages attached to metal components including force, weight, pressure, displacement, and acceleration.

We sell our strain gages under the well-known Micro-Measurements brand.

• Transducers, load cells, and modules – A transducer is mounted on a structure that is subjected to weight or other forces, such as the platform of an industrial scale.

Our innovative advanced sensors product line enhances the capability and performance of our strain gages, while simultaneously reducing their size and power consumption.

A significant portion of our strain gage products are sold to third parties as “standard catalog items”, while the remainder of these products are sold as non-standard and/or custom products to third parties and to our Weighing Solutions segment.

The products in the Sensors segment are primarily based on our resistive foil technology, which continues to evolve and enables many products in both segments to be suited for new and varied applications.

The production cycles for precision resistors and strain gages are similar and many of the same raw materials are utilized in the manufacturing processes for both operating segments.

The foil resistor and strain gage products require a similar level of labor and capital.

Weighing Solutions

The Weighing Solutions segment is comprised of our VPG Transducers, VPG Onboard Weighing, BLH Nobel, Stress-Tek and Vulcan businesses.

VPG Transducers offers a broad line of load cells and force measurement transducers, which also known as force sensors, that are offered as precision sensors for industrial and commercial use.

The heavy equipment market has begun to adopt load cell technology as process control and equipment control features for their products.

In some cases, these products use our strain gage products, which serve as sensing elements and components within each unit.

Further integration of our load cell technology is also offered as part of our weighing module products, which provide customers with a complete sensor assembly that may be used within a wide variety of digital transducers.

A transducer is mounted on a structure that is subjected to weight or other forces, such as the platform of an industrial scale.

The term “load cell” is primarily used to describe transducers used in weighing applications.

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We sell our load cells and modules under the overall VPG Transducers name as we continue to transition from the previously used Celtron, Revere, Sensortronics, and Tedea-Huntleigh brands.

• Data acquisition systems – Data acquisition systems, which include instruments to measure, process, digitize, display, and record the output of our strain gages, transducers, and other sensor or sensor-based systems as well as deliver information to control systems.

Our acquisition of Pacific Instruments significantly expanded our previous instruments offerings.

• Weighing and control systems – Weighing and control systems are integrated systems for the detection and measurement of weight and other types of force, primarily for use in industrial applications.

A majority of VPG Transducer load cell products are sold to third parties as “standard catalog items,” but a growing sector of this segment’s products are sold as non-standard and/or custom products to third parties.

In addition, we sell products from this segment to our Measurement Systems segment as well as to OEM manufacturers.

Distributors are also used for those customers that desire standard products.

Our VPG Onboard Weighing business specializes in high-quality, high-accuracy vehicle weighing and load monitoring systems for all commercial vehicle types, including trucks, vans and specialty vehicles.

Many of these products use solid-state sensors.

VPG Onboard Weighing products, sold under the brand names TruckWeigh and VanWeigh, are used by drivers and fleet operators to monitor vehicle loads within legally permitted limits and regulations.

Our Stress-Tek, Vulcan, and BLH Nobel businesses mainly provide load cells and instrumentation for weighing and force control/measurement for a variety of uses.

These include systems to control process weighing in food, chemical, and pharmaceutical plants;

force measurement systems used to control web tension in paper mills, roller force in steel mills, and cable tension in winch controls;

on-board weighing systems installed in logging and waste-handling trucks;

force measurement systems used to control web tension in paper mills, cable tension in winch controls;

onboard weighing systems installed in logging and waste-handling trucks;

and special scale systems used for aircraft weighing and portable truck weighing.

Our mechanical and thermal simulators are used for testing and developing various types of metals.

With our acquisition of Stress-Tek, we enhanced and broadened our on-board weighing offerings with products that are recognized for high quality in their markets.

With our acquisition of KELK, we added certain optical gages for control systems and enhanced our other product offerings for process control in the steel mill industry.

With the acquisition of DSI, we broadened our offerings to the steel mill industry and to materials testing labs.

We sell our systems under a variety of brand names including BLH Nobel, KELK, Gleeble, and VPG Onboard Weighing.

Major components that comprise our Weighing Solutions products include:

load cells, electronic displays, optical gages, laser systems, signal processors, MEMS sensors, cabling, system software, and communications software/hardware.

The end use for the majority of these products is the precision measurement of force, weight, pressure, torque, tilt, motion, and acceleration.

FAEs are utilized as the primary customer interface relating to initial design specifications, development of prototypes, and pricing/delivery of this segment's products.

We also use distributors and sales agents, as appropriate, to market, sell, and support certain products in this segment.

Measurement Systems

The Measurement Systems segment includes highly specialized systems for steel production, materials development, and safety testing.

This segment is comprised of our KELK, DSI, Pacific Instruments, and our DTS businesses.

Our KELK business provides high accuracy and performance sensors and systems for the steel and aluminum industries — and within those industries, mainly for rolling mills.

KELK's products include rolling force measuring load cell systems and pressure transmitters;

web tension measurement load cells and systems;

optical strip width gages;

laser velocimeters for speed and length measurements, and closed-loop crop optimization control systems for optimal strip cuts.

Our products are required to meet the most demanding requirements of the steel and aluminum industries, providing high accuracy and reliability under the most demanding harsh conditions of rolling mills.

Our DSI business specializes in thermal-mechanical simulation systems for metallurgical research.

Marketed under the name "Gleeble®", DSI's line of physical simulation systems are used by universities, research departments, and development departments within the steel ecosystem to accelerate the development of new metal alloys, explore new production techniques, optimize existing processes, or simulate the conditions a material will face in the real world.

government-related customers.

Our DTS business provides data acquisition systems and sensors for product safety testing.

As a major supplier of embedded data acquisition and data logging capabilities for crash test dummies, DTS expands our offering in the automotive market and in the avionics, military and space market.

We believe DTS will continue to benefit from the global need for specialized safety testing technology that is expanding from the automotive and avionics sectors to other applications such as sports safety.

Qualifications and Specifications

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We are taking steps to determine the use, source, and origin of any tin, tantalum, tungsten, or gold in our global product portfolio and, if appropriate, would work with our suppliers to remediate issues and source more responsibly.

A significant portion of our Force Sensors and Weighing and Control Systems segment products are based on strain gages produced by our Foil Technology Products segment.

A portion of our Weighing Solutions and Measurement Systems segment products are based on strain gages produced by our Sensors segment.

Inventory and Backlog

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No single customer comprises greater than 10% of net revenues.

The vast majority of our products are used in the broad industrial market, with selected uses in the military and aerospace, medical, agricultural, steel, and construction sectors.

Within the broad industrial market, our products serve a wide variety of applications in waste management, bulk hauling, logging, scales manufacturing, engineering systems, pharmaceutical, oil, chemical, steel, paper, and food industries.

A portion of our products are used in the broad industrial market for wide variety of applications in waste management, bulk hauling, logging, scales manufacturing, engineering systems, pharmaceutical, oil, chemical, steel, paper, and food industries.

In addition, we sell to an expanding array of end markets including test and measurement, steel, medical, construction, agricultural, and consumer.

Many of our products have historically been sold by dedicated sales forces, consisting mainly of FAEs focusing on specific market segments or specific customers.

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Our competitive success depends on our ability to maintain a competitive advantage on the basis of superior product capability and performance, product quality, know-how, proprietary data, market knowledge, service capability, and business reputation.

Price competitiveness can be an important factor, especially within our Force Sensors segment.

Price competitiveness can be an important factor, especially within our Weighing Solutions segment.

Our sales and marketing programs offer our customers a broad range of world-class precision technologies, and superior global sales and support.

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Competitors try to compete in this market using different technology to offer functionally equivalent products.

Examples of competition in our Foil Technology Products segment includes KOA, Bourns, Vishay Intertechnology, TT Electronics, Susumu, Isabellenhute, Caddock and Flat Dashi for foil resistors, and HBK, an operating company of Spectris, Tokyo Sokki Kenkyujo Co., Ltd (TML), Kyowa and Zemic for foil strain gages.

Competitors in our Force Sensors segment include HBK, Zemic, Utilcell, and Flintec.

Competitors in our Weighing and Control Systems segment include Hardy Instruments and Mettler-Toledo for process weighing;

ABB, Siemens, Haehne, Dalian, IMS and Fuji for steel mill systems;

and Air-Weigh, Vehicle Weighing Systems, MOBA, and AMCS for onboard weighing.

Examples of competition in our Sensors segment includes KOA, Bourns, Vishay Intertechnology, TT Electronics, Susumu, Isabellenhute, Caddock and Flat Dashi for foil resistors, and HBK, an operating company of Spectris, Tokyo Sokki Kenkyujo Co., Ltd (TML), Kyowa and Zemic for foil strain gages.

Competitors in our Weighing Solutions segment include HBK, Zemic, Utilcell, Flintec, Hardy Instruments and Mettler-Toledo for load cell products, and Air-Weigh, Vehicle Weighing Systems, MOBA, and AMCS for onboard weighing products.

In the Measurement Systems segment, we compete with ABB, Siemens, Haehne, Dalian, IMS and Fuji in the steel market and Kistler for data acquisition systems.

Research and Development

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We have made a significant investment in securing intellectual property protection for our technology and products.

We seek to protect our technology by, among other things, filing patent applications for technology considered important to the

development of our business.

We seek to protect our technology by, among other things, filing patent applications for technology considered important to the development of our business.

Although we have numerous United States and foreign patents covering certain of our products and manufacturing processes, no particular patent is considered individually material to our business.

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Substantially all of our technical, research and development, sales and marketing, and management employees have entered into agreements providing for the assignment to us of rights to inventions made by them while employed by us.

Environmental, Health and Safety

We have an Environmental, Health and Safety Policy that commits us to achieve health and safety for employees and protection of the environment, to maintain compliance with applicable environmental, health and safety laws, to promote proper management of hazardous materials, and to minimize the hazardous materials generated in the course of our operations.

Environmental, Social and Governance

We have issued an Environmental, Health and Safety Policy that commits us to achieve health and safety for employees and protection of the environment, to maintain compliance with applicable environmental, health and safety laws, to promote proper management of hazardous materials, and to minimize the hazardous materials generated in the course of our operations.

In addition, our manufacturing operations are subject to various regional, federal, state, and local laws restricting discharge of materials into the environment.

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We are not involved in any pending or threatened proceedings that would require curtailment of our operations.

The Company is in the process of designing, evaluating, and implementing a corporate Environmental, Social and Governance ("ESG") program and intends to complete a materiality assessment, scorecard and short and long-term objectives with deliverables starting in the second quarter of 2022.

The Company has launched a corporate Environmental, Social and Governance ("ESG") program and plans to complete a materiality assessment, scorecard and short and long-term objectives with deliverables during 2022.

We still expect that this multi-year ESG plan will occur in three phases, including defining ESG ambitions, implementing a reporting strategy, and planning and executing employee ESG training and improving ESG awareness for all employees.

The ESG program is built on four pillars:

Our People, Our Environment, Our Governance and Our Products.

Human Capital

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Shoshani was Executive Vice President of Vishay Intertechnology from 2000 to 2009 with various areas of responsibility, including Executive Vice President of the Capacitors and the Resistors businesses, as well as heading the Measurements Group and Foil Divisions.

Shoshani had been employed by Vishay Intertechnology

Shoshani had been employed by Vishay Intertechnology since 1995.

He continues to serve on the Vishay Intertechnology board of directors.

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Copies of each of our filings with the SEC on Form 10-K, Form 10-Q, and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC.

To view the reports, access http://ir.vpgsensors.com and click on “SEC Filings”/ “Documents.”

To view the reports, access http://ir.vpgsensors.com and click on “Financials”/ “SEC Filings.”

The following corporate governance related documents are also available on our website:

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• Corporate Governance Principles

To view these documents, access http://ir.vpgsensors.com and click on “Corporate Governance.”

To view our Ethics Program Reporting Procedures, access http:/www.vpgsensors.com/company and click on “Ethics.”

• Policy Regarding Qualifications of Directors

To view these documents, access http://ir.vpgsensors.com and click on “Governance” and then on "Governance Documents."

To view our Ethics Program Reporting Procedures, access http:/www.vpgsensors.com/Ethics

We are not incorporating by reference into this Annual Report on Form 10-K any material from our website.

Any of the above documents can also be obtained in print by any stockholder, upon request to our Investor Relations Department at the following address:

Any of the above documents can also be obtained in print by any stockholder, upon written request to our Investor Relations Department at the following address:

Corporate Investor Relations

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

What changed 10-K

Item 1. Business