What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-10 compared with 2021-11-12 · 160 added, 232 removed, 257 unchanged (60% of the section changed)

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

VPG 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.

VPG 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.

Impact of COVID-19 on Our Business

As of November 12, 2021, all of the Company’s facilities are open and operational.

The Company is continuing to maintain COVID-19 best practices it believes are warranted with respect to working conditions.

As of May 10, 2022, all of the Company’s facilities are open and operational.

Nonetheless, given the ongoing uncertainty concerning the magnitude and duration of the COVID-19 pandemic around the world, any ongoing economic disruption may adversely affect the Company’s business and financial results.

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VPG reports in three product segments:

the Foil Technology Products segment, the Force Sensors segment, and the Weighing and Control Systems segment.

The Foil Technology Products reporting segment is comprised of the foil resistor and strain gage operating segments.

The Force Sensors reporting segment is comprised of transducers, load cells, and modules.

The Weighing and Control Systems reporting segment is comprised of complete systems which include load cells and instrumentation for weighing, force control and force measurement for a variety of uses such as process control on-board weighing applications.

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

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

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

Net revenues for the fiscal quarter ended October 2, 2021 were $82.0 million versus $67.5 million for the comparable prior year period.

Net earnings attributable to VPG stockholders for the fiscal quarter ended October 2, 2021 were $5.4 million, or $0.39 per diluted share, versus $5.6 million, or $0.41 per diluted share, for the comparable prior year period.

Net revenues for the nine fiscal months ended October 2, 2021 were $227.9 million versus $194.4 million for the comparable prior year period.

Net earnings attributable to VPG stockholders for the nine fiscal months ended October 2, 2021 were $14.3 million, or $1.04 per diluted share, versus $10.7 million, or $0.78 per diluted share, for the comparable prior year period.

The results of operations for the fiscal quarter ended October 2, 2021 and September 26, 2020 include items affecting comparability as listed in the reconciliations below.

the Sensors segment, the Weighing Solutions segment, and the Measurement Systems segment.

The Sensors reporting segment is comprised of the foil resistor and strain gage operating segments.

The Weighing Solutions segment is comprised of specialized modules and systems used to precisely measure weight, force torque, and pressure.

The Measurement Systems reporting segment is comprised of highly specialized systems for steel production, materials development, and safety testing.

Net revenues for the fiscal quarter ended April 2, 2022 were $87.7 million versus $70.6 million for the comparable prior year period.

Net earnings attributable to VPG stockholders for the fiscal quarter ended April 2, 2022 were $6.4 million, or $0.46 per diluted share, versus $5.0 million, or $0.36 per diluted share, for the comparable prior year period.

The results of operations for the fiscal quarter ended April 2, 2022 and April 3, 2021 include items affecting comparability as listed in the reconciliations below.

The reconciliations below include certain financial measures which are not recognized in accordance with U.S.

generally accepted accounting principles ("GAAP"), including adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA.

These non-GAAP measures should not be viewed as an alternative to

GAAP measures of performance.

These non-GAAP measures should not be viewed as an alternative to GAAP measures of performance.

Non-GAAP measures such as adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA do not have uniform definitions.

These measures, as calculated by VPG, may not be comparable to similarly titled measures used by other companies.

Management believes that these non-GAAP measures are useful to investors because each presents what management views as our core operating performance for the relevant period.

Management believes that these non-GAAP measures are useful to investors because each presents what management views as our core operating results for the relevant period.

The adjustments to the applicable GAAP measures relate to occurrences or events that are outside of our core operations, and management believes that the use of these non-GAAP measures provides a consistent basis to evaluate our operating profitability and performance trends across comparable periods.

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Management believes that the Company’s non-GAAP measures are regarded as supplemental to its GAAP financial results.

Beginning in the fourth quarter of 2020, the Company determined to include the impact of foreign currency exchange rates on its assets and liabilities in certain of its non-GAAP measures for its current and comparative periods.

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

Three months ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

As reported - GAAP $ 31,845 $ 27,349 $ 7,265 $ 8,121 $ 5,379 $ 5,598 $ 0.39 $ 0.41

As reported - GAAP Margins 38.8 % 40.5 % 8.9 % 12.0 %

Acquisition purchase accounting adjustments (a) 1,329 4 1,329 4 1,329 4 0.10 —

Acquisition costs — — — — — — —

COVID-19 impact (b) 111 (22) 111 (320) 111 (320) 0.01 (0.02)

Start-up costs (c) 970 — 970 — 970 — 0.07 —

Impairment of goodwill and indefinite-lived intangibles — — — — — — —

Restructuring costs — — 84 — 84 — 0.01

Foreign exchange (gain)/loss (d) — — 38 (162) 0.01 (0.01)

Tax effect of reconciling items and discrete tax items — — 754 (109) 0.06 (0.01)

As Adjusted - Non GAAP $ 34,255 $ 27,331 $ 9,675 $ 7,889 $ 7,073 $ 5,313 $ 0.52 $ 0.40

As Adjusted - Non GAAP Margins 41.8 % 40.5 % 11.8 % 11.7 %

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

Nine fiscal months ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Three months ended April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

As reported - GAAP $ 35,250 $ 28,622 $ 8,315 $ 6,439 $ 6,356 $ 4,961 $ 0.46 $ 0.36

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Acquisition purchase accounting adjustments (a) 371 11 371 11 371 11 0.03 —

Acquisition costs — 1,198 — 1,198 — 0.09 —

COVID-19 impact (b) 138 (151) 138 (443) 138 (443) 0.01 (0.03)

Start-up costs (c) 150 129 150 129 150 129 0.01 0.01

2,258 — 2,258 — 2,258 — 0.17 —

Impairment of goodwill and indefinite-lived intangibles — — 1,223 — 1,223 — 0.09 —

Restructuring costs — 261 — 261 — 0.02 —

Foreign exchange (gain)/loss (d) — — (554) (735) (0.04) (0.05)

(523) 123 (0.04) 0.01

Tax effect of reconciling items and discrete tax items — — 76 (233) — (0.02)

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As Adjusted - Non GAAP Margins 41.0 % 40.5 % 10.5 % 8.7 %

Three months ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Three months ended

April 2, 2022 April 3, 2021

Net earnings attributable to VPG stockholders $ 6,356 $ 4,961

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EBITDA MARGIN 14.0 % 14.9 %

Impairment of goodwill and indefinite-lived intangibles — — 1,223 —

Acquisition purchase accounting adjustments (a) 371 11

Acquisition costs — — 1,198 —

Restructuring costs 261 —

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(b) COVID-19 impact is the net impact to the Company of costs incurred as a result of the COVID-19 pandemic, net of government subsidies received.

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

Note that impacts in prior year have been added to this table.

Financial Metrics

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The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business.

The following tables show net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover for our business as a whole and by segment during the five quarters beginning with the third quarter of 2020 through the third quarter of 2021 (dollars in thousands) :

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

The following tables show net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover for our business as a whole and by segment during the five quarters beginning with the first quarter of 2021 through the first quarter of 2022 (dollars in thousands) :

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

2021 2021 2021 2021 2022

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Inventory turnover 2.67 2.64 2.55 2.82 2.69

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

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

2021 2021 2021 2021 2022

Foil Technology Products

Net revenues $ 31,815 $ 31,176 $ 30,721 $ 34,149 $ 37,750

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Inventory turnover 3.06 2.90 3.14 3.53 3.54

Force Sensors

Weighing Solutions

Net revenues $ 30,968 $ 31,675 $ 30,676 $ 32,071 $ 32,768

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Inventory turnover 2.89 2.78 2.47 2.63 2.61

Weighing and Control Systems

Measurement Systems

Net revenues $ 7,806 $ 12,488 $ 20,577 $ 23,797 $ 17,147

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Inventory turnover 1.32 1.85 1.92 2.18 1.68

Net revenues for the third quarter of 2021 increased 8.8% from the second quarter of 2021 mainly due to increased volume in Forces Sensor and Weighing and Control Systems reporting segments.

Net revenues increased 21.4% from the third quarter of 2020 with increased volume primarily from the Force Sensors reporting segment and the Weighing and Control Systems segment.

The increase in the Weighing and Control Systems reporting segment was aided by the addition of revenues from the acquisition of DTS.

Net revenues in the Foil Technology Products reporting segment decreased 1.6% compared to the second quarter of 2021 and decreased 0.4% from the third quarter of 2020.

The sequential decline primarily reflected lower revenue of advanced sensors to our Other markets which was mainly the result of the transition to our new advanced sensors facility.

Compared to a year ago, higher revenue of precision foil resistors in the Test and Measurements market was offset by lower revenue of precision foil resistors and Pacific Instruments systems in the Avionics, Military and Space market and by lower revenue of advanced sensors to our Other markets which was mainly the result of the transition to our new advanced sensors facility.

Net revenues in the Force Sensors reporting segment increased 2.8% from the second quarter of 2021 and increased 27.7% from the third quarter of 2020.

The sequential increase was primarily due to higher revenue in our Industrial Weighing markets, partially offset by lower revenue for precision agriculture.

The year-over-year increase primarily reflected operational limitations in the third fiscal quarter of 2020 from the COVID pandemic at our facility in India.

Net revenues in the Weighing and Control Systems reporting segment increased 26.9% from the second quarter of 2021 and increased 51.7% from the third quarter of 2020.

The sequential increase in net revenues was primarily due to the addition of revenue for DTS, and higher revenue of Dynamic Systems, Inc.

("DSI") and KELK products to the Steel market The year-over-year increase in revenue was primarily attributable to the addition of revenue for DTS, which was acquired on June 1, 2021, higher revenue of our onboard weighing products for the Transportation market, and higher revenue of our DSI products for the Steel market.

Overall gross profit margin in the third quarter of 2021 decreased 0.8% as compared to the second quarter of 2021 and decreased 1.7% from the third quarter of 2020.

Sequentially, the increase in the gross profit margin in the Weighing and Controls Systems reporting segment was completely offset by a decrease in the gross profit margin in the Foil Technology Products reporting segment, while the Force Sensors reporting segment gross profit margin remained flat.

In the Weighing and Control Systems reporting segment, the sequential increase was mainly due to higher revenue, the addition of DTS, and favorable product mix.

The Foil Technology Products

reporting segment gross profit margins decreased sequentially due to lower volume and unfavorable product mix, a reduction in inventory, labor inefficiencies, and unfavorable exchange rates.

Compared to the third quarter of 2020, the Foil Technology Products reporting segment had a lower gross profit margin due to impacts from charges related to start-up costs in our new advanced sensors facility and the impact of COVID-19 in conjunction with unfavorable foreign exchange rates, higher rent and manufacturing overhead related to the new advanced sensors facility, and a reduction in inventory.

The Force Sensors reporting segment increase in gross profit margin as compared to 2020 was primarily due to higher revenue.

In the Weighing and Control Systems reporting segment, the decrease in gross profit margin as compared to the third quarter of 2020 was due to the impact of charges related to purchase accounting adjustments from the DTS acquisition and the impact of COVID-19, which were partially offset by higher revenue coming from DTS .

Net revenues for the first quarter of 2022 decreased 2.6% from the fourth quarter of 2021 mainly due to decreased volume in Measurement Systems reporting segments partially offset by increased volume in the Sensors reporting segment.

Net revenues increased 24.2% from the first quarter of 2021 with increased volume primarily from the Sensors and Measurement Systems reporting segments.

The increase in the Measurement Systems reporting segment was mainly driven by the revenues from the acquisition of DTS.

Net revenues in the Sensors reporting segment increased 10.5% compared to the fourth quarter of 2021 and increased 18.7% from the first quarter of 2021.

Sequentially, the increase in revenues reflected revenue growth in our advanced sensors products in Other markets (mainly for consumer and medical applications) and in our General Industrial end markets.

The year-over-year increase in revenues was primarily attributable to higher sales of precision resistors in the Test and Measurements market and higher revenue of our advanced sensors products primarily in Other markets (mainly for consumer and medical applications) and in our General Industrial markets.

Net revenues in the Weighing Solutions reporting segment increased 2.2% from the fourth quarter of 2021 and increased 5.8% from the first quarter of 2021.The sequential increase in revenues was primarily attributable to higher sales of on-board weighing products in our Transportation market and an increase in our OEM customers in our Other markets mainly for precision agriculture and medical equipment, partially offset by lower sales in the Industrial weighing market for process weighing applications.

The year-over-year increase in revenues was primarily attributable to increased revenue to our OEM customers in our Other markets (primarily for construction equipment) and in our Industrial weighing market.

Net revenues in the Measurement Systems reporting segment decreased 27.9% from the fourth quarter of 2021 and increased 119.7% from the first quarter of 2021.

Sequentially, the decrease in revenue was primarily due to the lower revenue of Dynamic Systems, Inc.

("DSI") and KELK products to the Steel market, and lower revenues for our Diversified Technical Systems, Inc.

("DTS") and Pacific Instruments businesses.

The year-over-year increase in revenue was primarily attributable to the addition of revenue for DTS, which was acquired on June 1, 2021, and higher revenue of our Pacific Instruments and KELK businesses.

Overall gross profit margin in the first quarter of 2022 increased 1.5% as compared to the fourth quarter of 2021 and decreased 0.3% from the first quarter of 2021.

Sequentially, the increase in the gross profit margin in the Sensors and Weighing Solutions reporting segments was partially offset by a decrease in the gross profit margin in the Measurement Systems reporting segment.

In the Sensors reporting

segment, the gross profit margins increased sequentially due to higher volume and a favorable product mix, partially offset by wage increases.

In the Weighing Solutions reporting segment, the sequential increase in gross profit margins was primarily due to higher volume, higher selling prices and a favorable product mix, offset by higher material costs.

The sequential decrease in the gross profit margins in the Measurement Systems reporting segment was primarily due to lower revenue and unfavorable product mix.

Compared to the first quarter of 2021, the Sensors and Weighing Solutions reporting segments had lower gross profit margins, while the Measurement Systems gross profit margin was flat.

The Sensors reporting segment had a lower gross profit margin due to impacts from charges related to start-up costs in our new advanced sensors facility and the impact of COVID-19 in conjunction with unfavorable foreign exchange rates, wage increases, and labor inefficiencies due to the hiring of new personnel, partially offset by higher volume.

The Weighing Solutions reporting segment decrease in gross profit margin as compared to 2021 was primarily due to higher material prices, unfavorable foreign exchange rates, and wage increases, partially offset by higher volume.

In the Measurement Systems reporting segment, the gross profit margin was flat as compared to the first quarter of 2021.

The higher revenue coming from DTS was offset by the impact of charges related to purchase accounting adjustments from the DTS acquisition and the impact of COVID-19.

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 that adds 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.

The transition of our advanced sensors business to that facility was completed in the third quarter of 2021.

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

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

Our design, research, and product development teams, in partnership with our marketing teams, drive our efforts to bring innovations to market.

We intend to leverage our insights into customer demand to continually develop and roll out new, innovative products within our existing lines and to modify our existing core products in ways that make them more appealing, addressing changing customer needs and industry trends in terms of form, fit, and function.

We also seek to achieve significant production cost savings through the transfer, expansion, and construction of manufacturing operations in countries such as India, China, 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.

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.

Acquisition Strategy

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 employs our foil strain gages to manufacture load cells for its 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.

The acquisition of DSI expanded our position in the steel market.

On June 1, 2021, we completed the acquisition of California-based Diversified Technical Systems, Inc., a manufacturer of data acquisition systems and sensors for product safety and testing, DTS is an established niched-market leader with a strong brand in automotive, avionics, military and defense markets.

DTS adds complementary technology to our platform and brings unique engineering capabilities, centered on miniaturized data acquisition and systems integration with sensor technology for critical testing applications.

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.

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.

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Research and development will continue to play a key role in our efforts to introduce innovative products to generate new sales and to improve profitability.

We expect to continue to expand our position as a leading supplier of precision foil technology products.

We expect to continue to expand our position as a leading supplier of precision foil technology

We believe our R&D efforts should provide us with a variety of opportunities to leverage technology, products, and our manufacturing base in order to ultimately improve our financial performance.

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For those foreign subsidiaries where the U.S.

dollar is the functional

currency, all foreign currency financial statement amounts are remeasured into U.S.

dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S.

Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the results of operations.

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Effects of Foreign Exchange Rate on Operations

For the fiscal quarter ended October 2, 2021, exchange rates increased net revenues by $0.9 million, and increased costs of products sold and selling, general, and administrative expenses by $1.8 million, when compared to the comparable prior year period.

For the nine fiscal months ended October 2, 2021, exchange rates increased net revenues by $5.8 million, and increased costs of products sold and selling, general, and administrative expenses by $7.6 million, when compared to the comparable prior year period.

Off-Balance Sheet Arrangements

As of October 2, 2021 and December 31, 2020, we did not have any off-balance sheet arrangements.

For the fiscal quarter ended April 2, 2022, exchange rates decreased net revenues by $1.5 million, and decreased costs of products sold and selling, general, and administrative expenses by $0.2 million, when compared to the comparable prior year period.

Results of Operations

Results of operations by reporting segments for the fiscal quarter ended April 3, 2021 have been recast to reflect the new reporting segments as described under Item 7.

Overview of Financial Results of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 4, 2022.

Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows:

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Fiscal quarter ended

April 2, 2022 April 3, 2021

Costs of products sold 59.8 % 59.5 %

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Net revenues were as follows (dollars in thousands) :

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Fiscal quarter ended

April 2, 2022 April 3, 2021

Net revenues $ 87,665 $ 70,589

Change versus comparable prior year period

$ 14,449 $ 33,535

Percentage change versus prior year period

21.4 % 17.3 %

Changes in net revenues were attributable to the following:

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Net change 24.2 %

During the fiscal quarter and nine fiscal months ended October 2, 2021, net revenues increased 21.4% and 17.3%, respectively, as compared to the comparable prior year periods, with increased volume primarily from the Force Sensors reporting segment and the Weighing and Control Systems segment.

The increase in the Weighing and Control Systems reporting segment was aided by the addition of revenues from the acquisition of DTS.

During the fiscal quarter ended April 2, 2022, net revenues increased 24.2% as compared to the comparable prior year period, with increased volume primarily from the Sensors and Measurement Systems reporting segments.

The increase in the Measurement Systems reporting segment was mainly driven by the revenues from the acquisition of DTS.

Gross Profit Margin

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

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Fiscal quarter ended

April 2, 2022 April 3, 2021

Gross profit margin 40.2 % 40.5 %

The gross profit margin for the fiscal quarter ended October 2, 2021 decreased 1.7% as compared to the comparable prior year period with higher gross profit margins in the Force Sensors and Weighing and Control Systems reporting segments being offset by lower margin in the Foil Technology Products reporting segment.

The gross profit margin for the nine fiscal months ended October 2, 2021 increased 0.7% as compared to the comparable prior year period, mainly from higher gross profit margins in the Force Sensors reporting segment, partially offset by lower gross profit margins in the Foil Technology and Weighing and Controls Systems reporting segments.

The gross profit margin for the fiscal quarter ended April 2, 2022 decreased 0.3% as compared to the comparable prior year period with lower gross profit margins in the Sensors and Weighing Solutions reporting segments and flat gross profit margins in the Measurement Systems reporting segment.

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

Foil Technology Products

Net revenues of the Foil Technology Products segment were as follows (dollars in thousands) :

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

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

Fiscal quarter ended

April 2, 2022 April 3, 2021

Net revenues $ 37,750 $ 31,815

Change versus comparable prior year period

$ (116) $ 3,641

Percentage change versus prior year period

(0.4) % 3.8 %

Changes in Foil Technology Products segment net revenues were attributable to the following:

Changes in Sensors segment net revenues were attributable to the following:

Change attributable to:

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Net change 18.7 %

Net revenues decreased 0.4% for the fiscal quarter ended October 2, 2021, as compared to the comparable prior year period.

Net revenues increased 3.8% for the nine fiscal months ended October 2, 2021, as compared to the comparable prior year period.

Increases in net revenues are primarily attributable to our advanced sensors product line in other markets, test and measurement markets, and general industrial markets, in addition to favorable exchange rate impacts.

Gross profit as a percentage of net revenues for the Foil Technology Products segment was as follows:

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Net revenues increased 18.7% for the fiscal quarter ended April 2, 2022, as compared to the comparable prior year period.

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

Fiscal quarter ended

April 2, 2022 April 3, 2021

Gross profit margin 37.8 % 40.3 %

The gross profit margin decreased 9.0% for the fiscal quarter ended October 2, 2021, when compared to the comparable prior year period due to impacts from charges related to start-up costs in our new advanced sensors facility and the impact of COVID-19 in conjunction with unfavorable foreign exchange rates, higher rent and manufacturing overhead related to the new advanced sensors facility, and a reduction in inventory.

The gross profit margin decreased 2.9% for the nine fiscal months ended October 2, 2021 as compared to the comparable prior year period.

Impacts from charges related to start-up costs in our new advanced sensors facility and the impact COVID-19 completely offset the higher volume in our foil resisters products.

Force Sensors

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

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

The gross profit margin decreased 2.5% for the fiscal quarter ended April 2, 2022, when compared to the comparable prior year period due to impacts from charges related to start-up costs in our new advanced sensors facility and the impact of COVID-19 in conjunction with unfavorable foreign exchange rates, wage increases, and labor inefficiencies due to the hiring of new personnel, partially offset by higher volume.

Weighing Solutions

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

Fiscal quarter ended

April 2, 2022 April 3, 2021

$ 32,768 $ 30,968

Change versus comparable prior year period

$ 3,842 $ 14,380

Percentage change versus prior year period

27.7 % 38.4 %

Changes in Force Sensors segment net revenues were attributable to the following:

Changes in Weighing Solutions segment net revenues were attributable to the following:

Change attributable to:

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Net change 5.8 %

Net revenues increased 27.7% for the fiscal quarter ended October 2, 2021, and 38.4% for the nine fiscal months ended October 2, 2021 as compared to the comparable prior year periods.

The increases primarily reflected operational limitations in 2020 from the COVID pandemic at our facility in India.

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

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Net revenues increased 5.8% for the fiscal quarter ended April 2, 2022 as compared to the comparable prior year periods.

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

Fiscal quarter ended

April 2, 2022 April 3, 2021

Gross profit margin 36.9 % 38.0 %

The gross profit margin for the fiscal quarter ended October 2, 2021 increased 4.0% as compared to the comparable prior year period primarily due to higher revenue.

The gross profit margin for the nine fiscal months ended October 2, 2021 increased 11.3% as compared to the prior year period primarily due to higher revenue, favorable exchange rate impacts and an increase in inventory.

Weighing and Control Systems

Net revenues of the Weighing and Control Systems segment were as follows (dollars in thousands) :

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

The gross profit margin for the fiscal quarter ended April 2, 2022 decreased 1.1% as compared to the comparable prior year period was primarily due to higher material prices, unfavorable foreign exchange rates, and wage increases, partially offset by higher volume.

Measurement Systems

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

Fiscal quarter ended

April 2, 2022 April 3, 2021

Net revenues $ 17,147 $ 7,806

Change versus comparable prior year period

$ 10,723 $ 15,514

Percentage change versus prior year period

51.7 % 25.1 %

Changes in Weighing and Control Systems segment net revenues were attributable to the following:

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

Change attributable to:

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Net change 119.7 %

Net revenues increased 51.7% for the fiscal quarter ended October 2, 2021 as compared to the comparable prior year period.

The year-over-year increase in revenue was primarily attributable to the addition of revenue for DTS, which was acquired on June 1, 2021, higher revenue of our onboard weighing products for the Transportation market, and higher revenue of our DSI products for the Steel market.

Net revenues increased 25.1% for the nine fiscal months ended October 2, 2021 as compared to the comparable prior year period primarily due to the addition of revenue for DTS, higher revenue of our onboard weighing products for the transportation market and favorable exchange rate impacts.

Gross profit as a percentage of net revenues for the Weighing and Control Systems segment were as follows:

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Net revenues increased 119.7% for the fiscal quarter ended April 2, 2022 as compared to the comparable prior year period.

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

Fiscal quarter ended

April 2, 2022 April 3, 2021

Gross profit margin 51.8 % 51.4 %

The gross profit margin for the fiscal quarter ended October 2, 2021 of 48.3% increased from the third quarter of 2020 due to higher revenue coming from DTS.

The gross profit margin for the nine fiscal months ended October 2, 2021 of 46.1%, decreased from the prior year period due to the impacts of charges related to purchase accounting adjustments from the DTS acquisition and an unfavorable product mix, partially offset by the higher revenues coming from DTS and favorable exchange rate impacts.

The gross profit margin for the fiscal quarter ended April 2, 2022 of 51.8% was flat compared to the first quarter of 2021.

The increase in volume from DTS was offset by the impact of charges related to purchase accounting adjustments from the DTS acquisition and the impact of COVID-19.

Selling, General, and Administrative Expenses

Selling, general, and administrative (“SG&A”) expenses are summarized as follows (dollars in thousands) :

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Fiscal quarter ended

April 2, 2022 April 3, 2021

Total SG&A expenses $ 26,674 $ 22,183

As a percentage of net revenues 30.4 % 31.4 %

SG&A expenses for the fiscal quarter and nine fiscal months ended October 2, 2021 increased compared to the comparable prior year periods with additional SG&A expenses related to personnel costs and unfavorable foreign currency impacts and SG&A expenses from the acquisition of DTS.

Impairment of Goodwill and Indefinite-lived Intangible Assets

In the second fiscal quarter of 2021, as a result of our interim impairment test, we recorded a $1.2 million pre-tax, non-cash impairment charge which reduced the carrying value of our goodwill and indefinite-lived intangible assets.

See Note 4 for further discussion.

Acquisition Costs

Acquisition costs associated with the acquisition of DTS were as follows (in thousands):

Fiscal quarter ended Nine fiscal months ended

October 2, 2021 October 2, 2021

Legal fees $ — $ 341

Appraisal fees — 18

Other (investment banker and insurance costs) — 839

SG&A expenses for the fiscal quarter ended April 2, 2022 increased $4.5 million compared to the comparable prior year periods, with $4.1 million of the increase driven by SG&A expenses from DTS, which was acquired in June of 2021.

The remaining increase is from additional SG&A expenses related to wage increases and other costs.

Restructuring Costs

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

The Company recorded $0.0 million and $0.1 million of restructuring costs during the fiscal quarter ended October 2, 2021 and September 26, 2020, respectively, and $0.0 million and $0.7 million of restructuring costs during the nine fiscal months ended October 2, 2021 and September 26, 2020, respectively.

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

The Company recorded $0.3 million and $0.0 million of restructuring costs during the fiscal quarter ended April 2, 2022 and April 3, 2021, respectively.

Restructuring costs were comprised primarily of employee terminations costs, including severance and statutory retirement allowances, in connection with the closure of one of our facilities.

Other Income (Expense)

Interest expense for the fiscal quarter ended October 2, 2021 was higher when compared with interest expense in the comparable prior year period reflecting the impact of increased borrowings on the Company's revolving credit facility in conjunction with the acquisition of DTS.

Interest expense for the nine fiscal months ended October 2, 2021 was lower when compared with the comparable prior year period mainly due to more favorable borrowing rates in 2021.

Interest expense for the fiscal quarter ended April 2, 2022 was comparable with interest expense for the fiscal quarter ended April 3, 2021.

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

Fiscal quarter ended

October 2, 2021 September 26, 2020 Change

Foreign exchange loss $ (38) $ 162 $ (200)

Interest income 151 29 122

Pension expense (151) (159) 8

Other 212 (71) 283

$ 174 $ (39) $ 213

Nine fiscal months ended

October 2, 2021 September 26, 2020 Change

Foreign exchange gain (loss) $ 522 $ (123) $ 645

April 2, 2022 April 3, 2021 Change

Foreign exchange gain $ 554 $ 735 $ (181)

Interest income 64 45 19

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

For the fiscal quarter ended October 2, 2021, the change in foreign exchange gains and losses during the period, as compared to the prior year period, is largely due to exposure to currency fluctuations with the Canadian dollar, the euro, the Israeli shekel and the British pound.

For the nine fiscal months ended October 2, 2021, the change in foreign exchange gains and losses during the period as compared to the prior year period is largely due to exposure to currency fluctuations with the euro, the Israeli shekel, and the Japanese yen.

For the fiscal quarter ended April 2, 2022, the change in foreign exchange gains and losses during the period, as compared to the prior year period, is largely due to exposure to currency fluctuations with the Canadian dollar, the Israeli shekel, the Japanese yen and the British pound.

Included in Other for the fiscal quarter ended April 2, 2022 is a $0.2 million loss on liquidation of two of the Company's European subsidiaries.

VPG calculates the tax provision for interim periods using an estimated annual effective tax rate methodology based on projected full-year pre-tax earnings among the taxing jurisdictions in which we operate with adjustments for discrete items.

The effective tax rate for the fiscal quarter ended October 2, 2021 was 23.4% compared to 27.1% for the fiscal quarter ended September 26, 2020 and the effective tax rate for the nine fiscal months ended October 2, 2021 was 20.3% compared to 29.0% for the nine fiscal months ended September 26, 2020.

The tax rate for both periods presented in 2021 is lower than the prior year periods primarily due to the acquisition of DTS, which enabled the Company to reduce its valuation allowance against deferred tax assets, tax rate changes in certain foreign jurisdictions, and changes in the mix of worldwide income.

The effective tax rate for the fiscal quarter ended April 2, 2022 was 20.7% compared to 26.3% for the fiscal quarter ended April 3, 2021 The tax rate for the fiscal quarter ended April 2, 2022 is lower than the prior year period primarily due to the reduction of the valuation allowance on certain tax credits.

On December 28, 2021, the United States Treasury Department and the Internal Revenue Service issued final regulations relating to the foreign tax credit and clarifying the rules relating to foreign derived intangible income.

These new regulations apply to tax years beginning on or after December 28, 2021.

The Company is still in the process of analyzing the potential tax impact that these regulations could have on the Company’s tax position.

The Company and its subsidiaries are subject to income taxes imposed by the U.S., various states, and the foreign jurisdictions in which we operate.

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We believe that our current cash and cash equivalents, credit facilities and projected cash from operations will be sufficient to meet our liquidity needs for at least the next 12 months.

In March, 2020, we entered into a third amended and restated credit agreement.

The terms of our credit agreement provide for the following facilities:

(1) secured revolving facility of $75.0 million, with a sublimit of $10.0 million which can be used for letters of credit for the account of the Company or its subsidiaries that are parties to the Credit Agreement, the proceeds of which may be used for working capital and general corporate purposes.

On March 20, 2020, the Company entered into a Third Amended and Restated Credit Agreement (the “2020 Credit Agreement”) among the Company, the lenders named therein, Citizens Bank, National Association and Wells Fargo Bank, National Association as joint lead arrangers and JPMorgan Chase Bank, National Association as agent for such lenders (the “Agent”), pursuant to which the terms of the Company’s multi-currency, secured credit facility were revised to provide a secured revolving facility (the “2020 Revolving Facility”) in an aggregate principal amount of $75.0 million, with a sublimit of $10.0 million which can be used for letters of credit for the account of the Company or its subsidiaries that are parties to the Credit Agreement.

The proceeds of the 2020 Revolving Facility may be used on an ongoing basis for working capital and general corporate purposes.

The aggregate principal amount of the 2020 Revolving Facility may be increased by a maximum of $25.0 million upon the request of the Company, subject to the terms of the 2020 Credit Agreement.

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The 2020 Credit Agreement restricts the Company from paying cash dividends and requires the Company to comply with other customary covenants, representations, and warranties, including the maintenance of specific financial ratios.

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

We were in compliance with these covenants at October 2, 2021.

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, 2021.

If the Company is not in compliance with any of these covenant restrictions, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable.

Our business has historically generated significant cash flow.

For the nine fiscal months ended October 2, 2021, cash provided by operating activities was $18.1 million compared to $22.8 million in the comparable prior year period.

Our net cash used in investing activities for the nine fiscal months ended October 2, 2021 was higher compared to the prior year period mainly due to the acquisition of DTS.

Our net cash provided by financing activities for the nine fiscal months ended October 2, 2021 was higher compared to prior year mainly due to the borrowings on the 2020 credit facility for the acquisition of DTS.

Adjusted free cash flow generated during the nine fiscal months ended October 2, 2021, was $7.1 million.

We refer to the amount of cash provided by operating activities ($18.1 million) in excess of our capital expenditures ($11.2 million) and net of proceeds from the sale of assets ($0.2 million) as “adjusted free cash flow.”

The following table summarizes the components of net cash at October 2, 2021 and December 31, 2020 (in thousands) :

October 2, 2021 December 31, 2020

Cash and cash equivalents $ 75,544 $ 98,438

Third-party debt, including current and long-term:

Revolving debt 61,000 41,000

Third-party debt held by Japanese subsidiary — 18

Deferred financing costs (308) (374)

Total third-party debt 60,692 40,644

Net cash $ 14,852 $ 57,794

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

Such measures should not be viewed as alternatives to GAAP measures of performance or liquidity.

However, management believes that “adjusted free cash flow” is a meaningful measure of our ability to fund acquisitions, and that an analysis of “net cash” assists investors in understanding aspects of our cash and debt management.

These measures, as calculated by us, may not be comparable to similarly titled measures used by other companies.

Approximately 90% of our cash and cash equivalents balance at October 2, 2021 and December 31, 2020 was held by our non-U.S.

Our business has historically generated significant cash flow, however, in the first quarter of 2022, our working capital needs, driven by our high backlog, impacted our cash from operation.

For the three fiscal months ended April 2, 2022, cash used in operating activities was $0.3 million compared to cash provided by operations of $5.6 million in the comparable prior year period.

Our net cash used in investing activities for the three fiscal months ended April 2, 2022 was lower compared to the prior year period mainly due to slightly lower capital spending.

Our net cash used in financing activities for the three fiscal months ended April 2, 2022 was comparable to prior year period.

Approximately 89% and 87% of our cash and cash equivalents balance at April 2, 2022 and December 31, 2021, respectively, was held by our non-U.S.

subsidiaries.

See the following table for the percentage of cash and cash equivalents, by region, at October 2, 2021 and December 31, 2020:

October 2, 2021 December 31, 2020

See the following table for the percentage of cash and cash equivalents, by region, at April 2, 2022 and December 31, 2021:

April 2, 2022 December 31, 2021

Israel 20 % 25 %

4 unchanged sentences

Canada 11 % 8 %

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

We earn a significant amount of our operating income outside the United States, and we consider the majority of the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, as of April 2, 2022.

As a result, as discussed above, a significant portion of our cash and short-term investments are held by foreign subsidiaries.

The Company will continue to evaluate its cash needs, however we currently do not intend, nor do we foresee a need, to repatriate funds in excess of what is already planned.

The Company will continue to evaluate its cash needs.

However, we currently do not intend, nor do we foresee a need, to repatriate funds in excess of what

is already planned.

The Company will evaluate the possibility of repatriating future cash provided such repatriation can be accomplished in a tax efficient manner.

2 unchanged sentences

These alternatives could result in higher tax expense, increased interest expense, or dilution of our earnings.

We consider the majority of the undistributed earnings of our foreign subsidiaries, as of October 2, 2021, to be indefinitely reinvested.

Our financial condition as of October 2, 2021 remains strong, with a current ratio (current assets to current liabilities) of 4.1 to 1.0, as compared to a ratio of 4.7 to 1.0 at December 31, 2020.

Cash paid for property and equipment for the nine fiscal months ended October 2, 2021 was $11.2 million compared to $15.8 million in the comparable prior year period.

Adjusted free cash flow generated during the three fiscal months ended April 2, 2022, was $(4.6) million.

We refer to the amount of cash provided by operating activities ($(0.3) million) in excess of our capital expenditures ($4.3 million) and net of proceeds from the sale of assets ($0.0 million) as “adjusted free cash flow.”

The following table summarizes the components of net cash at April 2, 2022 and December 31, 2021 (in thousands) :

April 2, 2022 December 31, 2021

Cash and cash equivalents $ 78,181 $ 84,335

Third-party debt, including current and long-term:

Revolving debt 61,000 61,000

Deferred financing costs (264) (286)

Total third-party debt 60,736 60,714

Net cash $ 17,445 $ 23,621

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

Such measures should not be viewed as alternatives to GAAP measures of performance or liquidity.

These measures, as calculated by us, may not be comparable to similarly titled measures used by other companies.

Our financial condition as of April 2, 2022 remains strong, with a current ratio (current assets to current liabilities) of 4.0 to 1.0, as compared to a ratio of 3.6 to 1.0 at December 31, 2021.

Cash paid for property and equipment for the three fiscal months ended April 2, 2022 was $4.3 million compared to $5.7 million in the comparable prior year period.

As of April 2, 2022 and December 31, 2021, we did not have any off-balance sheet arrangements.

Safe Harbor Statement

From time to time, information provided by us, including but not limited to statements in this report, or other statements made by or on our behalf, may contain "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995.

From time to time, information provided by us, including, but not limited to, statements in this report, or other statements made by or on our behalf, may contain or constitute "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995.

Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from those anticipated.

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general business and economic conditions;

global labor and supply chain challenges;

impact of inflation, global labor and supply chain challenges;

difficulties or delays in identifying, negotiating and completing acquisitions and integrating acquired companies;

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our efforts and efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, shelter-in-place orders and business closures and the related impact on resource allocations, manufacturing and supply chains;

the Company’s status as a “critical”, “essential” or “life-sustaining” business in light of COVID-19 business closure laws, orders and guidance being challenged by a governmental body or other applicable authority;

the Company’s ability to execute its business continuity, operational and budget plans in light of the COVID-19 pandemic;

and other factors affecting our operations, markets, products, services, and prices that are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended October 2, 2021.

our status as a “critical”, “essential” or “life-sustaining” business in light of COVID-19 business closure laws, orders and guidance being challenged by a governmental body or other applicable authority;

our ability to execute our new corporate strategy and business continuity, operational and budget plans;

and other factors affecting our operations, markets, products, services, and prices that are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis