What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2022-11-08 · 100 added, 250 removed, 378 unchanged (48% of the section changed)

3 unchanged sentences

(In thousands)

October 1, 2022 December 31, 2021

April 1, 2023 December 31, 2022

Current assets:

24 unchanged sentences

(In thousands)

October 1, 2022 December 31, 2021

April 1, 2023 December 31, 2022

Liabilities and equity (Unaudited)

12 unchanged sentences

Total liabilities 165,876 170,220

Commitments and contingencies

Common stock 1,328 1,325

14 unchanged sentences

Fiscal quarter ended

October 1, 2022 October 2, 2021

Net revenues $ 90,057 $ 81,974

Costs of products sold 52,737 50,129

Gross profit 37,320 31,845

Selling, general, and administrative expenses 25,271 24,580

Restructuring costs 165 —

Operating income 11,884 7,265

Other income (expense):

Interest expense ( 636 ) ( 328 )

Other 1,223 174

Other income (expense) 587 ( 154 )

Income before taxes 12,471 7,111

Income tax expense 2,323 1,662

Net earnings 10,148 5,449

net earnings attributable to noncontrolling interests 30 70

Net earnings attributable to VPG stockholders $ 10,118 $ 5,379

Basic earnings per share attributable to VPG stockholders $ 0.74 $ 0.39

Diluted earnings per share attributable to VPG stockholders $ 0.74 $ 0.39

Weighted average shares outstanding - basic 13,649 13,626

Weighted average shares outstanding - diluted 13,708 13,664

See accompanying notes.

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Operations

(Unaudited - In thousands, except per share amounts)

Nine fiscal months ended

October 1, 2022 October 2, 2021

April 1, 2023 April 2, 2022

Net revenues $ 88,864 $ 87,665

2 unchanged sentences

Selling, general, and administrative expenses 27,159 26,674

Acquisition costs — 1,198

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

Restructuring costs 116 261

18 unchanged sentences

Fiscal quarter ended

October 1, 2022 October 2, 2021

April 1, 2023 April 2, 2022

Net earnings $ 6,982 $ 6,684

2 unchanged sentences

Pension and other postretirement actuarial items 3 81

Other comprehensive loss ( 8,414 ) ( 2,003 )

Comprehensive income 1,734 3,446

comprehensive income attributable to noncontrolling interests 30 70

Comprehensive income attributable to VPG stockholders $ 1,704 $ 3,376

See accompanying notes.

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited - In thousands)

Nine fiscal months ended

October 1, 2022 October 2, 2021

Net earnings $ 27,712 $ 14,455

Other comprehensive income (loss) 1,505 ( 1,711 )

Foreign currency translation adjustment ( 18,214 ) ( 3,309 )

Pension and other postretirement actuarial items, net of tax 227 431

Other comprehensive loss ( 17,987 ) ( 2,878 )

Comprehensive income 8,487 4,973

5 unchanged sentences

(Unaudited - In thousands)

Nine fiscal months ended

October 1, 2022 October 2, 2021

Three fiscal months ended

April 1, 2023 April 2, 2022

Operating activities

1 unchanged sentence

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

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

Depreciation and amortization 3,858 3,823

4 unchanged sentences

Deferred income taxes 383 25

Other ( 4,319 ) ( 2,022 )

Foreign currency impacts and other items ( 1,022 ) ( 844 )

Net changes in operating assets and liabilities:

Accounts receivable, net ( 2,077 ) ( 3,078 )

Inventories, net ( 14,151 ) ( 9,624 )

Accounts receivable 1,201 ( 1,546 )

Inventories ( 2,854 ) ( 3,755 )

Prepaid expenses and other current assets 1,260 ( 2,367 )

1 unchanged sentence

Other current liabilities ( 695 ) ( 2,641 )

Net cash provided by operating activities 20,515 18,081

Other non current assets and liabilities, net ( 201 ) ( 131 )

Accrued pension and other postretirement costs, net 138 ( 254 )

Net cash provided by (used in) operating activities 8,443 ( 273 )

Investing activities

1 unchanged sentence

Proceeds from sale of property and equipment — 10

Purchase of business, net of cash acquired — ( 47,216 )

Net cash used in investing activities ( 3,501 ) ( 4,293 )

Financing activities

Principal payments on long-term debt — ( 18 )

Proceeds from revolving facility — 20,000

Purchase of treasury stock ( 1,061 ) —

Distributions to noncontrolling interests ( 20 ) ( 246 )

Payments of employee taxes on certain share-based arrangements ( 825 ) ( 435 )

Net cash (used in) provided by financing activities ( 1,862 ) 18,885

Net cash used in financing activities ( 845 ) ( 681 )

Effect of exchange rate changes on cash and cash equivalents 622 ( 907 )

Decrease in cash and cash equivalents ( 4,425 ) ( 22,894 )

Increase (decrease) in cash and cash equivalents 4,719 ( 6,154 )

Cash and cash equivalents at beginning of period 88,562 84,335

1 unchanged sentence

Supplemental disclosure of investing transactions:

Capital expenditures purchased $ ( 13,198 ) $ ( 9,368 )

Capital expenditures accrued but not yet paid $ 806 $ 850

4 unchanged sentences

Fiscal quarter ended

October 1, 2022

Stock Class B

Common Stock Treasury Stock Capital in

Par Value Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total VPG Inc.

Stockholders'

Equity Noncontrolling

Interests Total

Balance at July 2, 2022 $ 1,325 $ 103 $ ( 8,765 ) $ 199,749 $ 137,407 $ ( 44,581 ) $ 285,238 $ 112 $ 285,350

Net earnings — — — — 10,118 — 10,118 30 10,148

Other comprehensive loss — — — — — ( 8,414 ) ( 8,414 ) — ( 8,414 )

Share-based compensation expense

— — — 559 — — 559 — 559

Purchase of treasury stock.

( 32,601 shares)

— — ( 1,061 ) — — — ( 1,061 ) — ( 1,061 )

Distributions to noncontrolling interests — — — — — — — ( 82 ) ( 82 )

Balance at October 1, 2022 $ 1,325 $ 103 $ ( 9,826 ) $ 200,308 $ 147,525 $ ( 52,995 ) $ 286,440 $ 60 $ 286,500

Fiscal quarter ended

October 2, 2021

Stock Class B

Common Stock Treasury Stock Capital in

Par Value Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total VPG Inc.

Stockholders'

Equity Noncontrolling

Interests Total

Balance at July 3, 2021 $ 1,322 $ 103 $ ( 8,765 ) $ 197,856 $ 108,956 $ ( 33,546 ) $ 265,926 $ ( 8 ) $ 265,918

— — — — 5,379 — 5,379 70 5,449

Other comprehensive income — — — — — ( 2,003 ) ( 2,003 ) — ( 2,003 )

Share-based compensation expense

— — — 386 — — 386 — 386

Restricted stock issuances ( 465 shares)

— — — ( 7 ) — — ( 7 ) — ( 7 )

Distribution to noncontrolling interests — — — — — — — ( 77 ) ( 77 )

Balance at October 2, 2021 $ 1,322 $ 103 $ ( 8,765 ) $ 198,235 $ 114,335 $ ( 35,549 ) $ 269,681 $ ( 15 ) $ 269,666

See accompanying notes.

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Equity

(Unaudited - In thousands, except share amounts)

Nine Fiscal Months Ended October 1, 2022

April 1, 2023

Stock Class B

10 unchanged sentences

Other comprehensive loss — — — — — 1,505 1,505 — 1,505

— — — — — ( 17,987 ) ( 17,987 ) — ( 17,987 )

Share-based compensation expense

2 unchanged sentences

3 — — ( 780 ) — — ( 777 ) — ( 777 )

Purchase of treasury stock ( 32,601 shares)

— — ( 1,061 ) — — — ( 1,061 ) — ( 1,061 )

Distributions to noncontrolling interests — — — — — — — ( 20 ) ( 20 )

Balance at October 1, 2022 $ 1,325 $ 103 $ ( 9,826 ) $ 200,308 $ 147,525 $ ( 52,995 ) $ 286,440 $ 60 $ 286,500

Nine Fiscal Months Ended October 2, 2021

Balance at April 1, 2023 $ 1,328 $ 103 $ ( 11,504 ) $ 201,065 $ 163,323 $ ( 39,395 ) $ 314,920 $ ( 27 ) $ 314,893

Fiscal quarter ended

April 2, 2022

Stock Class B

9 unchanged sentences

— — — — 6,356 — 6,356 328 6,684

Other comprehensive loss — — — — — ( 2,878 ) ( 2,878 ) — ( 2,878 )

Other comprehensive income — — — — — ( 1,711 ) ( 1,711 ) — ( 1,711 )

Share-based compensation expense

3 unchanged sentences

Distribution to noncontrolling interests — — — — — — — ( 246 ) ( 246 )

Balance at October 2, 2021 $ 1,322 $ 103 $ ( 8,765 ) $ 198,235 $ 114,335 $ ( 35,549 ) $ 269,681 $ ( 15 ) $ 269,666

Balance at April 2, 2022 $ 1,324 $ 103 $ ( 8,765 ) $ 199,223 $ 126,652 $ ( 36,719 ) $ 281,818 $ 25 $ 281,843

See accompanying notes.

3 unchanged sentences

Vishay Precision Group, Inc.

(“VPG” or the “Company”) 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.

(“VPG” or the “Company”) is a global, diversified company focused on precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one.

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

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

Interim Financial Statements

2 unchanged sentences

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022, included in VPG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 1, 2023.

The results of operations for the fiscal quarter ended October 1, 2022 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the fiscal quarter ended April 1, 2023 are not necessarily indicative of the results to be expected for the full year.

VPG reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first quarter, which always begins on January 1, and the fourth quarter, which always ends on December 31.

2 unchanged sentences

Quarter 2 July 1, July 2,

Quarter 3 October 1, October 2,

Quarter 3 September 30, October 1,

Quarter 4 December 31, December 31,

Reclassifications

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

Note 2 – Revenues

3 unchanged sentences

Fiscal quarter ended

October 1, 2022 Fiscal quarter ended

October 2, 2021

Sensors Weighing Solutions Measurement Systems Total Sensors Weighing Solutions Measurement Systems Total

United States $ 12,992 $ 14,671 $ 13,065 $ 40,728 $ 9,640 $ 12,729 $ 13,914 $ 36,283

United Kingdom 752 4,090 55 4,897 746 4,366 129 5,241

Other Europe 7,740 8,714 986 17,440 6,063 9,681 1,194 16,938

Israel 7,447 101 — 7,548 4,711 232 — 4,943

Asia 8,948 3,815 2,462 15,225 9,561 3,668 1,933 15,162

Canada — 8 4,211 4,219 — — 3,407 3,407

Total $ 37,879 $ 31,399 $ 20,779 $ 90,057 $ 30,721 $ 30,676 $ 20,577 $ 81,974

Nine Fiscal Months Ended October 1, 2022 Nine Fiscal Months Ended October 2, 2021

April 1, 2023 Fiscal quarter ended

April 2, 2022

Sensors Weighing Solutions Measurement Systems Total Sensors Weighing Solutions Measurement Systems Total

7 unchanged sentences

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

Fiscal quarter ended Nine fiscal months ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Fiscal quarter ended

April 1, 2023 April 2, 2022

Test & Measurement $ 18,664 $ 17,973

13 unchanged sentences

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

Note 2 – Revenues (continued)

Contract Asset Contract Liability

1 unchanged sentence

Balance at December 31, 2022 $ 3,990 $ 7,983

Balance at October 1, 2022 3,621 8,867

Balance at April 1, 2023 4,223 8,618

Increase $ 233 $ 635

The amount of revenue recognized during the nine fiscal months ended October 1, 2022 that was included in the contract liability balance at December 31, 2021 was $ 3.2 million.

Note 3 - Acquisition

Diversified Technical Systems, Inc.

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

(“DTS”), a manufacturer of data acquisition systems and sensors for product safety and testing, for a purchase price of $ 47.2 million.

The Company used cash on hand and borrowings under its revolving credit facility to fund the purchase price under the purchase agreement.

DTS reports into the Company's Measurement Systems segment.

The following table summarizes the final fair values assigned to the assets and liabilities of DTS as of June 1, 2021 (in thousands):

Working capital $ 12,494

Property and equipment 1,209

Deferred income tax liability ( 6,215 )

Intangible assets:

Acquired technology 13,167

Customer relationships 8,135

Trade names 2,393

Total intangible assets 23,695

Fair value of acquired identifiable assets 31,183

Purchase price $ 47,216

Goodwill $ 16,033

The Company utilizes certain valuations and studies to determine the fair value of the tangible and intangible assets acquired.

The estimated weighted average useful lives for the acquired technology and customer relationships are 15 years.

Trade names are treated as indefinite-lived intangible assets.

None of the goodwill associated with DTS is deductible for income tax purposes.

The Company recorded acquisition costs associated with this transaction of $ 1.2 million in the second quarter of 2021, which included legal fees, appraisal fees, investments banker fees and insurance costs.

Included in the results of the operations of the Company for the fiscal quarter ended October 1, 2022, are net revenues of $ 7.9 million from DTS and a net income of $ 0.2 million from DTS.

DTS results include amortization of the inventory step-up of $ 0.3 million for the fiscal quarter ended October 1, 2022, and amortization of intangible assets of $ 0.4 million for the fiscal quarter ended October 1, 2022.

Included in the results of the operations of the Company for the nine fiscal months ended October 1, 2022 are net revenues of $ 22.5 million from DTS and a net loss of $ 0.3 million from DTS.

DTS results include amortization of the inventory step-up of $ 1.3 million and amortization of intangible assets of $ 1.1 million for the nine fiscal months ended October 1, 2022.

Following is the supplemental consolidated financial results for the Company on an unaudited pro forma basis, as if the DTS acquisition had been consummated on January 1, 2021:

Nine fiscal months ended

October 2, 2021

Pro forma net revenues

Pro forma net earnings attributable to VPG stockholders

Pro forma basic earnings per share attributable to VPG stockholders

Pro forma diluted earnings per share attributable to VPG stockholders

The amount of revenue recognized during the three fiscal months ended April 1, 2023 that was included in the contract liability balance at December 31, 2022 was $ 3.3 million

Note 3 – Goodwill

1 unchanged sentence

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

Note 3 – Goodwill (continued)

Total Measurement Systems Weighing Solutions

1 unchanged sentence

Balance at December 31, 2022 $ 45,544 $ 6,313 $ 16,887 $ 16,033 $ 6,311

Adjustment to goodwill acquired 130 — — 130 —

Foreign currency translation adjustment 23 15 8 — —

Balance at October 1, 2022 $ 45,460 $ 6,260 $ 16,856 $ 16,033 $ 6,311

Balance at April 1, 2023 $ 45,567 $ 6,328 $ 16,895 $ 16,033 $ 6,311

Note 4 – Leases

2 unchanged sentences

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

Leases October 1, 2022 December 31, 2021

Leases April 1, 2023 December 31, 2022

Operating lease right of use asset $ 24,189 $ 24,342

2 unchanged sentences

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

October 1, 2022

April 1, 2023

Operating leases weighted average remaining lease term (in years) 7.48 years

1 unchanged sentence

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

Note 5 - Leases (continued)

Fiscal quarter ended Nine Fiscal Months Ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Fiscal quarter ended

April 1, 2023 April 2, 2022

Operating lease cost $ 1,244 $ 1,310

2 unchanged sentences

Total net lease cost $ 1,190 $ 1,224

Right of use assets obtained in exchange for new operating lease liability during 2022 were $ 0.7 million.

The Company paid $ 3.9 million and $ 3.8 million for its operating leases for each of the nine fiscal months ended October 1, 2022 and October 2, 2021, which are included in operating cash flows on the consolidated condensed statements of cash flows.

Undiscounted maturities of operating lease payments as of October 1, 2022 are summarized as follows (in thousands) :

2022 (excluding the nine months ended October 1, 2022) $ 1,172

Right of use assets obtained in exchange for new operating lease liability during the three fiscal months ended April 1, 2023 were $ 1.0 million.

The Company paid $ 1.2 million and $ 1.3 million for its operating leases for each of the three fiscal months ended April 1, 2023 and April 2, 2022, which are included in operating cash flows on the consolidated condensed statements of cash flows.

Undiscounted maturities of operating lease payments as of April 1, 2023 are summarized as follows (in thousands) :

Note 4 - Leases (continued)

2023 (excluding the three months ended April 1, 2023) $ 3,512

Thereafter 9,310

4 unchanged sentences

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 1, 2022 was 18.6 % compared to 23.4 % for the fiscal quarter ended October 2, 2021.

The effective tax rate for the nine fiscal months ended October 1, 2022 was 19.4 % compared to 20.3 % for the nine fiscal months ended October 2, 2021.

The effective tax rate for the fiscal quarter ended April 1, 2023 was 24.1 % compared to 20.7 % for the fiscal quarter ended April 2, 2022.

The effective tax rate for the fiscal quarter ended April 1, 2023 differs from the federal statutory rate of 21% primarily due to foreign income taxed at different tax rates and changes in our valuation allowance on deferred tax assets.

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.

8 unchanged sentences

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

October 1, 2022 December 31, 2021

April 1, 2023 December 31, 2022

2020 Credit Agreement - Revolving Facility $ 61,000 $ 61,000

7 unchanged sentences

Balance at January 1, 2023 $ ( 41,489 ) $ 589 $ ( 40,900 )

Other comprehensive loss before reclassifications ( 18,405 ) — ( 18,405 )

Other comprehensive income before reclassifications 1,502 — 1,502

Amounts reclassified from accumulated other comprehensive income — 3 3

Balance at October 1, 2022 $ ( 48,490 ) $ ( 4,505 ) $ ( 52,995 )

Balance at April 1, 2023 $ ( 39,987 ) $ 592 $ ( 39,395 )

Note 7 – Accumulated Other Comprehensive Income (Loss) (continued)

Foreign Currency Translation Adjustment Pension

4 unchanged sentences

Amounts reclassified from accumulated other comprehensive income 191 81 272

Balance at October 2, 2021 $ ( 28,900 ) $ ( 6,649 ) $ ( 35,549 )

Balance at April 2, 2022 $ ( 32,068 ) $ ( 4,651 ) $ ( 36,719 )

Reclassification of foreign currency translation adjustment for the loss on liquidation of subsidiaries is included in other income and expense other (see Note 12).

3 unchanged sentences

The following table sets forth the components of the net periodic benefit cost for the Company's defined benefit pension and OPEB plans (in thousands) :

Note 9 - Pension and Other Postretirement Benefits ( continued)

Fiscal quarter ended

October 1, 2022 Fiscal quarter ended

October 2, 2021

Plans Pension

Net service cost $ 79 $ 7 $ 96 $ 9

Interest cost 117 17 102 17

Expected return on plan assets ( 116 ) ( 97 ) —

Amortization of actuarial losses 69 1 102 5

Net periodic benefit cost $ 149 $ 25 $ 203 $ 31

Nine fiscal months ended October 1, 2022 Nine fiscal months ended October 2, 2021

April 1, 2023 Fiscal quarter ended

April 2, 2022

Plans Pension

5 unchanged sentences

Note 9 – Share-Based Compensation

On May 26, 2022, t he Company’s stockholders voted to approve the adoption of the Vishay Precision Group, Inc.

2022 Stock Incentive Plan (the "2022 plan"), which replaced the Amended and Restated Vishay Precision Group, Inc.

2010 Stock Incentive Program (the "previous plan").

The 2022 plan permits issuance of up to 608,000 shares of common stock, which includes approximately 308,000 shares that were reserved for issuance under the previous plan and up to an additional 197,685 additional shares underlying awards outstanding under the previous plan.

At October 1, 2022, the Company had reserved 590,034 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the 2022 plan.

The Vishay Precision Group, Inc.

2022 Stock Incentive Plan (the "2022 plan") permits issuance of up to 608,000 shares of common stock.

At April 1, 2023, the Company had reserved 540,014 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the 2022 plan.

If any outstanding awards are forfeited by the holder or canceled by the Company, the underlying shares would be available for re-grant to others.

If shares are withheld for payment of taxes, those shares do not become available for grant under the 2022 plan.

On March 3, 2022 and in accordance with their respective employment agreements, VPG’s three executive officers were granted annual equity awards in the form of RSUs, of which 50 % are performance-based.

On February 28, 2023 and in accordance with their respective employment agreements, VPG’s three executive officers were granted annual equity awards in the form of RSUs, of which 50 % are performance-based.

The awards have an aggregate target grant-date fair value of $ 1.9 million and were comprised of 43,243 RSUs.

6 unchanged sentences

The performance-based portion of the RSUs will also vest on January 1, 2026, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings and cash flow goals, each weighted equally.

On January 1, 2022 and in accordance with the Company's 2017 Non-Employee Director Compensation Plan (the "Director Plan"), the Board of Directors approved the issuance of an aggregate of 595 RSUs to the newly-appointed independent member of the Board of Directors.

This award represented a pro-rated portion of the annual equity grant made to non-executive directors pursuant to the Director Plan.

The aggregate grant-date fair value of this award is immaterial, and the award vested on May 26, 2022, the date of the 2022 Annual Stockholders Meeting.

Note 10 - Share-Based Compensation (continued)

On May 26, 2022 and in accordance with the Company's 2017 Non-Employee Director Compensation Plan, the Board of Directors approved the issuance of an aggregate of 16,534 RSUs to the independent board members of the Board of Directors and to the non-executive Chairman of the Board of Directors.

The awards have an aggregate grant-date fair value of $ 0.5 million and will vest on the earlier of the 2023 Annual Stockholders Meeting or May 26, 2023, subject to the directors' continued service on the Board of Directors.

On July 1, 2022, a non-executive VPG employee was granted an annual equity award in the form of RSU's, of which 50 % are performance-based.

The award has an aggregate grant-date fair value of $ 0.04 million and was comprised of 1,432 RSU's.

The non-performance portion of this award will vest on July 1, 2025, subject to the employees' continued employment.

The performance-based portion of the RSUs will also vest on July 1, 2025, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings and cash flow goals, each weighted equally.

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

Note 9 - Share-Based Compensation (continued)

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

2 unchanged sentences

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

Fiscal quarter ended Nine fiscal months ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Restricted stock units $ 559 $ 386 $ 1,583 $ 1,328

Fiscal quarter ended

April 1, 2023 April 2, 2022

Share-based compensation expense $ 681 $ 497

Note 10 – Segment Information

8 unchanged sentences

Management believes that evaluating segment performance, excluding items such as restructuring and severance costs, impairment of goodwill and indefinite-lived intangible assets, acquisition costs, and other items is meaningful because they relate to occurrences or events that are outside of our core operations, and management believes that the use of these measures provides a consistent basis to evaluate our operating profitability and performance trends across comparable periods.

The following table sets forth reporting segment information.

The reporting segment information reported for the fiscal quarter and nine fiscal months ended October 2, 2021 has been recast to reflect the new reporting segments adopted by the Company in the fourth quarter of 2021, as described in the consolidated financial statements as of December 31, 2021, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 4, 2022 (in thousands) :

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

Note 10 - Segment Information (continued)

Fiscal quarter ended Nine fiscal months ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Fiscal quarter ended

April 1, 2023 April 2, 2022

Net revenues:

13 unchanged sentences

Unallocated G&A expenses ( 9,105 ) ( 8,807 )

Acquisition costs — — — ( 1,198 )

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

Restructuring costs ( 116 ) ( 261 )

Operating income $ 9,924 $ 8,315

Acquisition costs:

Measurement Systems — — — ( 1,198 )

$ — $ — $ — $ ( 1,198 )

Impairment of goodwill and indefinite-lived intangibles:

Measurement Systems — — — ( 1,223 )

$ — $ — $ — $ ( 1,223 )

Restructuring costs:

Sensors $ — $ ( 203 )

Weighing Solutions ( 34 ) —

Measurement Systems ( 32 ) ( 58 )

Corporate/Other ( 50 ) —

$ ( 116 ) $ ( 261 )

1 unchanged sentence

The table below summarizes intersegment sales (in thousands) :

Fiscal quarter ended Nine fiscal months ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Fiscal quarter ended

April 1, 2023 April 2, 2022

Sensors to Weighing Solutions $ 328 $ 389

2 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share attributable to VPG stockholders (in thousands, except earnings per share) :

Fiscal quarter ended Nine fiscal months ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Fiscal quarter ended

April 1, 2023 April 2, 2022

Numerator for basic earnings per share:

14 unchanged sentences

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

Fiscal quarter ended Nine fiscal months ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Foreign currency exchange gain (loss) $ 1,261 $ ( 38 ) $ 5,195 $ 522

Fiscal quarter ended

April 1, 2023 April 2, 2022

Foreign currency exchange gain $ 62 $ 554

Interest income 366 64

1 unchanged sentence

Other ( 79 ) ( 103 )

$ 1,223 $ 174 $ 5,006 $ 421

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

For the fiscal quarter and nine fiscal months ended October 1, 2022, the change in foreign currency exchange gains and losses during the period, as compared to the prior year periods, is largely due to exposure of currency fluctuations with the Israeli shekel, the Japanese yen, the Canadian dollar, and the British pound.

The change in the dollar-shekel exchange rate resulted in a favorable foreign currency exchange impact primarily related to the shekel-denominated lease liability for the Sensors facility in Israel.

Included in Other for the nine fiscal months ended October 1, 2022 is a $ 0.2 million loss on the liquidation of two of the Company's European subsidiaries.

For the fiscal quarter ended April 1, 2023, the change in foreign currency exchange gains and losses during the period, as compared to the prior year period, is largely due to exposure of currency fluctuations with the Japanese yen, the Canadian dollar, and the British pound.

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

Note 12 – Additional Financial Statement Information ( continued)

Other Accrued Expenses

Other accrued expenses consist of the following (in thousands) :

April 1, 2023 December 31, 2022

Customer advance payments $ 8,618 $ 7,983

Accrued restructuring 14 183

Goods received, not yet invoiced 2,588 2,523

Accrued taxes, other than income taxes 2,309 1,141

Accrued commissions 3,350 3,217

Accrued professional fees 1,036 1,360

Accrued technical warranty 758 740

Current accrued pensions and other post retirement costs 505 505

Other 3,186 2,654

$ 22,364 $ 20,306

Note 13 – Fair Value Measurements

12 unchanged sentences

Inputs Level 3

October 1, 2022

April 1, 2023

Assets held in rabbi trusts $ 5,619 $ 136 $ 5,483 $ —

2 unchanged sentences

The Company maintains non-qualified trusts, referred to as “rabbi” trusts, to fund payments under deferred compensation and non-qualified pension plans.

Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale money market funds at October 1, 2022 and December 31, 2021, and company-owned life insurance assets.

Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale money market funds at April 1, 2023 and December 31, 2022, and company-owned life insurance assets.

The marketable securities held in the rabbi trusts are valued using quoted market prices on the last business day of the period.

The company-owned life insurance assets are valued in consultation with the Company’s insurance brokers using the value of underlying assets of the insurance contracts.

The fair value measurement of the cash equivalents held in the rabbi trust are considered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within the fair value hierarchy.

The fair value of the long-term debt, excluding capitalized deferred financing costs, at October 1, 2022 and December 31, 2021 approximates its carrying value as the revolving debt is reset on a monthly basis based on current market rates, plus a base rate as specified in the debt agreement.

The fair value measurement of the cash equivalents held in the rabbi trust are considered a Level 1

Note 13 – Fair Value Measurements (continued)

measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within the fair value hierarchy.

The fair value of the long-term debt, excluding capitalized deferred financing costs, at April 1, 2023 and December 31, 2022 approximates its carrying value as the revolving debt is reset on a monthly basis based on current market rates, plus a base rate as specified in the debt agreement.

The fair value of long-term debt is considered a Level 2 measurement within the fair value hierarchy.

4 unchanged sentences

Restructuring costs are expensed during the period in which the Company determines it will incur those costs and all requirements for accrual are met.

Because these

costs are recorded based upon estimates, actual expenditures for the restructuring activities may differ from the initially recorded costs.

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 $ 0.2 million and $ 0.0 million of restructuring costs during the fiscal quarter ended October 1, 2022 and October 2, 2021, respectively and $ 1.3 million and $ 0.0 million of restructuring costs during the nine fiscal months ended October 1, 2022 and October 2, 2021, respectively.

Because these costs are recorded based upon estimates, actual expenditures for the restructuring activities may differ from the initially recorded costs.

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

The Company recorded $ 0.1 million and $ 0.3 million of restructuring costs during the fiscal quarter ended April 1, 2023 and April 2, 2022, respectively.

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

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

The accrued restructuring liability balance as of October 1, 2022 and December 31, 2021, respectively, is included in Other accrued expenses in the accompanying consolidated condensed balance sheets (in thousands) :

The accrued restructuring liability balance as of April 1, 2023 and December 31, 2022, respectively, is included in Other accrued expenses in the accompanying consolidated condensed balance sheets (in thousands) :

Balance at December 31, 2022 $ 183

2 unchanged sentences

Foreign currency translation 2

Balance at October 1, 2022 $ —

Note 16 – Stockholder's Equity

On August 8, 2022, the Board of Directors (the “Board”) of the Company authorized the repurchase of up to 600,000 shares of the Company’s outstanding common stock (the “Stock Repurchase Plan”).

The Stock Repurchase Plan will expire on August 11, 2023, and the Board authorized purchases thereunder to be made through an issuer repurchase plan adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), open market purchases or private transactions, in accordance with the applicable federal securities laws, including Rule 10b-18 under the Exchange Act.

At October 1, 2022, the Company had repurchased 32,601 shares of its common stock under the Stock Repurchase Plan.

Balance at April 1, 2023 $ 14

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

What changed 10-Q

Item 1. Financial Statements