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Vishay Precision Group, Inc. – ‘10-Q’ for 10/1/22

On:  Tuesday, 11/8/22, at 1:13pm ET   ·   For:  10/1/22   ·   Accession #:  1487952-22-34   ·   File #:  1-34679

Previous ‘10-Q’:  ‘10-Q’ on 8/9/22 for 7/2/22   ·   Next:  ‘10-Q’ on 5/9/23 for 4/1/23   ·   Latest:  ‘10-Q’ on 11/7/23 for 9/30/23   ·   2 References:   

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  As Of               Filer                 Filing    For·On·As Docs:Size

11/08/22  Vishay Precision Group, Inc.      10-Q       10/01/22   83:7.6M

Quarterly Report   —   Form 10-Q

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML   2.03M 
 2: EX-10.1     Material Contract                                   HTML     27K 
 3: EX-31.1     Certification -- §302 - SOA'02                      HTML     26K 
 4: EX-31.2     Certification -- §302 - SOA'02                      HTML     26K 
 5: EX-32.1     Certification -- §906 - SOA'02                      HTML     23K 
 6: EX-32.2     Certification -- §906 - SOA'02                      HTML     23K 
12: R1          Cover                                               HTML     75K 
13: R2          Consolidated Condensed Balance Sheets               HTML    173K 
14: R3          Consolidated Condensed Statements of Operations     HTML    114K 
15: R4          Consolidated Condensed Statements of Comprehensive  HTML     58K 
                Income (Loss)                                                    
16: R5          Consolidated Condensed Statements of Cash Flows     HTML    108K 
17: R6          Consolidated Condensed Statements of Equity         HTML     77K 
18: R7          Consolidated Condensed Statements of Equity         HTML     29K 
                (Parenthetical)                                                  
19: R8          Basis of Presentation                               HTML     31K 
20: R9          Revenues                                            HTML    127K 
21: R10         Acquisition                                         HTML     41K 
22: R11         Goodwill                                            HTML     41K 
23: R12         Leases                                              HTML     54K 
24: R13         Income Taxes                                        HTML     28K 
25: R14         Long-Term Debt                                      HTML     34K 
26: R15         Accumulated Other Comprehensive Income (Loss)       HTML     44K 
27: R16         Pensions and Other Postretirement Benefits          HTML     56K 
28: R17         Share-Based Compensation                            HTML     37K 
29: R18         Segment Information                                 HTML    104K 
30: R19         Earnings Per Share                                  HTML     52K 
31: R20         Additional Financial Statement Information          HTML     39K 
32: R21         Fair Value Measurements                             HTML     41K 
33: R22         Restructuring Costs                                 HTML     31K 
34: R23         Stockholder's equity                                HTML     29K 
35: R24         Basis of Presentation - (Policies)                  HTML     28K 
36: R25         Basis of Presentation - (Tables)                    HTML     27K 
37: R26         Revenues - (Tables)                                 HTML    125K 
38: R27         Acquisition - (Tables)                              HTML     40K 
39: R28         Goodwill (Tables)                                   HTML     43K 
40: R29         Leases - (Tables)                                   HTML     59K 
41: R30         Long-Term Debt - (Tables)                           HTML     34K 
42: R31         Accumulated Other Comprehensive Income (Loss) -     HTML     43K 
                (Tables)                                                         
43: R32         Pensions and Other Postretirement Benefits -        HTML     53K 
                (Tables)                                                         
44: R33         Share-Based Compensation - (Tables)                 HTML     30K 
45: R34         Segment Information - (Tables)                      HTML    100K 
46: R35         Earnings Per Share - (Tables)                       HTML     52K 
47: R36         Additional Financial Statement Information -        HTML     38K 
                (Tables)                                                         
48: R37         Fair Value Measurements - (Tables)                  HTML     37K 
49: R38         Restructuring Costs - (Tables)                      HTML     29K 
50: R39         Revenues - (Disaggregation of Revenue by            HTML     70K 
                Geographic Area) (Details)                                       
51: R40         Revenues - (Disaggregation of Revenue by Market     HTML     43K 
                Sector) (Details)                                                
52: R41         Revenues - (Contract Assets and Liabilities)        HTML     32K 
                (Details)                                                        
53: R42         Revenues - (Narrative) (Details)                    HTML     24K 
54: R43         Acquisition - (Narrative) (Details)                 HTML     64K 
55: R44         Acquisition - (Schedule of Assets Acquired and      HTML     51K 
                Liabilities Assumed) (Details)                                   
56: R45         Acquisitions - (Pro Forma Information) (Details)    HTML     33K 
57: R46         Goodwill - (Schedule of Goodwill) (Details)         HTML     42K 
58: R47         Leases - (Narrative) (Details)                      HTML     34K 
59: R48         Leases - (Leases Recorded on the Balance Sheet)     HTML     29K 
                (Details)                                                        
60: R49         Leases - (Other Information Related to Leases)      HTML     26K 
                (Details)                                                        
61: R50         Leases - (Components of Lease Expense) (Details)    HTML     31K 
62: R51         Leases - (Maturities of Operating Lease             HTML     40K 
                Liabilities) (Details)                                           
63: R52         Income Taxes - (Details)                            HTML     24K 
64: R53         Long-Term Debt - (Schedule of Long-term Debt)       HTML     33K 
                (Details)                                                        
65: R54         Accumulated Other Comprehensive Income (Loss) -     HTML     49K 
                (Details)                                                        
66: R55         Pensions and Other Postretirement Benefits -        HTML     44K 
                (Schedule of Net Pension and Other Retirement Plan               
                Costs) (Details)                                                 
67: R56         Share-Based Compensation - (Narrative) (Details)    HTML     55K 
68: R57         Share-Based Compensation - (Schedule of             HTML     24K 
                Share-based Compensation Expense) (Details)                      
69: R58         Segment Information - (Narrative) (Details)         HTML     23K 
70: R59         Segment Information - (Schedule of Segment          HTML     68K 
                Reporting) (Details)                                             
71: R60         Segment Information - (Intersegment Sales)          HTML     33K 
                (Details)                                                        
72: R61         Earnings Per Share - (Computation of Basic and      HTML     63K 
                Diluted Earnings Per Share) (Details)                            
73: R62         Additional Financial Statement Information -        HTML     33K 
                (Schedule of Other Items in Operations) (Details)                
74: R63         Additional Financial Statement Information -        HTML     26K 
                (Narrative) (Details)                                            
75: R64         Fair Value Measurements - (Schedule of Assets and   HTML     32K 
                Liabilities at Fair Value, Recurring) (Details)                  
76: R65         Restructuring Costs - (Narrative) (Details)         HTML     25K 
77: R66         Restructuring Costs - Restructuring Programs        HTML     33K 
                (Details)                                                        
78: R67         Equity (Details)                                    HTML     29K 
81: XML         IDEA XML File -- Filing Summary                      XML    149K 
79: XML         XBRL Instance -- vpg-20221001_htm                    XML   2.17M 
80: EXCEL       IDEA Workbook of Financial Reports                  XLSX    117K 
 8: EX-101.CAL  XBRL Calculations -- vpg-20221001_cal                XML    190K 
 9: EX-101.DEF  XBRL Definitions -- vpg-20221001_def                 XML    429K 
10: EX-101.LAB  XBRL Labels -- vpg-20221001_lab                      XML   1.17M 
11: EX-101.PRE  XBRL Presentations -- vpg-20221001_pre               XML    710K 
 7: EX-101.SCH  XBRL Schema -- vpg-20221001                          XSD    127K 
82: JSON        XBRL Instance as JSON Data -- MetaLinks              370±   529K 
83: ZIP         XBRL Zipped Folder -- 0001487952-22-000034-xbrl      Zip    346K 


‘10-Q’   —   Quarterly Report

Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Part I
"Financial Information
"Item 1
"Financial Statements
"Consolidated Condensed Balance Sheets
"Consolidated Condensed Statements of Operations
"Consolidated Condensed Statements of Comprehensive Income (Loss)
"Consolidated Condensed Statements of Cash Flows
"Consolidated Condensed Statements of Equity
"Notes to Unaudited Consolidated Condensed Financial Statements
"Item 2
"Management's Discussion and Analysis of Financial Condition and Results of Operations
"Item 3
"Quantitative and Qualitative Disclosures About Market Risk
"Item 4
"Controls and Procedures
"Part Ii
"Other Information
"Legal Proceedings
"Item 1A
"Risk Factors
"Unregistered Sales of Equity Securities and Use of Proceeds
"Defaults Upon Senior Securities
"Mine Safety Disclosures
"Item 5
"Item 6
"Exhibits
"Signatures

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM  i 10-Q
(Mark One)
 i     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended           i October 1, 2022
 i     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number  i 1-34679
 i VISHAY PRECISION GROUP, INC.
(Exact name of registrant as specified in its charter)
 i Delaware i 27-0986328
(State or Other Jurisdiction of Incorporation)(I.R.S. Employer Identification Number)
 i 3 Great Valley Parkway, Suite 150
 i Malvern,  i PA,  i 19355
 i 484- i 321-5300
(Address of Principal Executive Offices) (Zip Code)(Registrant’s Telephone Number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
 i Common stock, $0.10 par value i VPG i New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý  i Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. ý  i Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨ i Accelerated filerý
Non-accelerated filer¨Smaller reporting company i 
Emerging growth company i 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  i  Yes ý No
As of November 8, 2022, the registrant had  i 12,550,775 shares of its common stock and  i 1,022,887 shares of its Class B convertible common stock outstanding.


VISHAY PRECISION GROUP, INC.
FORM 10-Q
October 1, 2022
CONTENTS
Page Number
 
 
(Unaudited) – Fiscal Quarters Ended October 1, 2022 and October 2, 2021
 
(Unaudited) – Nine Fiscal Months Ended October 1, 2022 and October 2, 2021
 
(Unaudited) – Fiscal Quarters Ended October 1, 2022 and October 2, 2021
 
(Unaudited) – Nine Fiscal Months Ended October 1, 2022 and October 2, 2021
 
(Unaudited) –Nine Fiscal Months Ended October 1, 2022 and October 2, 2021
 
(Unaudited) – Fiscal Quarters Ended October 1, 2022 and October 2, 2021
(Unaudited) – Nine Fiscal Months Ended October 1, 2022 and October 2, 2021
 
 
 
 
 
 
 
 
 
 
 
 
-2-


PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets
(In thousands)
October 1, 2022December 31, 2021
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$ i 79,910 $ i 84,335 
Accounts receivable, net i 55,151  i 58,265 
Inventories:
Raw materials i 31,036  i 25,464 
Work in process i 27,903  i 23,851 
Finished goods i 26,384  i 27,112 
Inventories, net i 85,323  i 76,427 
Prepaid expenses and other current assets i 16,160  i 15,916 
Total current assets i 236,544  i 234,943 
Property and equipment:
Land i 4,029  i 4,241 
Buildings and improvements i 69,769  i 68,778 
Machinery and equipment i 122,412  i 122,202 
Software i 9,136  i 8,871 
Construction in progress i 6,364  i 7,747 
Accumulated depreciation( i 129,225)( i 130,619)
Property and equipment, net i 82,485  i 81,220 
Goodwill i 45,460  i 45,830 
Intangible assets, net i 49,081  i 52,437 
Operating lease right-of-use assets i 24,737  i 27,764 
Other assets i 15,890  i 19,695 
Total assets$ i 454,197 $ i 461,889 
Continues on the following page.
-3-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets
(In thousands)
October 1, 2022December 31, 2021
Liabilities and equity(Unaudited)
Current liabilities:
Trade accounts payable$ i 10,234 $ i 14,876 
Payroll and related expenses i 20,658  i 23,772 
Other accrued expenses i 21,863  i 17,596 
Income taxes i 818  i 3,774 
Current portion of operating lease liabilities i 4,119  i 4,610 
Total current liabilities i 57,692  i 64,628 
Long-term debt, less current portion i 60,780  i 60,714 
Deferred income taxes i 4,585  i 5,848 
Operating lease liabilities i 20,422  i 25,140 
Other liabilities i 13,959  i 16,264 
Accrued pension and other postretirement costs i 10,259  i 12,253 
Total liabilities i 167,697  i 184,847 
Commitments and contingencies i  i 
Equity:
Common stock i 1,325  i 1,322 
Class B convertible common stock i 103  i 103 
Treasury stock( i 9,826)( i 8,765)
Capital in excess of par value i 200,308  i 199,151 
Retained earnings i 147,525  i 120,296 
Accumulated other comprehensive loss( i 52,995)( i 35,008)
Total Vishay Precision Group, Inc. stockholders' equity i 286,440  i 277,099 
Noncontrolling interests i 60 ( i 57)
Total equity i 286,500  i 277,042 
Total liabilities and equity$ i 454,197 $ i 461,889 
See accompanying notes.
-4-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)
Fiscal quarter ended
October 1, 2022October 2, 2021
Net revenues$ i 90,057 $ i 81,974 
Costs of products sold i 52,737  i 50,129 
Gross profit i 37,320  i 31,845 
Selling, general, and administrative expenses i 25,271  i 24,580 
Restructuring costs i 165  i  
Operating income i 11,884  i 7,265 
Other income (expense):
Interest expense( i 636)( i 328)
Other i 1,223  i 174 
Other income (expense) i 587 ( i 154)
Income before taxes i 12,471  i 7,111 
Income tax expense i 2,323  i 1,662 
Net earnings i 10,148  i 5,449 
Less: net earnings attributable to noncontrolling interests i 30  i 70 
Net earnings attributable to VPG stockholders$ i 10,118 $ i 5,379 
Basic earnings per share attributable to VPG stockholders$ i 0.74 $ i 0.39 
Diluted earnings per share attributable to VPG stockholders$ i 0.74 $ i 0.39 
Weighted average shares outstanding - basic i 13,649  i 13,626 
Weighted average shares outstanding - diluted i 13,708  i 13,664 















See accompanying notes.
-5-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)
Nine fiscal months ended
October 1, 2022October 2, 2021
Net revenues$ i 266,340 $ i 227,902 
Costs of products sold i 156,436  i 137,637 
Gross profit i 109,904  i 90,265 
Selling, general, and administrative expenses i 77,824  i 69,216 
Acquisition costs i   i 1,198 
Impairment of goodwill and indefinite-lived intangibles i   i 1,223 
Restructuring costs i 1,330  i  
Operating income i 30,750  i 18,628 
Other income (expense):
Interest expense( i 1,393)( i 906)
Other i 5,006  i 421 
Other income (expense) i 3,613 ( i 485)
Income before taxes i 34,363  i 18,143 
Income tax expense i 6,651  i 3,688 
Net earnings i 27,712  i 14,455 
Less: net earnings attributable to noncontrolling interests i 483  i 195 
Net earnings attributable to VPG stockholders$ i 27,229 $ i 14,260 
Basic earnings per share attributable to VPG stockholders$ i 2.00 $ i 1.05 
Diluted earnings per share attributable to VPG stockholders$ i 1.99 $ i 1.04 
Weighted average shares outstanding - basic i 13,645  i 13,612 
Weighted average shares outstanding - diluted i 13,692  i 13,647 
See accompanying notes.
-6-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Comprehensive Income (Loss)
(Unaudited - In thousands)
Fiscal quarter ended
October 1, 2022October 2, 2021
Net earnings$ i 10,148 $ i 5,449 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment( i 8,479)( i 2,116)
Pension and other postretirement actuarial items i 65  i 113 
Other comprehensive loss( i 8,414)( i 2,003)
Comprehensive income i 1,734  i 3,446 
Less: comprehensive income attributable to noncontrolling interests i 30  i 70 
Comprehensive income attributable to VPG stockholders$ i 1,704 $ i 3,376 


































See accompanying notes.
-7-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Comprehensive Income (Loss)
(Unaudited - In thousands)
Nine fiscal months ended
October 1, 2022October 2, 2021
Net earnings$ i 27,712 $ i 14,455 
Other comprehensive income (loss):
Foreign currency translation adjustment( i 18,214)( i 3,309)
Pension and other postretirement actuarial items, net of tax i 227  i 431 
Other comprehensive loss( i 17,987)( i 2,878)
Comprehensive income i 9,725  i 11,577 
Less: comprehensive income attributable to noncontrolling interests i 483  i 195 
Comprehensive income attributable to VPG stockholders$ i 9,242 $ i 11,382 
See accompanying notes.
-8-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Nine fiscal months ended
October 1, 2022October 2, 2021
Operating activities
Net earnings$ i 27,712 $ i 14,455 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Impairment of goodwill and indefinite-lived intangibles i   i 1,223 
Depreciation and amortization i 11,519  i 11,033 
Gain on sale of property and equipment( i 182)( i 35)
Reclassification of foreign currency translation adjustment related to disposal of subsidiary i 191  i  
Share-based compensation expense i 1,583  i 1,328 
Inventory write-offs for obsolescence i 1,451  i 1,613 
Deferred income taxes( i 72)( i 1,412)
Other( i 4,319)( i 2,022)
Net changes in operating assets and liabilities:
Accounts receivable, net( i 2,077)( i 3,078)
Inventories, net( i 14,151)( i 9,624)
Prepaid expenses and other current assets( i 984)( i 3,591)
Trade accounts payable( i 1,459) i 3,695 
Other current liabilities i 1,303  i 4,496 
Net cash provided by operating activities i 20,515  i 18,081 
Investing activities
Capital expenditures( i 15,545)( i 11,191)
Proceeds from sale of property and equipment i 397  i 181 
Purchase of business, net of cash acquired i  ( i 47,216)
Net cash used in investing activities( i 15,148)( i 58,226)
Financing activities
Principal payments on long-term debt i  ( i 18)
Proceeds from revolving facility i   i 20,000 
Purchase of treasury stock( i 1,061) i  
Distributions to noncontrolling interests( i 366)( i 244)
Payments of employee taxes on certain share-based arrangements( i 435)( i 853)
Net cash (used in) provided by financing activities( i 1,862) i 18,885 
Effect of exchange rate changes on cash and cash equivalents( i 7,930)( i 1,634)
Decrease in cash and cash equivalents( i 4,425)( i 22,894)
Cash and cash equivalents at beginning of period i 84,335  i 98,438 
Cash and cash equivalents at end of period$ i 79,910 $ i 75,544 
Supplemental disclosure of investing transactions:
Capital expenditures purchased$( i 13,198)$( i 9,368)
Capital expenditures accrued but not yet paid$ i 720 $ i 738 
See accompanying notes.
-9-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Equity
(Unaudited - In thousands, except share amounts)
Fiscal quarter ended 
 
October 1, 2022
Common
Stock
Class B
Convertible
Common Stock
Treasury StockCapital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total VPG Inc.
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
Balance at July 2, 2022$ i 1,325 $ i 103 $( i 8,765)$ i 199,749 $ i 137,407 $( i 44,581)$ i 285,238 $ i 112 $ i 285,350 
Net earnings     i 10,118   i 10,118  i 30  i 10,148 
Other comprehensive loss     ( i 8,414)( i 8,414) ( i 8,414)
Share-based compensation expense
    i 559    i 559   i 559 
Purchase of treasury stock. ( i 32,601 shares)
  ( i 1,061)   ( i 1,061) ( i 1,061)
Distributions to noncontrolling interests       ( i 82)( i 82)
Balance at October 1, 2022$ i 1,325 $ i 103 $( i 9,826)$ i 200,308 $ i 147,525 $( i 52,995)$ i 286,440 $ i 60 $ i 286,500 
Fiscal quarter ended 
 
October 2, 2021
Common
Stock
Class B
Convertible
Common Stock
Treasury StockCapital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total VPG Inc.
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
Balance at July 3, 2021$ i 1,322 $ i 103 $( i 8,765)$ i 197,856 $ i 108,956 $( i 33,546)$ i 265,926 $( i 8)$ i 265,918 
Net earnings
— — — —  i 5,379 —  i 5,379  i 70  i 5,449 
Other comprehensive income— — — — — ( i 2,003)( i 2,003)— ( i 2,003)
Share-based compensation expense
— — —  i 386 — —  i 386 —  i 386 
Restricted stock issuances ( i 465 shares)
 i  — — ( i 7)— — ( i 7)— ( i 7)
Distribution to noncontrolling interests— — — — — — — ( i 77)( i 77)
Balance at October 2, 2021$ i 1,322 $ i 103 $( i 8,765)$ i 198,235 $ i 114,335 $( i 35,549)$ i 269,681 $( i 15)$ i 269,666 
See accompanying notes.
-10-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Equity
(Unaudited - In thousands, except share amounts)
Nine Fiscal Months Ended October 1, 2022
Common
Stock
Class B
Convertible
Common Stock
Treasury StockCapital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total VPG, Inc.
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2021$ i 1,322 $ i 103 $( i 8,765)$ i 199,151 $ i 120,296 $( i 35,008)$ i 277,099 $( i 57)$ i 277,042 
Net earnings     i 27,229   i 27,229  i 483  i 27,712 
Other comprehensive loss
     ( i 17,987)( i 17,987) ( i 17,987)
Share-based compensation expense
    i 1,583    i 1,583   i 1,583 
Restricted stock issuances ( i 28,368 shares)
 i 3   ( i 426)  ( i 423) ( i 423)
Purchase of treasury stock ( i 32,601 shares)
  ( i 1,061)   ( i 1,061) ( i 1,061)
Distributions to noncontrolling interests       ( i 366)( i 366)
Balance at October 1, 2022$ i 1,325 $ i 103 $( i 9,826)$ i 200,308 $ i 147,525 $( i 52,995)$ i 286,440 $ i 60 $ i 286,500 
Nine Fiscal Months Ended October 2, 2021
Common
Stock
Class B
Convertible
Common Stock
Treasury StockCapital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total VPG, Inc.
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2020$ i 1,317 $ i 103 $( i 8,765)$ i 197,764 $ i 100,075 $( i 32,671)$ i 257,823 $ i 34 $ i 257,857 
Net earnings
— — — —  i 14,260 —  i 14,260  i 195  i 14,455 
Other comprehensive loss— — — — — ( i 2,878)( i 2,878)— ( i 2,878)
Share-based compensation expense
— — —  i 1,328 — —  i 1,328 —  i 1,328 
Restricted stock issuances ( i 50,781 shares)
 i 5 — — ( i 857)— — ( i 852)— ( i 852)
Distribution to noncontrolling interests— — — — — — — ( i 244)( i 244)
Balance at October 2, 2021$ i 1,322 $ i 103 $( i 8,765)$ i 198,235 $ i 114,335 $( i 35,549)$ i 269,681 $( i 15)$ i 269,666 
See accompanying notes.
-11-


Vishay Precision Group, Inc.
Notes to Unaudited Consolidated Condensed Financial Statements
Note 1 –  i Basis of Presentation
Background
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.
Interim Financial Statements
These unaudited consolidated condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements and therefore do not include all information and footnotes necessary for the presentation of financial position, results of operations, and cash flows required by accounting principles generally accepted in the United States for complete financial statements. The information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations, and cash flows for the interim periods presented. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of December 31, 2021 and 2020 and for each of the three years in the period ended December 31, 2021, included in VPG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 4, 2022. 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.  i  i VPG reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first quarter, which always begins on January 1, and the fourth quarter, which always ends on December 31. The four fiscal quarters in 2022 and 2021 end on the following dates:  / 
20222021
Quarter 1April 2,April 3,
Quarter 2July 2,July 3,
Quarter 3October 1,October 2,
Quarter 4December 31,December 31,

Note 2 –  i Revenues
Revenue Recognition

 i The following table disaggregates net revenue by geographic region from contracts with customers based on net revenues generated by subsidiaries within that geographic location (in thousands):
-12-

Note 2 – Revenues (continued)

Fiscal quarter ended 
 
October 1, 2022
Fiscal quarter ended 
 
October 2, 2021
SensorsWeighing SolutionsMeasurement SystemsTotalSensorsWeighing SolutionsMeasurement SystemsTotal
United States$ i 12,992 $ i 14,671 $ i 13,065 $ i 40,728 $ i 9,640 $ i 12,729 $ i 13,914 $ i 36,283 
United Kingdom i 752  i 4,090  i 55  i 4,897  i 746  i 4,366  i 129  i 5,241 
Other Europe i 7,740  i 8,714  i 986  i 17,440  i 6,063  i 9,681  i 1,194  i 16,938 
Israel i 7,447  i 101  i   i 7,548  i 4,711  i 232  i   i 4,943 
Asia i 8,948  i 3,815  i 2,462  i 15,225  i 9,561  i 3,668  i 1,933  i 15,162 
Canada i   i 8  i 4,211  i 4,219  i   i   i 3,407  i 3,407 
Total$ i 37,879 $ i 31,399 $ i 20,779 $ i 90,057 $ i 30,721 $ i 30,676 $ i 20,577 $ i 81,974 
Nine Fiscal Months Ended October 1, 2022Nine Fiscal Months Ended October 2, 2021
SensorsWeighing SolutionsMeasurement SystemsTotalSensorsWeighing SolutionsMeasurement SystemsTotal
United States$ i 39,467 $ i 41,212 $ i 34,838 $ i 115,517 $ i 28,783 $ i 38,241 $ i 24,771 $ i 91,795 
United Kingdom i 2,562  i 12,283  i 514  i 15,359  i 2,350  i 13,141  i 525  i 16,016 
Other Europe i 23,556  i 28,065  i 3,985  i 55,606  i 19,640  i 29,511  i 1,916  i 51,067 
Israel i 22,828  i 401  i   i 23,229  i 16,436  i 623  i   i 17,059 
Asia i 27,496  i 10,657  i 4,283  i 42,436  i 26,503  i 11,794  i 3,815  i 42,112 
Canada i   i 8  i 14,185  i 14,193  i   i 9  i 9,844  i 9,853 
Total$ i 115,909 $ i 92,626 $ i 57,805 $ i 266,340 $ i 93,712 $ i 93,319 $ i 40,871 $ i 227,902 

The following table disaggregates net revenue from contracts with customers by market sector (in thousands).
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Test & Measurement$ i 20,659 $ i 15,883 $ i 60,115 $ i 46,578 
Avionics, Military & Space i 6,523  i 7,542  i 21,563  i 19,444 
Transportation i 13,912  i 13,668  i 41,061  i 35,152 
Other Markets i 20,110  i 17,453  i 59,295  i 52,487 
Industrial Weighing i 12,473  i 12,254  i 38,626  i 36,301 
General Industrial i 4,981  i 4,069  i 16,172  i 12,324 
Steel i 11,399  i 11,105  i 29,508  i 25,616 
Total$ i 90,057 $ i 81,974 $ i 266,340 $ i 227,902 

Contract Assets & Liabilities

Contract assets are established when revenues are recognized prior to a contractual payment due from the customer. When a payment becomes due based on the contract terms, the Company will reduce the contract asset and record a receivable. Contract liabilities are deferred revenues that are recorded when cash payments are received or due in advance of our performance obligations. Our payment terms vary by the type and location of the products offered. The term between invoicing and when payment is due is not significant.

 i The outstanding contract assets and liability accounts were as follows (in thousands):
-13-

Note 2 – Revenues (continued)

Contract AssetContract Liability
Unbilled RevenueAccrued Customer Advances
Balance at December 31, 2021$ i 3,570 $ i 4,765 
Balance at October 1, 2022 i 3,621  i 8,867 
Increase$ i 51 $ i 4,102 
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 $ i 3.2 million.

Note 3 -  i 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 $ i 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.  i The following table summarizes the final fair values assigned to the assets and liabilities of DTS as of June 1, 2021 (in thousands):

June 1, 2021
Working capital$ i 12,494 
Property and equipment i 1,209 
Deferred income tax liability( i 6,215)
Intangible assets:
Acquired technology i 13,167 
Customer relationships i 8,135 
Trade names i 2,393 
Total intangible assets i 23,695 
Fair value of acquired identifiable assets i 31,183 
Purchase price$ i 47,216 
Goodwill$ i 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  i  i 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 $ i 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 $ i 7.9 million from DTS and a net income of $ i 0.2 million from DTS. DTS results include amortization of the inventory step-up of $ i 0.3 million for the fiscal quarter ended October 1, 2022, and amortization of intangible assets of $ i 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 $ i 22.5 million from DTS and a net loss of $ i 0.3 million from DTS. DTS results include amortization of the inventory step-up of $ i 1.3 million and amortization of intangible assets of $ i 1.1 million for the nine fiscal months ended October 1, 2022.
 i 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:

-14-


Nine fiscal months ended
October 2, 2021
Pro forma net revenues
$ i 241,138 
Pro forma net earnings attributable to VPG stockholders
$ i 17,641 
Pro forma basic earnings per share attributable to VPG stockholders
$ i 1.30 
Pro forma diluted earnings per share attributable to VPG stockholders
$ i 1.29 


Note 4 –  i Goodwill
The Company tests the goodwill in each of its goodwill reporting units for impairment at least annually, as of the first day of its fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have been incurred.

 i 
The change in the carrying amount of goodwill by segment is as follows (in thousands):
TotalMeasurement SystemsWeighing Solutions
KELK AcquisitionDSI AcquisitionDTS AcquisitionStress-Tek Acquisition
Balance at December 31, 2021$ i 45,830 $ i 6,706 $ i 16,910 $ i 15,903 $ i 6,311 
Adjustment to goodwill acquired i 130 — —  i 130 — 
Foreign currency translation adjustment( i 500)( i 446)( i  i 54 / )— — 
Balance at October 1, 2022$ i 45,460 $ i 6,260 $ i 16,856 $ i 16,033 $ i 6,311 
 / 

Note 5 –  i Leases
The Company primarily leases office and manufacturing facilities in addition to vehicles, which have remaining terms of less than  i one year to  i fourteen years. The Company has no finance leases.
 i 
Leases recorded on the balance sheet consist of the following (in thousands):
LeasesOctober 1, 2022December 31, 2021
 Assets
 Operating lease right of use asset$ i 24,737 $ i 27,764 
 Liabilities
 Operating lease - current$ i 4,119 $ i 4,610 
 Operating lease - non-current$ i 20,422 $ i 25,140 
 / 
 i 
Other information related to lease term and discount rate is as follows:
October 1, 2022
 Operating leases weighted average remaining lease term (in years) i 7.94 years
 Operating leases weighted average discount rate i 3.12 %
 / 

 i The components of lease expense are as follows (in thousands):
-15-

Note 5 - Leases (continued)

Fiscal quarter endedNine Fiscal Months Ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Operating lease cost$ i 1,267 $ i 1,407 $ i 3,876 $ i 3,847 
Short-term lease cost i 30  i 30  i 72  i 98 
Sublease income( i 104)( i 78)( i 321)( i 106)
Total net lease cost$ i 1,193 $ i 1,359 $ i 3,627 $ i 3,839 

Right of use assets obtained in exchange for new operating lease liability during 2022 were $ i 0.7 million. The Company paid $ i 3.9 million and $ i 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.
 i 
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)$ i 1,172 
2023 i 4,432 
2024 i 3,809 
2025 i 3,223 
2026 i 2,886 
Thereafter i 12,123 
Total future minimum lease payments$ i 27,645 
 Less: amount representing interest( i 3,104)
 Present value of future minimum lease payments$ i 24,541 
 / 
Note 6 –  i Income Taxes
VPG calculates the tax provision for interim periods using an estimated annual effective tax rate methodology based on projected full-year pre-tax earnings among the taxing jurisdictions in which we operate with adjustments for discrete items. The effective tax rate for the fiscal quarter ended October 1, 2022 was  i 18.6% compared to  i 23.4% for the fiscal quarter ended October 2, 2021. The effective tax rate for the nine fiscal months ended October 1, 2022 was  i 19.4% compared to  i 20.3% for the nine fiscal months ended October 2, 2021.
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. Each jurisdiction establishes rules that set forth the years which are subject to examination by its tax authorities. While the Company believes the tax positions taken on its tax returns for each jurisdiction are supportable, they may still be challenged by the jurisdiction's tax authorities. In anticipation of such challenges, the Company has established reserves for tax-related uncertainties. These liabilities are based on the Company’s best estimate of the potential tax exposures in each respective jurisdiction. It may take a number of years for a final tax liability in a jurisdiction to be determined, particularly in the event of an audit. If an uncertain matter is determined favorably, there could be a reduction in the Company’s tax expense. An unfavorable determination could increase tax expense and could require a cash payment, including interest and penalties.
Note 7 –  i Long-Term Debt
 i 
Long-term debt consists of the following (in thousands):
October 1, 2022December 31, 2021
2020 Credit Agreement - Revolving Facility$ i 61,000 $ i 61,000 
Deferred financing costs( i 220)( i 286)
Total long-term debt$ i 60,780 $ i 60,714 
 / 

-16-


Note 8 –  i Accumulated Other Comprehensive Income (Loss)
 i 
The components of accumulated other comprehensive income (loss), net of tax, consist of the following (in thousands):
Foreign Currency Translation AdjustmentPension
and Other
Postretirement
Actuarial Items
Total
Balance at January 1, 2022$( i 30,276)$( i 4,732)$( i 35,008)
Other comprehensive loss before reclassifications( i 18,405) i  ( i 18,405)
Amounts reclassified from accumulated other comprehensive income i 191  i 227  i 418 
Balance at October 1, 2022$( i 48,490)$( i 4,505)$( i 52,995)
Foreign Currency Translation AdjustmentPension
and Other
Postretirement
Actuarial Items
Total
Balance at January 1, 2021$( i 25,591)$( i 7,080)$( i 32,671)
Other comprehensive loss before reclassifications( i 3,309) i  ( i 3,309)
Amounts reclassified from accumulated other comprehensive income i   i 431  i 431 
Balance at October 2, 2021$( i 28,900)$( i 6,649)$( i 35,549)
 / 
Reclassification of foreign currency translation adjustment for the loss on liquidation of subsidiaries is included in other income and expense other (see Note 13). Reclassifications of pension and other postretirement actuarial items out of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost (see Note 9).
Note 9 –  i Pension and Other Postretirement Benefits
Employees of VPG participate in various defined benefit pension and other postretirement benefit ("OPEB") plans.  i 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):
-17-

Note 9 - Pension and Other Postretirement Benefits ( continued)
Fiscal quarter ended 
 
October 1, 2022
Fiscal quarter ended 
 
October 2, 2021
Pension
Plans
OPEB
Plans
Pension
Plans
OPEB
Plans
Net service cost$ i 79 $ i 7 $ i 96 $ i 9 
Interest cost i 117  i 17  i 102  i 17 
Expected return on plan assets( i 116) i ( i 97) i  
Amortization of actuarial losses i 69  i 1  i 102  i 5 
Net periodic benefit cost$ i 149 $ i 25 $ i 203 $ i 31 

Nine fiscal months ended October 1, 2022Nine fiscal months ended October 2, 2021
Pension
Plans
OPEB
Plans
Pension
Plans
OPEB
Plans
Net service cost$ i 244 $ i 21 $ i 289 $ i 27 
Interest cost i 360  i 51  i 308  i 51 
Expected return on plan assets( i 358) i  ( i 291) i  
Amortization of actuarial losses i 215  i 3  i 306  i 15 
Net periodic benefit cost$ i 461 $ i 75 $ i 612 $ i 93 

Note 10 –  i Share-Based Compensation
On May 26, 2022, the 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  i 608,000 shares of common stock, which includes approximately  i 308,000 shares that were reserved for issuance under the previous plan and up to an additional  i 197,685 additional shares underlying awards outstanding under the previous plan. At October 1, 2022, the Company had reserved  i 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. 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  i three executive officers were granted annual equity awards in the form of RSUs, of which  i 50% are performance-based. The awards have an aggregate target grant-date fair value of $ i 1.5 million and were comprised of  i 47,831 RSUs.  i Fifty percent of these awards will vest on January 1, 2025, subject to the executives’ continued employment. The performance-based portion of the RSUs will also vest on January 1, 2025, subject to the executives' continued employment and the satisfaction of certain performance objectives relating to  i three-year cumulative “adjusted free cash flow” and "net earnings goals", each weighted equally.
On March 9, 2022, certain non-executive VPG employees were granted annual equity awards in the form of RSUs. Certain employees received awards, of which  i 75% are performance-based and certain employees received awards of which  i 50% are performance-based. The awards have an aggregate grant-date fair value of $ i 0.5 million and were comprised of  i 16,324 RSUs. The non-performance portion of these awards ( i twenty-five percent for certain employees and  i fifty percent for certain employees) will vest on January 1, 2025 subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2025, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to  i 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  i 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.
-18-

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  i 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 $ i 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  i 50% are performance-based. The award has an aggregate grant-date fair value of $ i 0.04 million and was comprised of  i 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  i three-year cumulative earnings and cash flow goals, each weighted equally.

Vesting of equity awards is subject to acceleration under certain circumstances.
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. VPG determines compensation cost for RSUs based on the grant-date fair value of the underlying common stock. The Company recognizes compensation cost for RSUs that are expected to vest and for which performance criteria are expected to be met.  i The following table summarizes share-based compensation expense recognized (in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Restricted stock units$ i 559 $ i 386 $ i 1,583 $ i 1,328 
Note 11 –  i Segment Information
VPG reports in  i three product segments: 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.
The chief operating decision maker ("CODM") is our chief executive officer. The CODM evaluates each operating segment's performance. The evaluation of the segment's performance is based on multiple performance measures including gross profits, revenues, and operating income, exclusive of certain items. 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.
 i 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):
-19-

Note 11 - Segment Information (continued)
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Net revenues:
Sensors$ i 37,879 $ i 30,721 $ i 115,909 $ i 93,712 
Weighing Solutions i 31,399  i 30,676  i 92,626  i 93,319 
Measurement Systems i 20,779  i 20,577  i 57,805  i 40,871 
Total$ i 90,057 $ i 81,974 $ i 266,340 $ i 227,902 
Gross profit:
Sensors$ i 15,324 $ i 9,568 $ i 47,441 $ i 34,521 
Weighing Solutions i 10,470  i 11,422  i 32,134  i 34,988 
Measurement Systems i 11,526  i 10,855  i 30,329  i 20,756 
Total$ i 37,320 $ i 31,845 $ i 109,904 $ i 90,265 
Reconciliation of segment operating income to consolidated results:
Sensors$ i 10,703 $ i 5,070 $ i 32,721 $ i 20,217 
Weighing Solutions i 5,392  i 5,917  i 15,783  i 17,831 
Measurement Systems i 4,876  i 4,659  i 10,350  i 7,046 
Unallocated G&A expenses( i 8,922)( i 8,381)( i 26,774)( i 24,045)
Acquisition costs i   i   i  ( i 1,198)
Impairment of goodwill and indefinite-lived intangibles i   i   i  ( i 1,223)
Restructuring costs( i 165) i  ( i 1,330) i  
Operating income$ i 11,884 $ i 7,265 $ i 30,750 $ i 18,628 
Acquisition costs:
Measurement Systems i   i   i  ( i 1,198)
$ i  $ i  $ i  $( i 1,198)
Impairment of goodwill and indefinite-lived intangibles:
Measurement Systems i   i   i  ( i 1,223)
$ i  $ i  $ i  $( i 1,223)
Restructuring costs:
Sensors$( i 165)$ i  $( i 1,272)$ i  
Measurement Systems i   i  ( i 58) i  
$( i 165)$ i  $( i 1,330)$ i  
Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products. The table below summarizes intersegment sales (in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Sensors to Weighing Solutions$ i 542 $ i 824 $ i 1,364 $ i 2,730 
Sensors to Measurement Systems i 32  i 51  i 191  i 66 
-20-


Note 12 –  i Earnings Per Share
 i 
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 endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Numerator:
Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders$ i 10,118 $ i 5,379 $ i 27,229 $ i 14,260 
Denominator:
Denominator for basic earnings per share:
Weighted average shares i 13,649  i 13,626  i 13,645  i 13,612 
Effect of dilutive securities:
Restricted stock units i 59  i 38  i 47  i 35 
Dilutive potential common shares i 59  i 38  i 47  i 35 
Denominator for diluted earnings per share:
Adjusted weighted average shares i 13,708  i 13,664  i 13,692  i 13,647 
Basic earnings per share attributable to VPG stockholders
$ i 0.74 $ i 0.39 $ i 2.00 $ i 1.05 
Diluted earnings per share attributable to VPG stockholders
$ i 0.74 $ i 0.39 $ i 1.99 $ i 1.04 
 / 
Note 13 –  i Additional Financial Statement Information
Other Income (Expense) Other
 i 
The caption “Other” on the consolidated condensed statements of operations consists of the following (in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Foreign currency exchange gain (loss)$ i 1,261 $( i 38)$ i 5,195 $ i 522 
Interest income i 91  i 151  i 235  i 216 
Pension expense( i 81)( i 151)( i 261)( i 431)
Other( i 48) i 212 ( i 163) i 114 
$ i 1,223 $ i 174 $ i 5,006 $ i 421 
 / 

-21-


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 $ i 0.2 million loss on the liquidation of  i two of the Company's European subsidiaries.
Note 14 –  i Fair Value Measurements
ASC Topic 820, Fair Value Measurement, establishes a valuation hierarchy of the inputs used to measure fair value. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the Company’s own assumptions.
An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
 i 
The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis (in thousands):
Fair value measurements at reporting date using:
Total
Fair Value
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
October 1, 2022
Assets
Assets held in rabbi trusts$ i 5,282 $ i 79 $ i 5,203 $ i  
December 31, 2021
Assets
Assets held in rabbi trusts$ i 6,158 $ i 49 $ i 6,109 $ i  
 / 
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. 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 of long-term debt is considered a Level 2 measurement within the fair value hierarchy. The Company’s financial instruments include cash and cash equivalents, accounts receivable, short-term notes payable, and accounts payable. The carrying amounts for these financial instruments reported in the consolidated condensed balance sheets approximate their fair values.
Note 15 –  i Restructuring Costs
Restructuring costs reflect the cost reduction programs implemented by the Company. 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
-22-


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 $ i 0.2 million and $ i 0.0 million of restructuring costs during the fiscal quarter ended October 1, 2022 and October 2, 2021, respectively and $ i 1.3 million and $ i 0.0 million of restructuring costs during the nine fiscal months ended October 1, 2022 and October 2, 2021, 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.
 i 
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):
Balance at December 31, 2021$ i  
Restructuring charges in 2022 i 1,330 
Cash payments( i 1,338)
Foreign currency translation i 8 
Balance at October 1, 2022$ i  
 / 
Note 16 –  i Stockholder's Equity

On August 8, 2022, the Board of Directors (the “Board”) of the Company authorized the repurchase of up to  i 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  i 32,601 shares of its common stock under the Stock Repurchase Plan.

-23-


Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
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.
Overview of Financial Results
VPG reports in three product segments: 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 October 1, 2022 were $90.1 million versus $82.0 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the fiscal quarter ended October 1, 2022 were $10.1 million, or $0.74 per diluted share, versus $5.4 million, or $0.39 per diluted share, for the comparable prior year period.
Net revenues for the nine fiscal months ended October 1, 2022 were $266.3 million versus $227.9 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the nine fiscal months ended October 1, 2022 were $27.2 million, or $1.99 per diluted share, versus $14.3 million, or $1.04 per diluted share, for the comparable prior year period.
The results of operations for the fiscal quarter and nine fiscal months ended October 1, 2022 and October 2, 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. 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 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. In addition, the Company has historically provided these or similar non-GAAP measures and understands that some investors and financial analysts find this information helpful in analyzing the Company’s performance and in comparing the Company’s financial performance to that of its peer companies and competitors. Management believes that the Company’s non-GAAP measures are regarded as supplemental to its GAAP financial results.
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Gross ProfitOperating IncomeNet Earnings Attributable to VPG StockholdersDiluted Earnings Per share
Three months ended October 1, 2022October 2, 2021October 1, 2022October 2, 2021October 1, 2022October 2, 2021October 1, 2022October 2, 2021
As reported - GAAP$37,320 $31,845 $11,884 $7,265 $10,118 $5,379 $0.74 $0.39 
As reported - GAAP Margins41.4 %38.8 %13.2 %8.9 %
Acquisition purchase accounting adjustments (a)260 1,329 260 1,329 260 1,329 0.02 0.10 
COVID-19 impact (b) 111  111  111  0.01 
Start-up costs (c) 970  970  970  0.07 
Restructuring costs— 165 — 165 — 0.01 — 
Foreign currency exchange (gain)/loss (d)— — (1,261)38 (0.09)0.01 
Less: Tax effect of reconciling items and discrete tax items— — (194)754 (0.01)0.06 
As Adjusted - Non GAAP$37,580 $34,255 $12,309 $9,675 $9,476 $7,073 $0.69 $0.52 
As Adjusted - Non GAAP Margins41.7 %41.8 %13.7 %11.8 %
Gross ProfitOperating IncomeNet Earnings Attributable to VPG StockholdersDiluted Earnings Per share
Nine fiscal months endedOctober 1, 2022October 2, 2021October 1, 2022October 2, 2021October 1, 2022October 2, 2021October 1, 2022October 2, 2021
As reported - GAAP109,904 90,265 30,750 18,628 $27,229 $14,260 $1.99 $1.04 
As reported - GAAP Margins41.3 %39.6 %11.5 %8.2 %
Acquisition purchase accounting adjustments (a)1,310 2,259 1,310 2,259 1,310 2,259 0.10 0.17 
Acquisition costs—  1,198  1,198  0.09 
COVID-19 impact (b)138 (66)138 (574)138 (574)0.01 (0.04)
Start-up costs (c)
150 2,258 150 2,258 150 2,258 0.01 0.17 
Impairment of goodwill and indefinite-lived intangibles— —  1,223  1,223  0.09 
Restructuring costs1,330 — 1,330 — 0.10 — 
Foreign currency exchange (gain)/loss (d)
(5,195)(523)(0.38)(0.04)
Less: Tax effect of reconciling items and discrete tax items(496)2,160 (0.03)0.16 
As Adjusted - Non GAAP$111,502 $94,716 $33,678 $24,992 $25,458 $17,941 $1.86 $1.32 
As Adjusted - Non GAAP Margins41.9 %41.6 %12.6 %11.0 %
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Three months ended Nine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Net earnings attributable to VPG stockholders$10,118 $5,379 $27,341 $14,260 
Interest Expense636 328 1,393 906 
Income tax expense2,323 1,662 6,539 3,688 
Depreciation2,937 2,955 8,622 8,691 
Amortization960 970 2,897 2,342 
EBITDA16,974 $11,294 46,792 $29,887 
EBITDA MARGIN18.8 %13.8 %17.6 %13.1 %
Impairment of goodwill and indefinite-lived intangibles —  1,223 
Acquisition purchase accounting adjustments (a)260 1,329 1,310 2,259 
Acquisition costs —  1,198 
Restructuring costs165 — 1,330 — 
COVID-19 impact (b) 111 138 (574)
Start-up costs (c) 970 150 2,258 
Foreign currency exchange (gain)/loss (d)(1,261)38 (5,195)(523)
ADJUSTED EBITDA$16,138 $13,742 $44,525 $21,986 
ADJUSTED EBITDA MARGIN17.9 %16.8 %16.7 %9.6 %

(a)     Acquisition purchase accounting adjustments include fair market value adjustments associated with inventory recorded as a component of costs of products sold.
(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.
(c)    Start-up costs in 2022 and 2021 are associated with the ramp up of our new manufacturing facility in Israel.
(d)    Impact of foreign currency exchange rates on assets and liabilities.
Financial Metrics
We utilize several financial measures and metrics to evaluate performance and assess the future direction of our business. These key financial measures and metrics include net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover.
Gross profit margin is computed as gross profit as a percentage of net revenues. Gross profit is generally net revenues less costs of products sold, but could also include certain other period costs. Gross profit margin is a function of net revenues, but also reflects our cost-cutting programs and our ability to contain fixed costs.
End-of-period backlog is one indicator of potential future sales. We include in our backlog only open orders that have been released by the customer for shipment in the next twelve months. If demand falls below customers’ forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty. Therefore, backlog is not necessarily indicative of the results expected for future periods.
Another important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period compared with the amount of product shipped during that period. A book-to-bill ratio that is greater than one indicates that revenues may increase in future periods. Conversely, a book-to-bill ratio that is less than one is an indicator of lower demand and may foretell declining sales. The book-to-bill ratio is also impacted by the timing of orders, particularly from our project-based product lines.
We focus on inventory turnover as a measure of how well we manage our inventory. We define inventory turnover for a financial reporting period as our costs of products sold for the four fiscal quarters ending on the last day of the reporting period divided by our average inventory (computed using each quarter-end balance) for this same period. A higher level of inventory turnover reflects more efficient use of our capital.
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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 2021 through the third quarter of 2022 (dollars in thousands):
3rd Quarter4th Quarter1st Quarter2nd Quarter3rd Quarter
20212021202220222022
Net revenues$81,974 $90,017 $87,665 $88,618 $90,057 
Gross profit margin38.8 %38.7 %40.2 %42.1 %41.4 %
End-of-period backlog$146,700 $150,500 $170,600 $171,400 $171,700 
Book-to-bill ratio1.21 1.06 1.25 1.08 1.08 
Inventory turnover2.55 2.82 2.69 2.52 2.47 
3rd Quarter4th Quarter1st Quarter2nd Quarter3rd Quarter
20212021202220222022
Sensors
Net revenues$30,721 $34,149 $37,750 $40,280 $37,879 
Gross profit margin31.1 %32.1 %37.8 %44.3 %40.5 %
End-of-period backlog$70,100 $72,900 $81,300 $84,200 $80,600 
Book-to-bill ratio1.37 1.11 1.27 1.17 0.99 
Inventory turnover3.14 3.53 3.54 3.20 3.04 
Weighing Solutions
Net revenues$30,676 $32,071 $32,768 $28,459 $31,399 
Gross profit margin37.2 %34.0 %36.9 %33.7 %33.3 %
End-of-period backlog$42,600 $41,800 $43,600 $43,000 $43,000 
Book-to-bill ratio1.06 0.98 1.06 1.03 1.05 
Inventory turnover2.47 2.63 2.61 2.33 2.48 
Measurement Systems
Net revenues$20,577 $23,797 $17,147 $19,879 $20,779 
Gross profit margin52.8 %54.7 %51.8 %49.9 %55.5 %
End-of-period backlog$34,000 $35,800 $45,700 $44,200 $48,100 
Book-to-bill ratio1.18 1.08 1.56 0.98 1.27 
Inventory turnover1.92 2.18 1.68 1.90 1.68 
Net revenues for the third quarter of 2022 increased 1.6% from the second quarter of 2022 mainly due to increased volume in the Weighing Solutions and Measurement Systems reporting segments partially offset by decreased volume in the Sensors reporting segment. Net revenues increased 9.9% from the third quarter of 2021 with increased volume primarily from the Sensors reporting segment.
Net revenues in the Sensors reporting segment decreased 6.0% compared to the second quarter of 2022 and increased 23.3% from the third quarter of 2021. Excluding the unfavorable impact of foreign currency exchange rates, revenue increased 35.1% from the third quarter of 2021. Excluding the unfavorable impact of foreign currency exchange rates, revenue decreased 4.2% from the second quarter of 2022. Sequentially, the decrease primarily reflected lower advanced sensors revenue in Other markets (mainly for consumer applications) and lower revenue of precision resistors in the Test and Measurements market. The year-over-year increase in revenues was primarily attributable to higher sales of precision resistors in the Test and
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Measurements market and higher revenue of our advanced sensors products primarily in Other markets (mainly for consumer applications).
Net revenues in the Weighing Solutions reporting segment increased 10.3% from the second quarter of 2022 and increased 2.4% from the third quarter of 2021. The year-over-year and sequential increases in revenues were primarily attributable to increases in our Other markets for precision agriculture and construction applications.
Net revenues in the Measurement Systems reporting segment increased 4.5% from the second quarter of 2022 and increased 1.0% from the third quarter of 2021. Sequentially, the increase in revenue was primarily due to the higher revenue of Dynamic Systems Inc. ("DSI") products in the Steel market and our Diversified Technical Systems Inc. ("DTS") products in the Transportation market. The year-over-year increase was primarily attributable to increased revenue in the Steel market.
Overall gross profit margin in the third quarter of 2022 decreased 0.7% as compared to the second quarter of 2022 and increased 2.6% from the third quarter of 2021.
Sequentially, the decrease in the gross profit margin in the Sensors and Weighing Solutions reporting segments was partially offset by an increase in the gross profit margin in the Measurement Systems reporting segments. In the Sensors reporting segment, the gross profit margins decreased sequentially due to lower volume, one-time inventory adjustments, and unfavorable foreign currency exchange rates. In the Weighing Solutions reporting segment, the sequential decrease in gross profit margins was primarily due to higher materials costs and reduction of inventories partially offset by higher volume and selling price increases. The sequential increase in the gross profit margins in the Measurement Systems reporting segment was a result of favorable product mix and higher volume.
Compared to the third quarter of 2021, the Sensors and Measurement Systems reporting segments had higher gross profit margins, while the Weighing Solutions reporting segment gross profit margin was lower.
The Sensors reporting segment had a higher gross profit margin due to higher volume and selling price increases partially offset by unfavorable foreign currency exchange rates and wage increases. In the Measurement Systems reporting segment, the gross profit margin was higher as compared to the third quarter of 2021 primarily due to lower purchase accounting adjustments related to the DTS acquisition, partially offset by unfavorable product mix. The Weighing Solutions reporting segment decrease in gross profit margin as compared to 2021 was primarily due to higher materials costs, unfavorable product mix, unfavorable foreign currency exchange rates, and reduction of inventories, partially offset by higher volume and selling price increases.
Optimize Core Competence
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; continuing to innovate in product performance and design; and refining our manufacturing processes.
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. Our development engineering team is also responsible for creating new processes to further automate manufacturing, and improve productivity and quality. 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 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 improved efficiencies or available tax and other government-sponsored incentives. In the past several years, we incurred restructuring expense related to closing and
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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 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.
Research and Development
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 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.
Cost Management
To be successful, we believe we must seek new strategies for controlling operating costs. Through automation in our plants, we believe we can optimize our capital and labor resources in production, inventory management, quality control, and warehousing. We are in the process of moving some manufacturing to more cost effective locations. This may enable us to become more efficient and cost competitive, and also maintain tighter controls of the operation.
Production transfers, facility consolidations, and other long-term cost-cutting measures require us to initially incur significant severance and other exit costs. We are realizing the benefits of our restructuring through lower labor costs and other operating expenses, and expect to continue reaping these benefits in future periods. However, these programs to improve our profitability also involve certain risks which could materially impact our future operating results, as further detailed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 4, 2022.
We are evaluating plans to further reduce our costs by consolidating additional manufacturing operations. These plans may require us to incur restructuring and severance costs in future periods. While streamlining and reducing fixed overhead, we are exercising caution so that we will not negatively impact our customer service or our ability to further develop products and processes.
Goodwill
We test the goodwill in each of our reporting units for impairment at least annually, as of the first day of our fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have been incurred. Determining whether to test goodwill for impairment, and the application of goodwill impairment tests, require significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Changes in these estimates could materially affect the determination of fair value for each reporting unit. A slowdown or deferral of orders for a business, with which we have goodwill associated, could impact our valuation of that goodwill.
Foreign Currency
We are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functional currencies of certain subsidiaries. U.S. GAAP requires that entities identify the “functional currency” of each of their subsidiaries and measure all elements of the financial statements in that functional currency. A subsidiary’s functional currency is the currency of the primary economic environment in which it operates. In cases where a subsidiary is relatively self-contained within a particular country, the local currency is generally deemed to be the functional currency. However, a foreign subsidiary that is a direct and integral component or extension of the parent company’s operations generally would have the parent company’s currency as its functional currency. We have subsidiaries that fall into each of these categories.
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Foreign Subsidiaries which use the Local Currency as the Functional Currency
Our operations in Europe, Canada, and certain locations in Asia primarily generate and expend cash using local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. For those subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated condensed balance sheets have been translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the results of operations and are reported as a separate component of equity.
For those subsidiaries where the local currency is the functional currency, revenues and expenses are translated at the average exchange rate for the period. While the translation of revenues and expenses into U.S. dollars does not directly impact the consolidated condensed statement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expenses incurred in those foreign currencies.
Foreign Subsidiaries which use the U.S. Dollar as the Functional Currency
Our operations in Israel and certain locations in Asia primarily generate cash in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the results of operations. While these subsidiaries transact most business in U.S. dollars, they may have significant costs, particularly related to payroll, which are incurred in the local currency and significant lease assets and liabilities.
Effects of Foreign Currency Exchange Rate on Operations
For the fiscal quarter ended October 1, 2022, exchange rates decreased net revenues by $5.3 million, and decreased costs of products sold and selling, general, and administrative expenses by $4.2 million, when compared to the comparable prior year period.
For the nine fiscal months ended October 1, 2022, exchange rates decreased net revenues by $10.8 million, and decreased costs of products sold and selling, general, and administrative expenses by $7.7 million, when compared to the comparable prior year period.
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Results of Operations
Results of operations by reporting segments for the fiscal quarter and nine fiscal months ended October 2, 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 endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Costs of products sold58.6 %61.2 %58.7 %60.4 %
Gross profit41.4 %38.8 %41.3 %39.6 %
Selling, general, and administrative expenses28.1 %30.0 %29.2 %30.4 %
Operating income13.2 %8.9 %11.5 %8.2 %
Income before taxes13.8 %8.7 %12.9 %8.0 %
Net earnings11.3 %6.6 %10.4 %6.3 %
Net earnings attributable to VPG stockholders11.2 %6.6 %10.2 %6.3 %
Effective tax rate18.6 %23.4 %19.4 %20.3 %
Net Revenues
Net revenues were as follows (dollars in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Net revenues$90,057 $81,974 $266,340 $227,902 
Change versus comparable prior year period
$8,083 $38,438 
Percentage change versus prior year period
9.9 %16.9 %
Changes in net revenues were attributable to the following:
vs. prior year
quarter
vs. prior year-
to-date
Change attributable to:
Change in volume13.7 %14.2 %
Change in average selling prices2.9 %2.5 %
Foreign currency effects(6.7)%(4.8)%
Acquisitions0.0 %5.0 %
Net change9.9 %16.9 %
During the fiscal quarter and nine fiscal months ended October 1, 2022, net revenues increased 9.9% and 16.9%, respectively, as compared to the comparable prior year periods, with increased volume primarily from the Sensors reporting segment.
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Gross Profit Margin
Gross profit as a percentage of net revenues was as follows:
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Gross profit margin41.4 %38.8 %41.3 %39.6 %
The gross profit margin for the fiscal quarter and nine fiscal months ended October 1, 2022 increased 2.6% and 1.7%, respectively, as compared to the comparable prior year periods. For the fiscal quarter period, the Sensors and Measurement Systems reporting segments reported higher gross profit margins while the Weighing Solutions reporting segment reported lower gross profit margins when compared to the prior year period. For the nine fiscal month period, the Sensors and Measurement Systems reporting segments reported higher gross profit margins while the Weighing Solutions reporting segment reported lower gross profit margins when compared to the prior year period.
Segments
Analysis of revenues and gross profit margins for each of our reportable segments is provided below.
Sensors
Net revenues of the Sensors segment were as follows (dollars in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Net revenues$37,879 $30,721 $115,909 $93,712 
Change versus comparable prior year period
$7,158 $22,197 
Percentage change versus prior year period
23.3 %23.7 %
Changes in Sensors segment net revenues were attributable to the following:
vs. prior year
quarter
vs. prior year-
to-date
Change attributable to:
Change in volume32.1 %28.3 %
Change in average selling prices1.7 %1.9 %
Foreign currency effects(10.5)%(6.5)%
Net change23.3 %23.7 %
Net revenues increased 23.3% for the fiscal quarter ended October 1, 2022, as compared to the comparable prior year period and increased 23.7% for the nine fiscal months ended October 1, 2022, as compared to the comparable prior year period. 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 applications).
Gross profit as a percentage of net revenues for the Sensors segment was as follows:
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Gross profit margin40.5 %31.1 %40.9 %36.8 %
The gross profit margin increased 9.4% for the fiscal quarter ended October 1, 2022, when compared to the comparable prior year period due to higher volume and selling price increases partially offset by unfavorable foreign currency exchange rates and wage increases. Additionally, there were higher start-up costs associated with our new advanced sensors facility in 2021.
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The gross profit margin increased 4.1% for the nine fiscal months ended October 1, 2022 as compared to the comparable prior year period. Volume increases were partially offset by impacts from charges related to start-up costs in our new advanced sensors facility, wage increase, and labor inefficiencies.

Weighing Solutions
Net revenues of the Weighing Solutions segment were as follows (dollars in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Net revenues
$31,399 $30,676 $92,626 $93,319 
Change versus comparable prior year period
$723 $(693)
Percentage change versus prior year period
2.4 %(0.7)%
Changes in Weighing Solutions segment net revenues were attributable to the following:
vs. prior year
quarter
vs. prior year-
to-date
Change attributable to:
Change in volume4.5 %0.2 %
Change in average selling prices5.3 %4.0 %
Foreign currency effects(7.4)%(4.9)%
Net change2.4 %(0.7)%
Net revenues increased 2.4% for the fiscal quarter ended October 1, 2022, and decreased 0.7% for the nine fiscal months ended October 1, 2022 as compared to the comparable prior year periods. The increase in fiscal quarter net revenues was primarily attributable to increases in our Other markets for precision agriculture and construction applications, while the same market reflected a decrease for the nine fiscal month period. Both the fiscal quarter and nine fiscal month periods were negatively impacted by foreign currency exchange rate effects.
Gross profit as a percentage of net revenues for the Weighing Solutions segment was as follows:
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Gross profit margin33.3 %37.2 %34.7 %37.5 %
The gross profit margin for the fiscal quarter ended October 1, 2022 decreased 3.9% as compared to the comparable prior year period and decreased 2.8% for the nine fiscal months ended October 1, 2022 when compared to the prior year period. The decrease for the fiscal quarter was primarily due to higher materials costs, unfavorable product mix, unfavorable foreign currency exchange rates, and reduction of inventories, partially offset by higher volume and selling price increases. The decrease for the nine fiscal month period was primarily due to lower volume, higher materials costs, unfavorable product mix, unfavorable foreign currency exchange rates, and reduction of inventories, partially offset by selling price increases.
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Measurement Systems
Net revenues of the Measurement Systems segment were as follows (dollars in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Net revenues$20,779 $20,577 $57,805 $40,871 
Change versus comparable prior year period
$202 $16,934 
Percentage change versus prior year period
1.0 %41.4 %
Changes in Measurement Systems segment net revenues were attributable to the following:
vs. prior year
quarter
vs. prior year-
to-date
Change attributable to:
Change in volume1.3 %14.3 %
Change in average selling prices1.8 %1.2 %
Foreign currency effects(2.1)%(2.1)%
Acquisitions0.0 %28.0 %
Net change1.0 %41.4 %
Net revenues increased 1.0% for the fiscal quarter ended October 1, 2022 as compared to the comparable prior year period and increased 41.4% for the nine fiscal months ended October 1, 2022 as compared to the comparable prior year period. The increase for the fiscal quarter was primarily due to increased revenue in the Steel market. The increase in revenue for the nine fiscal months period was primarily attributable to the addition of revenue for DTS, which was acquired on June 1, 2021, and higher revenue of our KELK and DSI steel-related businesses.
Gross profit as a percentage of net revenues for the Measurement Systems segment were as follows:
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Gross profit margin55.5 %52.8 %52.5 %50.8 %
The gross profit margin for the fiscal quarter ended October 1, 2022 increased 2.7% compared to the third quarter of 2021. The increase was primarily due to lower purchase accounting adjustments related to the DTS acquisition partially offset by an unfavorable product mix.
The gross profit margin for the nine fiscal months ended October 1, 2022 increased 1.7% from the prior year period. Higher revenues coming from DTS and our KELK and DSI steel-related businesses and lower purchase accounting adjustment related to the DTS acquisition were partially offset by an unfavorable product mix and an unfavorable foreign currency exchange rate impact. Additionally, COVID-19 subsidies were received in 2021 that did not continue in 2022.
Selling, General, and Administrative Expenses
Selling, general, and administrative (“SG&A”) expenses are summarized as follows (dollars in thousands):
Fiscal quarter endedNine fiscal months ended
October 1, 2022October 2, 2021October 1, 2022October 2, 2021
Total SG&A expenses$25,271 $24,580 $77,824 $69,216 
As a percentage of net revenues28.1 %30.0 %29.2 %30.4 %
SG&A expenses for the fiscal quarter ended October 1, 2022 increased $0.7 million compared to the comparable prior year period due to increases in wages, travel costs and other fees, partially offset by favorable foreign currency exchange rate impacts.
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SG&A expenses for the nine fiscal months ended October 1, 2022 increased $8.6 million compared to the comparable prior year periods with $6.1 million of the increase driven by SG&A expenses from DTS. The remaining increase is from additional SG&A expenses related to wage increases, travel costs, and other fees.
Impairment of Goodwill and Indefinite-lived Intangible Assets
For the nine fiscal months ended October 2, 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.
Acquisition Costs
For the nine fiscal months ended October 2, 2021, we recorded Acquisition Costs associated with the acquisition of DTS as follows (in thousands):
Nine fiscal months ended
October 2, 2021
Legal fees$341 
Appraisal fees18 
Other (investment banker and insurance costs)839 
$1,198 
Restructuring Costs
Restructuring costs reflect the cost reduction programs implemented by the Company. 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. Restructuring costs were comprised primarily of employee termination costs, including severance and statutory retirement allowances, in connection with various cost reduction programs.
Other Income (Expense)
Interest expense for the fiscal quarter and nine fiscal months ended October 1, 2022 was higher when compared with the comparable prior year periods mainly due to higher borrowing rates in 2022.
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The following table analyzes the components of the line “Other” on the consolidated condensed statements of operations (in thousands):
Fiscal quarter ended
October 1, 2022October 2, 2021Change
Foreign currency exchange gain (loss)$1,261 $(38)$1,299 
Interest income91 151 (60)
Pension expense(81)(151)70 
Other(48)212 (260)
$1,223 $174 $1,049 
Nine fiscal months ended
October 1, 2022October 2, 2021Change
Foreign currency exchange gain$5,195 $522 $4,673 
Interest income235 216 19 
Pension expense(261)(431)170 
Other(163)114 (277)
$5,006 $421 $4,585 
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 to 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.
Income Taxes
VPG calculates the tax provision for interim periods using an estimated annual effective tax rate methodology based on projected full-year pre-tax earnings among the taxing jurisdictions in which we operate with adjustments for discrete items. The effective tax rate for the fiscal quarter ended October 1, 2022 was 18.6% compared to 23.4% for the fiscal quarter ended October 2, 2021. The effective tax rate for the fiscal quarter ended October 1, 2022 was lower than the prior year period primarily due to foreign currency exchange gains and losses, tax rate changes and a reduction in our valuation allowance on deferred tax assets. 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 nine fiscal months ended October 1, 2022 was lower than the prior year period primarily due to changes in the mix of worldwide income and foreign currency exchange gains and losses, tax rate changes and a reduction 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. Each jurisdiction establishes rules that set forth the years which are subject to examination by its tax authorities. While the Company believes the tax positions taken on its tax returns for each jurisdiction are supportable, they may still be challenged by the jurisdiction's tax authorities. In anticipation of such challenges, the Company has established reserves for tax-related uncertainties. These liabilities are based on the Company’s best estimate of the potential tax exposures in each respective jurisdiction. It may take a number of years for a final tax liability in a jurisdiction to be determined, particularly in the event of an audit. If an uncertain matter is determined favorably, there could be a reduction in the Company’s tax expense. An unfavorable determination could increase tax expense and could require a cash payment, including interest and penalties.

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Financial Condition, Liquidity, and Capital Resources
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.
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. The 2020 Credit Agreement terminates on March 20, 2025.
Interest payable on amounts borrowed under the 2020 Revolving Facility is based upon, at the Company’s option, (1) the greatest of: the Agent’s prime rate, the Federal Funds rate, or a LIBOR floor (the “Base Rate”), or (2) LIBOR or CDOR plus a specified margin. An interest margin of 0.25% is added to Base Rate loans. Depending upon the Company’s leverage ratio, an interest rate margin ranging from 1.50% to 2.75% per annum is added to the applicable LIBOR or CDOR rate to determine the interest payable on the LIBOR or CDOR loans. The Company is required to pay a quarterly fee of 0.25% per annum to 0.40% per annum on the unused portion of the 2020 Revolving Facility, which is determined based on the Company’s leverage ratio each quarter. Additional customary fees apply with respect to letters of credit.
The obligations of the Company under the 2020 Credit Agreement are secured by pledges of stock in certain domestic and foreign subsidiaries, as well as guarantees by substantially all of the Company’s domestic subsidiaries. The obligations of the Company and the guarantors under the 2020 Credit Agreement are secured by substantially all the assets (excluding real estate) of the Company and such guarantors. 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 an interest coverage ratio and a leverage ratio. The Company was in compliance with its financial maintenance covenants at October 1, 2022. 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 1, 2022, cash provided by operating activities was $20.5 million compared to cash provided by operations of $18.1 million in the comparable prior year period. Our net cash used in investing activities for the nine fiscal months ended October 1, 2022 was lower compared to the prior year period mainly due to the acquisition of DTS which took place in the second quarter of 2021. Our net cash used in financing activities for the nine fiscal months ended October 1, 2022 was lower than the comparable to prior year period due to the 2021 borrowings in connection with the acquisition of DTS.
Approximately 91% and 87% of our cash and cash equivalents balance at October 1, 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 1, 2022 and December 31, 2021:
October 1, 2022December 31, 2021
Israel24 %25 %
Asia27 %24 %
Europe15 %18 %
United States9 %13 %
United Kingdom11 %12 %
Canada14 %%
100 %100 %
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 October 1, 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
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is already planned. The Company will evaluate the possibility of repatriating future cash provided such repatriation can be accomplished in a tax efficient manner. In addition, we expect existing domestic cash, short-term investments, and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.
If we should require more capital in the United States than is generated by our domestic operations, for example, to fund significant discretionary activities, such as business acquisitions, we could elect to repatriate future earnings from foreign jurisdictions or raise capital in the United States through debt or equity issuances. These alternatives could result in higher tax expense, increased interest expense, or dilution of our earnings.
Adjusted free cash flow generated during the nine fiscal months ended October 1, 2022, was $5.4 million. We refer to the amount of cash provided by operating activities ($20.5 million) in excess of our capital expenditures ($15.5 million) and net of proceeds from the sale of assets ($0.4 million) as “adjusted free cash flow.”
The following table summarizes the components of net cash at October 1, 2022 and December 31, 2021 (in thousands):
October 1, 2022December 31, 2021
Cash and cash equivalents$79,910 $84,335 
Third-party debt, including current and long-term:
Revolving debt61,000 61,000 
Deferred financing costs(220)(286)
Total third-party debt60,780 60,714 
Net cash$19,130 $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. GAAP. 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.
Our financial condition as of October 1, 2022 remains strong, with a current ratio (current assets to current liabilities) of 4.1 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 nine fiscal months ended October 1, 2022 was $15.5 million compared to $11.2 million in the comparable prior year period.
As of October 1, 2022 and December 31, 2021, we did not have any off-balance sheet arrangements.
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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 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.
Such statements are based on current expectations only, and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, expected, estimated, or projected. Among the factors that could cause actual results to materially differ include: general business and economic conditions; impact of inflation, global labor and supply chain challenges; difficulties or delays in identifying, negotiating and completing acquisitions and integrating acquired companies; the inability to realize anticipated synergies and expansion possibilities; difficulties in new product development; changes in competition and technology in the markets that we serve and the mix of our products required to address these changes; changes in foreign currency exchange rates; political, economic, health (including the COVID-19 pandemic) and military instability in the countries in which we operate; difficulties in implementing our cost reduction strategies, such as underutilization of production facilities, labor unrest or legal challenges to our lay-off or termination plans, operation of redundant facilities due to difficulties in transferring production to achieve efficiencies; compliance issues under applicable laws, such as export control laws, including the outcome of our voluntary self-disclosure of export control non-compliance; significant developments from the recent and potential changes in tariffs and trade regulation; 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; 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 caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this report or as of the dates otherwise indicated in such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.


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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the market risks previously disclosed in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 4, 2022.
Item 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act are: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our CEO and CFO, believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. While the design of any system of controls is to provide reasonable assurance of the effectiveness of disclosure controls, such design is also based in part upon certain assumptions about the likelihood of future events, and such assumptions, while reasonable, may not take into account all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and may not be prevented or detected.
Changes in Internal Control over Financial Reporting
During our last fiscal quarter ended October 1, 2022, there was no change in our internal control over financial reporting that materially affected, or is reasonable likely to materially affect, internal control over financial reporting.



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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is subject to various legal proceedings that constitute ordinary, routine litigation incidental to its business. In addition, the Company has determined that certain export shipments of products from one of its subsidiaries did not comply with the filing requirements of U.S. export administration and foreign trade regulations, and the Company voluntarily self-disclosed such non-compliance to the U.S. government. Non-compliance with the filing requirements may result in fines and penalties.

The Company believes that the foregoing matters will not have a material adverse effect on the Company’s business or its financial condition, results of operations, and cash flows.
Item 1A. RISK FACTORS
In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 4, 2022. There have been no material changes in reported risk factors from the information reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about repurchases of the Company's common stock during the three-month period ended October 1, 2022.

Total Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Number of Shares that May Yet Be Purchased Under the Plans (a)
July 3, 2022 - August 3, 2022— — — — 
August 4, 2022 - September 4, 20226,085 $34.60 6,085 593,915 
September 5, 2022 - October 1, 202226,516 32.05 26,516 567,399 
Total32,601 32,601 567,399 
(a) 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. As of October 1, 2022, the Company had repurchased 32,601 shares under the Stock Repurchase Plan.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.

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Item 6. EXHIBITS
10.1
31.1      
31.2      
32.1      
32.2      
101      Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended October 1 2022, furnished in XBRL (eXtensible Business Reporting Language).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
VISHAY PRECISION GROUP, INC.
 
/s/ William M. Clancy
William M. Clancy
Executive Vice President and Chief Financial Officer
(as a duly authorized officer and principal financial and accounting officer)
Date: November 8, 2022

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
7/1/25
3/20/25
1/1/25
8/11/23
5/26/23
Filed on:11/8/22
For Period end:10/1/22
9/5/22
9/4/22
8/8/228-K
8/4/22
8/3/22
7/3/22
7/2/2210-Q
7/1/22
5/26/224,  8-K,  DEF 14A,  S-8
3/9/22
3/4/2210-K
3/3/224
1/1/223,  4
12/31/2110-K,  SD
10/2/2110-Q
7/3/2110-Q
6/1/218-K
1/1/214
12/31/2010-K,  DEF 14A,  SD
3/20/208-K
 List all Filings 


2 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/29/24  Vishay Precision Group, Inc.      10-K       12/31/23  119:13M
 3/01/23  Vishay Precision Group, Inc.      10-K       12/31/22  119:14M
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