VISHAY PRECISION GROUP, INC.

FORM 10-Q

~~September 30, 2017~~April 2, 2022

CONTENTS


				Page Number
PART I.		FINANCIAL INFORMATION

		Item 1.	~~Page~~Financial Statements ~~Number~~
~~PART I.~~		~~FINANCIAL INFORMATION~~

~~Item 1.~~	~~Financial Statements~~

	Consolidated Condensed Balance Sheets – ~~September 30, 2017~~April 2, 2022 (Unaudited) and December 31, ~~2016~~2021		3

		Consolidated Condensed Statements of Operations (Unaudited) – Fiscal Quarters Ended ~~September 30, 2017~~April 2, 2022 and ~~October 1, 2016~~April 3, 2021		5

		~~Consolidated Condensed Statements of Operations~~ ~~(Unaudited) – Nine Fiscal Months Ended September 30, 2017 and October 1, 2016~~		6

		Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) – Fiscal Quarters Ended ~~September 30, 2017~~April 2, 2022 and ~~October 1, 2016~~April 3, 2021		76

		~~Consolidated Condensed Statements of Comprehensive Income (Loss)~~ ~~(Unaudited) – Nine Fiscal Months Ended September 30, 2017 and October 1, 2016~~		8

		Consolidated Condensed Statements of Cash Flows (Unaudited) –Three Fiscal Months Ended April 2, 2022 and April 3, 2021		7

		Consolidated Condensed Statements of Equity (Unaudited) – ~~Nine~~ Fiscal ~~Months~~Quarters Ended ~~September 30, 2017~~April 2, 2022 and ~~October 1, 2016~~April 3, 2021		98

		~~Consolidated Condensed Statement of Equity (Unaudited)~~		10

		Notes to Unaudited Consolidated Condensed Financial Statements		119

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		2120

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		3735

Item 4.		Controls and Procedures		3735

PART II.		OTHER INFORMATION

Item 1.		Legal Proceedings		3836

Item 1A.		Risk Factors		3836

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		3836

Item 3.		Defaults Upon Senior Securities		3836

Item 4.		Mine Safety Disclosures		3836

Item 5.		Other Information		3836

Item 6.		~~Exhibits~~	39Exhibits		37

		~~SIGNATURES~~	40SIGNATURES		38

-2-

PART I - FINANCIAL INFORMATION

Item 1.FINANCIAL STATEMENTS


VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)
	April 2, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	78,181	$	84,335
Accounts receivable, net	59,056		58,265
Inventories:
Raw materials	26,779		25,464
Work in process	27,723		23,851
Finished goods	24,898		27,112
Inventories, net	79,400		76,427


Prepaid expenses and other current assets	18,219		15,916

Total current assets	234,856		234,943

Property and equipment:
Land	4,206		4,241
Buildings and improvements	68,617		68,778
Machinery and equipment	123,966		122,202
Software	9,384		8,871
Construction in progress	5,866		7,747
Accumulated depreciation	(132,141)		(130,619)
Property and equipment, net	79,898		81,220

Goodwill	45,970		45,830
Intangible assets, net	51,623		52,437
Operating lease right-of-use assets	26,884		27,764
Other assets	18,588		19,695
Total assets	$	457,819	$	461,889

Continues on the following page.

-3-

VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets
(In thousands)

September 30, 2017
December 31, 2016

(Unaudited)

Assets

Current assets:

Cash and cash equivalents $ 69,891

$ 58,452
Accounts receivable, net 43,037

34,270
Inventories:

Raw materials 16,487

15,647
Work in process 22,215

21,115
Finished goods 20,561

19,559
Inventories, net 59,263

56,321

Prepaid expenses and other current assets 9,923

6,831
Total current assets 182,114

155,874

Property and equipment, at cost:

Land 3,428

3,344
Buildings and improvements 49,491

48,454
Machinery and equipment 92,521

89,080
Software 7,787

7,441
Construction in progress 2,338

4,340
Accumulated depreciation (101,964 )
(97,374 )
Property and equipment, net 53,601

55,285

Goodwill 19,228

18,717

Intangible assets, net 21,025

21,585

Other assets 19,751

19,049
Total assets $ 295,719
$ 270,510


VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)
	April 2, 2022		December 31, 2021
Liabilities and equity
Current liabilities:
Trade accounts payable	$	12,203	$	14,876
Payroll and related expenses	19,788		23,772
Other accrued expenses	20,870		17,596
Income taxes	1,209		3,774
Current portion of operating lease liabilities	4,553		4,610

Total current liabilities	58,623		64,628

Long-term debt, less current portion	60,736		60,714
Deferred income taxes	5,761		5,848
Operating lease liabilities	23,959		25,140
Other liabilities	15,279		16,264
Accrued pension and other postretirement costs	11,618		12,253
Total liabilities	175,976		184,847

Commitments and contingencies	0		0

Equity:
Common stock	1,324		1,322
Class B convertible common stock	103		103
Treasury stock	(8,765)		(8,765)
Capital in excess of par value	199,223		199,151
Retained earnings	126,652		120,296
Accumulated other comprehensive loss	(36,719)		(35,008)
Total Vishay Precision Group, Inc. stockholders' equity	281,818		277,099
Noncontrolling interests	25		(57)
Total equity	281,843		277,042
Total liabilities and equity	$	457,819	$	461,889

See accompanying notes.

-4-

VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)

September 30, 2017
December 31, 2016

(Unaudited)

Liabilities and equity

Current liabilities:

Trade accounts payable $ 9,673

$ 8,264
Payroll and related expenses 14,992

11,978
Other accrued expenses 15,615

13,285
Income taxes 3,193

772
Current portion of long-term debt 2,965

2,623
Total current liabilities 46,438

36,922

Long-term debt, less current portion 30,017

33,529
Deferred income taxes 809

735
Other liabilities 13,793

13,054
Accrued pension and other postretirement costs 15,161

14,713
Total liabilities 106,218

98,953

Commitments and contingencies

Equity:

Common stock 1,288

1,278
Class B convertible common stock 103

103
Treasury stock (8,765 ) (8,765 )
Capital in excess of par value 192,364

190,373
Retained earnings 38,600

28,731
Accumulated other comprehensive loss (34,278 )
(40,337 )
Total Vishay Precision Group, Inc. stockholders' equity 189,312

171,383
Noncontrolling interests 189

174
Total equity 189,501

171,557
Total liabilities and equity $ 295,719

$ 270,510

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Operations

(Unaudited - In thousands, except per share amounts)


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Net revenues	$	87,665	$	70,589
Costs of products sold	52,415		41,967
Gross profit	35,250		28,622

Selling, general, and administrative expenses	26,674		22,183



Restructuring costs	261		—
Operating income	8,315		6,439

Other income (expense):
Interest expense	(329)		(305)
Other	439		573
Other income	110		268

Income before taxes	8,425		6,707

Income tax expense	1,741		1,764

Net earnings	6,684		4,943
Less: net loss (earnings) attributable to noncontrolling interests	328		(18)
Net earnings attributable to VPG stockholders	$	6,356	$	4,961

Basic earnings per share attributable to VPG stockholders	$	0.47	$	0.36
Diluted earnings per share attributable to VPG stockholders	$	0.46	$	0.36

Weighted average shares outstanding - basic	13,637		13,593
Weighted average shares outstanding - diluted	13,675		13,629

See accompanying notes.

-5-

Fiscal quarter ended
September 30, 2017 October 1, 2016
Net revenues $ 62,805
$ 54,490
Costs of products sold 38,538
34,225
Gross profit 24,267
20,265

Selling, general, and administrative expenses 18,525
16,917
Restructuring costs 423
709
Operating income 5,319
2,639

Other income (expense):
Interest expense (472 ) (377 )
Other 1,717
(44 )
Other income (expense) - net 1,245
(421 )

Income before taxes 6,564
2,218

Income tax expense 2,239
1,135

Net earnings 4,325
1,083
Less: net earnings attributable to noncontrolling interests 70
32
Net earnings attributable to VPG stockholders $ 4,255
$ 1,051

Basic earnings per share attributable to VPG stockholders $ 0.32
$ 0.08
Diluted earnings per share attributable to VPG stockholders $ 0.32
$ 0.08

Weighted average shares outstanding - basic 13,291
13,192
Weighted average shares outstanding - diluted 13,470
13,422

~~VISHAY PRECISION GROUP, INC.~~

~~Consolidated Condensed Statements of Operations~~

~~(Unaudited - In thousands, except per share amounts)~~

Nine fiscal months ended
September 30, 2017 October 1, 2016
Net revenues $ 184,911
$ 169,115
Costs of products sold 113,368
107,580
Gross profit 71,543
61,535

Selling, general, and administrative expenses 55,551
53,409
Acquisition costs —
414
Restructuring costs 1,292
2,395
Operating income 14,700
5,317
Other income (expense):
Interest expense (1,392 ) (1,076 )
Other 1,034
351
Other income (expense) - net (358 ) (725 )

Income before taxes 14,342
4,592

Income tax expense 4,398
1,164

Net earnings 9,944
3,428
Less: net earnings attributable to noncontrolling interests 75
29
Net earnings attributable to VPG stockholders $ 9,869
$ 3,399

Basic earnings per share attributable to VPG stockholders $ 0.74
$ 0.26

Diluted earnings per share attributable to VPG stockholders $ 0.73
$ 0.25

Weighted average shares outstanding - basic 13,253
13,185

Weighted average shares outstanding - diluted 13,452
13,409

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited - In thousands)


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Net earnings	$	6,684	$	4,943

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(1,792)		(1,800)
Pension and other postretirement actuarial items	81		209
Other comprehensive loss	(1,711)		(1,591)

Comprehensive income	4,973		3,352

Less: comprehensive income (loss) attributable to noncontrolling interests	328		(18)

Comprehensive income attributable to VPG stockholders	$	4,645	$	3,370

See accompanying notes.

-6-

Fiscal quarter ended
September 30, 2017 October 1, 2016
Net earnings $ 4,325
$ 1,083

Other comprehensive income (loss):
Foreign currency translation adjustment 2,285
(496 )
Pension and other postretirement actuarial items, net of tax (29 ) 130
Other comprehensive income (loss) 2,256
(366 )

Total comprehensive income 6,581
717

Less: comprehensive income attributable to noncontrolling interests 70
32

Comprehensive income attributable to VPG stockholders $ 6,511
$ 685

~~VISHAY PRECISION GROUP, INC.~~

~~Consolidated Condensed Statements of Comprehensive Income (Loss)~~

~~(Unaudited - In thousands)~~

Nine fiscal months ended
September 30, 2017 October 1, 2016
Net earnings $ 9,944
$ 3,428

Other comprehensive income (loss):
Foreign currency translation adjustment 6,119
167
Pension and other postretirement actuarial items, net of tax (60 ) 503
Other comprehensive income 6,059
670

Comprehensive income 16,003
4,098

Less: comprehensive income attributable to noncontrolling interests 75
29

Comprehensive income attributable to VPG stockholders $ 15,928
$ 4,069

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Cash Flows

(Unaudited - In thousands)


	Three fiscal months ended
	April 2, 2022		April 3, 2021
Operating activities
Net earnings	$	6,684	$	4,943
Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization	3,823		3,522

Loss (gain) on sale of property and equipment	7		(1)
Reclassification of foreign currency translation adjustment related to disposal of subsidiary	191		—
Share-based compensation expense	497		366
Inventory write-offs for obsolescence	396		613
Deferred income taxes	25		(116)
Other	(1,229)		(1,659)
Net changes in operating assets and liabilities:
Accounts receivable, net	(1,546)		753
Inventories, net	(3,755)		(3,089)
Prepaid expenses and other current assets	(2,367)		366
Trade accounts payable	(358)		526
Other current liabilities	(2,641)		(601)
Net cash (used in) provided by operating activities	(273)		5,623

Investing activities
Capital expenditures	(4,303)		(5,746)
Proceeds from sale of property and equipment	10		3


Net cash used in investing activities	(4,293)		(5,743)

Financing activities

Principal payments on long-term debt	—		(18)





Distributions to noncontrolling interests	(246)		(111)
Payments of employee taxes on certain share-based arrangements	(435)		(846)
Net cash used in financing activities	(681)		(975)
Effect of exchange rate changes on cash and cash equivalents	(907)		(1,189)
Decrease in cash and cash equivalents	(6,154)		(2,284)
Cash and cash equivalents at beginning of period	84,335		98,438
Cash and cash equivalents at end of period	$	78,181	$	96,154

Supplemental disclosure of investing transactions:
Capital expenditures purchased	$	(2,085)	$	(4,150)
Capital expenditures accrued but not yet paid	$	850	$	965

See accompanying notes.

-7-

Nine fiscal months ended
September 30, 2017 October 1, 2016
Operating activities
Net earnings $ 9,944
$ 3,428
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 7,977
8,416
Gain on disposal of property and equipment (193 ) (24 )
Share-based compensation expense 959
465
Inventory write-offs for obsolescence 1,662
1,410
Deferred income taxes 264
(1,537 )
Other (907 ) (862 )
Net changes in operating assets and liabilities:
Accounts receivable, net (7,030 ) 2,139
Inventories, net (3,280 ) (2,891 )
Prepaid expenses and other current assets (2,937 ) (1,848 )
Trade accounts payable 1,176
453
Other current liabilities 7,166
(2,572 )
Net cash provided by operating activities 14,801
6,577

Investing activities
Capital expenditures (4,366 ) (6,266 )
Proceeds from sale of property and equipment 442
316
Purchase of business —
(10,727 )
Net cash used in investing activities (3,924 ) (16,677 )

Financing activities
Principal payments on long-term debt and capital leases (1,971 ) (1,599 )
Proceeds from revolving facility 27,000
17,000
Payments on revolving facility (27,000 ) (12,000 )
Distributions to noncontrolling interests (60 ) (12 )
Payments of employee taxes on certain share-based arrangements (303 ) (85 )
Net cash (used in) provided by financing activities (2,334 ) 3,304
Effect of exchange rate changes on cash and cash equivalents 2,896
288
Increase (decrease) in cash and cash equivalents 11,439
(6,508 )

Cash and cash equivalents at beginning of period 58,452
62,641
Cash and cash equivalents at end of period $ 69,891
$ 56,133

Supplemental disclosure of non-cash financing transactions:
Conversion of exchangeable notes to common stock $ (1,303 ) $ —

VISHAY PRECISION GROUP, INC.

Consolidated Condensed ~~Statement~~Statements of Equity

(Unaudited - In thousands, except share amounts)


	Fiscal quarter ended April 2, 2022
	Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital 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	$	1,322	$	103	$	(8,765)	$	199,151	$	120,296	$	(35,008)	$	277,099	$	(57)	$	277,042
Net earnings	—		—		—		—		6,356		—		6,356		328		6,684
Other comprehensive income	—		—		—		—		—		(1,711)		(1,711)		—		(1,711)
Share-based compensation expense	—		—		—		497		—		—		497		—		497
Restricted stock issuances ( 17,837 shares)	2		—		—		(425)		—		—		(423)		—		(423)





Distributions to noncontrolling interests	—		—		—		—		—		—		—		(246)		(246)
Balance at April 2, 2022	$	1,324	$	103	$	(8,765)	$	199,223	$	126,652	$	(36,719)	$	281,818	$	25	$	281,843


	Fiscal quarter ended April 3, 2021
	Common Stock		Class B Convertible Common Stock		Treasury Stock		Capital 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	$	1,317	$	103	$	(8,765)	$	197,764	$	100,075	$	(32,671)	$	257,823	$	34	$	257,857
Net earnings	—		—		—		—		4,961		—		4,961		(18)		4,943
Other comprehensive loss	—		—		—		—		—		(1,591)		(1,591)		—		(1,591)
Share-based compensation expense	—		—		—		366		—		—		366		—		366
Restricted stock issuances (34,572 shares)	3		—		—		(848)		—		—		(845)		—		(845)





Distribution to noncontrolling interests	—		—		—		—		—		—		—		(111)		(111)
Balance at April 3, 2021	$	1,320	$	103	$	(8,765)	$	197,282	$	105,036	$	(34,262)	$	260,714	$	(95)	$	260,619

See accompanying notes.

-8-

Common
Stock
Class B
Convertible
Common Stock Treasury Stock
Capital 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, 2016 $ 1,278
$ 103
$ (8,765 ) $ 190,373
$ 28,731
$ (40,337 ) $ 171,383
$ 174
$ 171,557
Net earnings —
—
—
—
9,869
—
9,869
75
9,944
Other comprehensive income —
—
—
—
—
6,059
6,059
—
6,059
Share-based compensation expense —
—
—
959
—
—
959
—
959
Restricted stock issuances (41,322 shares) 4
—
—
(265 ) —
—
(261 ) —
(261 )
Common stock issuance from conversion of exchangeable notes (57,729 shares) 6
—
—
1,297
—
—
1,303
—
1,303
Distributions to noncontrolling interests —
—
—
—
—
—
—
(60 ) (60 )
Balance at September 30, 2017 $ 1,288
$ 103
$ (8,765 ) $ 192,364
$ 38,600
$ (34,278 ) $ 189,312
$ 189
$ 189,501

Vishay Precision Group, Inc.

Notes to Unaudited Consolidated Condensed Financial Statements

Note 1 – Basis of Presentation

Background

Vishay Precision Group, Inc. (“VPG” or the “Company”) is ~~an internationally recognized designer, manufacturer~~a global, diversified company focused on precision measurement sensing technologies, including specialized sensors, weighing solutions, and ~~marketer~~measurement systems. Many of ~~sensors, and sensor-based~~our precision measurement ~~systems, as well as specialty resistors and strain gages based upon the Company's proprietary technology. The Company provides precision~~sensing products and solutions ~~many of which~~ are “designed-in” by ~~its~~our customers, ~~specializing in the~~and address growing ~~markets~~applications across a diverse array of ~~stress, force, weight, pressure,~~industries and ~~current measurements.~~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, ~~2016~~2021 and ~~2015~~2020 and for each of the three years in the period ended December 31, ~~2016,~~2021, included in VPG’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2021, filed with the SEC on March ~~16, 2017.~~4, 2022. The results of operations for the fiscal quarter ended ~~September 30, 2017~~April 2, 2022 are not necessarily indicative of the results to be expected for the full year. VPG reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first quarter, which always begins on January 1, and the fourth quarter, which always ends on December 31. The four fiscal quarters in ~~2017~~2022 and ~~2016~~2021 end on the following dates:


	2022	2021
Quarter 1	April 2,	April 3,
Quarter 2	July 2,	July 3,
Quarter 3	October 1,	October 2,
Quarter 4	December 31,	December 31,

Note 2 – Revenues

Revenue Recognition

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):


	Fiscal quarter ended April 2, 2022								Fiscal quarter ended April 3, 2021
	Sensors		Weighing Solutions		Measurement Systems		Total		Sensors		Weighing Solutions		Measurement Systems		Total
United States	$	13,006	$	14,078	$	10,465	$	37,549	$	9,706	$	12,580	$	3,631	$	25,917
United Kingdom	877		4,334		298		5,509		860		4,580		38		5,478
Other Europe	7,792		10,531		1,882		20,205		7,181		9,933		188		17,302
Israel	7,331		190		—		7,521		6,441		130		—		6,571
Asia	8,744		3,635		1,010		13,389		7,627		3,736		855		12,218
Canada	—		—		3,492		3,492		—		9		3,094		3,103
Total	$	37,750	$	32,768	$	17,147	$	87,665	$	31,815	$	30,968	$	7,806	$	70,589

-9-

Note 2 – Revenues (continued)

2017 2016
Quarter 1 April 1, April 2,
Quarter 2 July 1, July 2,
Quarter 3 September 30, October 1,
Quarter 4 December 31, December 31,
The following table disaggregates net revenue from contracts with customers by market sector (in thousands).


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Test & Measurement	$	17,973	$	14,416
Avionics, Military & Space	8,162		6,030
Transportation	13,954		9,554
Other Markets	21,150		17,545
Industrial Weighing	13,209		12,005
General Industrial	5,866		4,082
Steel	7,351		6,957

Total	$	87,665	$	70,589

~~Recent Accounting Pronouncements~~

~~In May 2017,~~Contract Assets & Liabilities

Contract assets are established when revenues are recognized prior to a contractual payment due from the ~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09,~~ ~~“Scope of Modification Accounting”. This ASU clarifies which changes to the terms or conditions of~~customer. When a ~~share-based~~ payment award will require modification accounting. The amendments in this ASU are effective for interim and annual reporting periods beginning after December 15, 2017 and early adoption is permitted. The Company is evaluating the new standard to determine the impact on the Company’s consolidated condensed financial statements.

~~In March 2017, the FASB issued ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~”. This ASU requires the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs. All other components of the net periodic benefit cost will be presented outside of operating income. The amendments in this ASU are effective for interim and annual reporting periods beginning after December 15, 2017 and early adoption is permitted. The ASU will result in the reclassification of non-service costs components from Cost of products sold and Selling, general and administrative expenses to Other income (expense) - other. For the year ended December 31, 2016, the Company estimates the new standard would have increased Operating income by approximately $0.5 million with an offsetting increase in Other income (expense).

~~In January 2017, the FASB issued ASU No. 2017‑04, “Simplifying the Test for Goodwill Impairment~~.” This ASU eliminates the requirement to calculate the implied fair value of goodwill (second step) to measure a goodwill impairment charge. Under the guidance, an impairment charge will be measuredbecomes due based on the ~~excess~~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 ~~reporting unit’s carrying amount over its fair value (first step).~~products offered. The ~~amendments in this ASU are effective for interim~~term between invoicing and ~~annual reporting periods beginning after December 15, 2019 and early adoption~~when payment is ~~permitted.~~ due is not significant.

The ~~Company is evaluating the new standard to determine the impact on the Company’s consolidated condensed financial statements.~~

~~Note 1 – Basis of Presentation (continued)~~

~~In January 2017, FASB issued ASU No. 2017‑01, “Clarifying the Definition of a Business.” This ASU provides a more robust framework to determine when a set of~~outstanding contract assets and ~~activities constitutes a business.~~ liability accounts were as follows (in thousands):


	Contract Asset		Contract Liability
	Unbilled Revenue		Accrued Customer Advances
Balance at December 31, 2021	$	3,570	$	4,765
Balance at April 2, 2022	3,415		7,836
(Decrease)/increase	$	(155)	$	3,071

The ~~amendments in this ASU are effective for interim and annual reporting periods beginning after December 15, 2017 and will be applied prospectively to any transactions occurring within~~amount of revenue recognized during the ~~period of adoption and early adoption is permitted. The Company is evaluating the new standard to determine the impact on the Company’s consolidated condensed financial statements.~~

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~“Classification of Certain Cash Receipts and Cash Payments~~.” This ASU is intended to clarify the presentation of certain cash receipts and payments within the statement of cash flows. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company is evaluating the new standard to determine the impact on the Company’s consolidated condensed financial statements.

~~In March 2016, the FASB issued ASU No. 2016-09,"Improvements to Employee Share-Based Payment Accounting.~~" This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company prospectively adopted this ASU effective January 1, 2017. For the fiscal quarter and ninethree fiscal months ended ~~September 30, 2017,~~April 2, 2022 that was included in the ~~tax benefit within income tax expense~~contract liability balance at December 31, 2021 was$1.2 million.

Note 3 - Acquisition

Diversified Technical Systems, Inc.

On June 1, 2021, VPG completed the acquisition of California-based Diversified Technical Systems, Inc. (“DTS”), a manufacturer of data acquisition systems and sensors for ~~the tax effect~~product safety and testing, for a purchase price of ~~share-based payment transactions was not material. Prior to adoption, this amount would have been recorded as a component of Capital in excess of par value.~~$47.2 million. The Company ~~elected~~used cash on hand and borrowings under its revolving credit facility to ~~change its accounting policy~~fund the purchase price under the purchase agreement. DTS reports into the Company's Measurement Systems segment. The following table summarizes the provisional fair values assigned to recognize forfeitures as they occur. As a result of this change, there was no cumulative-effect adjustment to retained earnings. For the fiscal quarter and nine fiscal months ended September 30, 2017, the Company excluded excess tax benefits from the assumed proceeds available to repurchase shares in the computation of its diluted earnings per share and the related increase in the Company’s diluted weighted average commons shares outstanding was not significant.

~~In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of this ASU will require lessees to present~~ the assets and liabilities that arise from leases on their balance sheets. The ASU is effective for public companies for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. of DTS as of June 1, 2021 (in thousands):

-10-


	June 1, 2021
Working capital	$	12,587
Property and equipment	1,209
Deferred income tax liability	(6,178)

Intangible assets:
Acquired technology	13,167
Customer relationships	8,135
Trade names	2,393
Total intangible assets	23,695
Fair value of acquired identifiable assets	31,313
Purchase price	$	47,216
Goodwill	$	15,903

The Company ~~is evaluating the new standard~~utilizes certain valuations and studies to determine the ~~impact on~~fair value of the ~~Company’s consolidated condensed financial statements.~~

~~In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory (Topic 330)~~,"~~which simplifies the subsequent measurement of inventory by requiring inventory~~tangible and intangible assets acquired. These valuations and studies are currently being analyzed and have yet to be ~~measured at~~finalized. Accordingly, the ~~lower~~assets and liabilities assumed are subject to adjustment once the detailed analysis is completed. The provisional estimated weighted average useful lives for the acquired technology and customer relationships are 15 years. Trade names are treated as indefinite-lived intangible assets. None of ~~cost~~the goodwill associated with DTS will be deductible for income tax purposes. The Company recorded acquisition costs associated with this transaction of $1.2 million in the second quarter of 2021, which included legal fees, appraisal fees, investments banker fees and insurance costs.

Included in the results of the operations of the Company, are net revenues of $7.7 million from DTS for the fiscal quarter ended April 2, 2022 and net ~~realizable value. Net realizable value~~earnings of $0.1 million fiscal quarter ended April 2, 2022. DTS results include amortization of the inventory step-up of $0.4 million for the fiscal quarter ended April 2, 2022, and amortization of intangible assets of $0.4 million for the fiscal quarter ended April 2, 2022.

Following is the ~~estimated selling price in~~supplemental consolidated financial results for the ~~ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.~~ Company on an unaudited pro forma basis, as if the DTS acquisition had been consummated on January 1, 2021:


	Fiscal quarter ended
	April 3, 2021
Pro forma net revenues	$	78,921

Pro forma net earnings attributable to VPG stockholders	$	5,333

Pro forma basic earnings per share attributable to VPG stockholders	$	0.39
Pro forma diluted earnings per share attributable to VPG stockholders	$	0.39

Note 4 – Goodwill

The Company ~~prospectively adopted this ASU effective January 1, 2017 and~~tests the ~~adoption did not have a significant impact on the Company’s consolidated condensed financial statements.~~

~~In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," and modified the standard thereafter. The objective~~goodwill in each of ~~the ASU is to establish a single comprehensive model~~its goodwill reporting units for entities to use in accounting for revenue arising from contracts with customers that will supersede most current revenue recognition guidance. The basis of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.

The ASU will affect the timing of certain revenue related transactions primarily resulting in earlier recognition of revenue for contracts related to our steel products. The Company expects to adopt the ASU effective January 1, 2018 on a modified retrospective basis through a cumulative adjustment to equity. Upon adoption of the ASU, the Company does not expect the cumulative adjustment to equity to have a material impact to the consolidated financial statements. The estimate is subject to change based on the contracts outstandingimpairment at least annually, as of the ~~effective date~~first day of ~~the ASU. The Company will continue to monitor the overall impact the adoption of this ASU will~~its fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have ~~on the consolidated results of operations, financial position, cash flows and financial statement disclosures to facilitate adoption by January 1, 2018.~~been incurred.

-11-

~~Note 2 – Goodwill~~

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


	Total		Measurement Systems
			KELK Acquisition		DSI Acquisition		DTS Acquisition		Stress-Tek Acquisition
Balance at December 31, 2021	$	45,830	$	6,706	$	16,910	$	15,903	$	6,311


Foreign currency translation adjustment	140		147		(7)		0		—

Balance at April 2, 2022	$	45,970	$	6,853	$	16,903	$	15,903	$	6,311

Total Weighing and Control Systems Segment Foil Technology Products Segment
KELK Acquisition Stress-Tek Acquisition Pacific Acquisition
Balance at December 31, 2016 $ 18,717
$ 6,364
$ 6,311
$ 6,042
Foreign currency translation adjustment 511
511
—
—
Balance at September 30, 2017 $ 19,228
$ 6,875
$ 6,311
$ 6,042

Note 35 – ~~Restructuring Costs~~

Restructuring costs represent the cost reduction programs initiated 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.Leases

The Company primarily leases office and manufacturing facilities in addition to vehicles, which have remaining terms of less than one year to fourteen years. The Company has no finance leases.

Leases recorded ~~aggregate restructuring costs~~on the balance sheet consist of ~~$0.4 million~~the following (in thousands):


Leases	April 2, 2022		December 31, 2021
Assets
Operating lease right of use asset	$	26,884	$	27,764

Liabilities
Operating lease - current	$	4,553	$	4,610
Operating lease - non-current	$	23,959	$	25,140

Other information related to lease term and ~~$0.7 million~~discount rate is as follows:


	April 2, 2022
Operating leases weighted average remaining lease term (in years)	8.33 years
Operating leases weighted average discount rate	3.1	%

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


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Operating lease cost	$	1,310	$	1,181
Short-term lease cost	26		33
Sublease income	(112)		—
Total net lease cost	$	1,224	$	1,214

Right of use assets obtained in exchange for new operating lease liability during ~~the fiscal quarters ended September 30, 2017 and October 1, 2016, respectively, and~~2021 were $0.2 million. The Company paid $1.3 million and ~~$2.4~~$1.2 million ~~during~~for its operating leases for each of the ~~nine~~three fiscal months ended ~~September 30, 2017~~April 2, 2022 and ~~October 1, 2016, respectively.~~April 3, 2021, which are included in operating cash flows on the consolidated condensed statements of cash flows.

~~Restructuring costs consist mainly~~Undiscounted maturities of employee termination costs and facility closure costs, which were incurred in connection with various cost reduction programs. The restructuring expenses recorded for the nine fiscal months ended September 30, 2017, represent additional costs related to the previously announced cost reduction programs. During the nine fiscal months ended October 1, 2016, the Company recorded $1.6 million related to cost reduction plans initiated at locations in Europe, the United States, and Canada, $0.4 million related to the closure of our Costa Rica facility, and $0.4 million related to the November 2015 global cost reduction plan.

~~The following table summarizes recent activity related to all restructuring programs. The accrued restructuring liability balance~~operating lease payments as of ~~September 30, 2017 and December 31, 2016, respectively, is included in other accrued expenses in the accompanying consolidated condensed balance sheets~~ April 2, 2022 are summarized as follows (in thousands):

-12-

Note 5 - Leases (continued)

Balance at December 31, 2016 $ 1,333
Restructuring costs in 2017 1,292
Cash payments (2,070 )
Foreign currency translation 1
Balance at September 30, 2017 $ 556


2022 (excluding the three months ended April)	$	3,842
2023	4,670
2024	3,992
2025	3,419
2026	3,087
Thereafter	13,302
Total future minimum lease payments	$	32,312
Less: amount representing interest	(3,800)
Present value of future minimum lease payments	$	28,512

Note 46 – 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 ~~September 30, 2017~~April 2, 2022 was ~~34.1%~~20.7% compared to ~~51.2%~~26.3% for the fiscal quarter ended ~~October 1, 2016.~~April 3, 2021. The ~~effective~~ tax rate for the ~~nine fiscal months ended September 30, 2017 was 30.7% compared to 25.3% for the nine fiscal months ended October 1, 2016. The tax rate in the current~~ fiscal quarter ended April 2, 2022 is lower than the prior year ~~fiscal quarter~~period primarily ~~because~~due to the reduction of ~~higher earnings subject~~the valuation allowance on certain tax credits.

On December 28, 2021, the United States Treasury Department and the Internal Revenue Service issued final regulations relating to the foreign tax credit and clarifying the rules relating to foreign derived intangible income. These new regulations apply to tax years beginning on or after December 28, 2021. The Company is still in the ~~current fiscal quarter which reduced~~process of analyzing the potential tax impact ~~of losses~~that these regulations could have on ~~which no~~the Company’s tax benefit is provided. The current year nine fiscal month tax rate is higher than the prior year nine fiscal month tax rate primarily because of a tax benefit recorded last year related to the release of a valuation allowance in connection with the acquisition of Pacific. This difference is partially offset by a 2017 foreign currency benefit from a foreign subsidiary with U.S. dollars as its functional currency.position.

The Company and its subsidiaries are subject to income taxes imposed by the U.S., various states, and the foreign jurisdictions in which we operate. Each jurisdiction establishes rules that set forth the ~~United States. and numerous foreign jurisdictions. Significant judgment is required in evaluating~~years which are subject to examination by its tax authorities. While the ~~Company’s~~Company believes the tax positions ~~and determining~~taken on its tax returns for each jurisdiction are supportable, they may still be challenged by the ~~provision for income taxes. During~~jurisdiction's tax authorities. In anticipation of such challenges, the ~~ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. VPG establishes~~Company has established reserves for tax-related ~~uncertainties~~uncertainties. These liabilities are based on ~~estimates~~the Company’s best estimate of ~~whether, and~~ the ~~extent~~potential tax exposures in each respective jurisdiction. It may take a number of years for a final tax liability in a jurisdiction to ~~which, additional taxes will~~ be ~~due. These reserves are established when VPG believes that certain positions might~~determined, particularly in the event of an audit. If an uncertain matter is determined favorably, there could be ~~challenged despite its belief that the tax return positions~~

~~Note 4 – Income Taxes (continued)~~

are supportable. VPG adjusts these reserves in light of changing facts and circumstances and the provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. Penalties and tax-related interest expense are reported as a component of income tax expense. The Company anticipates a reduction in the ~~liability for unrecognized~~Company’s tax ~~benefits between $0.1 million to $0.3 million within twelve months of the balance sheet date due to~~expense. An unfavorable determination could increase tax expense and could require a cash ~~payments~~payment, including interest and ~~the potential for the expiration of statutes of limitation in certain jurisdictions.~~penalties.

Note 57 – Long-Term Debt

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


	April 2, 2022		December 31, 2021
2020 Credit Agreement - Revolving Facility	$	61,000	$	61,000






Deferred financing costs	(264)		(286)
Total long-term debt	60,736		60,714

September 30, 2017 December 31, 2016
2015 Credit Agreement - Revolving Facility $ 9,000
$ 9,000
2015 Credit Agreement - U.S. Closing Date Term Facility 3,780
4,128
2015 Credit Agreement - U.S. Delayed Draw Term Facility 9,240
10,092
2015 Credit Agreement - Canadian Term Facility 8,105
8,780
Exchangeable Unsecured Notes, due 2102 2,794
4,097
Other debt 432
509
Deferred financing costs (369 ) (454 )
Total long-term debt 32,982
36,152
Less: current portion 2,965
2,623
Long-term debt, less current portion $ 30,017
$ 33,529

~~Exchangeable Unsecured Notes, due 2102~~

Effective May 12, 2017, a holder of the Company's exchangeable notes exercised its option to exchange approximately $1.3 million principal amount of the notes for 57,729 shares of VPG common stock at a contractual put/call rate of $22.57. Following this transaction, VPG has outstanding exchangeable unsecured notes with a principal amount of approximately $2.8 million, which are exchangeable for an aggregate of 123,808 shares of VPG common stock.

Note 68 – Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, consist of the following (in thousands):


	Foreign Currency Translation Adjustment		Pension and Other Postretirement Actuarial Items		Total
Balance at January 1, 2022	$	(30,276)	$	(4,732)	$	(35,008)
Other comprehensive loss before reclassifications	(1,983)		—		(1,983)
Amounts reclassified from accumulated other comprehensive income	191		81		272
Balance at April 2, 2022	$	(32,068)	$	(4,651)	$	(36,719)

-13-

Foreign Currency Translation Adjustment Pension
and Other
Postretirement
Actuarial Items Total
Balance at January 1, 2017 $ (33,192 ) $ (7,145 ) $ (40,337 )
Other comprehensive income before reclassifications 6,119
—
6,119
Amounts reclassified from accumulated other comprehensive income (loss) —
(60 ) (60 )
Balance at September 30, 2017 $ (27,073 ) $ (7,205 ) $ (34,278 )


	Foreign Currency Translation Adjustment		Pension and Other Postretirement Actuarial Items		Total
Balance at January 1, 2021	$	(25,591)	$	(7,080)	$	(32,671)
Other comprehensive loss before reclassifications	(1,800)		—		(1,800)
Amounts reclassified from accumulated other comprehensive income	—		209		209
Balance at April 3, 2021	$	(27,391)	$	(6,871)	$	(34,262)

Reclassification of foreign currency translation adjustment for the loss on liquidation of subsidiaries is included in other income and expense other (see Note ~~6 – Accumulated Other Comprehensive Income (Loss) (continued)~~

Foreign Currency Translation Adjustment Pension
and Other
Postretirement
Actuarial Items Total
Balance at January 1, 2016 $ (28,704 ) $ (4,417 ) $ (33,121 )
Other comprehensive loss before reclassifications 167
—
167
Amounts reclassified from accumulated other comprehensive income (loss) —
503
503
Balance at October 1, 2016 $ (28,537 ) $ (3,914 ) $ (32,451 )

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 7)9).

Note 9 – Pension and Other Postretirement Benefits

Employees of VPG participate in various defined benefit pension and other postretirement benefit ("OPEB") plans. 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):


	Fiscal quarter ended April 2, 2022				Fiscal quarter ended April 3, 2021
	Pension Plans		OPEB Plans		Pension Plans		OPEB Plans
Net service cost	$	84	$	7	$	97	$	9
Interest cost	123		17		103		17
Expected return on plan assets	(123)		0		(97)		—
Amortization of actuarial losses	74		1		102		5
Net periodic benefit cost	$	158	$	25	$	205	$	31

Note ~~7 – Pension and Other Postretirement Benefits~~

~~Employees of VPG participate in various defined benefit pension and other postretirement benefit ("OPEB") plans.~~

~~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)~~:

Fiscal quarter ended
September 30, 2017 Fiscal quarter ended
October 1, 2016
Pension
Plans OPEB
Plans Pension
Plans OPEB
Plans
Net service cost $ 119
$ 28
$ 101
$ 25
Interest cost 167
35
192
33
Expected return on plan assets (133 ) —
(153 ) —
Amortization of actuarial losses 114
28
48
19
Net periodic benefit cost $ 267
$ 91
$ 188
$ 77

Nine fiscal months ended September 30, 2017 Nine fiscal months ended October 1, 2016

Pension
Plans OPEB
Plans Pension
Plans OPEB
Plans
Net service cost $ 355
$ 84
$ 307
$ 75
Interest cost 495
105
602
97
Expected return on plan assets (395 ) —
(486 ) —
Amortization of actuarial losses 338
84
151
57
Net periodic benefit cost $ 793
$ 273
$ 574
$ 229

~~Note 8~~10 – Share-Based Compensation

The Amended and Restated Vishay Precision Group, Inc. 2010 Stock Incentive Program (as amended and restated, the “Plan”) permits the issuance of up to 1,000,000 shares of common stock. At ~~September 30, 2017,~~April 2, 2022, the Company had reserved ~~256,730~~308,645 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the 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.

On ~~February 9, 2017,~~March 3, 2022 and in accordance with their respective employment agreements, VPG’s ~~three current~~3 executive officers were granted annual equity awards in the form of RSUs, of which ~~75%~~50% are performance-based. The awards ~~were comprised of 53,913 RSUs, as determined using the average of the closing stock prices of the Company's common stock for the last five trading days immediately preceding January 1, 2017 and~~ have an aggregate target grant-date fair value of ~~$0.9 million. Twenty-five~~$1.5 million and were comprised of 47,831 RSUs. NaN percent of these awards will vest on January 1, ~~2020,~~2025, subject to the executives’ continued employment. The performance-based portion of the RSUs will also vest on January 1, ~~2020,~~2025, subject to the executives' continued employment and the satisfaction

~~Note 8 – Share-Based Compensation (continued)~~

of certain performance objectives relating to three-year cumulative ~~“free cash”~~“adjusted free cash flow” and ~~net~~"net earnings ~~goals,~~goals", each weighted ~~equally, and the executives' continued employment.~~equally.

On March ~~23, 2017,~~9, 2022, certain non-executive VPG employees were granted annual equity awards in the form of ~~RSUs,~~RSUs. Certain employees received awards, of which 75% are performance-based and certain employees received awards of which 50% are performance-based. The awards have an aggregate grant-date fair value of ~~$0.4~~$0.5 million and were comprised of ~~23,921~~16,324 RSUs. ~~Twenty-five percent~~The non-performance portion of these awards (NaN percent for certain employees and 50 percent for certain employees) will vest on January 1, ~~2020~~2025 subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, ~~2020,~~2025, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings and cash flow goals, ~~and the employees' continued employment.~~each weighted equally.

On ~~May 25,~~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 ~~15,495~~595 RSUs to the newly-appointed independent ~~board members of the Board of Directors and to the non-executive Chairman~~ member

-14-

Note 10 - Share-Based Compensation (continued)

of the Board of Directors. The awards have an aggregate grant-date fair value of $0.3 million and will vest on the earlier of the next Annual Stockholders meeting or May 25, 2018, subject to the directors' continued service on the Board of Directors.

~~On July 26, 2017, the Board of Directors approved the issuance of an aggregate of 5,176 RSUs to newly appointed board members of the Board of Directors. These awards~~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 ~~was $0.1 million~~is immaterial, and the award will vest on the earlier of the ~~next~~2022 Annual Stockholders ~~meeting~~Meeting or May ~~25, 2018.~~27, 2022, subject to the director's continued service on the Board of Directors.

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


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Restricted stock units	$	497	$	366

Note 11 – Segment Information

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Restricted stock units $ 467
$ (83 ) $ 959
$ 465
VPG reports in 3 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.

~~During~~The following table sets forth reporting segment information. The reporting segment information reported for the ~~third~~fiscal quarter ended April 3, 2021 has been recast to reflect the new reporting segments adopted by the Company in the fourth quarter of ~~2017,~~2021, as described in the ~~Company recorded an increase~~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):

-15-

Note 11 - Segment Information (continued)


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Net revenues:
Sensors	$	37,750	$	31,815
Weighing Solutions	32,768		30,968
Measurement Systems	17,147		7,806
Total	$	87,665	$	70,589

Gross profit:
Sensors	$	14,286	$	12,833
Weighing Solutions	12,079		11,774
Measurement Systems	8,885		4,015
Total	$	35,250	$	28,622

Reconciliation of segment operating income to consolidated results:
Sensors	$	8,958	$	7,669
Weighing Solutions	6,214		5,817
Measurement Systems	2,211		674
Unallocated G&A expenses	(8,807)		(7,721)



Restructuring costs	(261)		—
Operating income	$	8,315	$	6,439













Restructuring costs:
Sensors	$	(203)	$	—

Measurement Systems	(58)		—

	$	(261)	$	—

Products are transferred between segments on a basis intended to ~~share-based compensation expense~~reflect, as nearly as practicable, the market value of ~~$0.2 million based upon a determination that achievement of certain performance objectives associated with awards granted~~ the products. The table below summarizes intersegment sales (in ~~2015 to executives and certain other employees were likely to be met. Share based compensation expense related to these performance objectives had been reduced in prior years.~~thousands):


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Sensors to Weighing Solutions	$	389	$	954

Sensors to Measurement Systems	61		8

During the third quarter of 2016, it was determined that certain performance objectives associated with awards granted in 2014, 2015 and 2016, to executives and certain other employees were not likely to be fully met. As a result, share-based compensation expense of $0.5 million was reversed based on anticipated performance levels at that time.

-16-

Note ~~9 – Segment Information~~

VPG reports in three product segments: the Foil Technology Products segment, the Force Sensors segment, and the Weighing and Control Systems segment. The Foil Technology Products reporting segment is comprised of the foil resistor and strain gage operating segments. The Force Sensors reporting segment is comprised of transducers, load cells and modules. The Weighing and Control Systems reporting segment is comprised of instruments, complete systems for process control, and on-board weighing applications.

VPG evaluates reporting segment performance based on multiple performance measures including revenues, gross profits and operating income, exclusive of certain items. Management believes that evaluating segment performance, excluding items such as restructuring costs, acquisition costs, and other items is meaningful because it provides insight with respect to the intrinsic operating results of VPG. The following table sets forth reporting segment information ~~(in thousands)~~:

~~Note 9 – Segment Information (continued)~~

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Net third-party revenues:
Foil Technology Products $ 29,315
$ 23,852
$ 86,385
$ 75,530
Force Sensors 16,596
15,231
47,720
45,465
Weighing and Control Systems 16,894
15,407
50,806
48,120
Total $ 62,805
$ 54,490
$ 184,911
$ 169,115

Gross profit:
Foil Technology Products $ 12,235
$ 8,639
$ 36,009
$ 29,092
Force Sensors 4,746
4,716
12,964
11,903
Weighing and Control Systems 7,286
6,910
22,570
20,540
Total $ 24,267
$ 20,265
$ 71,543
$ 61,535

Reconciliation of segment operating income to consolidated results:
Foil Technology Products $ 6,894
$ 3,894
$ 19,811
$ 14,839
Force Sensors 2,564
2,865
6,242
5,481
Weighing and Control Systems 2,992
2,997
9,691
7,114
Unallocated G&A expenses (6,708 ) (6,408 ) (19,752 ) (19,308 )
Acquisition costs —
—
—
(414 )
Restructuring costs (423 ) (709 ) (1,292 ) (2,395 )
Consolidated condensed operating income $ 5,319
$ 2,639
$ 14,700
$ 5,317

Acquisition costs:
Foil Technology Products $ —
$ —
$ —
$ (391 )
Weighing and Control Systems —
—
—
(23 )
$ —
$ —
$ —
$ (414 )

Restructuring costs:
Foil Technology Products $ 53
$ (416 ) $ (85 ) $ (1,134 )
Force Sensors (142 ) (78 ) (404 ) (379 )
Weighing and Control Systems (79 ) (192 ) (366 ) (724 )
Corporate/Other (255 ) (23 ) (437 ) (158 )
$ (423 ) $ (709 ) $ (1,292 ) $ (2,395 )

Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products. Intersegment sales from the Foil Technology Products segment to the Force Sensors segment and Weighing and Control Systems segment were $0.5 million and $0.8 million during the fiscal quarters ended September 30, 2017 and October 1, 2016, respectively and $1.8 million and $1.9 million during the nine fiscal months ended September 30, 2017 and October 1, 2016, respectively. Intersegment sales from the Force Sensors segment to the Foil Technology Products segment and Weighing and Control Systems segment were $0.3 million and $0.5 million during the fiscal quarters ended September 30, 2017 and October 1, 2016, respectively, and $1.0 million and $1.5 million during the nine fiscal months ended September 30, 2017 and October 1, 2016, respectively. Intersegment sales from the Weighing and Control Systems segment to the Force Sensors segment were $0.4 million and $0.2 million, during the fiscal quarters ended September 30, 2017 and October 1, 2016, respectively, and $0.7 million and $0.7 million during the nine fiscal months ended September 30, 2017 and October 1, 2016, respectively.

~~Note 10~~12 – Earnings Per Share

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


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Numerator:
Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders	$	6,356	$	4,961







Denominator:
Denominator for basic earnings per share:
Weighted average shares	13,637		13,593

Effect of dilutive securities:


Restricted stock units	38		36
Dilutive potential common shares	38		36

Denominator for diluted earnings per share:
Adjusted weighted average shares	13,675		13,629

Basic earnings per share attributable to VPG stockholders	$	0.47	$	0.36

Diluted earnings per share attributable to VPG stockholders	$	0.46	$	0.36

Note 13 – Additional Financial Statement Information

Fiscal quarter ended
Nine fiscal months ended

September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Numerator:

Numerator for basic earnings per share:

Net earnings attributable to VPG stockholders $ 4,255
$ 1,051

$ 9,869
$ 3,399

Adjustment to the numerator for net earnings:

Interest savings assuming conversion of dilutive exchangeable notes, net of tax 6
4

18
12

Numerator for diluted earnings per share:

Net earnings attributable to VPG stockholders $ 4,261
$ 1,055

$ 9,887
$ 3,411

Denominator:

Denominator for basic earnings per share:

Weighted average shares 13,291
13,192

13,253
13,185

Effect of dilutive securities:

Exchangeable notes 124
181

152
181
Restricted stock units 55
49

47
43
Dilutive potential common shares 179
230

199
224

Denominator for diluted earnings per share:

Adjusted weighted average shares 13,470
13,422

13,452
13,409

Basic earnings per share attributable to VPG stockholders $ 0.32
$ 0.08

$ 0.74
$ 0.26

Diluted earnings per share attributable to VPG stockholders $ 0.32
$ 0.08

$ 0.73
$ 0.25
Other Income (Expense) Other

~~Diluted earnings per share~~The caption “Other” on the consolidated condensed statements of operations consists of the following (in thousands):


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Foreign exchange gain	$	554	$	735
Interest income	64		45
Pension expense	(76)		(137)
Other	(103)		(70)
	$	439	$	573

Foreign currency exchange gains represent the impact of changes in foreign currency exchange rates. For the fiscal quarter ended April 2, 2022, the change in foreign exchange gains and losses during the period, as compared to the prior year period, is largely due to exposure to currency fluctuations with the Canadian dollar, the Israeli shekel, the Japanese yen and the British pound. Included in Other for the ~~periods presented do not reflect~~fiscal quarter ended April 2, 2022 is a $0.2 million loss on the ~~following weighted average potential common shares, as~~liquidation of 2 of the ~~effect would be antidilutive~~ ~~(in thousands)~~:Company's European subsidiaries.

-17-

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Weighted average employee stock options —
18
—
18

Note ~~11 – Additional Financial Statement Information~~

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

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Foreign exchange gain (loss) $ 169
$ (59 ) $ (463 ) $ 436
Interest income 47
42
103
145
Other 1,501
(27 ) 1,394
(230 )
$ 1,717
$ (44 ) $ 1,034
$ 351

Included within Other, for the fiscal quarter ended September 30, 2017, is net proceeds of $1.5 million related to a lease termination payment at the Company's Tianjin, People's Republic of China location. The relocation of operations in Tianjin has been completed and the majority of the expenses associated with the move have been incurred.

~~Note 12~~14 – Fair Value Measurements

~~Accounting Standards Codification (“ASC”)~~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.

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:
			Fair value measurements at reporting date using:							Total Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	Total Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
September 30, 2017
April 2, 2022									April 2, 2022
Assets									Assets
Assets held in rabbi trusts	$	4,899	$	378	$	4,521	$	—	Assets held in rabbi trusts	$	5,980	$	124	$	5,856	$	—

December 31, 2016
December 31, 2021									December 31, 2021
Assets									Assets
Assets held in rabbi trusts	$	4,772	$	537	$	4,235	$	—	Assets held in rabbi trusts	$	6,158	$	49	$	6,109	$	—

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 ~~September 30, 2017~~April 2, 2022 and December 31, ~~2016,~~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 ~~marketable securities~~cash equivalents held in the rabbi trust isare 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 ~~September 30, 2017~~April 2, 2022 and December 31, ~~2016 is approximately $33.8 million and $36.0 million, respectively, compared to~~2021 approximates its carrying value ~~excluding capitalized deferred financing costs, of $33.0 million and $36.2 million, respectively. The Company estimates~~as the ~~fair value of its long-term~~revolving debt ~~using~~is reset on a ~~combination of quoted~~monthly basis based on current market ~~prices for similar financing arrangements and expected future payments discounted at risk-adjusted rates.~~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

~~Note 12 – Fair Value Measurements (continued)~~

financial instruments include cash and cash equivalents, ~~whose~~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 – 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.

-18-

The Company recorded $0.3 million and $0.0 million of restructuring costs during the fiscal quarter ended April 2, 2022 and April 3, 2021, respectively. Restructuring costs were comprised primarily of employee terminations costs, including severance and statutory retirement allowances, in connection with the closure of one of the Company's facilities.

The following table summarizes recent activity related to all restructuring programs. The accrued restructuring liability balance as of April 2, 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	$	—
Restructuring charges in 2022	261

Cash payments	(78)

Balance at April 2, 2022	$	183

-19-

Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

VPG is ~~an internationally recognized designer, manufacturer~~a global, diversified company focused on precision measurement sensing technologies, including specialized sensors, weighing solutions, and ~~marketer~~measurement systems. Many of ~~sensors, and sensor-based~~our precision measurement ~~systems, as well as specialty resistors and strain gages based upon our proprietary technology. We provide precision~~sensing products and solutions ~~many of which~~ are “designed-in” by our customers ~~specializing in the~~and address growing ~~markets~~applications across a diverse array of ~~stress, force, weight, pressure,~~industries and current measurements. A significant portion of our products and solutions are primarily based upon our proprietary foil technology and are produced as part of our vertically integrated structure. We believe this strategy results in higher quality, more cost effective and focused solutions for our customers.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. Our global operations enable us~~quality, and we employ an operationally diversified structure to ~~produce~~manage our businesses.

Driven by the continued proliferation of data generated by the expanding use of sensors across a ~~wide variety~~widening array of ~~products~~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 ~~strategically effective geographic locations that also optimize~~both our ~~resources for specific technologies, sensors, assemblies,~~traditional industrial markets and ~~systems.~~

The Company also has a long heritage of innovation in precision foil resistors, foil strain gages, and sensors that convert mechanical inputs into an electronic signal for display, processing, interpretation, or control by our instrumentation and systems products. Our advanced sensor product line continues this heritage by offering high-quality foil strain gages produced in a proprietary, highly automated environment. Precision sensors are essential to the accurate measurement, resolution and display of force, weight, pressure, torque, tilt, motion, or acceleration, especially in the legal-for-trade, commercial, and industrial marketplaces. This expertise served as a foundation for our expansion into strain gage instrumentation, load cells, transducers, weighing modules, and complete systems for process control and on-board weighing. Although our products are typically used in the industrial market, we believe our advanced sensors may find application outside the industrial market.

~~The precision sensor market is integral~~new markets, due to the development of ~~intelligent products~~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, ~~agricultural, transportation, industrial,~~agriculture, avionics, military and space, and consumer product applications. ~~We believe~~The Company has a long heritage of innovation in sensor technologies that ~~as original equipment manufacturers (“OEMs”) continue a drive to~~provide accuracy, reliability and repeatability that make our customers' products ~~“smarter,”~~safer, smarter, and more productive. As the functionality of customers products increases, and they ~~will~~ integrate more precision measurement sensors and related systems into their solutions in order to link the ~~mechanical/~~mechanical and physical world with digital control and/or ~~response. We~~response, we believe this ~~offers a~~will offer substantial growth ~~opportunity~~opportunities for our products and expertise.

Impact of COVID-19 on Our Business

As of May 10, 2022, all of the Company’s facilities are open and operational. Nonetheless, given the ongoing uncertainty concerning the magnitude and duration of the COVID-19 pandemic around the world, any ongoing economic disruption may adversely affect the Company’s business and financial results.

Overview of Financial Results

VPG reports in three product segments: the ~~Foil Technology Products~~Sensors segment, the ~~Force Sensors~~Weighing Solutions segment, and the ~~Weighing and Control~~Measurement Systems segment. The ~~Foil Technology Products~~Sensors reporting segment is comprised of the foil resistor and strain gage operating segments. The ~~Force Sensors reporting~~Weighing Solutions segment is comprised of ~~transducers, load cells,~~specialized modules and ~~modules.~~systems used to precisely measure weight, force torque, and pressure. The ~~Weighing and Control~~Measurement Systems reporting segment is comprised of ~~instruments, complete~~highly specialized systems for ~~process control,~~steel production, materials development, and ~~on-board weighing applications.~~safety testing.

Net revenues for the fiscal quarter ended ~~September 30, 2017~~April 2, 2022 were ~~$62.8~~$87.7 million versus ~~$54.5~~$70.6 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the fiscal quarter ended ~~September 30, 2017~~April 2, 2022 were ~~$4.3~~$6.4 million, or ~~$0.32~~$0.46 per diluted share, versus ~~$1.1~~$5.0 million, or ~~$0.08 per diluted share, for the comparable prior year period.~~

Net revenues for the nine fiscal months ended September 30, 2017 were $184.9 million versus $169.1 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the nine fiscal months ended September 30, 2017 were $9.9 million, or $0.73 per diluted share versus $3.4 million, or $0.25$0.36 per diluted share, for the comparable prior year period.

The results of operations for the fiscal ~~quarters~~quarter ended ~~September 30, 2017~~April 2, 2022 and ~~October 1, 2016~~April 3, 2021 include items affecting comparability as listed in the reconciliations below. The reconciliations below include certain financial measures which are not recognized in accordance with U.S. generally accepted accounting principles ("GAAP"), including adjusted gross ~~profit,~~profits, adjusted gross profit margin, adjusted operating income, adjusted operating ~~income~~ margin, adjusted net earnings, ~~and~~ adjusted net earnings per diluted ~~share.~~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 ~~profit,~~profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, ~~and~~ 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 ~~meaningful~~useful to investors because ~~they provide insight with respect~~each presents what management views as our core operating results for the relevant period. The adjustments to ~~intrinsic~~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 ~~results. The reconciling items presented below represent significant charges~~profitability and performance trends across comparable periods. In addition, the Company has historically provided these or ~~credits which~~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 ~~important~~regarded as supplemental to ~~understanding our intrinsic operations.~~

~~The items affecting comparability are~~ ~~(in thousands, except per share amounts)~~:its GAAP financial results.

-20-

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Gross profit $ 24,267
$ 20,265
$ 71,543
$ 61,535
Gross profit margin 38.6 % 37.2 % 38.7 % 36.4 %

Reconciling items affecting gross profit margin
Acquisition purchase accounting adjustments ^(a)
42
46
42
537

Adjusted gross profit $ 24,309
$ 20,311
$ 71,585
$ 62,072
Adjusted gross profit margin 38.7 % 37.3 % 38.7 % 36.7 %



	Gross Profit						Operating Income						Net Earnings Attributable to VPG Stockholders				Diluted Earnings Per share
Three months ended	April 2, 2022			April 3, 2021			April 2, 2022			April 3, 2021			April 2, 2022		April 3, 2021		April 2, 2022		April 3, 2021
As reported - GAAP	$	35,250		$	28,622		$	8,315		$	6,439		$	6,356	$	4,961	$	0.46	$	0.36
As reported - GAAP Margins	40.2		%	40.5		%	9.5		%	9.1		%
Acquisition purchase accounting adjustments (a)	371			11			371			11			371		11		0.03		—

COVID-19 impact (b)	138			(151)			138			(443)			138		(443)		0.01		(0.03)
Start-up costs (c)	150			129			150			129			150		129		0.01		0.01

Restructuring costs				—			261			—			261		—		0.02		—
Foreign exchange (gain)/loss (d)				—						—			(554)		(735)		(0.04)		(0.05)
Less: Tax effect of reconciling items and discrete tax items				—						—			76		(233)		—		(0.02)
As Adjusted - Non GAAP	$	35,909		$	28,611		$	9,235		$	6,136		$	6,646	$	4,156	$	0.49	$	0.31
As Adjusted - Non GAAP Margins	41.0		%	40.5		%	10.5		%	8.7		%


	Three months ended
	April 2, 2022			April 3, 2021
Net earnings attributable to VPG stockholders	$	6,356		$	4,961
Interest Expense	329			305
Income tax expense	1,741			1,764
Depreciation	2,853			2,907
Amortization	970			615
EBITDA	12,249			$	10,552
EBITDA MARGIN	14.0		%	14.9		%

Acquisition purchase accounting adjustments (a)	371			11

Restructuring costs	261			—
COVID-19 impact (b)	138			(443)
Start-up costs (c)	150			129
Foreign exchange (gain)/loss (d)	(554)			(735)
ADJUSTED EBITDA	$	12,615		$	9,514
ADJUSTED EBITDA MARGIN	14.4		%	13.5		%

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Operating income $ 5,319
$ 2,639
$ 14,700
$ 5,317
Operating margin 8.5 % 4.8 % 7.9 % 3.1 %

Reconciling items affecting operating margin
Acquisition purchase accounting adjustments ^(a)
42
46
42
537
Acquisition costs —
—
—
414
Strategic alternative evaluation costs ^(b)
—
1,079
—
1,079
Restructuring costs 423
709
1,292
2,395

Adjusted operating income $ 5,784
$ 4,473
$ 16,034
$ 9,742
Adjusted operating margin 9.2 % 8.2 % 8.7 % 5.8 %

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Net earnings attributable to VPG stockholders $ 4,255
$ 1,051
$ 9,869
$ 3,399

Reconciling items affecting operating margin
Acquisition purchase accounting adjustments ^(a)
42
46
42
537
Acquisition costs —
—
—
414
Strategic alternative evaluation costs ^(b)
—
1,079
—
1,079
Restructuring costs 423
709
1,292
2,395
Reconciling items affecting other income/expense

Net proceeds from lease termination ^(c)
(1,544 )
—
(1,544 )
—
Less reconciling items affecting income tax expense
Tax effect of reconciling items and discrete tax items (394 ) 27
(339 ) 1,317
Adjusted net earnings attributable to VPG stockholders $ 3,570
$ 2,858
$ 9,998
$ 6,507

Adjusted net earnings per diluted share $ 0.27
$ 0.21
$ 0.74
$ 0.49

Weighted average shares outstanding - diluted 13,470
13,422
13,452
13,409

(a) Acquisition purchase accounting adjustments ~~recorded in connection with the acquisition of Stress-Tek and Pacific~~ include fair market value adjustments associated with ~~inventory.~~inventory recorded as a component of costs of products sold.


~~(b)~~	The Company incurred costs associated with the Company's evaluation of strategic alternatives. The evaluation process did not result in the adoption of any particular strategic alternative other that the Company's continued execution of its business plan.

(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) ~~Net proceeds related to a lease termination payment at~~Start-up costs in 2022 and 2021 are associated with the ~~Company's Tianjin, Peoples' Republic~~ramp up of ~~China location.~~our new manufacturing facility in Israel.

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

-21-

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.

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~~first quarter of ~~2016~~2021 through the ~~third~~first quarter of ~~2017~~ 2022 (dollars in thousands):


	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter			1st Quarter
	2021			2021			2021			2021			2022
Net revenues	$	70,589		$	75,339		$	81,974		$	90,017		$	87,665

Gross profit margin	40.5		%	39.6		%	38.8		%	38.7		%	40.2		%

End-of-period backlog	$	100,700		$	130,900		$	146,700		$	150,500		$	170,600

Book-to-bill ratio	1.21			1.40			1.21			1.06			1.25

Inventory turnover	2.67			2.64			2.55			2.82			2.69

-22-

3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter
2016 2016 2017 2017 2017
Net revenues $ 54,490
$ 55,814
$ 59,787
$ 62,319
$ 62,805

Gross profit margin 37.2 % 38.1 % 37.7 % 39.7 % 38.6 %

End-of-period backlog $ 50,300
$ 56,800
$ 61,400
$ 67,500
$ 76,200

Book-to-bill ratio 0.98
1.16
1.06
1.08
1.12

Inventory turnover 2.36
2.41
2.64
2.64
2.64


																	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter			1st Quarter
	3rd Quarter			4th Quarter			1st Quarter			2nd Quarter			3rd Quarter				2021			2021			2021			2021			2022
	2016			2016			2017			2017			2017
Foil Technology Products
Sensors																Sensors
Net revenues	$	23,852		$	25,412		$	27,764		$	29,306		$	29,315		Net revenues	$	31,815		$	31,176		$	30,721		$	34,149		$	37,750
Gross profit margin	36.2		%	40.6		%	41.4		%	41.9		%	41.7		%	Gross profit margin	40.3		%	38.9		%	31.1		%	32.1		%	37.8		%
End-of-period backlog	$	23,600		$	28,800		$	31,100		$	34,300		$	35,500		End-of-period backlog	$	47,400		$	59,200		$	70,100		$	72,900		$	81,300
Book-to-bill ratio	0.99			1.26			1.06			1.09			1.03			Book-to-bill ratio	1.19			1.38			1.37			1.11			1.27
Inventory turnover	2.57			2.57			2.80			2.90			2.88			Inventory turnover	3.06			2.90			3.14			3.53			3.54

Force Sensors
Weighing Solutions																Weighing Solutions
Net revenues	$	15,231		$	14,769		$	15,468		$	15,656		$	16,596		Net revenues	$	30,968		$	31,675		$	30,676		$	32,071		$	32,768
Gross profit margin	31.0		%	25.3		%	23.9		%	28.9		%	28.6		%	Gross profit margin	38.0		%	37.2		%	37.2		%	34.0		%	36.9		%
End-of-period backlog	$	12,000		$	13,000		$	14,100		$	14,100		$	18,300		End-of-period backlog	$	35,700		$	41,100		$	42,600		$	41,800		$	43,600
Book-to-bill ratio	1.02			1.08			1.06			0.99			1.25			Book-to-bill ratio	1.16			1.16			1.06			0.98			1.06
Inventory turnover	1.84			1.93			2.11			1.97			2.02			Inventory turnover	2.89			2.78			2.47			2.63			2.61

Weighing and Control Systems
Measurement Systems																Measurement Systems
Net revenues	$	15,407		$	15,633		$	16,555		$	17,357		$	16,894		Net revenues	$	7,806		$	12,488		$	20,577		$	23,797		$	17,147
Gross profit margin	44.9		%	46.5		%	44.3		%	45.8		%	43.1		%	Gross profit margin	51.4		%	47.1		%	52.8		%	54.7		%	51.8		%
End-of-period backlog	$	14,700		$	15,000		$	16,200		$	19,100		$	22,400		End-of-period backlog	$	17,600		$	30,600		$	34,000		$	35,800		$	45,700
Book-to-bill ratio	0.92			1.05			1.06			1.14			1.15			Book-to-bill ratio	1.48			2.03			1.18			1.08			1.56
Inventory turnover	2.98			3.08			3.36			3.52			3.41			Inventory turnover	1.32			1.85			1.92			2.18			1.68

Net revenues for the ~~third~~first quarter of ~~2017 increased 0.8%~~2022 decreased 2.6% from the ~~second~~fourth quarter of ~~2017 and 15.3% from the third quarter of 2016,~~2021 mainly due to decreased volume in Measurement Systems reporting segments partially offset by increased volume in ~~all three~~the Sensors reporting segment. Net revenues increased 24.2% from the first quarter of 2021 with increased volume primarily from the Sensors and Measurement Systems reporting segments. The increase in the Measurement Systems reporting segment was mainly driven by the revenues from the acquisition of DTS.

Net revenues in the ~~Foil Technology Products~~Sensors reporting segment ~~were flat~~increased 10.5% compared to the ~~second~~fourth quarter of ~~2017~~2021 and increased ~~22.9%~~18.7% from the ~~third~~first quarter of ~~2016.~~2021. Sequentially, ~~declines~~the increase in ~~volume~~revenues reflected revenue growth in the test and measurement market sector in Asia and the Americas, were completely offset by positive foreign currency impacts. Compared to the third quarter of 2016, net revenues increased due to higher revenue related to precision resistors products in the test and measurement market sector in all regions, higher revenues fromour advanced sensors products in Other markets (mainly for consumer and medical applications) and in our General Industrial end markets.The year-over-year increase in revenues was primarily attributable to higher sales of precision resistors in the ~~force measurements~~Test and Measurements market ~~sector in Asia,~~ and higher ~~revenues from Pacific~~revenue of our advanced sensors products primarily in ~~the avionics, military~~Other markets (mainly for consumer and ~~space market sector~~medical applications) and in ~~the Americas.~~our General Industrial markets.

Net revenues in the Force Sensors reporting segment increased 6.0% from the second quarter of 2017, mainly due to higher volume with OEM customers in the force measurement market and distribution customers for the precision weighing market in the Americas, along with positive foreign currency impacts. Net revenues increased 9.0% from the third quarter of 2016, mainly due to higher volume with OEM customers in the precision weighing end market in Europe.

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

Net revenues in the Measurement Systems reporting segment decreased ~~(2.7)%~~27.9% from the ~~second~~fourth quarter of ~~2017~~2021 and increased ~~9.7%~~119.7% from the ~~third~~first quarter of ~~2016.~~2021. Sequentially, the ~~lower net revenues are primarily related to a~~ decrease in ~~our steel business revenues in Asia and process weighing in the Americas, partially offset by positive foreign currency impacts. Compared~~revenue was primarily due to the ~~third quarter~~lower revenue of ~~2016, strong~~Dynamic Systems, Inc. ("DSI") and KELK products to the Steel market, and lower revenues ~~from~~for our ~~on-board weighing products~~Diversified Technical Systems, Inc. ("DTS") and Pacific Instruments businesses.The year-over-year increase in ~~Europe~~revenue was primarily attributable to the addition of revenue for DTS, which was acquired on June 1, 2021, and ~~the Americas were primarily responsible for the improvement in net revenues.~~higher revenue of our Pacific Instruments and KELK businesses.

Overall gross profit margin in the ~~third~~first quarter of ~~2017 decreased (1.1)%~~2022 increased 1.5% as compared to the ~~second~~fourth quarter of ~~2017~~2021 and ~~increased 1.4%~~decreased 0.3% from the ~~third~~first quarter of ~~2016.~~2021.

Sequentially, ~~all of our reporting segments contributed to~~ the ~~lower~~increase in the gross profit margin ~~where an~~in the Sensors and Weighing Solutions reporting segments was partially offset by a decrease in the gross profit margin in the Measurement Systems reporting segment. In the Sensors reporting

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segment, the gross profit margins increased sequentially due to higher volume and a favorable product mix, partially offset by wage increases. In the Weighing Solutions reporting segment, the sequential increase in ~~overall revenues~~gross profit margins was primarily due to higher volume, higher selling prices and ~~positive foreign currency impacts were~~a favorable product mix, offset by higher ~~manufacturing~~material costs. The ~~Weighing and Control~~sequential decrease in the gross profit margins in the Measurement Systems reporting segment was ~~responsible for the largest portion of the decline, mainly~~primarily due to ~~the~~ lower ~~volume in steel business revenues.~~revenue and unfavorable product mix.

Compared to the ~~third~~first quarter of ~~2016,~~2021, the ~~Foil Technology Products~~Sensors and Weighing Solutions reporting segments had lower gross profit margins, while the Measurement Systems gross profit margin was flat.

The Sensors reporting segment had a ~~higher~~lower gross profit margin due to ~~higher volume~~impacts from charges related to start-up costs in our new advanced sensors facility and ~~manufacturing efficiencies. This improvement was~~the impact of COVID-19 in conjunction with unfavorable foreign exchange rates, wage increases, and labor inefficiencies due to the hiring of new personnel, partially offset by ~~a lower~~higher volume. The Weighing Solutions reporting segment decrease in gross profit margin ~~in the Force Sensors segment~~as compared to 2021 was primarily due to ~~manufacturing inefficiencies related to increased production at our facility in India~~higher material prices, unfavorable foreign exchange rates, and ~~negative foreign currency impacts and a lower~~wage increases, partially offset by higher volume. In the Measurement Systems reporting segment, the gross profit margin inwas flat as compared to the ~~Weighing~~first quarter of 2021. The higher revenue coming from DTS was offset by the impact of charges related to purchase accounting adjustments from the DTS acquisition and ~~Control Systems segment due to product mix.~~the impact of COVID-19.

Optimize Core Competence

The Company’s core ~~competency~~competencies include our innovative, deep technical and ~~key~~applications-specific expertise that adds value ~~proposition is providing customers with proprietary foil technology~~to our customers' products, our strong brands and ~~precision measurement sensors~~customer relationships, our focus on operational excellence, our ability to select and sensor-based systems. Our foil technology resistors and strain gages are recognized as global market leading products that provide high precision and high stability over extreme temperature ranges and long life. Our force sensor productsdevelop our management teams, and our ~~weighing and control systems products are also certified to meet some of the highest levels of precision measurements of force, weight, pressure, torque, tilt, motion, and acceleration.~~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 ~~foil technology~~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 ~~new~~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 ~~expect to result~~believe results in reduced manufacturing and lead times, improved quality and increased margins. ~~The implementation~~As a sign of ~~this innovative manufacturing technology was the basis~~our commitment to these businesses, we signed a long-term lease for a ~~significant portion~~state-of-the-art facility that has been constructed in Israel. We fully transitioned to this facility in the third quarter of ~~the restructuring~~fiscal 2021.

Our design, research, and product development teams, in partnership with our marketing teams, drive our efforts ~~we undertook~~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 ~~2015~~ways that make them more appealing, addressing changing customer needs and ~~2016.~~industry trends in terms of form, fit, and function.

We also seek to achieve significant production cost savings through the transfer, expansion, and ~~expansion~~construction of manufacturing operations in countries such as India, China, and Israel, where we can benefit from ~~lower labor costs,~~ improved efficiencies or available tax and other government-sponsored incentives. ~~For example, in 2016~~In the past several years, we ~~relocated a significant portion~~incurred restructuring expense related to closing and downsizing of facilities as part of the manufacturing transitions of our ~~force sensor~~load cell products to facilities in India and China, which marked key milestones in our ongoing strategic initiatives to align and consolidate our manufacturing from leased locations with higher labor cost to the owned facility we built in India. We closed a facility in Costa Rica and consolidated its functions with existing operations where significant efficiencies were available. This consolidation of operations is part of our global restructuring and cost reduction program announced in November 2015 and substantially completed in 2016.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 ~~has~~had been largely focused on vertical product integration, using our foil strain gages in our ~~force sensor~~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 control systems. The acquisitions of Stress-Tek and KELK, each of which employ our foil strain gages to manufacture load cells for their systems, continue this strategy. Additionally, the KELK acquisition resulted in the acquisition of certain optical sensor technology. The Pacific acquisition significantly broadened our existing data acquisition offerings and opened new markets for us. Along with our recent success in microelectromechanical systems ("MEMS") technology for on-board weighing, weproduct companies.

We expect to expand our expertise, and our acquisition focus, outside our traditional vertical approach to other precision ~~sensor~~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

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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 ~~from higher-cost countries~~ to ~~lower-cost countries and consolidating to fewer~~more cost effective locations. This may enable us to become more efficient and cost competitive, and also maintain tighter controls ~~over~~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 ~~have begun to realize~~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 ~~(“SEC”)~~ on March ~~16, 2017.~~

The Company recorded restructuring costs of $0.4 million and $1.3 million during the fiscal quarter and nine fiscal months ended September 30, 2017, respectively. Restructuring costs consist mainly of employee termination costs, including severance and statutory retirement allowances, and facility closure costs, and were incurred in connection with various cost reduction programs.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, 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 impairmenttests, require significant managementjudgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigninggoodwillto 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.

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.~~currency and significant lease assets and liabilities.

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Effects of Foreign Exchange Rate on Operations

For the fiscal quarter ended ~~September 30, 2017,~~April 2, 2022, exchange rates ~~increased~~decreased net revenues by ~~$0.6~~$1.5 million, and decreased costs of products sold and selling, general, and administrative expenses by $1.5 million, when compared to the comparable prior year period. For the fiscal nine months ended September 30, 2017, exchange rates reduced net revenues by $1.9 million, and increased costs of products sold and selling, general, and administrative expenses by $0.3$0.2 million, when compared to the comparable prior year period.

~~Off-Balance Sheet Arrangements~~

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~~As of September 30, 2017 and December 31, 2016, we did not have any off-balance sheet arrangements.~~

Results of Operations

Results of operations by reporting segments for the fiscal quarter ended April 3, 2021 have been recast to reflect the new reporting segments as described under Item 7. Overview of Financial Results of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 4, 2022.

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


	Fiscal quarter ended				Nine fiscal months ended					Fiscal quarter ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016			April 2, 2022		April 3, 2021
Costs of products sold	61.4	%	62.8	%	61.3	%	63.6	%	Costs of products sold	59.8	%	59.5	%
Gross profit	38.6	%	37.2	%	38.7	%	36.4	%	Gross profit	40.2	%	40.5	%
Selling, general, and administrative expenses	29.5	%	31.0	%	30.0	%	31.6	%	Selling, general, and administrative expenses	30.4	%	31.4	%
Operating income	8.5	%	4.8	%	7.9	%	3.1	%	Operating income	9.5	%	9.1	%
Income before taxes	10.5	%	4.1	%	7.8	%	2.7	%	Income before taxes	9.6	%	9.5	%
Net earnings	6.9	%	2.0	%	5.4	%	2.0	%	Net earnings	7.6	%	7.0	%
Net earnings attributable to VPG stockholders	6.8	%	1.9	%	5.3	%	2.0	%	Net earnings attributable to VPG stockholders	7.3	%	7.0	%

Effective tax rate	34.1	%	51.2	%	30.7	%	25.3	%	Effective tax rate	20.7	%	26.3	%

Net Revenues

Net revenues were as follows (dollars in thousands):


	Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended
	September 30, 2017			October 1, 2016		September 30, 2017			October 1, 2016			April 2, 2022			April 3, 2021
Net revenues	$	62,805		$	54,490	$	184,911		$	169,115	Net revenues	$	87,665		$	70,589
Change versus comparable prior year period	$	8,315				$	15,796				Change versus comparable prior year period	$	17,076
Percentage change versus prior year period	15.3		%			9.3		%			Percentage change versus prior year period	24.2		%

Changes in net revenues were attributable to the following:

vs. prior year
quarter vs. prior year-
to-date
Change attributable to:

Change in volume 14.6 % 10.2 %
Change in average selling prices (0.4 )% (0.3 )%
Foreign currency effects 1.1 % (1.3 )%
Acquisitions —
0.7 %
Net change 15.3 % 9.3 %


	vs. prior year quarter
Change attributable to:
Change in volume	13.1	%
Change in average selling prices	2.0	%
Foreign currency effects	(1.8)	%
Acquisitions	10.9	%

Net change	24.2	%

During the fiscal quarter ended ~~September 30, 2017,~~April 2, 2022, net revenues increased ~~15.3%~~24.2% as compared to the comparable prior year period, ~~due to~~with increased volume ~~in all three~~primarily from the Sensors and Measurement Systems reporting segments. ~~During~~The increase in the ~~fiscal nine months ended September 30, 2017, net revenues increased 9.3% as compared to~~Measurement Systems reporting segment was mainly driven by the ~~comparable prior year period. Volume increases from all three reporting segments and added~~ revenues from the acquisition of ~~Pacific, which was acquired on April 6, 2016, contributed to this improvement.~~DTS.

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Gross Profit Margin

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

Fiscal quarter ended Nine fiscal months ended
September 30, 2017 October 1, 2016 September 30, 2017 October 1, 2016
Gross profit margin 38.6 % 37.2 % 38.7 % 36.4 %


	Fiscal quarter ended
	April 2, 2022		April 3, 2021
Gross profit margin	40.2	%	40.5	%

The gross profit margin for the fiscal quarter ended September 30, 2017 increased 1.4% compared to the comparable prior year period. The Foil Technology Products segment had higher gross profit margins due to higher volume and manufacturing efficiencies. This improvement was partially offset by lower gross profit margin in the Force Sensors segment due to manufacturing inefficiencies related to increased production at our facility in India and lower gross profit margin in the Weighing and Control Systems segment due to product mix.

~~The gross profit margin for the nine fiscal months ended September 30, 2017 increased 2.3%~~April 2, 2022 decreased 0.3% as compared to the comparable prior year period ~~mainly due to volume improvements~~with lower gross profit margins in ~~all~~the Sensors and Weighing Solutions reporting ~~segments.~~segments and flat gross profit margins in the Measurement Systems reporting segment.

Segments

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

~~Foil Technology Products~~Sensors

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


	Fiscal quarter ended					Nine fiscal months ended						Fiscal quarter ended
	September 30, 2017			October 1, 2016		September 30, 2017			October 1, 2016			April 2, 2022			April 3, 2021
Net revenues	$	29,315		$	23,852	$	86,385		$	75,530	Net revenues	$	37,750		$	31,815
Change versus comparable prior year period	$	5,463				$	10,855				Change versus comparable prior year period	$	5,935
Percentage change versus prior year period	22.9		%			14.4		%			Percentage change versus prior year period	18.7		%


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.10 par value	VPG	New York Stock Exchange


x	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~


~~For the quarterly period ended~~	~~September 30, 2017~~ ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 2022 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


¨	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~



	Total		Weighing and Control Systems Segment				Foil Technology Products Segment
			KELK Acquisition		Stress-Tek Acquisition		Pacific Acquisition
Balance at December 31, 2016	$	18,717	$	6,364	$	6,311	$	6,042
Foreign currency translation adjustment	511		511		—		—
Balance at September 30, 2017	$	19,228	$	6,875	$	6,311	$	6,042



Balance at December 31, 2016	$	1,333
Restructuring costs in 2017	1,292
Cash payments	(2,070		)
Foreign currency translation	1
Balance at September 30, 2017	$	556



	September 30, 2017			December 31, 2016
2015 Credit Agreement - Revolving Facility	$	9,000		$	9,000
2015 Credit Agreement - U.S. Closing Date Term Facility	3,780			4,128
2015 Credit Agreement - U.S. Delayed Draw Term Facility	9,240			10,092
2015 Credit Agreement - Canadian Term Facility	8,105			8,780
Exchangeable Unsecured Notes, due 2102	2,794			4,097
Other debt	432			509
Deferred financing costs	(369		)	(454		)
Total long-term debt	32,982			36,152
Less: current portion	2,965			2,623
Long-term debt, less current portion	$	30,017		$	33,529



	Fiscal quarter ended September 30, 2017					Fiscal quarter ended October 1, 2016
	Pension Plans			OPEB Plans		Pension Plans			OPEB Plans
Net service cost	$	119		$	28	$	101		$	25
Interest cost	167			35		192			33
Expected return on plan assets	(133		)	—		(153		)	—
Amortization of actuarial losses	114			28		48			19
Net periodic benefit cost	$	267		$	91	$	188		$	77



	Nine fiscal months ended September 30, 2017					Nine fiscal months ended October 1, 2016
	Pension Plans			OPEB Plans		Pension Plans			OPEB Plans
Net service cost	$	355		$	84	$	307		$	75
Interest cost	495			105		602			97
Expected return on plan assets	(395		)	—		(486		)	—
Amortization of actuarial losses	338			84		151			57
Net periodic benefit cost	$	793		$	273	$	574		$	229



	vs. prior year quarter		vs. prior year- to-date
Change attributable to:
Change in volume	14.6	%	10.2	%
Change in average selling prices	(0.4	)%	(0.3	)%
Foreign currency effects	1.1	%	(1.3	)%
Acquisitions	—		0.7	%
Net change	15.3	%	9.3	%



31.1						Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Ziv Shoshani, Chief Executive Officer.
31.2						Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – William M. Clancy, Chief Financial Officer.
32.1						Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Ziv Shoshani, Chief Executive Officer.
32.2						Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – William M. Clancy, Chief Financial Officer.
101						Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended ~~September 30, 2017,~~April 2 2022, furnished in XBRL (eXtensible Business Reporting Language).



	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)