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Finance

Vishay Precision Group Inc.

05/07/2024 | Press release | Distributed by Public on 05/07/2024 09:04

Quarterly Report for Quarter Ending March 30, 2024 (Form 10-Q)

vpg-20240330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 30, 2024

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

For the transition period from _____ to _____

Commission File Number 1-34679

VISHAY PRECISION GROUP, INC.

(Exact name of registrant as specified in its charter)


Delaware	27-0986328
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification Number)
3 Great Valley Parkway, Suite 150
Malvern, PA, 19355	484-321-5300
(Address of Principal Executive Offices) (Zip Code)	(Registrant's Telephone Number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ýYes¨No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. ýYes¨No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	ý
Non-accelerated filer	¨	Smaller reporting company	☐
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes ýNo

As of May 7, 2024, the registrant had 12,331,036 shares of its common stock and 1,022,887 shares of its Class B convertible common stock outstanding.

VISHAY PRECISION GROUP, INC.

FORM 10-Q

March 30, 2024

CONTENTS


Page Number
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

Consolidated Condensed Balance Sheets - March 30, 2024 (Unaudited) and December 31, 2023	3

Consolidated Condensed Statements of Operations (Unaudited) - Fiscal Quarters Ended March 30, 2024 and April 1, 2023	5

Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) - Fiscal Quarters Ended March 30, 2024 and April 1, 2023	6

Consolidated Condensed Statements of Cash Flows (Unaudited) -Three Fiscal Months Ended March 30, 2024 and April 1, 2023	7

Consolidated Condensed Statements of Equity (Unaudited) - Fiscal Quarters Ended March 30, 2024 and April 1, 2023	8

Notes to Unaudited Consolidated Condensed Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

SIGNATURES	37

-2-

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS


VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)
March 30, 2024	December 31, 2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	83,016	$	83,965
Accounts receivable, net	52,184	56,438
Inventories:
Raw materials	35,363	33,973
Work in process	27,638	26,594
Finished goods	26,665	27,572
Inventories, net	89,666	88,139

Prepaid expenses and other current assets	16,098	14,520
Total current assets	240,964	243,062

Property and equipment:
Land	4,130	4,154
Buildings and improvements	72,542	72,952
Machinery and equipment	130,071	131,738
Software	9,696	9,619
Construction in progress	11,737	11,379
Accumulated depreciation	(139,645)	(139,206)
Property and equipment, net	88,531	90,636

Goodwill	45,553	45,734
Intangible assets, net	43,602	44,634
Operating lease right-of-use assets	26,927	26,953
Other assets	20,624	20,547
Total assets	$	466,201	$	471,566

Continues on the following page.

-3-


VISHAY PRECISION GROUP, INC. Consolidated Condensed Balance Sheets (In thousands)
March 30, 2024	December 31, 2023

Liabilities and equity	(Unaudited)
Current liabilities:
Trade accounts payable	$	10,792	$	11,698
Payroll and related expenses	19,171	18,971
Other accrued expenses	21,807	22,427
Income taxes	3,713	4,524
Current portion of operating lease liabilities	4,090	4,004
Current portion of long-term debt	31,885	-
Total current liabilities	91,458	61,624

Long-term debt	-	31,856
Deferred income taxes	3,478	3,490
Operating lease liabilities	22,353	22,625
Other liabilities	14,048	14,770
Accrued pension and other postretirement costs	6,996	7,276
Total liabilities	138,333	141,641

Equity:
Common stock	1,334	1,330
Class B convertible common stock	103	103
Treasury stock	(20,230)	(17,460)
Capital in excess of par value	202,475	202,672
Retained earnings	187,957	182,066
Accumulated other comprehensive loss	(43,763)	(38,869)
Total Vishay Precision Group, Inc. stockholders' equity	327,876	329,842
Noncontrolling interests	(8)	83
Total equity	327,868	329,925
Total liabilities and equity	$	466,201	$	471,566

See accompanying notes.

-4-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Operations

(Unaudited - In thousands, except per share amounts)


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net revenues	$	80,783	$	88,864
Costs of products sold	45,689	51,665
Gross profit	35,094	37,199

Selling, general, and administrative expenses	27,394	27,159
Restructuring costs	782	116
Operating income	6,918	9,924

Other income (expense):
Interest expense	(628)	(997)
Other	1,860	275
Other income (expense)	1,232	(722)

Income before taxes	8,150	9,202

Income tax expense	2,318	2,220

Net earnings	5,832	6,982
Less: net (loss) earnings attributable to noncontrolling interests	(59)	18
Net earnings attributable to VPG stockholders	$	5,891	$	6,964

Basic earnings per share attributable to VPG stockholders	$	0.44	$	0.51
Diluted earnings per share attributable to VPG stockholders	$	0.44	$	0.51

Weighted average shares outstanding - basic	13,405	13,586
Weighted average shares outstanding - diluted	13,468	13,652

See accompanying notes.

-5-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited - In thousands)


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net earnings	$	5,832	$	6,982

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(4,892)	1,502
Pension and other postretirement actuarial items	(2)	3
Other comprehensive (loss) income	(4,894)	1,505

Comprehensive income	938	8,487

Less: comprehensive (loss) income attributable to noncontrolling interests	(59)	18

Comprehensive income attributable to VPG stockholders	$	997	$	8,469

See accompanying notes.

-6-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Cash Flows

(Unaudited - In thousands)


Three fiscal months ended
March 30, 2024	April 1, 2023
Operating activities
Net earnings	$	5,832	$	6,982
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	3,943	3,858
Gain on sale of property and equipment	(149)	-
Share-based compensation expense	661	681
Inventory write-offs for obsolescence	582	425
Deferred income taxes	44	383
Foreign currency impacts and other items	(2,253)	(1,022)
Net changes in operating assets and liabilities:
Accounts receivable	3,086	1,201
Inventories	(2,887)	(2,854)
Prepaid expenses and other current assets	(1,766)	1,260
Trade accounts payable	67	(1,713)
Other current liabilities	242	(695)
Other non current assets and liabilities, net	(792)	(201)
Accrued pension and other postretirement costs, net	(205)	138
Net cash provided by operating activities	6,405	8,443

Investing activities
Capital expenditures	(2,573)	(3,501)
Proceeds from sale of property and equipment	341	-
Net cash used in investing activities	(2,232)	(3,501)

Financing activities
Purchase of treasury stock	(2,755)	-
Distributions to noncontrolling interests	(32)	(20)
Payments of employee taxes on certain share-based arrangements	(858)	(825)
Net cash used in financing activities	(3,645)	(845)
Effect of exchange rate changes on cash and cash equivalents	(1,477)	622
(Decrease) increase in cash and cash equivalents	(949)	4,719
Cash and cash equivalents at beginning of period	83,965	88,562
Cash and cash equivalents at end of period	$	83,016	$	93,281

Supplemental disclosure of investing transactions:
Capital expenditures accrued but not yet paid	$	1,480	$	806
Supplemental disclosure of financing transactions:
Excise tax on net share repurchases accrued but not yet paid	$	15	-

See accompanying notes.

-7-

VISHAY PRECISION GROUP, INC.

Consolidated Condensed Statements of Equity

(Unaudited - In thousands, except share amounts)


Fiscal quarter ended March 30, 2024
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, 2023	$	1,330	$	103	$	(17,460)	$	202,672	$	182,066	$	(38,869)	$	329,842	$	83	$	329,925
Net earnings	-	-	-	-	5,891	-	5,891	(59)	5,832
Other comprehensive loss	-	-	-	-	-	(4,894)	(4,894)	-	(4,894)
Share-based compensation expense	-	-	-	661	-	-	661	-	661
Restricted stock issuances (38,607 shares)	4	-	-	(858)	-	-	(854)	-	(854)
Purchase of treasury stock (84,765 shares)	-	-	(2,755)	-	-	-	(2,755)	-	(2,755)
Excise tax on net share repurchases	-	-	(15)	-	-	-	(15)	-	(15)
Distributions to noncontrolling interests	-	-	-	-	-	-	-	(32)	(32)
Balance at March 30, 2024	$	1,334	$	103	$	(20,230)	$	202,475	$	187,957	$	(43,763)	$	327,876	$	(8)	$	327,868


Fiscal quarter ended April 1, 2023
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, 2022	$	1,325	$	103	$	(11,504)	$	201,164	$	156,359	$	(40,900)	$	306,547	$	(25)	$	306,522
Net earnings	-	-	-	-	6,964	-	6,964	18	6,982
Other comprehensive income	-	-	-	-	-	1,505	1,505	-	1,505
Share-based compensation expense	-	-	-	681	-	-	681	-	681
Restricted stock issuances (29,803 shares)	3	-	-	(780)	-	-	(777)	-	(777)
Distribution to noncontrolling interests	-	-	-	-	-	-	-	(20)	(20)
Balance at April 1, 2023	$	1,328	$	103	$	(11,504)	$	201,065	$	163,323	$	(39,395)	$	314,920	$	(27)	$	314,893

See accompanying notes.

-8-

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 a global leader in precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one. Many of our specialized sensors, weighing solutions, and measurement systems are "designed-in" by our customers, and address growing applications across a diverse array of industries and markets. Our products are marketed under brand names that we believe are characterized as having a very high level of precision and quality, and we employ an operationally diversified structure to manage our businesses.

Interim Financial Statements

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, 2023 and 2022 and for each of the three years in the period ended December 31, 2023, included in VPG's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. The results of operations for the fiscal quarter ended March 30, 2024 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 2024 and 2023 end on the following dates:


2024	2023
Quarter 1	March 30,	April 1,
Quarter 2	June 29,	July 1,
Quarter 3	September 28,	September 30,
Quarter 4	December 31,	December 31,

Recent Accounting Pronouncements

The Company evaluates the applicability and impact of all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB").

Recent accounting pronouncements not yet adopted:

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities' segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment's profit or loss and assets. The ASU also allows, in addition to the measure that is most consistent with U.S. GAAP, the disclosure of additional measures of segment profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. The ASU is effective for the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The amendment also includes other changes to improve the effectiveness of income tax disclosures, including further disaggregation of income taxes paid for individually significant jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024. Adoption of this ASU should be applied on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

-9-

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 March 30, 2024	Fiscal quarter ended April 1, 2023
Sensors	Weighing Solutions	Measurement Systems	Total	Sensors	Weighing Solutions	Measurement Systems	Total
United States	$	9,879	$	11,328	$	11,443	$	32,650	$	12,674	$	14,879	$	10,661	$	38,214
Germany	7,539	2,251	2,282	12,072	9,488	2,834	3,137	15,459
Other Europe	1,536	11,979	144	13,659	1,333	10,993	129	12,455
Israel	4,188	77	-	4,265	3,963	76	-	4,039
Asia	6,273	3,175	3,446	12,894	9,267	3,078	2,053	14,398
Canada	-	34	5,209	5,243	-	-	4,299	4,299
Total	$	29,415	$	28,844	$	22,524	$	80,783	$	36,725	$	31,860	$	20,279	$	88,864

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Test & Measurement	$	15,650	$	18,664
Avionics, Military & Space	6,989	11,707
Transportation	14,370	12,472
Other Markets	15,971	19,305
Industrial Weighing	9,814	11,026
General Industrial	5,319	4,798
Steel	12,670	10,892
Total	$	80,783	$	88,864

Contract Assets & Liabilities

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

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


Contract Asset	Contract Liability
Unbilled Revenue	Accrued Customer Advances
Balance at December 31, 2023	$	2,989	$	8,712
Balance at March 30, 2024	4,614	7,984
Increase (decrease)	$	1,625	$	(728)

The amount of revenue recognized during the three fiscal months ended March 30, 2024 that was included in the contract liability balance at December 31, 2023 was $3.7 million.

-10-

Note 3 - Goodwill

The Company's required goodwill and indefinite-lived asset annual impairment test is completed as of the first day of the fourth fiscal quarter each year. In 2023, the results of the quantitative impairment test for the Dynamic Systems Inc. ("DSI") and Diversified Technical Systems Inc. ("DTS") reporting units indicated that the fair value of both reporting units exceeded their carrying values, and therefore no impairment was recognized.

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


Total	Measurement Systems	Weighing Solutions
KELK Acquisition	DSI Acquisition	DTS Acquisition	Stress-Tek Acquisition
Balance at December 31, 2023	$	45,734	$	6,488	$	16,902	$	16,033	$	6,311
Foreign currency translation adjustment	$	(181)	$	(171)	$	(10)	$	-	$	-
Balance at March 30, 2024	$	45,553	$	6,317	$	16,892	$	16,033	$	6,311

Note 4 - Leases

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

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


Leases	March 30, 2024	December 31, 2023
Assets
Operating lease right of use asset	$	26,927	$	26,953

Liabilities
Operating lease - current	$	4,090	$	4,004
Operating lease - non-current	$	22,353	$	22,625

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


March 30, 2024
Operating leases weighted average remaining lease term (in years)	7.61 years
Operating leases weighted average discount rate	4.99	%

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Operating lease cost	$	1,383	$	1,244
Short-term lease cost	18	46
Sublease income	(113)	(100)
Total net lease cost	$	1,288	$	1,190

Right of use assets obtained in exchange for new operating lease liability during the three fiscal months ended March 30, 2024 were $1.2 million. The Company paid $1.4 million and $1.2 million for its operating leases for each of the three fiscal months ended March 30, 2024 and April 1, 2023, which are included in operating cash flows on the consolidated condensed statements of cash flows.

-11-

Note 4 - Leases (continued)

Undiscounted maturities of operating lease payments as of March 30, 2024 are summarized as follows (in thousands):


2024 (excluding the three months ended March 30, 2024)	$	3,821
2025	4,693
2026	4,020
2027	3,662
2028	3,459
Thereafter	11,986
Total future minimum lease payments	$	31,640
Less: amount representing interest	(5,197)
Present value of future minimum lease payments	$	26,443

Note 5 - 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 was 28.4% and 24.1% for the fiscal quarter ended March 30, 2024, and April 1, 2023, respectively. The effective tax rate for the fiscal quarter ended March 30, 2024 differs from the federal statutory rate of 21%due to foreign income taxed at different tax rates and changes in our valuation allowance on deferred tax assets. The effective tax rate for the fiscal quarter ended April 1, 2023 differs from the federal statutory rate of 21% due to foreign income taxed at different tax rates and changes in our valuation allowance on deferred tax assets.

The Company and its subsidiaries are subject to income taxes imposed by the U.S., various states, and the foreign jurisdictions in which we operate. Each jurisdiction establishes rules that set forth the years which are subject to examination by its tax authorities. While the Company believes the tax positions taken on its tax returns for each jurisdiction are supportable, they may still be challenged by the jurisdiction's tax authorities. In anticipation of such challenges, the Company has established reserves for tax-related uncertainties. These liabilities are based on the Company's best estimate of the potential tax exposures in each respective jurisdiction. It may take a number of years for a final tax liability in a jurisdiction to be determined, particularly in the event of an audit. If an uncertain matter is determined favorably, there could be a reduction in the Company's tax expense. An unfavorable determination could increase tax expense and could require a cash payment, including interest and penalties.

Note 6 - Long-Term Debt

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


March 30, 2024	December 31, 2023
2020 Credit Agreement - Revolving Facility	$	32,000	$	32,000
Deferred financing costs	(115)	(144)
Total long-term debt	$	31,885	$	31,856
Less: current portion	31,885	-
Long-term debt, less: current portion	$	-	$	31,856

2020 Credit Agreement

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

-12-

Note 6 - Long-Term Debt (continued)

$25.0 million upon the request of the Company, subject to the terms of the 2020 Credit Agreement. The 2020 Credit Agreement terminates on March 20, 2025. Because the Credit Agreement expires less than one year from the end of the first fiscal quarter of 2024, the outstanding balance of long-term debt in the amount of $31.885 million has been reclassified as a current liability.

On May 5, 2023, the Company entered into Amendment No. 1 to Third Amended and Restated Credit Agreement (the "Credit Agreement Amendment") amending the Third Amended and Restated Credit Agreement, dated March 20, 2020. The primary purpose of the changes made in the Credit Agreement Amendment were to update the interest rate provisions to replace LIBOR with SOFR for U.S. dollar denominated loans as well as update the other applicable reference borrowing rates for foreign currency loans which took effect on June 15, 2023. Interest payable on amounts borrowed under the 2020 Revolving Facility, taking into account the effect of the Credit Agreement Amendment, is based upon the following: (a) for revolving credit loans denominated in US Dollars, the SOFR rate plus applicable credit spread; and (b) for revolving credit loans denominated in foreign currencies, at other applicable local reference rates plus an interest margin. Depending upon the Company's leverage ratio, an interest rate margin ranging from 1.50% to 2.75% per annum is added to the applicable SOFR rate to determine the interest payable on the SOFR loans. The Company is required to pay a quarterly fee of 0.25% per annum to 0.40% per annum on the unused portion of the 2020 Revolving Facility, which is determined based on the Company's leverage ratio each quarter. Additional customary fees apply with respect to letters of credit.

Note 7 - 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, 2024	$	(39,262)	$	393	$	(38,869)
Other comprehensive loss before reclassifications	(4,892)	-	(4,892)
Amounts reclassified from accumulated other comprehensive income	-	(2)	(2)
Balance at March 30, 2024	$	(44,154)	$	391	$	(43,763)


Foreign Currency Translation Adjustment	Pension and Other Postretirement Actuarial Items	Total
Balance at January 1, 2023	$	(41,489)	$	589	$	(40,900)
Other comprehensive loss before reclassifications	1,502	-	1,502
Amounts reclassified from accumulated other comprehensive income	-	3	3
Balance at April 1, 2023	$	(39,987)	$	592	$	(39,395)

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 8).

-13-

Note 8 - 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 March 30, 2024	Fiscal quarter ended April 1, 2023
Pension Plans	OPEB Plans	Pension Plans	OPEB Plans
Net service cost	$	67	$	4	$	69	$	4
Interest cost	191	27	190	28
Expected return on plan assets	(210)	-	(212)	-
Amortization of actuarial losses (gains)	5	(3)	8	(6)
Net periodic benefit cost	$	53	$	28	$	55	$	26

Note 9 - Share-Based Compensation

The Vishay Precision Group, Inc. 2022 Stock Incentive Plan (the "2022 plan") permits issuance of up to 608,000 shares of common stock. At March 30, 2024, the Company had reserved 486,632 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the 2022 plan. If any outstanding awards are forfeited by the holder or canceled by the Company, the underlying shares would be available for re-grant to others. If shares are withheld for payment of taxes, those shares do not become available for grant under the 2022 plan.

On March 7, 2024 and in accordance with their respective employment agreements, VPG's three executive officers were granted annual equity awards in the form of RSUs, of which 50% are performance-based. The awards have an aggregate target grant-date fair value of $1.7 million and were comprised of 49,190 RSUs. Fifty percent of these awards will vest on January 1, 2027, subject to the executives' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2027, subject to the executives' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative "adjusted free cash flow" and "net earnings goals", each weighted equally.

On March 7, 2024, certain non-executive VPG employees were granted annual equity awards in the form of 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 $0.6 million and were comprised of 16,821 RSUs. The non-performance portion of these awards (twenty-five percent for certain employees and fifty percent for certain employees) will vest on January 1, 2027, subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2027, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings and cash flow goals, each weighted equally.

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):


Three fiscal months ended
March 30, 2024	April 1, 2023
Share-based compensation expense	$	661	$	681

-14-

Note 10 - Segment Information

VPG reports in three reportable segments: Sensors segment, Weighing Solutions segment, and 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 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.

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net revenues:
Sensors	$	29,414	$	36,726
Weighing Solutions	28,845	31,859
Measurement Systems	22,524	20,279
Total	$	80,783	$	88,864

Gross profit:
Sensors	$	10,732	$	15,144
Weighing Solutions	11,266	11,129
Measurement Systems	13,094	10,926
Total	$	35,092	$	37,199

Reconciliation of segment operating income to consolidated results:
Sensors	$	5,497	$	9,933
Weighing Solutions	4,797	5,340
Measurement Systems	6,385	3,872
Unallocated G&A expenses	(8,979)	(9,105)
Restructuring costs	(782)	(116)
Operating income	$	6,918	$	9,924

Restructuring costs:
Sensors	$	(542)	$	-
Weighing Solutions	-	(34)
Measurement Systems	-	(32)
Corporate/Other	(240)	(50)
$	(782)	$	(116)

-15-

Note 10 - Segment Information (continued)

Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products. The table below summarizes intersegment sales (in thousands):


Fiscal quarter ended
March 30, 2024	April 1, 2023
Sensors to Weighing Solutions	$	469	$	328
Sensors to Measurement Systems	10	36

Note 11 - 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
March 30, 2024	April 1, 2023
Numerator:
Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders	$	5,891	$	6,964

Denominator:
Denominator for basic earnings per share:
Weighted average shares	13,405	13,586

Effect of dilutive securities:
Restricted stock units	63	66
Dilutive potential common shares	63	66

Denominator for diluted earnings per share:
Adjusted weighted average shares	13,468	13,652

Basic earnings per share attributable to VPG stockholders	$	0.44	$	0.51

Diluted earnings per share attributable to VPG stockholders	$	0.44	$	0.51

Note 12 - Additional Financial Statement Information

Other Income (Expense) Other

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Foreign currency exchange gain	$	1,589	$	62
Interest income	323	366
Pension expense	(10)	(74)
Other	(42)	(79)
$	1,860	$	275

-16-

Note 12 - Additional Financial Statement Information ( continued)

Foreign currency exchange gains represent the impact of changes in foreign currency exchange rates. The change in foreign currency exchange gains and losses for the fiscal quarter ended March 30, 2024, as compared to the prior year period, was largely due to exposure to currency fluctuations with the Japanese yen, the Canadian dollar, and the British pound.

Pension expense represents the net periodic benefit cost excluding the service cost.

Other Accrued Expenses

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


March 30, 2024	December 31, 2023
Customer advance payments	$	7,984	$	8,712
Accrued restructuring	290	249
Goods received, not yet invoiced	2,700	2,837
Accrued taxes, other than income taxes	1,793	1,370
Accrued commissions	3,580	4,077
Accrued professional fees	1,642	1,343
Accrued technical warranty	778	770
Current accrued pensions and other post retirement costs	511	511
Other	2,529	2,558
$	21,807	$	22,427

Note 13 - Fair Value Measurements

ASC Topic 820, Fair Value Measurement,establishes a valuation hierarchy of the inputs used to measure fair value. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the Company's own assumptions.

An asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis (in thousands):


Fair value measurements at reporting date using:
Total Fair Value	Level 1 Inputs	Level 2 Inputs	Level 3 Inputs
March 30, 2024
Assets
Assets held in rabbi trusts	$	6,148	$	122	$	6,026	$	-

December 31, 2023
Assets
Assets held in rabbi trusts	$	5,841	$	59	$	5,782	$	-

-17-

Note 13 - Fair Value Measurements (continued)

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 March 30, 2024 and December 31, 2023, and company-owned life insurance assets. The marketable securities held in the rabbi trusts are valued using quoted market prices on the last business day of the period. The company-owned life insurance assets are valued in consultation with the Company's insurance brokers using the value of underlying assets of the insurance contracts. The fair value measurement of the cash equivalents held in the rabbi trust are considered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within the fair value hierarchy.

The fair value of the long-term debt, excluding capitalized deferred financing costs, at March 30, 2024 and December 31, 2023 approximates its carrying value as the revolving debt is reset on a monthly basis based on current market rates, plus a base rate as specified in the debt agreement. The fair value of long-term debt is considered a Level 2 measurement within the fair value hierarchy. The Company's financial instruments include cash and cash equivalents, accounts receivable and accounts payable. The carrying amounts for these financial instruments reported in the consolidated condensed balance sheets approximate their fair values.

Note 14 - 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 either to record additional expense in future periods or to reverse part of the previously recorded charges.

The Company recorded $0.8 million and $0.1 million of restructuring costs during the fiscal quarter ended March 30, 2024 and April 1, 2023, respectively. Restructuring costs were comprised primarily of employee termination costs, including severance and statutory retirement allowances, and were incurred in connection with various cost reduction programs.

The following table summarizes recent activity related to all restructuring programs. The accrued restructuring liability balance as of March 30, 2024 and December 31, 2023, respectively, is included in Other accrued expenses in the accompanying consolidated condensed balance sheets (in thousands):


Balance at December 31, 2023	$	249
Restructuring charges in 2024	782
Cash payments	(706)
Foreign currency exchange translation	(35)
Balance at March 30, 2024	$	290

Note 15 - Stockholder's Equity

On August 8, 2022, the Board of Directors (the "Board") of the Company authorized the repurchase of up to 600,000 shares of the Company's outstanding common stock (the "Stock Repurchase Plan"). The Stock Repurchase Plan was originally set to expire on August 11, 2023. On August 8, 2023, the Company announced that its Board of Directors extended the term of the previously approved stock repurchase plan to August 9, 2024. From August 8, 2022 to March 30, 2024, the Company had repurchased an aggregate of 358,391 shares of its common stock under the stock repurchase plan for consideration of $11.4 million.

-18-

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

Overview

VPG is a global leader in precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one. Many of our specialized sensors, weighing solutions, and measurement systems are "designed-in" by our customers, and address growing applications across a diverse array of industries and markets. Our products are marketed under brand names that we believe are characterized as having a very high level of precision and quality, and we employ an operationally diversified structure to manage our businesses.

Driven by the continued proliferation of data generated by the expanding use of sensors across a widening array of industrial and non-industrial applications, precision measurement and sensing technologies help ensure and deliver required levels of quality of mission-critical or high-value data. VPG's products are often at the first stage of a data value chain (i.e., the process of converting the physical world into a digital format that can be used for a specific purpose) and as such impact the effectiveness of vast number of critical, high-value downstream processes. Over the past few years, we have seen a broadening of precision sensing applications in both our traditional industrial markets and new markets, due to the development of higher functionality in our customers' end products. Our precision measurement solutions are used across a wide variety of end markets upon which we focus, including industrial, test and measurement, transportation, steel, medical, agriculture, avionics, military and space, and consumer product applications. The Company has a long heritage of innovation in sensor technologies that provide accuracy, reliability and repeatability that make our customers' products safer, smarter, and more productive. As the functionality of customers' products continues to increase, and they integrate more precision measurement sensors and related systems into their solutions, we believe this will offer substantial growth opportunities for our products and expertise.

The impact of the recent Israel-Hamas war

In October 2023, Hamas terrorists infiltrated Israel's southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel's border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel's security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks.

Such geopolitical and military instabilities, impact of sanctions and trade restrictions imposed as a result thereof, operational disruptions at facilities located in Israel as a result of military call-ups of the Company's employees in Israel, closure of the offices there, potential impact of litigation and risks related to supply chain disruptions, might affect the Company's business and results from operations.

As of May 7, 2024 (date of filing),our facilities in Israel remain open and operated at normal level. The extent and duration of the current war, the possibility of further spread of the conflict to other countries in the region as well as involving other political and military entities in the Middle East, poses risks to our operations and may lead to disruptions which could adversely affect our business, prospects, financial condition and results of operations.

While sales to customers in Israel is relatively a small portion of our revenues, our operations in Israel include executive offices, which are the workplace for key executives including our chief executive officer, as well as two manufacturing facilities located in the central part of Israel which source approximately 25 percent of our total worldwide revenues. We have implemented a contingency plan that we believe will secure supply of materials and logistics, build safety stock of finished goods and transfer these goods to our distribution centers outside of Israel.

We continue to take measures with regards to the safety of our employees. We may, however, determine at some point in the future to temporarily discontinue production in Israel for the safety of our employees. We could also face future production slowdowns or interruptions at either manufacturing location in Israel due to personnel absences or resource constraints such as the inability to source materials for production.

Overview of Financial Results

VPG reports in three product segments: Sensors segment, Weighing Solutions segment, and Measurement Systems segment. The Sensors reporting segment is comprised of the foil resistor and strain gage operating segments. The Weighing Solutions segment is comprised of specialized modules and systems used to precisely measure weight, force, torque, and pressure. The Measurement Systems reporting segment is comprised of highly specialized systems for steel production, materials development, and safety testing.

Net revenues for the fiscal quarter ended March 30, 2024 were $80.8 million versus $88.9 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the fiscal quarter ended March 30, 2024 were $5.9 million, or $0.44 per diluted share, versus $7.0 million, or $0.51 per diluted share, for the comparable prior year period.

-19-

The results of operations for the fiscal quarters ended March 30, 2024 and April 1, 2023 include items affecting comparability as listed in the reconciliations below. The reconciliations below include certain financial measures which are not recognized in accordance with U.S. generally accepted accounting principles ("GAAP"), including adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA. These non-GAAP measures should not be viewed as an alternative to GAAP measures of performance. Non-GAAP measures such as adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA do not have uniform definitions. These measures, as calculated by VPG, may not be comparable to similarly titled measures used by other companies. Management believes that these non-GAAP measures are useful to investors because each presents what management views as our core operating results for the relevant period. The adjustments to the applicable GAAP measures relate to occurrences or events that are outside of our core operations, and management believes that the use of these non-GAAP measures provides a consistent basis to evaluate our operating profitability and performance trends across comparable periods. In addition, the Company has historically provided these or similar non-GAAP measures and understands that some investors and financial analysts find this information helpful in analyzing the Company's performance and in comparing the Company's financial performance to that of its peer companies and competitors. Management believes that the Company's non-GAAP measures are regarded as supplemental to its GAAP financial results.



Gross Profit	Operating Income	Net Earnings Attributable to VPG Stockholders	Diluted Earnings Per share
Three months ended	March 30, 2024	April 1, 2023	March 30, 2024	April 1, 2023	March 30, 2024	April 1, 2023	March 30, 2024	April 1, 2023
As reported - GAAP	$	35,094	$	37,199	$	6,918	$	9,924	$	5,891	$	6,964	$	0.44	$	0.51
As reported - GAAP Margins	43.4	%	41.9	%	8.6	%	11.2	%
Acquisition purchase accounting adjustments (a)	-	49	-	49	-	49	-	-
Restructuring costs	-	-	782	116	782	116	0.06	0.01
Severance cost	-	0	347	0	347	-	0.03	-
Foreign currency exchange gain (b)	-	-	-	-	(1,589)	(62)	(0.12)	-
Less: Tax effect of reconciling items and discrete tax items	-	-	-	-	(238)	32	(0.01)	-
As Adjusted - Non GAAP	$	35,094	$	37,248	$	8,047	$	10,089	$	5,669	$	7,035	$	0.42	$	0.52
As Adjusted - Non GAAP Margins	43.4	%	41.9	%	10.0	%	11.4	%

-20-


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net earnings attributable to VPG stockholders	$	5,891	$	6,964
Interest Expense	628	997
Income tax expense	2,318	2,220
Depreciation	3,016	2,919
Amortization	927	939
EBITDA	12,780	14,039
EBITDA MARGIN	15.8	%	15.8	%
Acquisition purchase accounting adjustments (a)	-	49
Restructuring costs	782	116
Severance cost	347	-
Foreign currency exchange gain (b)	(1,589)	(62)
ADJUSTED EBITDA	$	12,320	$	14,142
ADJUSTED EBITDA MARGIN	15.3	%	15.9	%

(a) Acquisition purchase accounting adjustments include fair market value adjustments associated with inventory recorded as a component of costs of products sold.

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

Financial Metrics

We utilize several financial measures and metrics to evaluate performance and assess the future direction of our business. These key financial measures and metrics include net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover.

Gross profit margin is computed as gross profit as a percentage of net revenues. Gross profit is generally net revenues less costs of products sold, but could also include certain other period costs. Gross profit margin is a function of net revenues, but also reflects our cost-cutting programs and our ability to contain fixed costs.

End-of-period backlog is one indicator of potential future sales. We include in our backlog only open orders that have been released by the customer for shipment in the next twelve months. If demand falls below customers' forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty. Therefore, backlog is not necessarily indicative of the results expected for future periods.

Another important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period compared with the amount of product shipped during that period. A book-to-bill ratio that is greater than one indicates that revenues may increase in future periods. Conversely, a book-to-bill ratio that is less than one is an indicator of lower demand and may foretell declining sales. The book-to-bill ratio is also impacted by the timing of orders, particularly from our project-based product lines.

We focus on inventory turnover as a measure of how well we manage our inventory. We define inventory turnover for a financial reporting period as our costs of products sold for the four fiscal quarters ending on the last day of the reporting period divided by our average inventory (computed using each quarter-end balance) for this same period. A higher level of inventory turnover reflects more efficient use of our capital.

-21-

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 first quarter of 2023 through the first quarter of 2024.


1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	1st Quarter
(dollars in thousands)	2023	2023	2023	2023	2024
Net revenues	$	88,864	$	90,802	$	85,854	$	89,528	$	80,783

Gross profit margin	41.9	%	42.6	%	41.9	%	43.0	%	43.4	%

End-of-period backlog	$	146,800	$	139,700	$	128,800	$	117,300	$	109,603

Book-to-bill ratio	0.94	0.94	0.90	0.84	0.93

Inventory turnover	2.39	2.34	2.20	2.27	2.05


1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	1st Quarter
(dollars in thousands)	2023	2023	2023	2023	2024
Sensors
Net revenues	$	36,726	$	36,266	$	32,532	$	34,259	$	29,414
Gross profit margin	41.2	%	40.1	%	35.9	%	40.2	%	36.5	%
End-of-period backlog	$	66,200	$	58,900	$	52,400	$	49,000	$	45,024
Book-to-bill ratio	0.82	0.84	0.83	0.85	0.91
Inventory turnover	2.62	2.55	2.38	2.36	2.09

Weighing Solutions
Net revenues	$	31,859	$	31,261	$	28,970	$	30,438	$	28,845
Gross profit margin	34.9	%	38.7	%	38.7	%	35.6	%	39.1	%
End-of-period backlog	$	35,400	$	34,300	$	30,800	$	28,800	$	27,109
Book-to-bill ratio	0.90	0.97	0.89	0.91	0.95
Inventory turnover	2.63	2.41	2.18	2.46	2.31

Measurement Systems
Net revenues	$	20,279	$	23,275	$	24,352	$	24,831	$	22,524
Gross profit margin	53.9	%	51.8	%	53.6	%	56.0	%	58.1	%
End-of-period backlog	$	45,200	$	46,500	$	45,600	$	39,500	$	37,470
Book-to-bill ratio	1.21	1.06	0.98	0.73	0.94
Inventory turnover	1.70	1.94	1.94	1.87	1.62

Net revenues for the first fiscal quarter of 2024 decreased 9.8% from the fourth fiscal quarter of 2023 mainly due to lower revenues in all three reporting segments. Net revenues decreased 9.1% from the first fiscal quarter of 2023 reflecting lower volume primarily in the Sensors and Weighing Solutions reporting segments, which was partially offset by higher volume in the Measurement Systems reporting segment.

Net revenues in the Sensors reporting segment decreased 14.1% compared to the fourth fiscal quarter of 2023, and decreased 19.9% from the first fiscal quarter of 2023. Sequentially, the decrease primarily reflected lower revenue of precision resistors in the Test and Measurement and Avionics, Military and Space ("AMS") end markets. The year-over-year decrease in revenues

-22-

was primarily attributable to lower sales of precision resistors in the Test and Measurement market and lower sales of precision resistors and strain gages in the AMS market.

Net revenues in the Weighing Solutions reporting segment decreased 5.2% from the fourth fiscal quarter of 2023, and decreased 9.5% from the first fiscal quarter of 2023. The sequential and year-over-year decreases in revenues were mainly attributable to lower OEM sales of force sensors in our Other markets for precision agriculture and construction applications and lower sales of force sensors in our Industrial Weighing market, partially offset by increased sales in the Transportation market.

Net revenues in the Measurement Systems reporting segment decreased 9.3% from the fourth fiscal quarter of 2023 and increased 11.1% from the first fiscal quarter of 2023. Sequentially, the decrease in revenue was primarily due to the lower sales of DTS in the AMS and Transportation markets partially offset by higher sales in the Steel markets. The year-over-year increase was primarily attributable to increased revenue to the Steel market.

Total Company gross profit margin in the first fiscal quarter of 2024 increased 0.4% as compared to the fourth fiscal quarter of 2023 and increased 1.5% from the first fiscal quarter of 2023.

Sequentially, the decrease in the gross profit margin in the Sensors reporting segment was offset by the increase in the gross profit margin in Weighing Solution and Measurement Systems reporting segments. In the Sensors reporting segment, the gross profit margin decreased sequentially mainly due to lower volume. In the Weighing Solutions reporting segment, the gross profit margin increased sequentially despite lower sales volume due to cost reduction programs and positive inventory adjustments in prior quarter. The sequential increase in the gross profit margin in the Measurement Systems reporting segment was primarily a result of favorable product mix partially offset by lower sales volume.

Compared to the first fiscal quarter of 2023, the Weighing Solutions and Measurement Systems reporting segments had higher gross profit margins, while the gross profit margin for the Sensors reporting segment was lower mainly due to lower sales volume. The increase in gross profit margin for the Weighing Solutions reporting segment as compared to 2023 was primarily due to favorable product mix, cost reduction programs and favorable foreign currency exchange, offset by lower sales volume. In the Measurement Systems reporting segment, the higher gross profit margin compared to the first fiscal quarter of 2023 was primarily due to higher sales volume and favorable product mix.

Optimize Core Competence

The Company's core competencies include our innovative deep technical and applications-specific expertise to add value to our customers' products, our strong brands and customer relationships, our focus on operational excellence, our ability to select and develop our management teams, and our proven M&A strategy. We continue to optimize all aspects of our development, manufacturing and sales processes, including by increasing our technical sales efforts; continuing to innovate in product performance and design; and refining our manufacturing processes.

Our Sensors segment research group developed innovations that enhance the capability and performance of our strain gages, while simultaneously reducing their size and power consumption as part of our advanced sensors product line. We believe this unique foil technology will create new markets as customers "design in" these next generation products in existing and new applications. Our development engineering team is also responsible for creating new processes to further automate manufacturing, and improve productivity and quality. Our advanced sensors manufacturing technology also offers us the capability to produce high-quality foil strain gages in a highly automated environment, which we believe results in reduced manufacturing and lead times, improved quality, and increased margins. As a sign of our commitment to these businesses, we signed a long-term lease for a state-of-the-art facility that has been constructed in Israel. We fully transitioned to this facility in the third quarter of fiscal 2021.

Our design, research, and product development teams, in partnership with our marketing teams, drive our efforts to bring innovations to market. We intend to leverage our insights into customer demand to continually develop and roll out new, innovative products within our existing lines and to modify our existing core products in ways that make them more appealing, addressing changing customer needs and industry trends in terms of form, fit, and function.

We also seek to achieve significant production cost savings through the transfer, expansion, and construction of manufacturing operations in countries such as India, Japan, and Israel, where we can benefit from improved efficiencies or available tax and other government-sponsored incentives. In the past several years, we incurred restructuring expense related to closing and downsizing of facilities as part of the manufacturing transitions of our load cell products to facilities in India and China, which marked key milestones in our ongoing strategic initiatives to align and consolidate our manufacturing footprint.

-23-

Acquisition Strategy

We expect to continue to make strategic acquisitions where opportunities present themselves to grow and expand our segments. Historically, our growth and acquisition strategy had been largely focused on vertical product integration, using our foil strain gages in our load cell products, and incorporating those products into our weighing solutions. In recent years, we widened our acquisition strategy to include a broader set of precision measurement systems and product companies.

We expect to expand our expertise, and our acquisition focus, outside our traditional vertical approach to other precision measurement solutions, including in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration. We believe acquired businesses will benefit from improvements we implement to reduce redundant functions and from our current global manufacturing and distribution footprint.

Research and Development

Research and development will continue to play a key role in our efforts to introduce innovative products to generate new sales and to improve profitability. We expect to continue to expand our position as a leading supplier of precision foil technology products. We believe our R&D efforts should provide us with a variety of opportunities to leverage technology, products, and our manufacturing base in order to ultimately improve our financial performance.

Cost Management

To be successful, we believe we must seek new strategies for controlling operating costs. Through automation in our plants, we believe we can optimize our capital and labor resources in production, inventory management, quality control, and warehousing. We are in the process of moving some manufacturing to more cost effective locations. This may enable us to become more efficient and cost competitive, and also maintain tighter controls of the operation.

Production transfers, facility consolidations, and other long-term cost-cutting measures require us to initially incur significant severance and other exit costs. We are realizing the benefits of our restructuring through lower labor costs and other operating expenses, and expect to continue reaping these benefits in future periods. However, these programs to improve our profitability also involve certain risks which could materially impact our future operating results, as further detailed in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 29, 2024.

We are evaluating plans to further reduce our costs by consolidating additional manufacturing operations. These plans may require us to incur restructuring and severance costs in future periods. While streamlining and reducing fixed overhead, we are exercising caution so that we will not negatively impact our customer service or our ability to further develop products and processes.

Goodwill

We test the goodwill in each of our reporting units for impairment at least annually, as of the first day of our fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have been incurred. Determining whether to test goodwill for impairment, and the application of goodwill impairment tests, require significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Changes in these estimates could materially affect the determination of fair value for each reporting unit. A slowdown or deferral of orders for a business, with which we have goodwill associated, could impact our valuation of that goodwill.

Foreign Currency

We are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functional currencies of certain subsidiaries. U.S. GAAP requires that entities identify the "functional currency" of each of their subsidiaries and measure all elements of the financial statements in that functional currency. A subsidiary's functional currency is the currency of the primary economic environment in which it operates. In cases where a subsidiary is relatively self-contained within a particular country, the local currency is generally deemed to be the functional currency. However, a foreign subsidiary that is a direct and integral component or extension of the parent company's operations generally would have the parent company's currency as its functional currency. We have subsidiaries that fall into each of these categories.

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

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the rate of exchange as of the balance sheet date. Translation adjustments do not impact the results of operations and are reported as a separate component of equity.

For those subsidiaries where the local currency is the functional currency, revenues and expenses are translated at the average exchange rate for the period. While the translation of revenues and expenses into U.S. dollars does not directly impact the consolidated condensed statement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expenses incurred in those foreign currencies.

Foreign Subsidiaries which use the U.S. Dollar as the Functional Currency

Our operations in Israel and certain locations in Asia primarily generate cash in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the results of operations. While these subsidiaries transact most business in U.S. dollars, they may have significant costs, particularly related to payroll, which are incurred in the local currency and significant lease assets and liabilities.

Effects of Foreign Currency Exchange Rate on Operations

For the fiscal quarter ended March 30, 2024, changes in foreign currency exchange rates decreased net revenues by $0.2 million, and decreased costs of products sold and selling, general, and administrative expenses by $0.8 million, when compared to the comparable prior year period.

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Results of Operations

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Costs of products sold	56.6	%	58.1	%
Gross profit	43.4	%	41.9	%
Selling, general, and administrative expenses	33.9	%	30.6	%
Operating income	8.6	%	11.2	%
Income before taxes	10.1	%	10.4	%
Net earnings	7.2	%	7.9	%
Net earnings attributable to VPG stockholders	7.3	%	7.8	%

Effective tax rate	28.4	%	24.1	%

Net Revenues

Net revenues were as follows (dollars in thousands):


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net revenues	$	80,783	$	88,864
Change versus comparable prior year period	$	(8,081)
Percentage change versus prior year period	(9.1)	%

Changes in net revenues were attributable to the following:


vs. prior year quarter
Change attributable to:
Change in volume	(9.5)	%
Change in average selling prices	0.8	%
Foreign currency effects	(0.4)	%
Net change	(9.1)	%

During the fiscal quarter ended March 30, 2024, net revenues decreased 9.1%, as compared to the comparable prior year period with decreased volume, primarily from the Sensors and Weighing Solutions reporting segments, was partially offset by higher volume in the Measurement Systems reporting segment.

Gross Profit Margin

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Gross profit margin	43.4	%	41.9	%

The gross profit margin for the fiscal quarter ended March 30, 2024 increased 1.5%, as compared to the comparable prior year periods. For the fiscal quarter period 2024, the Weighing Solutions and Measurement Systems reporting segments had higher gross profit margin, while the Sensors reporting segment had lower gross profit margin.

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Segments

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

Sensors

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net revenues	$	29,414	$	36,726
Change versus comparable prior year period	$	(7,312)
Percentage change versus prior year period	(19.9)	%

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


vs. prior year quarter
Change attributable to:
Change in volume	(20.1)	%
Change in average selling prices	1.3	%
Foreign currency effects	(1.1)	%
Net change	(19.9)	%

Net revenues decreased 19.9% for the fiscal quarter ended March 30, 2024, as compared to the comparable prior year period. The decrease in revenues was primarily attributable to lower sales of precision resistors in the Test and Measurement market and lower sales of precision resistors and strain gages in the AMS market.

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Gross profit margin	36.5	%	41.2	%

The gross profit margin decreased 4.7% for the fiscal quarter ended March 30, 2024, when compared to the comparable prior year periods due to lower volume.

Weighing Solutions

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net revenues	$	28,845	$	31,859
Change versus comparable prior year period	$	(3,014)
Percentage change versus prior year period	(9.5)	%

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


vs. prior year quarter
Change attributable to:
Change in volume	(10.4)	%
Change in average selling prices	0.6	%
Foreign currency effects	0.3	%
Net change	(9.5)	%

Net revenues decreased 9.5% for the fiscal quarter ended March 30, 2024, as compared to the comparable prior year period. The decrease in revenues were mainly attributable to lower OEM sales of force sensors in our Other markets for precision agriculture and construction applications and lower sales of force sensors in our Industrial Weighing market, partially offset by increased sales in the Transportation market.

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Gross profit margin	39.1	%	34.9	%

The gross profit margin for the fiscal quarter ended March 30, 2024 increased by 4.2% compared to the comparable prior year period primarily due to favorable product mix, cost reduction programs and favorable foreign currency exchange, partially offset by lower sales volume.

Measurement Systems

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Net revenues	$	22,524	$	20,279
Change versus comparable prior year period	$	2,245
Percentage change versus prior year period	11.1	%

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


vs. prior year quarter
Change attributable to:
Change in volume	11.3	%
Change in average selling prices	0.4	%
Foreign currency effects	(0.6)	%
Net change	11.1	%

Net revenues increased 11.1% for the fiscal quarter ended March 30, 2024 as compared to the comparable prior year period. The increase was primarily attributable to increased revenue in the Steel market as higher sales of KELK products were partially offset by lower sales of DSI systems.

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Gross profit margin	58.1	%	53.9	%

The gross profit margin for the fiscal quarter ended March 30, 2024 increased by 4.2% as compared to the comparable prior year period due to higher sales volume and favorable product mix.

Selling, General, and Administrative Expenses

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


Fiscal quarter ended
March 30, 2024	April 1, 2023
Total SG&A expenses	$	27,394	$	27,159

As a percentage of net revenues	33.9	%	30.6	%

SG&A expenses for the fiscal quarter ended March 30, 2024 increased $0.2 million, compared to the comparable prior year periods due to increases in bonus accruals, and travel costs, partially offset by lower commissions and favorable foreign currency exchange rate impacts.

Restructuring Costs

The Company recorded $0.8 million and $0.1 million of restructuring costs during the fiscal quarter ended March 30, 2024 and April 1, 2023. Restructuring costs were comprised primarily of employee termination costs, including severance and statutory retirement allowances, in connection with various cost reduction programs.

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Other Income (Expense)

Interest expense for the fiscal quarter ended March 30, 2024 was lower when compared with the comparable prior year periods mainly due to the lower debt balance outstanding as a result of debt payments made in the second half of 2023.

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


Fiscal quarter ended
March 30, 2024	April 1, 2023	Change
Foreign currency exchange gain	$	1,589	$	62	$	1,527
Interest income	323	366	(43)
Pension expense	(10)	(74)	64
Other	(42)	(79)	37
$	1,860	$	275	$	1,585

Foreign currency exchange gains represent the impact of changes in foreign currency exchange rates. For the fiscal quarter ended March 30, 2024, as compared to the prior year period, was largely due to exposure to currency fluctuations with the Japanese yen, the Canadian dollar, and the British pound.

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 March 30, 2024 was 28.4% compared to 24.1% for the fiscal quarter ended April 1, 2023. The effective tax rate for the fiscal quarter ended March 30, 2024 was higher than the prior year period primarily due to changes in the mix of worldwide income and an increase in our valuation allowance on deferred tax assets.

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Financial Condition, Liquidity, and Capital Resources

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

On May 5, 2023, the Company entered into Amendment No. 1 to Third Amended and Restated Credit Agreement (the "Credit Agreement Amendment"), by and among the Company, the lenders named therein, Citizens Bank, National Association and Wells Fargo Bank, National Association as joint lead arrangers and the Agent, as agent for such lenders. The Credit Agreement Amendment amended the 2020 Credit Agreement. The primary purpose of the changes made in the Credit Agreement Amendment were to update the interest rate provisions to replace LIBOR with SOFR for U.S. dollar denominated loans as well as update the other applicable reference borrowing rates for foreign currency loans which took effect on June 15, 2023. Interest payable on amounts borrowed under the 2020 Revolving Facility is based upon the following: (a) for revolving credit loans denominated in US Dollars, the SOFR rate plus applicable credit spread; and (b) for revolving credit loans denominated in foreign currencies, at other applicable local reference rates plus an interest margin. Depending upon the Company's leverage ratio, an interest rate margin ranging from 1.50% to 2.75% per annum is added to the applicable SOFR rate to determine the interest payable on the SOFR loans. The Company is required to pay a quarterly fee of 0.25% per annum to 0.40% per annum on the unused portion of the 2020 Revolving Facility, which is determined based on the Company's leverage ratio each quarter. Additional customary fees apply with respect to letters of credit.

The obligations of the Company under the 2020 Credit Agreement are secured by pledges of stock in certain domestic and foreign subsidiaries, as well as guarantees by substantially all of the Company's domestic subsidiaries. The obligations of the Company and the guarantors under the 2020 Credit Agreement are secured by substantially all the assets (excluding real estate) of the Company and such guarantors. The 2020 Credit Agreement restricts the Company from paying cash dividends and requires the Company to comply with other customary covenants, representations, and warranties, including the maintenance of specific financial ratios. The financial maintenance covenants include an interest coverage ratio and a leverage ratio. The Company was in compliance with its financial maintenance covenants at March 30, 2024. If the Company is not in compliance with any of these covenant restrictions, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable.

Our business has historically generated significant cash flow. For the three fiscal months ended March 30, 2024, cash provided by operating activities was $6.4 million compared to $8.4 million in the comparable prior year period. Our net cash used in investing activities for the three fiscal months ended March 30, 2024 was $2.2 compared to $3.5 million in the comparable to prior year period mainly due to lower capital expenditures. Our net cash used in financing activities for the three fiscal months ended March 30, 2024 was $3.6 million compared to $0.8 million in the comparable prior year period mainly due to the repurchase of an aggregate of $2.8 million of our common stock.

Approximately 94% and 92% of our cash and cash equivalents balance at March 30, 2024 and December 31, 2023, respectively, was held by our non-U.S. subsidiaries.

See the following table for the percentage of cash and cash equivalents, by region, at March 30, 2024 and December 31, 2023:


March 30, 2024	December 31, 2023
Israel	35	%	36	%
Asia	24	%	22	%
Europe	22	%	23	%
United States	6	%	8	%
Canada	13	%	11	%
100	%	100	%

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We earn a significant amount of our operating income outside the United States, the majority of which is deemed to be indefinitely reinvested in foreign jurisdictions. As a result, as discussed above, a significant portion of our cash and short-term investments are held by foreign subsidiaries. The Company will continue to evaluate its cash needs, however we currently do not intend, nor do we foresee a need, to repatriate funds in excess of what is already planned. The Company will evaluate the possibility of repatriating future cash provided such repatriation can be accomplished in a tax efficient manner. In addition, we expect existing domestic cash, short-term investments, and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.

If we should require more capital in the United States than is generated by our domestic operations, for example, to fund significant discretionary activities, such as business acquisitions, we could elect to repatriate future earnings from foreign jurisdictions or raise capital in the United States through debt or equity issuances. These alternatives could result in higher tax expense, increased interest expense, or dilution of our earnings. We consider the majority of the undistributed earnings of our foreign subsidiaries, as of March 30, 2024, to be indefinitely reinvested.

Adjusted free cash flow generated during the three fiscal months ended March 30, 2024 was $4.2 million. We refer to the amount of cash provided by operating activities ($6.4 million) in excess of our capital expenditures ($2.6 million) and net of proceeds from the sale of assets ($0.4 million) as "adjusted free cash flow."

The following table summarizes the components of net cash at March 30, 2024 and December 31, 2023 (in thousands):


March 30, 2024	December 31, 2023
Cash and cash equivalents	$	83,016	$	83,965

Third-party debt, including current and long-term:
Revolving debt	32,000	32,000
Deferred financing costs	(115)	(144)
Total third-party debt	31,885	31,856
Net cash	$	51,131	$	52,109

Measurements such as "adjusted free cash flow" and "net cash" do not have uniform definitions and are not recognized in accordance with U.S. GAAP. Such measures should not be viewed as alternatives to GAAP measures of performance or liquidity. However, management believes that "adjusted free cash flow" is a meaningful measure of our ability to fund acquisitions, and that an analysis of "net cash" assists investors in understanding aspects of our cash and debt management. These measures, as calculated by us, may not be comparable to similarly titled measures used by other companies.

Our financial condition as of March 30, 2024 remains strong, with a current ratio (current assets to current liabilities) of 2.6 to 1.0, as compared to a ratio of 3.9 to 1.0 at December 31, 2023. The current ratio was affected in large part due to the reclassification of long-term debt to a current liability.

Cash paid for property and equipment for the three fiscal months ended March 30, 2024 was $2.6 million compared to $3.5 million in the comparable prior year period.

As of March 30, 2024 and December 31, 2023, we did not have any off-balance sheet arrangements.

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Safe Harbor Statement

From time to time, information provided by us, including, but not limited to, statements in this report, or other statements made by or on our behalf, may contain or constitute "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from those anticipated.

Such statements are based on current expectations only, and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, expected, estimated, or projected. Among the factors that could cause actual results to materially differ include: general business and economic conditions; impact of inflation; potential issues respecting the United States federal government debt ceiling; global labor and supply chain challenges; difficulties or delays in identifying, negotiating and completing acquisitions and integrating acquired companies; the inability to realize anticipated synergies and expansion possibilities; difficulties in new product development; changes in competition and technology in the markets that we serve and the mix of our products required to address these changes; changes in foreign currency exchange rates; political, economic, and health (including pandemics) instabilities; instability caused by military hostilities in the countries in which we operate (including Israel); difficulties in implementing our cost reduction strategies, such as underutilization of production facilities, labor unrest or legal challenges to our lay-off or termination plans, operation of redundant facilities due to difficulties in transferring production to achieve efficiencies; compliance issues under applicable laws, such as export control laws, including the outcome of our voluntary self-disclosure of export control non-compliance; significant developments from the recent and potential changes in tariffs and trade regulation; our efforts and efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, shelter-in-place orders and business closures and the related impact on resource allocations, manufacturing and supply chains; our status as a "critical", "essential" or "life-sustaining" business in light of COVID-19 business closure laws, orders and guidance being challenged by a governmental body or other applicable authority; our ability to execute our new corporate strategy and business continuity, operational and budget plans; and other factors affecting our operations, markets, products, services, and prices that are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this report or as of the dates otherwise indicated in such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risks previously disclosed in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act are: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms; and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our CEO and CFO, believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. While the design of any system of controls is to provide reasonable assurance of the effectiveness of disclosure controls, such design is also based in part upon certain assumptions about the likelihood of future events, and such assumptions, while reasonable, may not take into account all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and may not be prevented or detected.

Changes in Internal Control over Financial Reporting

During our last fiscal quarter ended March 30, 2024, there was no change in our internal control over financial reporting that materially affected, or is reasonable likely to materially affect, internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The Company is subject to various legal proceedings that constitute ordinary, routine litigation incidental to its business. The Company believes that the foregoing matters will not have a material adverse effect on the Company's business or its financial condition, results of operations, and cash flows.

Item 1A. RISK FACTORS

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. There have been no material changes in reported risk factors from the information reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about repurchases of the Company's common stock during the three-month period ended March 30, 2024.


Total Number of Shares Purchased (a)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans (a)
January 1, 2024 - February 1, 2024	41,706	$	31.61	41,706	284,668
February 2, 2024 - March 2, 2024	25,421	32.68	25,421	259,247
March 3, 2024- March 30, 2024	17,638	34.34	17,638	241,609
Total	84,765	84,765	241,609
(a) On August 8, 2022, the Board of Directors (the "Board") of the Company authorized the repurchase of up to 600,000 shares of the Company's outstanding common stock (the "Stock Repurchase Plan"). The Stock Repurchase Plan was originally set to expire on August 11, 2023, and the Board authorized purchases thereunder to be made through an issuer repurchase plan adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), open market purchases or private transactions, in accordance with the applicable federal securities laws, including Rule 10b-18 under the Exchange Act. On August 8, 2023, the Company announced that its Board of Directors extended the term of the previously approved stock repurchase plan to August 9, 2024. From August 8, 2022 to March 30, 2024, the Company had repurchased an aggregate of 358,391 shares under the Stock Repurchase Plan.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

During the fiscal quarter ended March 30, 2024, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

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Item 6. EXHIBITS


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 March 30, 2024, furnished in XBRL (eXtensible Business Reporting Language).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

VISHAY PRECISION GROUP, INC.

/s/ William M. Clancy

William M. Clancy

Executive Vice President and Chief Financial Officer

(as a duly authorized officer and principal financial and accounting officer)

Date: May 7, 2024

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