10-Q 1 vpg-20220402.htm 10-Q vpg-20220402
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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          April 2, 2022
    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)
Delaware27-0986328
(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 classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.10 par valueVPGNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. ý Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨Accelerated filerý
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 ý No
As of May 10, 2022, the registrant had 12,621,057 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
April 2, 2022
CONTENTS
Page Number
 
– April 2, 2022 (Unaudited) and December 31, 2021
 
(Unaudited) – Fiscal Quarters Ended April 2, 2022 and April 3, 2021
 
(Unaudited) – Fiscal Quarters Ended April 2, 2022 and April 3, 2021
 
(Unaudited) –Three Fiscal Months Ended April 2, 2022 and April 3, 2021
 
(Unaudited) – Fiscal Quarters Ended April 2, 2022 and April 3, 2021
 
 
 
 
 
 
 
 
 
 
 
 
-2-


PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets
(In thousands)
April 2, 2022December 31, 2021
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$78,181 $84,335 
Accounts receivable, net59,056 58,265 
Inventories:
Raw materials26,779 25,464 
Work in process27,723 23,851 
Finished goods24,898 27,112 
Inventories, net79,400 76,427 
Prepaid expenses and other current assets18,219 15,916 
Total current assets234,856 234,943 
Property and equipment:
Land4,206 4,241 
Buildings and improvements68,617 68,778 
Machinery and equipment123,966 122,202 
Software9,384 8,871 
Construction in progress5,866 7,747 
Accumulated depreciation(132,141)(130,619)
Property and equipment, net79,898 81,220 
Goodwill45,970 45,830 
Intangible assets, net51,623 52,437 
Operating lease right-of-use assets26,884 27,764 
Other assets18,588 19,695 
Total assets$457,819 $461,889 
Continues on the following page.
-3-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Balance Sheets
(In thousands)
April 2, 2022December 31, 2021
Liabilities and equity
Current liabilities:
Trade accounts payable$12,203 $14,876 
Payroll and related expenses19,788 23,772 
Other accrued expenses20,870 17,596 
Income taxes1,209 3,774 
Current portion of operating lease liabilities4,553 4,610 
Total current liabilities58,623 64,628 
Long-term debt, less current portion60,736 60,714 
Deferred income taxes5,761 5,848 
Operating lease liabilities23,959 25,140 
Other liabilities15,279 16,264 
Accrued pension and other postretirement costs11,618 12,253 
Total liabilities175,976 184,847 
Commitments and contingencies
Equity:
Common stock1,324 1,322 
Class B convertible common stock103 103 
Treasury stock(8,765)(8,765)
Capital in excess of par value199,223 199,151 
Retained earnings126,652 120,296 
Accumulated other comprehensive loss(36,719)(35,008)
Total Vishay Precision Group, Inc. stockholders' equity281,818 277,099 
Noncontrolling interests25 (57)
Total equity281,843 277,042 
Total liabilities and equity$457,819 $461,889 
See accompanying notes.
-4-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)
Fiscal quarter ended
April 2, 2022April 3, 2021
Net revenues$87,665 $70,589 
Costs of products sold52,415 41,967 
Gross profit35,250 28,622 
Selling, general, and administrative expenses26,674 22,183 
Restructuring costs261  
Operating income8,315 6,439 
Other income (expense):
Interest expense(329)(305)
Other439 573 
Other income110 268 
Income before taxes8,425 6,707 
Income tax expense1,741 1,764 
Net earnings6,684 4,943 
Less: net loss (earnings) attributable to noncontrolling interests328 (18)
Net earnings attributable to VPG stockholders$6,356 $4,961 
Basic earnings per share attributable to VPG stockholders$0.47 $0.36 
Diluted earnings per share attributable to VPG stockholders$0.46 $0.36 
Weighted average shares outstanding - basic13,637 13,593 
Weighted average shares outstanding - diluted13,675 13,629 















See accompanying notes.
-5-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Comprehensive Income (Loss)
(Unaudited - In thousands)
Fiscal quarter ended
April 2, 2022April 3, 2021
Net earnings$6,684 $4,943 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment(1,792)(1,800)
Pension and other postretirement actuarial items81 209 
Other comprehensive loss(1,711)(1,591)
Comprehensive income4,973 3,352 
Less: comprehensive income (loss) attributable to noncontrolling interests328 (18)
Comprehensive income attributable to VPG stockholders$4,645 $3,370 


































See accompanying notes.
-6-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Three fiscal months ended
April 2, 2022April 3, 2021
Operating activities
Net earnings$6,684 $4,943 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization3,823 3,522 
Loss (gain) on sale of property and equipment7 (1)
Reclassification of foreign currency translation adjustment related to disposal of subsidiary191  
Share-based compensation expense497 366 
Inventory write-offs for obsolescence396 613 
Deferred income taxes25 (116)
Other(1,229)(1,659)
Net changes in operating assets and liabilities:
Accounts receivable, net(1,546)753 
Inventories, net(3,755)(3,089)
Prepaid expenses and other current assets(2,367)366 
Trade accounts payable(358)526 
Other current liabilities(2,641)(601)
Net cash (used in) provided by operating activities(273)5,623 
Investing activities
Capital expenditures(4,303)(5,746)
Proceeds from sale of property and equipment10 3 
Net cash used in investing activities(4,293)(5,743)
Financing activities
Principal payments on long-term debt (18)
Distributions to noncontrolling interests(246)(111)
Payments of employee taxes on certain share-based arrangements(435)(846)
Net cash used in financing activities(681)(975)
Effect of exchange rate changes on cash and cash equivalents(907)(1,189)
Decrease in cash and cash equivalents(6,154)(2,284)
Cash and cash equivalents at beginning of period84,335 98,438 
Cash and cash equivalents at end of period$78,181 $96,154 
Supplemental disclosure of investing transactions:
Capital expenditures purchased$(2,085)$(4,150)
Capital expenditures accrued but not yet paid$850 $965 
See accompanying notes.
-7-


VISHAY PRECISION GROUP, INC.
Consolidated Condensed Statements of Equity
(Unaudited - In thousands, except share amounts)
Fiscal quarter ended 
 
April 2, 2022
Common
Stock
Class B
Convertible
Common Stock
Treasury StockCapital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total VPG Inc.
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2021$1,322 $103 $(8,765)$199,151 $120,296 $(35,008)$277,099 $(57)$277,042 
Net earnings    6,356  6,356 328 6,684 
Other comprehensive income     (1,711)(1,711) (1,711)
Share-based compensation expense
   497   497  497 
Restricted stock issuances ( 17,837 shares)
2   (425)  (423) (423)
Distributions to noncontrolling interests       (246)(246)
Balance at April 2, 2022$1,324 $103 $(8,765)$199,223 $126,652 $(36,719)$281,818 $25 $281,843 
Fiscal quarter ended 
 
April 3, 2021
Common
Stock
Class B
Convertible
Common Stock
Treasury StockCapital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total VPG Inc.
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2020$1,317 $103 $(8,765)$197,764 $100,075 $(32,671)$257,823 $34 $257,857 
Net earnings
— — — — 4,961 — 4,961 (18)4,943 
Other comprehensive loss— — — — — (1,591)(1,591)— (1,591)
Share-based compensation expense
— — — 366 — — 366 — 366 
Restricted stock issuances (34,572 shares)
3 — — (848)— — (845)— (845)
Distribution to noncontrolling interests— — — — — — — (111)(111)
Balance at April 3, 2021$1,320 $103 $(8,765)$197,282 $105,036 $(34,262)$260,714 $(95)$260,619 
See accompanying notes.
-8-


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, diversified company focused on precision measurement sensing technologies, including specialized sensors, weighing solutions, and measurement systems. Many of our precision measurement sensing products and solutions are “designed-in” by our customers, and address growing applications across a diverse array of industries and markets. Our products are marketed under a variety of brand names that we believe are characterized as having a very high level of precision and quality, and we employ an operationally diversified structure to manage our businesses.
Interim Financial Statements
These unaudited consolidated condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements and therefore do not include all information and footnotes necessary for the presentation of financial position, results of operations, and cash flows required by accounting principles generally accepted in the United States for complete financial statements. The information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations, and cash flows for the interim periods presented. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of December 31, 2021 and 2020 and for each of the three years in the period ended December 31, 2021, included in VPG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 4, 2022. The results of operations for the fiscal quarter ended April 2, 2022 are not necessarily indicative of the results to be expected for the full year. VPG reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first quarter, which always begins on January 1, and the fourth quarter, which always ends on December 31. The four fiscal quarters in 2022 and 2021 end on the following dates: 
20222021
Quarter 1April 2,April 3,
Quarter 2July 2,July 3,
Quarter 3October 1,October 2,
Quarter 4December 31,December 31,

Note 2 – Revenues
Revenue Recognition

The following table disaggregates net revenue by geographic region from contracts with customers based on net revenues generated by subsidiaries within that geographic location (in thousands):
Fiscal quarter ended 
 
April 2, 2022
Fiscal quarter ended 
 
April 3, 2021
SensorsWeighing SolutionsMeasurement SystemsTotalSensorsWeighing SolutionsMeasurement SystemsTotal
United States$13,006 $14,078 $10,465 $37,549 $9,706 $12,580 $3,631 $25,917 
United Kingdom877 4,334 298 5,509 860 4,580 38 5,478 
Other Europe7,792 10,531 1,882 20,205 7,181 9,933 188 17,302 
Israel7,331 190  7,521 6,441 130  6,571 
Asia8,744 3,635 1,010 13,389 7,627 3,736 855 12,218 
Canada  3,492 3,492  9 3,094 3,103 
Total$37,750 $32,768 $17,147 $87,665 $31,815 $30,968 $7,806 $70,589 

-9-

Note 2 – Revenues (continued)

The following table disaggregates net revenue from contracts with customers by market sector (in thousands).
Fiscal quarter ended
April 2, 2022April 3, 2021
Test & Measurement$17,973 $14,416 
Avionics, Military & Space8,162 6,030 
Transportation13,954 9,554 
Other Markets21,150 17,545 
Industrial Weighing13,209 12,005 
General Industrial5,866 4,082 
Steel7,351 6,957 
Total$87,665 $70,589 

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 AssetContract Liability
Unbilled RevenueAccrued Customer Advances
Balance at December 31, 2021$3,570 $4,765 
Balance at April 2, 20223,415 7,836 
(Decrease)/increase$(155)$3,071 
The amount of revenue recognized during the three fiscal months ended April 2, 2022 that was included in the contract liability balance at December 31, 2021 was $1.2 million.







Note 3 - Acquisition
Diversified Technical Systems, Inc.

On June 1, 2021, VPG completed the acquisition of California-based Diversified Technical Systems, Inc. (“DTS”), a manufacturer of data acquisition systems and sensors for product safety and testing, for a purchase price of $47.2 million. The Company used cash on hand and borrowings under its revolving credit facility to fund the purchase price under the purchase agreement. DTS reports into the Company's Measurement Systems segment. The following table summarizes the provisional fair values assigned to the assets and liabilities of DTS as of June 1, 2021 (in thousands):

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June 1, 2021
Working capital$12,587 
Property and equipment1,209 
Deferred income tax liability(6,178)
Intangible assets:
Acquired technology13,167 
Customer relationships8,135 
Trade names2,393 
Total intangible assets23,695 
Fair value of acquired identifiable assets31,313 
Purchase price$47,216 
Goodwill$15,903 

The Company utilizes certain valuations and studies to determine the fair value of the tangible and intangible assets acquired. These valuations and studies are currently being analyzed and have yet to be finalized. Accordingly, the assets and liabilities assumed are subject to adjustment once the detailed analysis is completed. The provisional estimated weighted average useful lives for the acquired technology and customer relationships are 15 years. Trade names are treated as indefinite-lived intangible assets. None of the goodwill associated with DTS will be deductible for income tax purposes. The Company recorded acquisition costs associated with this transaction of $1.2 million in the second quarter of 2021, which included legal fees, appraisal fees, investments banker fees and insurance costs.

Included in the results of the operations of the Company, are net revenues of $7.7 million from DTS for the fiscal quarter ended April 2, 2022 and net earnings of $0.1 million fiscal quarter ended April 2, 2022. DTS results include amortization of the inventory step-up of $0.4 million for the fiscal quarter ended April 2, 2022, and amortization of intangible assets of $0.4 million for the fiscal quarter ended April 2, 2022.
Following is the supplemental consolidated financial results for the Company on an unaudited pro forma basis, as if the DTS acquisition had been consummated on January 1, 2021:

Fiscal quarter ended
April 3, 2021
Pro forma net revenues
$78,921 
Pro forma net earnings attributable to VPG stockholders
$5,333 
Pro forma basic earnings per share attributable to VPG stockholders
$0.39 
Pro forma diluted earnings per share attributable to VPG stockholders
$0.39 


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




-11-


The change in the carrying amount of goodwill by segment is as follows (in thousands):
TotalMeasurement Systems
KELK AcquisitionDSI AcquisitionDTS AcquisitionStress-Tek Acquisition
Balance at December 31, 2021$45,830 $6,706 $16,910 $15,903 $6,311 
Foreign currency translation adjustment140 147 (7) 
Balance at April 2, 2022$45,970 $6,853 $16,903 $15,903 $6,311 

Note 5 – Leases
The Company primarily leases office and manufacturing facilities in addition to vehicles, which have remaining terms of less than one year to fourteen years. The Company has no finance leases.
Leases recorded on the balance sheet consist of the following (in thousands):
LeasesApril 2, 2022December 31, 2021
 Assets
 Operating lease right of use asset$26,884 $27,764 
 Liabilities
 Operating lease - current$4,553 $4,610 
 Operating lease - non-current$23,959 $25,140 
Other information related to lease term and discount rate is as follows:
April 2, 2022
 Operating leases weighted average remaining lease term (in years)8.33 years
 Operating leases weighted average discount rate3.1 %

The components of lease expense are as follows (in thousands):
Fiscal quarter ended
April 2, 2022April 3, 2021
Operating lease cost$1,310 $1,181 
Short-term lease cost26 33 
Sublease income(112) 
 Total net lease cost$1,224 $1,214 

Right of use assets obtained in exchange for new operating lease liability during 2021 were $0.2 million. The Company paid $1.3 million and $1.2 million for its operating leases for each of the three fiscal months ended April 2, 2022 and April 3, 2021, which are included in operating cash flows on the consolidated condensed statements of cash flows.
Undiscounted maturities of operating lease payments as of April 2, 2022 are summarized as follows (in thousands):
-12-

Note 5 - Leases (continued)

2022 (excluding the three months ended April)$3,842 
20234,670 
20243,992 
20253,419 
20263,087 
Thereafter13,302 
 Total future minimum lease payments$32,312 
 Less: amount representing interest(3,800)
 Present value of future minimum lease payments$28,512 
Note 6 – 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 April 2, 2022 was 20.7% compared to 26.3% for the fiscal quarter ended April 3, 2021. The tax rate for the fiscal quarter ended April 2, 2022 is lower than the prior year period primarily due to the reduction of the valuation allowance on certain tax credits.
On December 28, 2021, the United States Treasury Department and the Internal Revenue Service issued final regulations relating to the foreign tax credit and clarifying the rules relating to foreign derived intangible income. These new regulations apply to tax years beginning on or after December 28, 2021. The Company is still in the process of analyzing the potential tax impact that these regulations could have on the Company’s tax position.
The Company and its subsidiaries are subject to income taxes imposed by the U.S., various states, and the foreign jurisdictions in which we operate. Each jurisdiction establishes rules that set forth the years which are subject to examination by its tax authorities. While the Company believes the tax positions taken on its tax returns for each jurisdiction are supportable, they may still be challenged by the jurisdiction's tax authorities. In anticipation of such challenges, the Company has established reserves for tax-related uncertainties. These liabilities are based on the Company’s best estimate of the potential tax exposures in each respective jurisdiction. It may take a number of years for a final tax liability in a jurisdiction to be determined, particularly in the event of an audit. If an uncertain matter is determined favorably, there could be a reduction in the Company’s tax expense. An unfavorable determination could increase tax expense and could require a cash payment, including interest and penalties.
Note 7 – Long-Term Debt
Long-term debt consists of the following (in thousands):
April 2, 2022December 31, 2021
2020 Credit Agreement - Revolving Facility$61,000 $61,000 
Deferred financing costs(264)(286)
Total long-term debt60,736 60,714 

Note 8 – 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 AdjustmentPension
and Other
Postretirement
Actuarial Items
Total
Balance at January 1, 2022$(30,276)$(4,732)$(35,008)
Other comprehensive loss before reclassifications(1,983) (1,983)
Amounts reclassified from accumulated other comprehensive income191 81 272 
Balance at April 2, 2022$(32,068)$(4,651)$(36,719)
-13-


Foreign Currency Translation AdjustmentPension
and Other
Postretirement
Actuarial Items
Total
Balance at January 1, 2021$(25,591)$(7,080)$(32,671)
Other comprehensive loss before reclassifications(1,800) (1,800)
Amounts reclassified from accumulated other comprehensive income 209 209 
Balance at April 3, 2021$(27,391)$(6,871)$(34,262)
Reclassification of foreign currency translation adjustment for the loss on liquidation of subsidiaries is included in other income and expense other (see Note 13) . Reclassifications of pension and other postretirement actuarial items out of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost (see Note 9).
Note 9 – Pension and Other Postretirement Benefits
Employees of VPG participate in various defined benefit pension and other postretirement benefit ("OPEB") plans. The following table sets forth the components of the net periodic benefit cost for the Company's defined benefit pension and OPEB plans (in thousands):
Fiscal quarter ended 
 
April 2, 2022
Fiscal quarter ended 
 
April 3, 2021
Pension
Plans
OPEB
Plans
Pension
Plans
OPEB
Plans
Net service cost$84 $7 $97 $9 
Interest cost123 17 103 17 
Expected return on plan assets(123)(97) 
Amortization of actuarial losses74 1 102 5 
Net periodic benefit cost$158 $25 $205 $31 


Note 10 – Share-Based Compensation
The Amended and Restated Vishay Precision Group, Inc. 2010 Stock Incentive Program (as amended and restated, the “Plan”) permits the issuance of up to 1,000,000 shares of common stock. At April 2, 2022, the Company had reserved 308,645 shares of common stock for future grants of equity awards (restricted stock, unrestricted stock, restricted stock units ("RSUs"), or stock options) pursuant to the Plan. If any outstanding awards are forfeited by the holder or canceled by the Company, the underlying shares would be available for re-grant to others.
On March 3, 2022 and in accordance with their respective employment agreements, VPG’s three executive officers were granted annual equity awards in the form of RSUs, of which 50% are performance-based. The awards have an aggregate target grant-date fair value of $1.5 million and were comprised of 47,831 RSUs. Fifty percent of these awards will vest on January 1, 2025, subject to the executives’ continued employment. The performance-based portion of the RSUs will also vest on January 1, 2025, subject to the executives' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative “adjusted free cash flow” and "net earnings goals", each weighted equally.
On March 9, 2022, certain non-executive VPG employees were granted annual equity awards in the form of RSUs. Certain employees received awards, of which 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 $0.5 million and were comprised of 16,324 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, 2025 subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2025, subject to the employees' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings and cash flow goals, each weighted equally.

On January 1, 2022 and in accordance with the Company's 2017 Non-Employee Director Compensation Plan (the "Director Plan"), the Board of Directors approved the issuance of an aggregate of 595 RSUs to the newly-appointed independent member
-14-

Note 10 - Share-Based Compensation (continued)
of the Board of Directors. This award represented a pro-rated portion of the annual equity grant made to non-executive directors pursuant to the Director Plan. The aggregate grant-date fair value of this award is immaterial, and the award will vest on the earlier of the 2022 Annual Stockholders Meeting or May 27, 2022, subject to the director's continued service on the Board of Directors.

Vesting of equity awards is subject to acceleration under certain circumstances.
The amount of compensation cost related to share-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. VPG determines compensation cost for RSUs based on the grant-date fair value of the underlying common stock. The Company recognizes compensation cost for RSUs that are expected to vest and for which performance criteria are expected to be met. The following table summarizes share-based compensation expense recognized (in thousands):
Fiscal quarter ended
April 2, 2022April 3, 2021
Restricted stock units$497 $366 
Note 11 – Segment Information
VPG reports in three product segments: the Sensors segment, the Weighing Solutions segment, and the Measurement Systems segment. The Sensors reporting segment is comprised of the foil resistor and strain gage operating segments. The Weighing Solutions segment is comprised of specialized modules and systems used to precisely measure weight, force torque, and pressure. The Measurement Systems reporting segment is comprised of highly specialized systems for steel production, materials development, and safety testing.
The chief operating decision maker ("CODM") is our chief executive officer. The CODM evaluates each operating segment's performance. The evaluation of the segment's performance is based on multiple performance measures including gross profits, revenues, and operating income, exclusive of certain items. Management believes that evaluating segment performance, excluding items such as restructuring and severance costs, impairment of goodwill and indefinite-lived intangible assets, acquisition costs, and other items is meaningful because they relate to occurrences or events that are outside of our core operations, and management believes that the use of these measures provides a consistent basis to evaluate our operating profitability and performance trends across comparable periods.
The following table sets forth reporting segment information. The reporting segment information reported for the fiscal quarter ended April 3, 2021 has been recast to reflect the new reporting segments adopted by the Company in the fourth quarter of 2021, as described in the consolidated financial statements as of December 31, 2021, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 4, 2022 (in thousands):
-15-

Note 11 - Segment Information (continued)
Fiscal quarter ended
April 2, 2022April 3, 2021
Net revenues:
Sensors$37,750 $31,815 
Weighing Solutions32,768 30,968 
Measurement Systems17,147 7,806 
Total$87,665 $70,589 
Gross profit:
Sensors$14,286 $12,833 
Weighing Solutions12,079 11,774 
Measurement Systems8,885 4,015 
Total$35,250 $28,622 
Reconciliation of segment operating income to consolidated results:
Sensors$8,958 $7,669 
Weighing Solutions6,214 5,817 
Measurement Systems2,211 674 
Unallocated G&A expenses(8,807)(7,721)
Restructuring costs(261) 
Operating income$8,315 $6,439 
Restructuring costs:
Sensors$(203)$ 
Measurement Systems(58) 
$(261)$ 
Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products. The table below summarizes intersegment sales (in thousands):
Fiscal quarter ended
April 2, 2022April 3, 2021
Sensors to Weighing Solutions$389 $954 
Sensors to Measurement Systems61 8 
-16-


Note 12 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share attributable to VPG stockholders (in thousands, except earnings per share):
Fiscal quarter ended
April 2, 2022April 3, 2021
Numerator:
Numerator for basic earnings per share:
Net earnings attributable to VPG stockholders$6,356 $4,961 
Denominator:
Denominator for basic earnings per share:
Weighted average shares13,637 13,593 
Effect of dilutive securities:
Restricted stock units38 36 
Dilutive potential common shares38 36 
Denominator for diluted earnings per share:
Adjusted weighted average shares13,675 13,629 
Basic earnings per share attributable to VPG stockholders
$0.47 $0.36 
Diluted earnings per share attributable to VPG stockholders
$0.46 $0.36 
Note 13 – Additional Financial Statement Information
Other Income (Expense) Other
The caption “Other” on the consolidated condensed statements of operations consists of the following (in thousands):
Fiscal quarter ended
April 2, 2022April 3, 2021
Foreign exchange gain$554 $735 
Interest income64 45 
Pension expense(76)(137)
Other(103)(70)
$439 $573 

Foreign currency exchange gains represent the impact of changes in foreign currency exchange rates. For the fiscal quarter ended April 2, 2022, the change in foreign exchange gains and losses during the period, as compared to the prior year period, is largely due to exposure to currency fluctuations with the Canadian dollar, the Israeli shekel, the Japanese yen and the British pound. Included in Other for the fiscal quarter ended April 2, 2022 is a $0.2 million loss on the liquidation of two of the Company's European subsidiaries.

-17-



Note 14 – 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
April 2, 2022
Assets
Assets held in rabbi trusts$