Vishay Precision Group, Inc.

Vishay Precision Group, Inc.

Notes to Consolidated Financial Statements

Note1 – Background and Summary of Significant Accounting Policies

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.

Principles of Consolidation

The consolidated financial statements include the accounts of the individual entities in which the Company maintained a controlling financial interest. For those subsidiaries in which the Company’s ownership is less than100 percent, the outside stockholders’ interests are shown as noncontrolling interests in the accompanying consolidated balance sheets. All transactions, accounts, and profits between individual members comprising the Company have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ significantly from those estimates.

Revenue Recognition

The Company derives substantially all of its revenue from product sales. The Company recognizes the vast majority of its sales at a point-in-time. It utilizes the core principle of recognizing revenue when the Company satisfies performance obligations as evidenced by the transfer of control of its products to the customer.

Such revenues are derived from purchase orders and/or contracts with customers. Each contract has the promise to transfer the control of the products, each of which is individually distinct and is considered the identified performance obligation. As part of the decision to enter into each contract, the Company evaluates the customer’s credit risk, but its contracts donot have any significant financing components, as payment is generally due net30 to60 days after delivery. In accordance with contract terms, revenue from the Company’s product sales is recognized at the time of product shipment from its facilities or delivery to the customer location, as determined by the agreed upon shipping terms.

Under the terms of some of its contracts, the Company* maybe required to perform certain installation services. These installation services are performed at the time of product delivery or at some point thereafter. The installation services donot* significantly modify the product provided, and although the Company* maybe required contractually to provide these services, the installation services could be performed by athird* party or the customer. Thus, these installation services are a distinct performance obligation. In most of the applicable contracts, this installation service element is immaterial in the context of the agreement. When the installation services are accounted for as a separate performance obligation, the Company allocates the transaction price to this element based on its relative standalone selling price.

Given the specialized nature of the Company's products, the Company generally doesnot allow product returns. Shipping and handling costs are recorded to Costs of product sold when control of the product has transferred to the customer. The Company offers standard product warranties. Warranty related costs continue to be recognized as expense when the products are sold. Sales, value added taxes and other taxes collected concurrent with revenue-producing activities are excluded from revenue. See Note2 for further details on Revenues.

Research and Development Expenses

Research and development costs are expensed as incurred. The amount charged to expense for research and development was $20.8 million, $20.0 million, and $20.4 million for the years ended* December 31, 2025,*2024 and2023, respectively. The Research and Development expenses are classified under the SG&A expenses as disclosed within the consolidated statement of operations.

F-10

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income tax expense in the period that includes the enactment date.

The Company records net deferred tax assets to the extent it believes such assets will "more likely thannot" be realized. In making this determination, the Company considers all positive and negative evidence, including historic earnings, projected future income, and cost-effective tax-planning strategies. When the Company determines that its ability to realize deferred tax assets isnot "more likely thannot", the Company adjusts its deferred tax asset valuation allowance, which increases income tax expense.

The Company records uncertain tax positions on the basis of atwo-step process in which the Companyfirst determines whether it is "more likely thannot" that the tax positions will be sustained based on the technical merits of the position and then measures those tax positions that meet the more-likely-than-not recognition threshold. The Company recognizes the largest amount of tax benefit that is greater than50% likely to be realized upon ultimate settlement with the tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying consolidated statements of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets.

Cash and Cash Equivalents

Cash and cash equivalents include demand deposits and highly liquid investments with original maturities ofthree months or less when purchased. Highly liquid investments with maturities greater thanthree months are classified as short-term investments. There wereno investments classified as short-term investments at* December 31, 2025* or2024.

Allowance for Credit Losses

The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments. In determining the amount of the allowance for credit losses, the Company considers historical loss data, customer specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. The allowance for credit losses was $0.5 million and $0.5 million at* December 31, 2025and2024*, respectively. The credit loss was $0.2 million, $0.1 million, and $0.2 million for the years ended* December 31, 2025,*2024 and2023, respectively.

Inventories

Inventories are stated at the lower of cost, determined by thefirst-in,first-out method, or market based on net realizable value. Inventories are adjusted for estimated excess and obsolescence and written down to net realizable value based upon estimates of future demand, technology developments, and market conditions.

Assets Held For Sale

The Company considers properties to be assets held for sale when (1) management commits to a plan to sell the property; (2) it is unlikely that the disposal plan will be significantly modified or discontinued; (3) the property is available for immediate sale in its present condition; (4) actions required to complete the sale of the property have been initiated; (5) sale of the property is probable and we expect the completed sale will occur withinone year; and (6) the property is actively being marketed for sale at a price that is reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we reclassify it to current assets as “Asset held for sale” and we record the property’s value at the lower of its carrying amount or its estimated fair value, less estimated costs to sell, and we cease depreciation.

F-11

Property and Equipment

Property and equipment are carried at cost and is depreciated principally by the straight-line method based upon the estimated useful lives of the assets. Machinery and equipment are being depreciated over useful lives ofseven tofifteen years. Buildings and building improvements are being depreciated over useful lives oftwenty toforty years or the lease term. Software is being depreciated over useful lives ofthree tofive years. Construction in progress isnot depreciated until the assets are placed in service. Depreciation expense was $12.0 million, $12.0 million, and $11.8 million for the years ended* December 31, 2025,2024 and2023, respectively, which included software depreciation expense of $0.6 million, $0.5 million, and $0.8 million for the years ended December 31, 2025,*2024 and2023, respectively.

Business Combinations

The Company allocates the purchase price of an acquired company, including when applicable, the fair value of contingent consideration between tangible and intangible assets acquired and liabilities assumed from the acquired businesses based on estimated fair values, with any residual of the purchase price recorded as goodwill. Estimating fair values requires significant judgments, estimates and assumptions including butnot limited to: discount rates, future cash flows and the economic lives of trade names, technology, and customer relationships. These estimates are based on historical experience and information obtained from the management of the acquired companies, and are inherently uncertain.

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived trademarks are tested for impairment at least annually, and whenever events or changes in circumstances occur indicating that it is "more likely thannot" impairment* mayhave been incurred. The Company has the option tofirst* assess qualitative factors to determine whether it is "more likely thannot" that the fair value of a reporting unit is less than its carrying value as a basis for determining if it is necessary to perform the quantitative goodwill impairment test. However, if the Company concludes otherwise, then it is required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing it against its carrying value. If the fair value exceeds the carrying value,no further evaluation is required andno impairment loss is recognized. An impairment charge would be recognized to the extent the carrying value of goodwill exceeds the reporting unit fair value.

The indefinite-lived trade names are tested for impairment either by employing the qualitative approach outlined above, or by comparing the carrying value to the fair value based on current revenue projections of the related operations, under the relief from royalty method. Any excess carrying value over the applicable fair value is recognized as impairment. Any impairment would be recognized in the reporting period in which it has been identified.

The Company's requires goodwill and indefinite-lived asset annual impairment test is completed as of thefirst day of thefourth fiscal quarter each year. As described in Note4 to the consolidated financial statements, the2025,2024 and2023 annual impairment tests resulted inno impairment.

Definite-lived intangible assets, such as customer relationships, patents and acquired technology, non-competition agreements, and certain trade names are amortized on a straight-line method over their estimated useful lives. Patents and acquired technology are being amortized over useful lives ofseven totwenty years. Customer relationships are being amortized over useful lives offive tofifteen years. Trade names are being amortized over useful lives ofseven toten years. Non-competition agreements are being amortized over periods offive toten years. The Company continually evaluates the reasonableness of the useful lives of these assets. Additionally, the Company reviews the carrying values of these assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of the asset* may**not* be recoverable based on undiscounted estimated cash flows expected to result from its use and eventual disposition.

Impairment of Long-Lived Assets

The carrying value of long-lived assets held-and-used, other than goodwill and indefinite-lived intangible assets, is evaluated when events or changes in circumstances indicate the carrying value* may**not* be recoverable. The carrying value of a long-lived asset group is considered impaired when the total projected undiscounted cash flows from such asset group are separately identifiable and are less than the carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset group. Fair market value is determined primarily using present value techniques based on projected cash flows from the asset group. Losses on long-lived assets held-for-sale, other than goodwill and indefinite-lived intangible assets, are determined in a similar manner, except that fair market values are reduced for disposal costs.

F-12

Foreign Currency Translation

The Company has significant operations outside of the United States. The Company's operations in Europe, Canada, and certain locations in Asia primarily generate and expend cash in local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. The Company’s 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 subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated balance sheets have been translated at the rate of exchange as of the balance sheet date. Revenues and expenses are translated at the average exchange rate for the year. Translation adjustments donot impact the consolidated statements of operations and are reported as a separate component of accumulated other comprehensive loss within the statement of comprehensive income. Foreign currency transaction gains and losses are included in the results of operations.

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 consolidated statements of operations.

Share-Based Compensation

Compensation costs related to share-based payments are recognized in the consolidated financial statements. The amount of compensation cost is measured based on the grant-date fair value of the equity instruments issued. For service-based awards, compensation cost is recognized over the period that an officer, employee, or non-employee director provides service in exchange for the award. The Company recognizes forfeitures as they occur. For performance based awards, the Company recognizes compensation cost for awards that are expected to vest based on whether performance criteria are expected to be met.

Leases

The Company determines if an arrangement is or contains a lease at inception or modification of such agreement. The arrangement is or contains a lease if the contract conveys the right to control the use of the identified asset for a period in exchange for consideration.

Lease right of use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected term at commencement date. As the implicit rate isnot determinable in most of the Company's leases, the Company's incremental borrowing rate is used as the basis to determine the present value of future lease payments. The expected lease terms include options to extend or terminate. The period which is subject to an option to extend the lease is included in the lease term if it is reasonably certain that the option will be exercised. Some of these leases contain variable payment provisions that depend on an index or rate, initially measured using the index or rate at the lease commencement date and are thereforenot included in our future minimum lease payments. Variable payments are expensed in the periods incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. The Company uses the practical expedients to exclude from balance sheet reporting leases with initial terms of12 months or less and to exclude non-lease components from lease right of use assets and corresponding liabilities.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.

Recent Accounting Pronouncements

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

F-13

Recent accounting pronouncements

In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740): 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.Early adoption is permitted. Adoption of this ASU should be applied on a prospective basis, although retrospective application is permitted. The Company adopted the ASU on its consolidated financial statements and disclosures- see note6.*

In* November 2024,the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220*-40), Disaggregation of Income Statement Expenses. This update aims to enhance the transparency of financial reporting by requiring public business entities (PBEs) to provide disaggregated disclosure of certain income statement expense captions into specified categories in disclosures within the footnotes to the financial statements. The ASU is effective for annual fiscal years beginning after* December 15, 2026,and interim periods within fiscal years beginning after December 15, 2027.*Early adoption is permitted. Adoption of this ASU should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In* July 2025the FASB issued ASUNo.* 2025-05 – Financial Instruments – Credit Losses (Topic326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Topic606 – Revenue from Contracts with Customers. Under this practical expedient, entities* mayassume that current conditions as of the balance sheet date donot* change for the remaining life of the asset. The ASU is effective for financial statements issued for fiscal years beginning after* December 15, 2025.*Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

Note2 – Revenues

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)*:

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Note2 – Revenues (continued)

The following table disaggregates net revenue by market sector*(in thousands)*:

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 isnot significant.

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

The amount of revenue recognized during the year ended* December 31, 2025* that was included in the contract liability balance at* December 31, 2024* was $6.0 million.

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Note3 – Assets held for sale

On* July 10, 2025,as part of the Company’s ongoing strategy to focus on its core operations and optimize its asset base utilization, the Company completed the sale of its manufacturing facility located at Kent, Washington which was part of the Weighing Solutions Segment. The total sale proceeds amounted to $11.5 million, and the net proceeds, after deducting broker’s commission and real estate excise tax, were approximately $10.8 million. The carrying amount of the asset was previously classified as asset held for sale under current assets in the consolidated balance sheet as of December 31, 2024after meeting the criteria outlined in ASC360.* No further depreciation was recorded once the asset was classified as held for sale. The net cash proceeds were used to repay a portion of the Company's credit facility, as further discussed in Note7 – Long-Term Debt. Upon completion of the sale, the Company recognized a gain of approximately $5.5 million in* July 2025,which is included in Operating income in the condensed consolidated statements of operations for the Twelve Months Ended December 31,* 2025.

Note4 – Goodwill and Other Intangible Assets

The Company hasfour reporting units to which goodwill was allocated: steel, on-board weighing, DSI, and DTS. In2025 the Company performed a quantitative impairment test for all its reporting units. In estimating the fair value of our reporting units the Company used the income approach. The income approach to valuation requires management to make significant estimates and assumptions related to future revenues, profitability, working capital requirements and selection of discount rate and long term growth rate. Changes in these estimates and assumptions could have a significant impact on the fair value of the reporting units. If the fair value exceeds the carrying value,no further evaluation is required andno impairment loss is recognized. An impairment charge would be recognized to the extent the carrying value of goodwill exceeds the reporting unit fair value.

The Company's required goodwill and indefinite-lived asset annual impairment test is completed as of thefirst day of thefourth fiscal quarter each year. In2025,2024 and2023, the results of the quantitative impairment test for all reporting units indicated that the fair value of the reporting units exceeded their carrying values, and thereforeno impairment was recognized.

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

(1)The goodwill resulting from the acquisition of Nokra in* September 2024,*was assigned to the Steel reporting unit.

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Note4 – Goodwill and Other Intangible Assets (continued)

Intangible assets were as follows*(in thousands)*:

Certain intangible assets are subject to foreign currency translation.

Amortization expense was $3.9 million, $3.8 million, and $3.8 million, for the years ended* December 31, 2025,*2024 and2023, respectively.

Estimated annual amortization expense for each of the nextfive years is as follows*(in thousands)*:

Note5 – Restructuring Costs

Restructuring costs reflect the cost reduction programs implemented by the Company. Restructuring costs are expensed during the period in which the Company determines it will incur those costs and all requirements for accrual are met. Because these costs are recorded based upon estimates, actual expenditures for the restructuring activities* may*differ from the initially recorded costs. If the initial estimates are too low or too high, the Company could be required to either record additional expense in future periods or to reverse part of the previously recorded charges.

The Company recorded restructuring costs of $1.5 million, $1.1 million, and $1.6 million during the years ended* December 31, 2025,*2024 and2023, respectively. The 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.

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Note5 – Restructuring Costs (continued)

The following table summarizes the activity to date related to these programs in the accrued restructuring liability, which is comprised of the activity associated primarily with the employee termination costs. The accrued restructuring liability balance as of* December 31, 2025and2024*, respectively, is included in other accrued expenses in the accompanying consolidated balance sheets*(in thousands)*:

Note6 – Income Taxes

The Company is subject to U.S. federal tax at the rate of 21%.

On* December 22, 2017,*the Tax Cuts and Jobs Act (the "Tax Act") was signed into law making significant changes to U.S. income tax law.

On** July 4, 2025,** the OBBBA was enacted into law, extending key provisions of the2017 Tax Cuts and Jobs Act. The OBBBA restores expensing of domestic research expenditures for years beginning after** December 31, 2024.** Additionally, the OBBBA restores the EBITDA-based interest expense limitation and includes changes related to the U.S. taxation of the income of our foreign subsidiaries and certain foreign derived income, and the base erosion and anti-abuse tax, and provides for accelerated depreciation for property acquired and placed in service after** January 19, 2025.** The legislation has multiple effective dates, with certain provisions effective in2025 and others implemented through2027. Due to the OBBBA provisions, the Company recorded tax benefit for the year as a decrease in valuation allowance on part of our deferred tax assets.

The Company recognized approximately $7.6 million and $8.1 million of GILTI for the years ended* December 31, 2025and2024,* respectively. The U.S. tax on Global Intangible Low-taxed Income ("GILTI"), net of foreign tax credits and other credits, was less than $0.1 million for each of the years ended* December 31, 2025and2024.*

For financial reporting purposes, income before taxes includes the following components*(in thousands)*:

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The expense (benefit) for income taxes is comprised of*(in thousands)*:

F-19

The Company adopted ASU2023‑09 prospectively for the year ended* December 31, 2025,and a reconciliation of the income tax provision and the amount computed by applying the statutory federal income tax rate of21%* to income before income taxes was as follows*(in thousands)*:

(a) State taxes in California and Pennsylvania made up the majority (greater than50 percent) of the tax effect in this category.

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A reconciliation of the income tax provision, prior to the adoption of ASU2023-09, to the amount computed by applying the statutory federal income tax rate of21% to income before income taxes for the years presented was as follows:

In2025, the Company recognized deferred tax benefits of $2.3 million on net operating loss carryforwards generated in certain foreign jurisdictions, which is included in deferred tax expense (benefit) above.

Deferred income taxes represent the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities are as follows*(in thousands)*:

F-21

The Company established a valuation allowance with respect to substantially all of its U.S. deferred tax assets due to uncertainty regarding the realization of these assets. Throughout2024 and2025, the Company reassessed its ability to realize its U.S. and other deferred tax assets by considering both positive and negative evidence regarding realization. The most significant negative evidence is continuing cumulative operating losses in the U.S. The impact of its US companies acquisitions was also considered in determining the realization of the U.S. deferred tax assets. Other aspects, such as operating results, additional interest expense and additional tax deductions related to the acquisitions, were also considered. The Company also considered positive evidence such as tax planning strategies and the projected benefits of our restructuring efforts. However, there was insufficient positive evidence to overcome the negative evidence.

Overall, the cumulative losses and the acquisition impacts still indicate that realization of our U.S. deferred tax assets remains uncertain such that the Company cannot conclude that it is "more likely thannot" that the deferred tax assets will be recoverable.

We will continue to monitor the realization of U.S. deferred tax assets and reduce the valuation allowance if, and when, sufficient positive evidence of realization exists.

On* September 30, 2024,the Company acquired Nokra, a German entity. Nokra's opening balance sheet included $1.0 million of gross deferred tax assets, and $1.2 million of indefinite-lived liabilities as a result of the purchase price allocation. The acquisition contributed to a less than $0.1 million net increase in valuation allowance and deferred tax expense for the Company in2024.* In2025 Nokra’s valuation allowance net increase was $0.8 million.

At* December 31, 2025and2024,* the valuation allowance on U.S. deferred tax assets was approximately $12.7 million and $13.3 million, respectively. The net change in this valuation allowance was approximately $(0.6) million, mostly related to net federal valuation allowances.

The Company also has valuation allowances of $2.9 million and $2.1 million at* December 31, 2025and2024*, respectively, with respect to certain foreign net operating loss and capital loss carryforwards.

Significant valuation allowances are as follows*(in thousands)*:

The following table summarizes significant net operating losses, capital losses and credit carryforwards as of* December 31, 2025* (in thousands):

Utilization of U.S. federal net operating losses is taken into account before the GILTI deduction allowable by IRC Section250.

F-22

Undistributed earnings of the Company’s foreign subsidiaries were approximately $304.2 million at* December 31, 2025* compared to $300.5 million at* December 31, 2024*. As of* December 31, 2025*, the Company had provided for a deferred tax liability of approximately $2.1 million of withholding tax associated with $21 million of unremitted, non-permanently reinvested earnings. Substantially all of the remaining undistributed earnings are considered to be indefinitely reinvested and accordinglyno provision has been made with respect to these earnings for incremental foreign income taxes, state income taxes or foreign withholding taxes. If those earnings were distributed to the U.S., the Company could be subject to incremental foreign income taxes, state income taxes, and withholding taxes. Determination of the amount of unrecognized deferred tax liability isnot practicable because of the uncertainty regarding the timing of any such distribution and the impact on existing valuation allowances. In addition to the*$2.1* million, additional withholding taxes of approximately $32.5 million are estimated to be payable upon distribution of the remaining previously unremitted earnings as of* December 31, 2025*.

Net income taxes paid were $8 million, $14.5 million and $10.9 million for the years ended* December 31, 2025,*2024 and2023, respectively.

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* maystill 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.

The following table summarizes changes in the Company's gross liabilities, excluding interest and penalties, associated with unrecognized tax benefits*(in thousands)*:

F-23

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Related to the unrecognized tax benefits noted above, for the years ended* December 31, 2025,2024 and2023, the Company accrued penalties and interest annually in a Insignificant amounts (lower than$0.1* million annually). As of* December 31, 2025,*2024 and2023, accrued penalties and interest were $0.1 million, each year.

Included in the balance of unrecognized tax benefits as of* December 31, 2025,2024 and2023 is $1.0 million, $0.8 million, and $0.8 million, respectively, of tax benefits that, if recognized, would impact the effective tax rate. Furthermore, as of December 31, 2025*, the Company doesnot anticipate that any of its current unrecognized tax benefits will reverse within the next calendar year due to the expiration of the statute of limitations.

The Company and its subsidiaries file U.S. federal income tax returns, as well as income tax returns in various state, local, and foreign jurisdictions. The Company files federal, state, and local income tax returns on a combined, unitary, or stand-alone basis. The statute of limitations in those jurisdictions generally ranges from3 to4 years. Additionally, the Company's foreign subsidiaries file income tax returns in the countries in which they have operations and the statutes of limitations in those jurisdictions generally range from3 to10 years.

During thefirst quarter of2024, a tax examination began ofone its subsidiaries in Israel covering the years 2019-2023.

During thesecond quarter of2024, the Company concluded a tax examination in France forone of its subsidiaries covering the years 2021 and2022, which resulted inno change in tax.

During thefourth quarter of2024, a tax examination began in Germany ofthree of the Company's subsidiaries. The Company also concluded a tax examination in Taiwan forone of its subsidiaries covering the year 2022, which resulted inno change in tax.

The Company is subject to ongoing income tax audits, administrative appeals and judicial proceedings in India spanning a number of years.

Note7 – Long-Term Debt

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

2024 Credit Agreement

On* August 15, 2024,the Company entered into a Fourth Amended and Restated Credit Agreement (the“2024* Credit Agreement”) among the Company, the lenders party thereto, JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A. and HSBC as joint lead arrangers and joint bookrunner, and JPMorgan Chase Bank, N.A., as agent for such lenders, pursuant to which its previously existing credit agreement, was amended and restated to, among other things, extend the maturity date from* March 20, 2025to August 15, 2029and adjust the interest rate and commitment fee. The2024* Credit Agreement provides for a multicurrency, secured credit facility (the*“2024* Revolving Facility”) in an aggregate principal amount of $75.0 million, with a sublimit of $10 million which can be used for letters of credit for the account of the Company or its subsidiaries that are parties to the2024 Credit Agreement, the proceeds of which* maybe used for working capital and general corporate purposes, and a portion of which were used to refinance the existing credit facility. The aggregate principal amount of the2024* Revolving Facility* maybe increased by a maximum of $25.0 million upon the request of the Company, subject to the terms of the2024* Credit Agreement. The Company* mayelect to make loans under the2024* Revolving Facility in US Dollars, Euros, Canadian Dollars, Sterling, Japanese Yen or such other freely convertible foreign currency.

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Note7 – Long-Term Debt (continued)

Amounts borrowed under the2024 Revolving Facility accrue interest in an amount equal to a floating rate plus a specified margin. Such floating rates are (i) for loans denominated in US Dollars, at the Company’s option, either (a) the greatest of: the Agent’s prime rate, the Federal Funds rate, or a 1% floor (the “US Base Rate”), or (b) the SOFR, (ii) for loans denominated in Canadian Dollars, at the Company’s option, either (x) the greatest of: the PRIMCAN Index rate, the average30 day rate for loans accruing interest based on the Canadian Overnight Repo Rate Average (“CORRA”) (the “Canadian Base Rate”), or (y) CORRA, (iii) for loans denominated in Pounds Sterling, the Sterling Overnight Index Average (“SONIA”), (iv) for loans denominated in Euros, the Euro Interbank Offered Rate (“EURIBOR"), and (v) for loans denominated in Japanese Yen, the Tokyo Interbank Offered Rate (“TIBOR”). The specified interest margin for US Base Rate Loans and Canadian Base Rate Loans is 0.25%. Depending upon the Company’s leverage ratio, the interest rate margin for loans based on SOFR, CORRA, SONIA, EURIBOR and TIBOR ranges from 1.75% to 3.00% per annum. The Company is required to pay a quarterly fee of 0.20% per annum to 0.40% per annum on the unused portion of the2024 Revolving Facility, which is also determined based on the Company’s leverage ratio. Additional customary fees apply with respect to letters of credit.

On* July 17, 2025,the Company made a partial repayment of the outstanding balance under the2024* Credit Agreement in the amount of $11.0 million, using proceeds from the sale of manufacturing facility (see Note3 - Asset Held for Sale). The repayment was made in accordance with the terms of the2024 Credit Agreement and resulted in a corresponding reduction in the outstanding balance under the2024 Revolving Facility. As of* December 31, 2025*, the outstanding balance under the2024 Revolving Facility was $20.6 million, bearing interest at variable rates based on the Credit Agreement.

The obligations of the Company under the2024 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 the2024 Credit Agreement are secured by substantially all the assets (excluding real estate) of the Company and such guarantors. The2024 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 as of* December 31, 2025*. If the Company isnot in compliance with any of these covenant restrictions, the2024 Revolving Facility could be terminated by the lenders, and all amounts outstanding pursuant to the2024 Revolving Facility could become immediately payable.

Aggregate annual maturities of long-term debt are as follows*(in thousands)*:

Interest paid onthird-party debt was $1.9 million, $2.5 million, and $4.0 million during the years ended* December 31, 2025,*2024 and2023, respectively.

Note8 – Stockholders’** Equity**

The Company’s Class B convertible common stock carriesten votes per share. The Company's common stock carriesone vote per share. Class B shares are transferable only to certain permitted transferees. Class B shares are convertible on aone- for-one basis at any time into shares of common stock. Transfers of Class B shares other than to permitted transferees will result in the automatic conversion of the Class B shares into common stock.

The Board of Directors* mayonly declare dividends or other distributions with respect to the common stock or the Class B convertible common stock if it grants such dividends or distributions in the same amount per share with respect to the other class of stock. As discussed in Note7,* the Company is restricted from paying cash dividends. Stock dividends or distributions, on any class of stock, are payable only in shares of stock of that class. Shares of either common stock or Class B convertible common stock cannot be split, divided, or combined unless the other is also split, divided, or combined equally.

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Note8 – Stockholders’** Equity (continued)**

On* August 8, 2022,the Board of Directors 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 Rule10b5*-1 of the Securities Exchange Act of1934, as amended (the “Exchange Act”), open market purchases or private transactions, in accordance with the applicable federal securities laws, including Rule10b-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.The Stock Repurchase Plan expired in accordance with its terms on August 9, 2024.*

From* August 8, 2022to August 9, 2024,*the Company had repurchased an aggregate of 518,328 shares of its common stock under the Stock Repurchase Plan.

The Board of Directors is authorized, without further stockholder approval, to issue from time to time up to an aggregate of 1,000,000 shares of preferred stock inone or more series. The Board of Directors* may*fix or alter the designation, preferences, rights and any qualification, limitations, restrictions of the shares of any series, including the dividend rights, dividend rates, conversion rights, voting rights, redemption terms and prices, liquidation preferences and the number of shares constituting any series.No shares of the Company’s preferred stock are currently outstanding.

Other Comprehensive Income (Loss)

The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows*(in thousands)*:

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 Note9).

Note9 – Pensions and Other Postretirement Benefits

Defined Benefit Plans

Employees of the Company participate in various defined benefit pension and other postretirement benefit plans.

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U.S. Pension Plan

The Vishay Precision Group Non-Qualified Retirement Plan, like all non-qualified plans, is considered to be unfunded. The Company maintains a nonqualified trust, referred to as a “rabbi” trust, to fund benefits under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and arenot the property of employees. Therefore, they are accounted for as other noncurrent assets within the consolidated balance sheets. The assets held in the rabbi trust are invested in money market funds and company-owned life insurance policies. The consolidated balance sheets include assets held in trust related to the nonqualified pension plan of $1.6 million at* December 31, 2025* and $1.6 million at* December 31, 2024*, and the related liabilities of $1.9 million and $2.1 million at* December 31, 2025and2024*, respectively.

The Vishay Precision Group Non-Qualified Retirement Plan is frozen. Accordingly,no new employees* mayparticipate in the plan,no further participant contributions are permitted, andno* further benefits accrue. Benefits accumulated prior to the freezing of the U.S. pension plan will be paid to employees upon retirement, and the Company will likely need to make additional cash contributions to the rabbi trust to fund this accumulated benefit obligation.

Non-U.S. Pension Plans

The Company provides pension and similar benefits to employees of certain non-U.S. subsidiaries consistent with local practices. Pension benefits earned are generally based on years of service and compensation during active employment.

The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to pension plans*(in thousands)*:

Actuarial gains incurred in2025 related mainly to our non-U.S. plan are primarily the result of the increase discount rate assumptions used to estimate the benefit obligation as of* December 31, 2025* compared to* December 31, 2024*. Actuarial gains incurred in2024 related to our U.S. and non-U.S. plans are primarily the result of an increase in the discount rate assumptions used to estimate the benefit obligations as of* December 31, 2024* compared to* December 31, 2023*.

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Amounts recognized in the consolidated balance sheets consist of the following pre-tax amounts*(in thousands)*:

Unrecognized actuarial gains and losses arise from several factors, including experience and assumption changes with respect to the obligations and from the difference between expected returns and actual returns on plan assets. Actuarial items consist of the following*(in thousands)*:

The following table sets forth additional information regarding the projected and accumulated benefit obligations for the pension plans*(in thousands)*:

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Unrecognized gains and losses are amortized into future net periodic pension cost using the10% corridor method over the expected remaining service life of the employee group. The following table sets forth the components of net periodic cost of pension*(in thousands)*:

See Note8 for the pre-tax, tax effect, and after tax amounts included in other comprehensive income during the years ended* December 31, 2025,*2024 and2023.

The following weighted-average assumptions were used to determine benefit obligations at* December 31*of the respective years:

The following weighted-average assumptions were used to determine the net periodic pension costs for the years ended* December 31, 2025and2024*:

The plans’ expected return on assets is based on management’s expectation of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, advice from pension consultants and investment advisors, and current economic and capital market conditions.

The investment mix between equity securities and fixed income securities is based upon achieving a desired return, balancing higher return, more volatile equity securities, and lower return, less volatile fixed income securities. The target allocation of plan assets approximates the actual allocation of plan assets at* December 31, 2025and2024*.

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Plan assets are comprised of:

The Company maintains defined benefit retirement plans in certain of its subsidiaries. The assets of the plans are measured at fair value.

Equity securities held by the defined benefit retirement plans consist of equity securities that are valued based on quoted market prices on the last business day of the year. The fair value measurement of the equity securities is considered a Level2 measurement within the fair value hierarchy.

Fixed income securities held by the defined benefit retirement plans consist of government bonds and corporate notes that are valued based on quoted market prices on the last business day of the year. The fair value measurement of the fixed income securities is considered a Level2 measurement within the fair value hierarchy.

Cash held by the defined benefit retirement plans consists of deposits on account in various financial institutions. The carrying amount of the cash approximates its fair value. A summary of the Company’s pension plan assets for each fair value hierarchy level are as follows for the periods presented (see Note16 for further description of the levels within the fair value hierarchy*(in thousands)*:

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Estimated future benefit payments are as follows*(in thousands)*:

The Company anticipates making contributions to its funded and unfunded pension of approximately $1.1 million during2026.

Other Postretirement Benefit Plans

In the U.S., the Company maintainstwo unfunded non-pension other postretirement benefit plans (“OPEB”) which are funded as costs are incurred. These plans provide medical and death benefits to retirees.

The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to other postretirement benefit plans*(in thousands)*:

Actuarial gains incurred in2025 related to our post-retirement plans are primarily the result of the increase discount rate assumptions used to estimate the benefit obligation as of* December 31, 2025* compared to* December 31, 2024*. Actuarial losses incurred in2024 related to our post-retirement plans are primarily the result of the decrease discount rate assumptions used to estimate the benefit obligation as of* December 31, 2024* compared to* December 31, 2023*.

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Amounts recognized in the consolidated balance sheets consist of the following pre-tax amounts*(in thousands)*:

Actuarial items consist of the following*(in thousands)*:

Unrecognized gains and losses are amortized into future net periodic benefit cost using the10% corridor method over the expected remaining service life of the employee group. The following table sets forth the components of net periodic benefit costs*(in thousands)*:

See Note8 for the pre-tax, tax effect, and after tax amounts included in other comprehensive income during the years ended* December 31, 2025,*2024 and2023.

The following weighted-average assumptions were used to determine benefit obligations at* December 31*of the respective years:

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The following weighted-average assumptions were used to determine the net periodic benefit costs for the years ended* December 31, 2025and2024*:

The impact of aone-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirement benefit obligation isnot material.

Estimated future benefit payments are as follows*(in thousands)*:

As the plans are unfunded, the Company's anticipated contributions for2025 are equal to the estimated benefit payment.

Other Retirement Obligations

The Company participates in various other defined contribution plans based on local law or custom. The Company periodically makes contributions to these plans. At* December 31, 2025and2024*, the consolidated balance sheets include $0.6 million and $0.5 million, respectively, within accrued pension and other postretirement costs related to these plans.

Most of the Company’s U.S. employees are eligible to participate in401(k) savings plans which provide company matching under various formulas. The Company’s matching expense for the plans was $0.7 million, $1.2 million and $1.2 million for the years ended* December 31, 2025,*2024 and2023, respectively.No material amounts are included in the consolidated balance sheets related to unfunded401(k) contributions.

Certain key employees participate in a nonqualified deferred compensation plan, which allows these employees to defer a portion of their compensation until retirement, or elect shorter deferral periods. The accompanying consolidated balance sheets include a liability within other noncurrent liabilities related to these deferrals. The Company maintains a nonqualified trust, referred to as a “rabbi” trust, to fund payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and arenot the property of employees. Therefore, they are accounted for as other noncurrent assets within the consolidated balance sheets. The assets held in the rabbi trust are invested in money market funds and company-owned life insurance policies. The consolidated balance sheets include assets held in trust related to the nonqualified deferred compensation plan of $5.0 million and $4.6 million at* December 31, 2025and2024* respectively, and the related liabilities of $6.1 million and $5.9 million at* December 31, 2025and2024*, respectively.

In* July 2024,the UK Court of Appeal upheld a ruling in the matter of Virgin Media Limited versus NTL Pension Trustees II Limited, that certain historical amendments for contracted out defined benefit schemes were invalid if they werenot* accompanied by the correct actuarial confirmation, a decision that the Company wasnot a party to or involved in and could impact the Company’s non US pension plan in the UK. The Company and its UK pension scheme trustee are reviewing this development, along with its actuaries, and considering whether this decision has any implications for its UK pension plan.

In* June 2025,*the UK Department for Work and Pensions announced that the government will introduce legislation to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards. The Company and its UK pension scheme trustee are reviewing this development, along with our actuaries, and considering whether this decision has any implications for its UK pension plan.

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Note10 – Share-Based Compensation

The Vishay Precision Group, Inc.2022 Stock Incentive Plan (the*"2022* plan") permits the issuance of up to 608,000 shares of common stock. At* December 31, 2025* the Company had reserved 378,739 shares of common stock for future grant of equity awards (restricted stock, unrestricted stock, restricted stock units (“RSUs”), or stock options) pursuant to the2022 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 donot become available for future grant under the2022 plan.

Restricted Stock Units

Pursuant to the2022 plan, the Company issued RSUs to board members, executive officers, and certain employees of the Company during2025. 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. Compensation cost is recognized over the period that the participant provides service in exchange for the award. The Company recognizes compensation cost for RSUs that are expected to vest and for which performance criteria are expected to be met.

On* February 25, 2025and in accordance with their respective employment agreements, VPG’sthree* executive officers were granted annual equity awards in the form of RSUs, of which 50% are performance-based. The awards have an aggregate grant-date fair value of $1.9 million and were comprised of 79,729 RSUs. Fifty percent of these awards will vest on* January 1, 2028,subject to the executives’ continued employment. The performance-based portion of the RSUs will also vest on January 1, 2028,subject to the executives' continued employment and the satisfaction of certain performance objectives relating tothree*-year cumulative “adjusted free cash flow” and "net earnings goals", each weighted equally.

On* February 25, 2025,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 $0.4 million and were comprised of 18,282 RSUs. The non-performance portion of these awards (twenty-five percent for certain employees andfifty percent for certain employees) will vest on January 1, 2028,subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2028,subject to the employees' continued employment and the satisfaction of certain performance objectives relating tothree*-year cumulative earnings and cash flow goals, each weighted equally.

On* May 21, 2025,and in accordance with the Company's2025* Non-Employee Director Compensation Plan, the Board of Directors ("Board") approved the issuance of an aggregate of 18,252 RSUs to the independent board members of the Board. The awards had an aggregate grant-date fair value of $0.5 million and will vest on or before the2026 Annual Stockholders Meeting in* May 2026,*subject to each applicable director's continued service on the Board. Vesting of equity awards is subject to acceleration under certain circumstances.

On* July 1, 2025,certain non-executive VPG employees were granted annual equity awards in the form of RSUs. One employee received an award, of which 75% is performance-based andone* employee received an award of which 50% is performance-based. The awards have an aggregate grant-date fair value of $0.1 million and were comprised of 2,444 RSUs. The non-performance portion of these awards will vest on* July 1, 2028,subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on July 1, 2028,subject to the employees' continued employment and the satisfaction of certain performance objectives relating tothree*-year cumulative earnings and cash flow goals, each weighted equally.

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Note10 – Share-Based Compensation (continued)

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

Vesting of equity awards* may*be subject to acceleration under certain circumstances.

RSU activity is presented below*(number of RSUs in thousands)*:

The fair value of the RSUs vested during2025 was $1.0 million. Included in the2025,2024 and2023 activity are RSU's forfeited as a result of performance objectivesnot being met. These awards are therefore available for future grants under the Plan.

None of the RSUs with performance-based criteria is expected to vest in the comingthree years period.

Share-Based Compensation Expense

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

Share- based compensation expense is recognized ratably over the vesting period of the awards and for RSUs with performance criteria, is recognized for RSU's that are expected to vest and for which performance criteria are expected to be met.

During2025, a net adjustment of $0.8 million decreasing share-based compensation expense was recorded, based on the evaluation of performance objectives associated with awards granted in2023,2024 and2025. It was determined that certain objectives werenot likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards.

During2024, a net adjustment of $1.5 million decreasing share-based compensation expense was recorded, based on the evaluation of performance objectives associated with awards granted in2022, 2023 and2024. It was determined that certain objectives werenot likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards. During2023, a net adjustment of $0.4 million decreasing share-based compensation expense was recorded, based on the evaluation of performance objectives associated with awards granted in2021, 2022 and2023. It was determined that certain objectives werenot likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards

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Note10 – Share-Based Compensation (continued)

The total tax benefit on share-based compensation expense was $0.4 million, $0.2 million and $0.5 million for the years ended* December 31, 2025,2024 and2023, respectively. The deferred tax benefit (expense) on share-based compensation expense was $0.05 million, $(0.3) million, and $0.1 million for the years ended December 31, 2025,*2024 and2023, respectively.

As of* December 31, 2025*, the Company had $2.2 million of unrecognized share-based compensation expense related to share-based awards that expected to be recognized over a weighted-average period of approximately 1.4 years.

Note11 – Commitments, Contingencies, and Concentrations

Tax Assessment

During thesecond quarter of2024, the Israeli Tax Authority has issued a Value Added Tax (VAT) assessment to the Company, in the amount of ILS 8.4 million (approximately $2.6 million), pertaining to claims of VAT between the years2019 to2023.

On* August 6, 2025,the Company received the decision of the Israeli Tax Authority regarding the Company's appeal of the VAT assessment. The appeal was rejected, based on the same reasoning outlined in the original assessment issued to the Company. The Company deferred the assessment and with the assistance of its legal counsel appealed on this decision to the court on January 18, 2026.*

The Company believes that the liability for the assessment isnot probable, and given the stage of this matter, the Company is currently unable to predict the likely outcome or estimate the potential financial impact, if any, of this matter.

Litigation

The Company is subject to various legal proceedings that constitute ordinary, routine litigation incidental to its business. The Company is of the opinion that the disposition of these proceedings willnot have a material adverse effect on its business or its financial condition, results of operations, and cash flows.

Executive Employment Agreements

The Company has employment agreements with its executive officers which outline base salary, incentive compensation, and equity-based compensation. The employment agreements with the Company's executive officers also provide for incremental compensation in the event of termination without cause or resignation for good reason.

Sources of Supplies

Although most materials incorporated in the Company’s products are available from a number of sources, certain materials are available only from a relatively limited number of suppliers.

Some of the most highly specialized materials for the Company’s sensors are sourced from a single vendor. The Company maintains a safety stock inventory of certain critical materials at its facilities.

Certain metals used in the manufacture of the Company’s products are traded on active markets, and can be subject to significant price volatility.

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Note11 – Commitments, Contingencies, and Concentrations (continued)

Market Concentrations

No single customer comprises greater than10% of net revenues.

The vast majority of the Company’s products are used in the broad industrial market, with selected uses in military and aerospace, medical, agriculture, and construction. Within the broad industrial segment, the Company’s products serve wide applications in the waste management, bulk hauling, logging, scale manufacturing, engineering systems, pharmaceutical, oil, chemical, steel, paper, and food industries.

Credit Risk Concentrations

Financial instruments with potential credit risk consist principally of cash and cash equivalents, accounts receivable, and notes receivable. The Company maintains cash and cash equivalents with various major financial institutions. Concentrations of credit risk with respect to receivables are generally limited due to the Company’s large number of customers and their dispersion across many countries and industries. At* December 31, 2025and2024*, the Company hadno significant concentrations of credit risk.

Geographic Concentrations

At* December 31, 2025and2024*, a significant percentage of the Company’s cash and cash equivalents are held outside the United States. See the following table for the percentage of cash and cash equivalents by region of subsidiary, at* December 31, 2025* and* December 31, 2024*:

Note12 – Leases

The Company primarily leases office and manufacturing facilities in addition to vehicles, which have remaining terms of less thanone year toeleven years,ten months,thirteen days.

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

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Note12 – Leases ( continued)

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

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

Right of use assets obtained in exchange for new operating lease liability during2025 were $2.5 million and in2024 were $2.0 million. The Company paid $5.5 million for its operating leases for the year ended* December 31, 2025* and $5.2 million for the year ended* December 31, 2024*, which are included in operating cash flows on the consolidated statements of cash flows.

Undiscounted maturities of operating lease payments as of* December 31, 2025* are summarized as follows*(in thousands)*:

Note13 – Segment and Geographic Data

VPG reports inthree 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 segments performance is based on multiple performance measures including revenues and operating income, exclusive of certain items. Management believes that evaluating segment performance, excluding items such as restructuring severance, impairment of goodwill and indefinite-lived intangible assets and amortization of 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 accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note1). Reporting segment assets are the owned or allocated assets used by each segment. Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products.

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Note13 – Segment and Geographic Data (continued)

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

(1) Segment selling, general and administrative expenses are direct selling, general and administrative expenses, excluding research and development expenses and amortization of intangible assets attributed to the segment.

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Note13 – Segment and Geographic Data (continued)

The following table reconciles segment profit to consolidated income before taxes*(in thousands)*:

The following geographic data includes property and equipment based on physical location*(in thousands)*:

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Note14 – Earnings Per Share

Basic earnings per share are computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding, adjusted to include the potentially dilutive effect of restricted stock units (see Note10), and other potentially dilutive securities.

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

Note15 –** Additional Financial Statement Information**

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

Foreign currency exchange gains and losses represent the impact of changes in foreign currency exchange rates. The foreign exchange gain/(loss) for the year ended* December 31, 2025*, is primarily due to fluctuations in the Israeli shekel, Japanese yen and the Canadian dollar. The foreign exchange gain/(loss) for the year ended* December 31, 2024*, is primarily due to fluctuations in the Israeli shekel, the Canadian dollar and the British pound and for the year ended* December 31, 2023*, is primarily due to fluctuations in the Israeli shekel, the Japanese yen and the British pound.

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Note15 – Additional Financial Statement Information (continued)

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

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

Israeli Severance Pay

The Israeli Severance Pay Law,1963 ("Severance Pay Law"), specifies that employees of our Israeli subsidiary are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated asone-month salary for each year of employment, or a portion thereof.

Part of the subsidiary's liability for severance pay is covered by the provisions of Section14 of the Severance Pay Law ("Section14"). Under Section14, employees are entitled to monthly deposits, at a rate of8.33% of their monthly salary, contributed on their behalf to their insurance funds. Payments in accordance with Section14 release the subsidiary from any future severance payments in respect of those employees. As a result, the Company doesnot recognize any liability for severance pay due to these employees and the deposits under Section14 arenot recorded as an asset in the Company's balance sheet.

For the subsidiary's employees in Israel who arenot subject to Section14, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees multiplied by the number of years of employment as of the balance sheet date. The Company recorded as expenses the increase in the severance liability, net of earnings (losses) from the related investment fund. The subsidiary's liability was partially funded by monthly payments deposited with insurers and the value of these deposits is recorded as an asset on the Company's balance sheet. Any unfunded amounts would be paid from operating funds and are covered by a provision established by the subsidiary. The accompanying consolidated balance sheets at* December 31, 2025* and* December 31, 2024* include a $6.2 million and $6.2 million non-current liability, respectively, associated with Israeli severance requirements in other liabilities and a $5.3 million and $5.0 million non-current asset, respectively, associated with Israeli severance requirements in other assets.

Note16 – Fair Value Measurements

ASC Topic820, Fair Value Measurements and Disclosures, 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 intothree broad levels. The following is a brief description of thosethree levels:

Level1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level2: 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 arenot active.

Level3: 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.

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Note16 – Fair Value Measurements (continued)

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

The Company maintains nonqualified trusts, referred to as “rabbi” trusts, to fund payments under deferred compensation and nonqualified pension plans. Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale money market funds at* December 31, 2025* and* December 31, 2024*, 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 year. 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 cash and cash equivalents held in the rabbi trust is considered a Level1 measurement and the measurement of the company-owned life insurance assets is considered a Level2 measurement within the fair value hierarchy.

The fair value of the long-term debt, excluding capitalized deferred financing costs at* December 31, 2025* and* December 31, 2024* approximates its carrying value, as the revolving debt and term loans are reset monthly based on current market rates, plus a base rate as specified in the2024 Credit Agreement. The fair value measurement of long-term debt is considered a Level2 measurement.

The Company’s financial instruments include cash and cash equivalents, accounts receivable, short-term notes payable, and accounts payable. The carrying amounts for these financial instruments reported in the consolidated balance sheets approximate their fair values.

** Note17 – Related Party Transactions**

Following the spin-off from Vishay Intertechnology, Inc. on* July 6, 2010,VPG is an independent, publicly-traded company, and Vishay Intertechnology doesnot* retain any ownership interest in VPG, although a common group of stockholders control a significant portion of the voting power of each company and the companies havethree common board members.

Subsequent to the spin-off, VPG and Vishay Intertechnology continue to share certain manufacturing locations. VPG ownsone location in Japan at which it leases space to Vishay Intertechnology. Lease receipts related to the shared facility are immaterial.