Vishay Precision Group Inc

Previous wording

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

Current wording

As of August 6, 2024 (date of filing), our facilities in Israel remain open and operate at normal level. The extent and duration of the current war, the possibility of further spread of the conflict to other countries in the region as well as involving other political and military entities in the Middle East, poses risks to our operations and may lead to disruptions which could adversely affect our business, prospects, financial condition and results of operations.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

VPG reports in three product segments: Sensors, Weighing Solutions, and Measurement Systems. The Sensors 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 segment is comprised of highly specialized systems for steel production, materials development, and safety testing.

Previous wording

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

Current wording

Net revenues for the fiscal quarter ended June 29, 2024 were $77.4 million versus $90.8 million for the comparable prior year period. Net earnings attributable to VPG stockholders for the fiscal quarter ended June 29, 2024 were $4.6 million, or $0.34 per diluted share, versus $8.2 million, or $0.60 per diluted share, for the comparable prior year period.

Previous wording

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

Current wording

End-of-period backlog is one indicator of potential future sales. We include in our backlog only open orders that have been released by the customer for shipment in the next twelve months. If demand falls below customers’ forecasts, or if customers do

Previous wording

The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following tables show net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover for our business as a whole and by segment during the five quarters beginning with the first quarter of 2023 through the first quarter of 2024.

Current wording

The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following tables show net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover for our business as a whole and by segment during the five quarters beginning with the second quarter of 2023 through the second quarter of 2024.

Previous wording

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

Current wording

Net revenues in the Weighing Solutions reporting segment decreased 4.8% from the first fiscal quarter of 2024 and decreased 12.2% from the second fiscal quarter of 2023. Sequentially, the decreases in revenues was primarily attributable to lower sales in the Transportation market. The year-over-year decrease in revenues was mainly attributable to lower sales of load cells in our Other markets, primarily for precision agriculture and medical applications, and in our Industrial Weighing market.

Previous wording

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

Current wording

Net revenues in the Measurement Systems reporting segment decreased 6.6% from the first fiscal quarter of 2024 and decreased 9.6% from the second fiscal quarter of 2023. Sequentially, the decrease in revenue was primarily due to lower sales of Diversified Technical Systems Inc. ("DTS") products in the AMS and Transportation markets. The year-over-year decrease was primarily attributable to decreased revenue in the Steel and the Transportation markets.

Previous wording

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

Current wording

Overall gross profit margin in the second fiscal quarter of 2024 decreased 1.5% as compared to the first fiscal quarter of 2024 and decreased 0.7% from the second fiscal quarter of 2023.

Previous wording

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

Current wording

Sequentially, the decrease in the gross profit margin in the Measurements Systems and Weighing Solutions reporting segments was partially offset by an increase in the gross profit margin in the Sensors reporting segment.

Previous wording

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

Current wording

Compared to the second fiscal quarter of 2023, the Measurement Systems reporting segment had higher gross profit margins, while the Sensors and Weighing Solutions reporting segments had a lower gross profit margin.

Previous wording

Our operations in Europe, Canada, and certain locations in Asia primarily generate and expend cash using local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. For those subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated condensed balance sheets have been translated at

Current wording

Our operations in Europe, Canada, and certain locations in Asia primarily generate and expend cash using local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. For those subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated condensed balance sheets have been translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the results of operations and are reported as a separate component of equity.

Previous wording

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

Current wording

For the fiscal quarter ended June 29, 2024, exchange rates decreased net revenues by $0.7 million, and decreased costs of products sold and selling, general, and administrative expenses by $0.7 million, when compared to the comparable prior year period.

Previous wording

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

Current wording

The Company recorded $0.0 million and $0.2 million of restructuring costs during the fiscal quarter ended June 29, 2024 and July 1, 2023, respectively, and $0.8 million and $0.3 million of restructuring costs during the six fiscal months ended June 29, 2024 and July 1, 2023, respectively. Restructuring costs were comprised primarily of employee termination costs, including severance and statutory retirement allowances, in connection with various cost reduction programs.

Previous wording

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

Current wording

Interest expense for the fiscal quarter and six fiscal months ended June 29, 2024 was lower when compared with the comparable prior year periods mainly due to lower debt balance outstanding as a result of debt payments made in the second half of 2023.

Previous wording

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

Current wording

Foreign currency exchange gains represent the impact of changes in foreign currency exchange rates. For the fiscal quarter and six fiscal months ended June 29, 2024, the change in foreign currency exchange gains and losses during the periods, as compared to the prior year periods, is largely due to exposure to currency fluctuations with the Israeli shekel, the Japanese Yen, the Canadian dollar and the British pound.

Previous wording

VPG calculates the tax provision for interim periods using an estimated annual effective tax rate methodology based on projected full-year pre-tax earnings among the taxing jurisdictions in which we operate with adjustments for discrete items. The effective tax rate for the fiscal quarter ended March 30, 2024 was 28.4% compared to 24.1% for the fiscal quarter ended April 1, 2023. The effective tax rate for the fiscal quarter ended March 30, 2024 was higher than the prior year period primarily due to changes in the mix of worldwide income and an increase in our valuation allowance on deferred tax assets.

Current wording

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 June 29, 2024 was 33.3% compared to 28.8% for the fiscal quarter ended July 1, 2023. The effective tax rate for the fiscal quarter ended June 29, 2024 was higher than the prior year period primarily due to changes in the mix of worldwide income and an increase in our valuation allowance on deferred tax assets. The effective tax rate for the six fiscal months ended June 29, 2024 was 30.7% compared to 26.8% for the six fiscal months ended July 1, 2023. The effective tax rate for the six fiscal months ended June 29, 2024 was higher than the prior year period primarily due to changes in the mix of worldwide income and an increase in our valuation allowance on deferred tax assets.

Previous wording

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

Current wording

Our business has historically generated significant cash flow. For the six fiscal months ended June 29, 2024, cash provided by operating activities was $13.9 million compared to $18.2 million in the comparable prior year period. Our net cash used in investing activities for the six fiscal months ended June 29, 2024 was lower compared to the prior year period mainly due to lower capital spending. Our net cash used in financing activities for the six fiscal months ended June 29, 2024 was significantly higher when compared with the prior year period due to the stock repurchases made during the period.

Previous wording

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

Current wording

Approximately 91% and 92% of our cash and cash equivalents balance at June 29, 2024 and December 31, 2023, respectively, was held by our non-U.S. subsidiaries.

Previous wording

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

Current wording

Adjusted free cash flow generated during the six fiscal months ended June 29, 2024, was $9.0 million. We refer to the amount of cash provided by operating activities ($13.9 million) in excess of our capital expenditures ($5.2 million) and net of proceeds from the sale of assets ($0.8 million) as “adjusted free cash flow.”

Previous wording

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

Current wording

Our financial condition as of June 29, 2024 remains strong, with a current ratio (current assets to current liabilities) of 2.7 to 1.0, as compared to a ratio of 3.9 to 1.0 at December 31, 2023.

Previous wording

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

Current wording

Cash paid for property and equipment for the six fiscal months ended June 29, 2024 was $5.2 million compared to $6.9 million in the comparable prior year period.