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What changed in Vishay Precision Group, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Vishay Precision Group, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+193 added−198 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-29)

Top changes in Vishay Precision Group, Inc.'s 2024 10-K

193 paragraphs added · 198 removed · 171 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

38 edited+6 added−5 removed95 unchanged
Biggest changeTo view the reports, access http://ir.vpgsensors.com and click on “Financials”/ “SEC Filings.” The following corporate governance related documents are also available on our website: • Compensation Committee Charter • Nominating and Corporate Governance Committee Charter • Audit Committee Charter • Code of Business Conduct and Ethics • Code of Ethics Applicable to the Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer or Controller • Corporate Governance Principles • Policy Regarding Qualifications of Directors • Anti-Bribery and Anti-Corruption Policy • Supplier Code of Conduct • Information Security Report • By-Laws of Vishay Precision Group To view these documents, access http://ir.vpgsensors.com and click on “Sustainability-Governance” and then on “Governance” and then on "Governance Documents." To view our Ethics Program Reporting Procedures, access http:/www.vpgsensors.com/Ethics - 11 - We are not incorporating by reference into this Annual Report on Form 10-K any material from our website.
Biggest changeTo view the reports, access http://ir.vpgsensors.com and click on “Financials”/ “SEC Filings.” The following corporate governance related documents, as may be amended from time to time, are also available on our website: • Compensation Committee Charter • Nominating and Corporate Governance Committee Charter • Audit Committee Charter • Global Code of Business Conduct • Code of Ethics Applicable to the Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer or Controller • Corporate Governance Principles • Policy Regarding Qualifications of Directors • Anti-Bribery and Anti-Corruption Policy • Supplier Code of Conduct - 11 - • Information Security Report • By-Laws of Vishay Precision Group Inc. • Insider Trading Policy • Dodd-Frank Clawback Policy.
We expect to expand our expertise and our acquisition focus to other precision measurement solutions, including in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration. We believe acquired businesses will benefit from improvements we implement to reduce redundant functions and from our current global manufacturing and distribution footprint.
We expect to expand our expertise and acquisition focus to other precision measurement solutions, including in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration. We believe acquired businesses will benefit from improvements we implement to reduce redundant functions and from our current global manufacturing and distribution footprint.
In some cases, these products use our strain gage products, which serve as sensing elements and components within each unit. Further integration of our load cell technology is also - 6 - offered as part of our weighing module products, which provide customers with a complete sensor assembly that may be used within a wide variety of digital transducers.
In some cases, these products use our strain gage products, - 6 - which serve as sensing elements and components within each unit. Further integration of our load cell technology is also offered as part of our weighing module products, which provide customers with a complete sensor assembly that may be used within a wide variety of digital transducers.
To our knowledge, there are no competitors with the same product mix and proprietary technology as ours. Our competitors range from very small, local companies to large, international companies with greater financial resources than us. Our foil resistors and our foil strain gages are based on our proprietary technology.
To our knowledge, there are no competitors with the same product mix and proprietary technology as ours. Our competitors range from very small, local companies to large, international companies with greater financial resources than us. Our foil resistors and our strain gages are based on our proprietary technology.
Competitors try to compete in this market using different technology to offer functionally equivalent products. Examples of competition in our Sensors segment includes KOA, Bourns, Vishay Intertechnology, TT Electronics, Susumu, Isabellenhute, Caddock and Flat Dashi for foil resistors, and HBK, an operating company of Spectris, Tokyo Sokki Kenkyujo Co., Ltd (TML), Kyowa and Zemic for foil strain gages.
Competitors try to compete in this market using different technology to offer functionally equivalent products. Examples of competition in our Sensors segment includes KOA, Bourns, Vishay Intertechnology, TT Electronics, Susumu, Isabellenhute, Caddock and Flat Dashi for foil resistors and HBK, an operating company of Spectris, Tokyo Sokki Kenkyujo Co., Ltd (TML), Kyowa and Zemic for strain gages.
Competitors in our Weighing Solutions segment include HBK, Zemic, and Utilcell for load cell products, and Air-Weigh and Vehicle Weighing Systems for onboard weighing products. In the Measurement Systems segment, we compete with ABB, IMS and Fuji in the steel market and Kistler for data acquisition systems.
Competitors in our Weighing Solutions segment include HBK, Zemic, and Utilcell for load cell products, Air-Weigh and Vehicle Weighing Systems for onboard weighing products. In the Measurement Systems segment, we compete with ABB, IMS and Fuji in the steel market and Kistler for data acquisition systems.
The website contains information about us and our operations. Copies of each of our filings with the SEC on Form 10-K, Form 10-Q, and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC.
The website contains information about us and our operations. Copies of each of our filings with the SEC on Form 10-K, Form 10-Q, Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC.
We continue to broaden and emphasize the VPG brand in the markets we serve under the following brands for each of our business segments: Sensors Weighing Solutions Measurement Systems VPG Foil Resistors VPG Transducers KELK - VFR - Celtron Dynamic Systems Inc. or Gleeble - Alpha Electronics - Revere DTS -Powertron - Sensortronics Pacific Instruments - APR - Tedea-Huntleigh Micro-Measurements VPG Onboard Weighing Stress-Tek Vulcan BLH Nobel - 5 - Business Segments and Products Each of VPG's business segments maintains and deploys specific go-to-market strategies, technical expertise, capital requirements, and acquisition opportunities, which are in line with our operationally diversified structure and strategy.
We continue to broaden and emphasize the VPG brand in the markets we serve under the following brands for each of our business segments: Sensors Weighing Solutions Measurement Systems VPG Foil Resistors VPG Transducers KELK - VFR - Celtron Dynamic Systems Inc. or Gleeble - Alpha Electronics - Revere DTS -Powertron - Sensortronics Pacific Instruments - APR - Tedea-Huntleigh Nokra Micro-Measurements VPG Onboard Weighing Stress-Tek Vulcan BLH Nobel - 5 - Business Segments and Products Each of VPG's business segments maintains and deploys specific go-to-market strategies, technical expertise, capital requirements, and acquisition opportunities, which are in line with our operationally diversified structure and strategy.
We believe DTS will continue to benefit from the global need for specialized safety testing technology that is expanding from the automotive and avionics sectors to other applications such as sports safety. - 7 - Qualifications and Specifications Certain of our products must be qualified or approved under various military and aerospace specifications and other standards.
We believe DTS will continue to benefit from the global need for specialized safety testing technology that is expanding from the automotive and avionics sectors to other applications such as sports safety. Qualifications and Specifications Certain of our products must be qualified or approved under various military and aerospace specifications and other standards.
The principal materials used in our products include various metallic foil alloys, aluminum, stainless steel, tool steel, plastics, and for a few products, gold. Some of the most highly specialized materials for our sensors are sourced from a single vendor. We maintain a safety stock inventory of certain critical materials at our facilities.
The principal materials used in our products include various metallic foil alloys, aluminum, stainless steel, tool steel, plastics, and for a few products, gold. Some of the most highly specialized materials for our sensors are sourced from a single vendor. We maintain a safety stock inventory of certain critical materials at our - 8 - facilities.
We also use distributors and sales agents, as appropriate, to market, sell, and support certain products in this segment. Measurement Systems The Measurement Systems segment includes highly specialized systems for steel production, materials development, and safety testing. This segment is comprised of our KELK, DSI, Pacific Instruments, and our DTS businesses.
We also use distributors and sales agents, as appropriate, to market, sell, and support certain products in this segment. Measurement Systems The Measurement Systems segment includes highly specialized systems for steel production, materials development, and safety testing. This segment is comprised of our KELK, Nokra, DSI, Pacific Instruments and DTS businesses.
Key Business Vision and Strategies Our vision is to be a leading provider of precision measurement and sensing technologies, which include sensors, weighing solutions and measurement systems that deliver accuracy, reliability and repeatability that make our customers' products safer, smarter, and more productive.
Key Business Vision and Strategies Our vision is to be a leading provider of precision measurement and sensing technologies, which include sensors, weighing solutions and measurement systems that deliver accuracy, reliability and repeatability that make our customers' products and processes safer, smarter, and more productive.
As a sign of our commitment to these businesses, we signed a long-term lease for a state-of-the-art facility that has been constructed in Israel. We fully transitioned to this facility in the third quarter of fiscal 2021.
As a sign of our commitment to these businesses, we signed a long-term lease for a state-of-the-art facility that has been constructed in Israel and fully transitioned to this facility in the third quarter of fiscal 2021.
Clancy served as the principal accounting officer of Siliconix. Mr. Clancy had been employed by Vishay Intertechnology since 1988. Mr. Clancy is a licensed CPA in Pennsylvania. Amir Tal is our Senior Vice President and Chief Accounting Officer. Mr. Tal was appointed by the Board of Directors to such position effective February 5, 2020.
Clancy served as the principal accounting officer of Siliconix. Mr. Clancy had been employed by Vishay Intertechnology since 1988. Mr. Clancy is a licensed CPA in Pennsylvania. Amir Tal is our Executive Vice President and Chief Accounting Officer. Mr. Tal was appointed by the Board of Directors to such position effective February 5, 2020.
Growth from Acquisitions Since becoming a public company, we have acquired five businesses utilizing stringent financial, market, operational, and valuation criteria: • In 2013, we completed our first acquisition as an independent public company when we acquired substantially all of the assets of the George Kelk Corporation ("KELK").
Growth from Acquisitions Since becoming a public company, we have acquired six businesses utilizing stringent financial, market, operational, and valuation criteria: • In 2013, we completed our first acquisition as an independent public company when we acquired substantially all of the assets of the George Kelk Corporation ("KELK").
Driven by the continued proliferation of data generated by the expanding use of sensors across a widening array of industrial and non-industrial applications, precision measurement and sensing technologies help ensure and deliver required levels of quality of mission-critical or high-value data.
Driven by the continued proliferation of data generated by the expanding use of sensors across a widening array of industrial and technology-driven applications, precision measurement and sensing technologies help ensure and deliver required levels of quality of mission-critical or high-value data.
Environmental, Social and Governance As part of our launch of a corporate Environmental, Social and Governance ("ESG") program in 2022, we completed a materiality assessment, developed a multi-year ESG plan, and established an internal scorecard with short and long-term objectives.
Environmental, Social and Governance As part of our launch of a corporate Environmental, Social and Governance ("ESG") program, we completed a materiality assessment, developed a multi-year ESG plan, and established an internal scorecard with short and long-term objectives.
We expect to continue to use our research and development, engineering, and product marketing resources to introduce new and innovative specialty products. An example of our success in this regard is the recent acceptance and growth of our on-board vehicle weighing solution incorporating microelectromechanical systems ("MEMS") technology.
We expect to continue to use our research and development, engineering, and product marketing resources to introduce new and innovative specialty products. An example of our success in this regard is the recent acceptance and growth of our on-board vehicle weighing solution incorporating micro-electromechanical systems ("MEMS") technology.
Human Capital As of December 31, 2023, we employed approximately 2,300 total employees, substantially all of which were full-time employees. Approximately 82% of our employees were located outside the United States. Our future success is substantially dependent on our ability to attract and retain highly qualified technical and administrative personnel.
Human Capital As of December 31, 2024, we employed approximately 2,200 total employees, substantially all of which were full-time employees. Approximately 82% of our employees were located outside the United States. Our future success is substantially dependent on our ability to attract and retain highly qualified technical and administrative personnel.
Clancy 61 Executive Vice President and Chief Financial Officer Amir Tal 54 Senior Vice President and Chief Accounting Officer Ziv Shoshani is our Chief Executive Officer and President, and also serves on the Board of Directors. Mr. Shoshani was Chief Operating Officer of Vishay Intertechnology from January 1, 2007 to November 1, 2009.
Clancy 62 Executive Vice President and Chief Financial Officer Amir Tal 55 Executive Vice President and Chief Accounting Officer Ziv Shoshani is our Chief Executive Officer and President, and also serves on the Board of Directors. Mr. Shoshani was Chief Operating Officer of Vishay Intertechnology from January 1, 2007 to November 1, 2009.
Item 1. BUSINESS DESCRIPTION General Vishay Precision Group, Inc. (“VPG,” the “Company,” “we,” “us” or “our”) is a global, diversified company focused on precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one.
Item 1. BUSINESS DESCRIPTION General Vishay Precision Group, Inc. (“VPG,” the “Company,” “we,” “us” or “our”) is a global leader in precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one.
We continue to support employee’s rights to collective bargaining and other recognized employee interests to organize. - 10 - Information about our Executive Officers The following table sets forth certain information regarding our executive officers as of February 29, 2024: Name Age Positions Ziv Shoshani 57 Chief Executive Officer, President, and Director William M.
We continue to support employee’s rights to collective bargaining and other recognized employee interests to organize. Information about our Executive Officers The following table sets forth certain information regarding our executive officers as of February 25, 2025: Name Age Positions Ziv Shoshani 58 Chief Executive Officer, President, and Director William M.
As a major supplier of embedded data acquisition and data logging capabilities for crash test dummies, DTS expands our offering in the automotive market and in the avionics, military and space market.
Our DTS business provides data acquisition systems and sensors for product safety testing. As a major supplier of embedded data acquisition and data logging capabilities for crash test dummies, DTS expands our offering in the automotive market and in the avionics, military and space market.
Research and development will continue to play a key role in our efforts to introduce innovative products for new sales, and to improve profitability. We expect to continue to expand our position as a leading supplier of precision foil technology products.
This in-depth knowledge of customer needs and specifications is a key factor in future research and development initiatives. Research and development will continue to play a key role in our efforts to introduce innovative products for new sales, and to improve profitability. We expect to continue to expand our position as a leading supplier of precision foil technology products.
We also maintain research and development staff, and promote programs at a number of our production facilities to develop new products and new applications of existing products, and to improve manufacturing techniques. This decentralized approach encourages individualized product development at specific manufacturing facilities that occasionally has applications at other facilities.
We also maintain research and development staff, and promote programs at a number of our production facilities to develop new products and new applications of existing products, and to improve manufacturing techniques.
Our innovative advanced sensors product line enhances the capability and performance of our strain gages, while simultaneously reducing their size and power consumption.
Our innovative advanced sensors product line enhances the capability and performance of our strain gages, while simultaneously reducing their size and power consumption. Emerging applications for our advanced sensors include industrial and medical robotics, as well as for consumer products.
ISO 9001 is a comprehensive set of quality program standards developed by the International Organization for Standardization ("ISO"). The quality management system in our major foil resistors manufacturing site is certified against Aerospace Standard AS9100.
ISO 9001 is a comprehensive set of quality program standards developed by the International Organization for Standardization ("ISO"). The quality management system in our major foil resistors manufacturing site is certified against Aerospace Standard AS 9100. Our third-party major load cells manufacturer as well as our third-party Onboard Weighing manufacturer have quality management systems certified to Automotive Standard IATF 16949.
Customers and Marketing Our customer base is diversified in terms of industry, geographic region, and range of product needs. No single customer comprises greater than 10% of net revenues.
Therefore, the backlog at any point in time is not necessarily indicative of the results to be expected for future periods. Customers and Marketing Our customer base is diversified in terms of industry, geographic region, and range of product needs. No single customer comprises greater than 10% of net revenues.
Marketed under the name "Gleeble®", DSI's line of physical simulation systems are used by universities, research departments, and development departments within the steel ecosystem to accelerate the development of new metal alloys, explore new production techniques, optimize existing processes, or simulate the conditions a material will face in the real world.
Marketed under the name "Gleeble®", DSI's line of physical simulation systems are used by universities, research departments, and development departments within the steel ecosystem to accelerate the development of new metal alloys, explore new production techniques, optimize existing processes, or simulate the conditions a material will face in the real world. - 7 - Our Pacific Instruments business offers a broad range of high performance signal conditioning, data acquisition and control systems, many of which reach customers outside our traditional commercial customer base, such as U.S. government-related customers.
We also rely upon trade secrets, unpatented know-how, and continuing technological innovation. Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology.
Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology.
We believe DTS will continue to benefit from the global need for specialized safety testing that is expanding from the automotive and avionics sectors to sports applications. As a result of our acquisition, we acquired a leased manufacturing, engineering, sales and administrative facilities in Seal Beach, California and Novi, Michigan.
We believe DTS will continue to benefit from the global need for specialized safety testing that is expanding from the automotive and avionics sectors to sports applications.
Our research and development staff and our sales force are closely linked. Our sales force is comprised of individuals with an engineering background who can help meet the needs of our customers for technical and applications support. This in-depth knowledge of customer needs and specifications is a key factor in future research and development initiatives.
This decentralized approach encourages individualized product development at specific manufacturing facilities that occasionally has applications at other facilities. - 9 - Our research and development staff and our sales force are closely linked. Our sales force is comprised of individuals with an engineering background who can help meet the needs of our customers for technical and applications support.
Many of our customers for strain gages, load cells, and foil resistors encounter uncertain and changing demand for their products. They typically order products from us based on their forecasts.
Many of our customers for strain gages, load cells, and foil resistors encounter uncertain and changing demand for their products. They typically order products from us based on their forecasts. If the customers' business needs change, they may cancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty.
We believe our R&D efforts should provide us with a variety of opportunities to leverage technology, products, and our manufacturing base and, ultimately, our financial performance.
We believe our R&D efforts should provide us with a variety of opportunities to leverage technology, products, and our manufacturing base and, ultimately, our financial performance. To that end, we expect to sustain or increase our R&D expenditures in order to fill the product development pipeline and lay the foundation for future sales growth.
We have had no employee strikes or work stoppages due to labor disputes and we consider our relationship with employees to be generally good, however, no assurance can be given that labor unrest or strikes will not occur.
We support worldwide employment and promotion of diversity to innovate and drive long-term value, by continuous monitoring of compensation and benefits to assure competitiveness, while implementing a worldwide talent strategy that includes workforce planning and succession planning. - 10 - We have had no employee strikes or work stoppages due to labor disputes and we consider our relationship with employees to be generally good, however, no assurance can be given that labor unrest or strikes will not occur.
Our products are required to meet the most demanding requirements of the steel and aluminum industries, providing high accuracy and reliability under the most demanding harsh conditions of rolling mills. Our DSI business specializes in thermal-mechanical simulation systems for metallurgical research.
Our products are required to meet the most demanding requirements of the steel and aluminum industries, providing high accuracy and reliability under the most demanding harsh conditions of rolling mills. Our Nokra business offers high-quality measurement and testing systems for use in manufacturing. The systems measure and test geometric features such as length, width, thickness, profile, shape, and position.
We seek to protect our technology by, among other things, filing patent applications for technology considered important to the development of our business. Although we have numerous United States and foreign patents covering certain of our products and manufacturing processes, no particular patent is considered individually material to our business.
Although we have numerous United States and foreign patents covering certain of our products and manufacturing processes, no particular patent is considered individually material to our business. We also rely upon trade secrets, unpatented know-how, and continuing technological innovation.
To that end, we expect to sustain or increase our R&D expenditures in order to fill the product development pipeline and lay the foundation for future sales growth. - 9 - Patents and Licenses We have made a significant investment in securing intellectual property protection for our technology and products.
Patents and Licenses We have made a significant investment in securing intellectual property protection for our technology and products. We seek to protect our technology by, among other things, filing patent applications for technology considered important to the development of our business.
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Our Pacific Instruments business offers a broad range of high performance signal conditioning, data acquisition and control systems, many of which reach customers outside our traditional commercial customer base, such as U.S. government-related customers. Our DTS business provides data acquisition systems and sensors for product safety testing.
Added
As a result of our acquisition, we acquired a leased manufacturing, engineering, sales and administrative facilities in Seal Beach, California and Novi, Michigan. • On September 30, 2024, we completed the acquisition of Nokra Optische Prueftechnik und Automation GmbH ("Nokra"), a Germany-based, privately held maker of precision measuring and testing equipment for manufacturing.
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If the customers' business needs change, they may - 8 - cancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty. Therefore, the backlog at any point in time is not necessarily indicative of the results to be expected for future periods.
Added
Nokra’s laser-based measuring systems expand our existing measurement and inspection solutions for steel and aluminum rolling mills, as well as for the metal processing industry. Nokra’s laser-based measurement gauge systems are used to precisely measure the thickness, flatness, contour, width or 3D profile of various metals depending on the application, in both inline and offline production.
Removed
The implementation of our multi-year ESG plan continues to be on track as evidenced by our actions over the past year, which include updating applicable governance documents to include ESG-related topics on Information Security, sharing further key ESG performance indicators for environment, health and safety with our stockholders, key stakeholders and the general public, adopting ESG policies on Climate Related Risk-Greenhouse Gas and a Supplier Code of Conduct and updating our Anti-Bribery and Anti-Corruption policies.
Added
Nokra’s laser-based measuring systems expand upon our existing KELK measurement and inspection solutions for steel and aluminum rolling mills, as well as for the metal processing industry around the world. Our DSI business specializes in thermal-mechanical simulation systems for metallurgical research.
Removed
Internally, we are also capturing baseline data to identify opportunities for reducing energy consumption that contribute to Scope 1 and Scope 2 emissions using the latest Greenhouse Gas Protocol.
Added
The implementation of our multi-year ESG plan continues to be on track as evidenced by our actions over the past year, which include the issuance of the first VPG Sustainability Report in October 2024 that details its risks and opportunities, further measurement and progress on material ESG topics during 2022-2023 that culminated in the capture and reporting of Scope 1 and Scope 2 emissions using the latest Greenhouse Gas (GHG) Protocol.
Removed
Some of our employees outside the United States are members of trade unions. We support worldwide employment and promotion of diversity to innovate and drive long-term value, by continuous monitoring of compensation and benefits to assure competitiveness, while implementing a worldwide talent strategy that includes workforce planning and succession planning.
Added
Some of our employees outside the United States are members of trade unions.
Added
To view these documents, access http://ir.vpgsensors.com and click on “Sustainability-Governance” and then on “Governance” and then on "Governance Documents." To view our Ethics Program Reporting Procedures, access http:/www.vpgsensors.com/Ethics We are not incorporating by reference into this Annual Report on Form 10-K any material from our website.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

33 edited+4 added−4 removed161 unchanged
Biggest changeWe are subject to the risks of political, economic, health, and military instability in countries outside the United States in which we operate. Some of our products are produced in Israel, India, China, and other countries which are particularly subject to risks of political, economic, health and military instability.
Biggest changeIn addition, our access to raw materials and other supplies may be adversely impacted by tariffs. We are subject to the risks of political, economic, health, and military instability in countries outside the United States in which we operate.
The failure by us to comply with applicable environmental, health and safety requirements could result in fines, penalties, enforcement actions, third-party claims for property damage and personal injury, requirements to clean up property or to pay for the costs of cleanup, or regulatory or judicial orders requiring corrective measures, which could have a material adverse effect on our business, financial condition or results of operations.
The failure by us to comply with applicable environmental, health and safety requirements could result in fines, penalties, enforcement actions, third-party claims for property damage and personal injury, requirements to clean up property or to pay for the costs of cleanup, or regulatory or judicial orders requiring corrective measures, which could have a material adverse effect - 17 - on our business, financial condition or results of operations.
Although we have never been involved in any environmental matter that has had a material adverse impact on our overall operations, there can be no assurance that in connection with any past or future operation, acquisition or - 17 - otherwise, we will not be obligated to address environmental matters that could have a material adverse impact on our business, financial condition, and results of operations.
Although we have never been involved in any environmental matter that has had a material adverse impact on our overall operations, there can be no assurance that in connection with any past or future operation, acquisition or otherwise, we will not be obligated to address environmental matters that could have a material adverse impact on our business, financial condition, and results of operations.
The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental actions related to tariffs, quotas, duties, taxes or trade - 19 - agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, and our suppliers, which in turn could adversely impact our business, financial condition and results of operations.
The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental actions related to tariffs, quotas, duties, taxes or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, and our suppliers, which in turn could adversely impact our business, financial condition and results of operations.
We have implemented protective measures to prevent against and limit the - 22 - effects of system or network disruptions, but there can be no assurance that such measures will be sufficient to prevent or limit the damage from any future disruptions and any such disruption could have a material adverse impact on our business and results of operations.
We have implemented protective measures to prevent against and limit the effects of system or network disruptions, but there can be no assurance that such measures will be sufficient to prevent or limit the damage from any future disruptions and any such disruption could have a material adverse impact on our business and results of operations.
To the extent that any tax authority disagrees with our transfer pricing practices, we could incur significant costs to defend our position and could be subject to significant additional tax liabilities, interest, and penalties. - 18 - We may not be able to realize our deferred tax assets which would adversely impact tax expense in future periods.
To the extent that any tax authority disagrees with our transfer pricing practices, we could incur significant costs to defend our position and could be subject to significant additional tax liabilities, interest, and penalties. We may not be able to realize our deferred tax assets which would adversely impact tax expense in future periods.
The nature of our measurement systems business segments, and in particular, the products and systems manufactured for the steel - 15 - industry, may therefore result in substantial fluctuations in our operating results, including revenues and profitability, from period to period, even though there has been no fundamental change in our business or its prospects.
The nature of our measurement systems business segments, and in particular, the products and systems manufactured for the steel industry, may therefore result in substantial fluctuations in our operating results, including revenues and profitability, from period to period, even though there has been no fundamental change in our business or its prospects.
Any increase or decrease in our valuation allowances could have a significant impact on our financial results. We use the mark Vishay under license from Vishay Intertechnology, which could result in product and market confusion . We use the mark Vishay as part of our name and in connection with many of our products.
Any increase or decrease in our valuation allowances could have a significant impact on our financial results. - 18 - We use the mark Vishay under license from Vishay Intertechnology, which could result in product and market confusion . We use the mark Vishay as part of our name and in connection with many of our products.
These conditions could have an adverse impact on our ability to manufacture, ship and operate in these regions and, depending on the extent and severity of these conditions, could result in a reduction in customer orders and sales to certain regions and end-markets and materially and adversely affect our overall financial condition and operating results.
These conditions could have an adverse impact on our ability to manufacture, ship and operate in these regions and, depending on the extent and severity of these conditions, could result in a reduction in - 19 - customer orders and sales to certain regions and end-markets and materially and adversely affect our overall financial condition and operating results.
Also, the fluctuating nature of key components of our revenues may limit the visibility of our management regarding performance in future periods, and make it more difficult for our management to provide guidance to our investors. We may not have adequate manufacturing capacity to satisfy future increases in demand for our products.
Also, the fluctuating nature of key components of our revenues may limit the visibility of our - 15 - management regarding performance in future periods, and make it more difficult for our management to provide guidance to our investors. We may not have adequate manufacturing capacity to satisfy future increases in demand for our products.
Any restrictions on the export of our products or product lines could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. Risks Relating to Our Common Stock The holders of Class B convertible common stock have effective voting control of our company.
Any restrictions on the export of our products or product lines could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. - 20 - Risks Relating to Our Common Stock The holders of Class B convertible common stock have effective voting control of our company.
The market price for our common stock may be affected by a number of factors, including, but not limited to: • shortfalls in our expected net revenue, earnings or key performance metrics; • changes in recommendations or estimates by securities analysts; • the announcement of new products by us or our competitors; • quarterly variations in our or our competitors’ results of operations; • a change in our dividend or stock repurchase activities; • developments in our industry or changes in the market for technology stocks; • changes in rules or regulations applicable to our business; and • other factors, including economic instability, inflation, COVID-19, labor shortages, supply chain disruptions and changes in political or market conditions.
The market price for our common stock may be affected by a number of factors, including, but not limited to: • shortfalls in our expected net revenue, earnings or key performance metrics; • changes in recommendations or estimates by securities analysts; • the announcement of new products by us or our competitors; • quarterly variations in our or our competitors’ results of operations; • a change in our dividend or stock repurchase activities; • developments in our industry or changes in the market for technology stocks; • changes in rules or regulations applicable to our business; and • other factors, including economic instability, inflation, labor shortages, supply chain disruptions and changes in political or market conditions.
In addition, failure to comply with any of these regulations could result in substantial civil and criminal, monetary and non-monetary penalties, - 20 - disruptions to our business, limitations on our ability to import and export products and services and damage to our reputation.
In addition, failure to comply with any of these regulations could result in substantial civil and criminal, monetary and non-monetary penalties, disruptions to our business, limitations on our ability to import and export products and services and damage to our reputation.
Any loss of such information could harm our competitive position, result in a loss of customer confidence, and cause us to incur significant costs to remedy the damages caused by the disruptions or security breaches.
Any loss of such information could harm our - 22 - competitive position, result in a loss of customer confidence, and cause us to incur significant costs to remedy the damages caused by the disruptions or security breaches.
For periods in which the prices are declining, we may be required to write down our - 16 - inventory carrying cost of these raw materials, since we record our inventory at the lower of cost or market.
For periods in which the prices are declining, we may be required to write down our inventory carrying cost of these raw materials, since we record our inventory at the lower of cost or market.
As of December 31, 2023, we did not have in place any arrangements to mitigate or hedge against exposures relating to fluctuations in foreign currency exchange rate. A change in the mix of the currencies in which we transact our business could have a material effect on results of operations.
As of December 31, 2024, we did not have in place any arrangements to mitigate or hedge against exposures relating to fluctuations in foreign currency exchange rate. A change in the mix of the currencies in which we transact our business could have a material effect on results of operations.
For example: • Although we believe we have sufficient liquidity to run our business, under extreme market conditions, there can be no assurance that financing, if needed, would be available or sufficient, and, in such a case, we may not be able to successfully obtain financing on favorable terms, or at all. - 21 - • Continuing market volatility can exert downward pressure on our stock price, which could make it more difficult or unfavorable for us to raise additional capital in the future. • Economic conditions could result in customers in our markets experiencing financial difficulties, including limited liquidity and their inability to obtain financing or electing to limit spending because of the economy which may result, for example, in customers’ inability to pay us at all or on a timely basis.
For example: • Although we believe we have sufficient liquidity to run our business, under extreme market conditions, there can be no assurance that financing, if needed, would be available or sufficient, and, in such a case, we may not be able to successfully obtain financing on favorable terms, or at all. • Continuing market volatility can exert downward pressure on our stock price, which could make it more difficult or unfavorable for us to raise additional capital in the future. • Economic conditions could result in customers in our markets experiencing financial difficulties, including limited liquidity and their inability to obtain financing or electing to limit spending because of the economy which may result, for example, in customers’ inability to pay us at all or on a timely basis. - 21 - We might require additional capital to support business growth and this capital might not be available.
In the Office of the United States Trade Representative (“USTR”) annual “Special 301” Report released in April 2021, the adequacy and effectiveness of intellectual property protection in a number of foreign countries were analyzed.
In the Office of the United States Trade Representative (“USTR”) annual “Special 301” Report released in April 2024, the adequacy and effectiveness of intellectual property protection in a number of foreign countries were analyzed.
To remain competitive, particularly when business conditions are difficult, we sometimes take steps to reduce our cost structure by restructuring our existing businesses to achieve efficiencies, eliminate redundant functions, facilities and staff positions, and move operations, where possible, to reduce labor or other costs.
To remain competitive, particularly when business conditions are difficult, from time to time we take steps to reduce our cost structure by restructuring our existing businesses to achieve efficiencies, eliminate redundant functions, facilities and staff positions, and move operations, where possible, to reduce labor or other costs.
Our business is cyclical and in periods of a rising economy, we may experience intense demand for our products. During such periods, we may have difficulty expanding our manufacturing capacity to satisfy demand. Factors which could limit such expansion include delays in procurement of manufacturing equipment, shortages of skilled personnel, and physical constraints on expansion at our facilities.
Our business is cyclical and in periods of a rising economy, we may experience greater than expected demand for our products. During such periods, we may have difficulty expanding our manufacturing capacity to satisfy demand. Factors which could limit such expansion include delays in procurement of manufacturing equipment, shortages of skilled personnel, and physical constraints on expansion at our facilities.
We generate a significant amount of cash and profits from our non-U.S. subsidiaries. As of December 31, 2023, 92% of our cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States. Any repatriation of such funds could incur local withholding tax in the source and intervening foreign jurisdictions.
We generate a significant amount of cash and profits from our non-U.S. subsidiaries. As of December 31, 2024, 94% of our cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States. Any repatriation of such funds could incur local withholding tax in the source and intervening foreign jurisdictions.
Any of these difficulties could delay and/or undermine our ability to realize the benefits of these cost reduction programs, as well as potentially adversely affecting our customer relationships and operations. Our business is cyclical, and in periods of increased economic strength, we may experience intense demand for our products.
Any of these difficulties could delay and/or undermine our ability to realize the benefits of these cost reduction programs, as well as potentially adversely affecting our customer relationships and operations. Our business is cyclical, and in periods of increased economic strength, we may experience greater than expected demand for our products.
Significant tariffs or other restrictions which are placed on Indian, Chinese, European, Canadian or Israeli imports to the United States, or any related counter-measures which are taken by the countries involved, may materially harm our revenues and results of operations. Tariffs, or other changes in U.S. trade policy, could trigger retaliatory actions by affected countries.
Significant current or future tariffs or other restrictions which are placed on Indian, Chinese, European, Canadian or Israeli imports to the United States, or any related countermeasures which are taken by the countries involved, may materially harm our revenues and results of operations. Additional tariffs, or other changes in U.S. trade policy, could trigger retaliatory actions by affected countries.
Ruta Zandman’s nephew and our Chief Executive Officer and a member of our Board of Directors), approximately 76.9% of our Class B convertible common stock, representing 34.9% of the total voting power of our capital stock as of December 31, 2023.
Ruta Zandman’s nephew and our Chief Executive Officer and a member of our Board of Directors), approximately 76.9% of our Class B convertible common stock, representing 35.0% of the total voting power of our capital stock as of December 31, 2024.
We continuously seek to maintain a robust program of information security and controls, but the impact of a material information technology event could have a material adverse effect on our competitive position, reputation, results of operations, financial condition, and cash flows. Interruptions in our information technology systems could adversely affect our business.
We continuously seek to maintain a robust program of information security and controls, but the impact of a material information technology event could have a material adverse effect on our competitive position, reputation, results of operations, financial condition, and cash flows.
A number of countries in which we manufacture or do business in are identified in the report as being on the Priority Watch List or the Watch List.
A number of countries in which we manufacture or do business in are identified in the report as being on the Priority Watch List, such as China and India, or the Watch List, such as Canada and Mexico.
If these tax audits result in assessments, our future results may be unfavorably impacted. As a global business, we have a complex tax structure, and there is a risk that the tax authorities will disagree with our transfer pricing. We are subject to complex transfer pricing regulations in the U.S. and foreign countries in which we operate.
As a global business, we have a complex tax structure, and there is a risk that the tax authorities will disagree with our transfer pricing. We are subject to complex transfer pricing regulations in the U.S. and foreign countries in which we operate.
Pursuant to the SEC’s “conflict minerals” rules, reporting companies that determine that certain metals, dubbed “conflict minerals” by the SEC (which include tantalum, gold, tin, and tungsten sourced from the Democratic Republic of the Congo or adjoining countries), are necessary to the functionality or production of a product they manufacture, or contract to have manufactured, must file a specialized disclosure form with the SEC.
We also may need to record losses for adverse purchase commitments for these materials in periods of declining prices. - 16 - Pursuant to the SEC’s “conflict minerals” rules, reporting companies that determine that certain metals, dubbed “conflict minerals” by the SEC (which include tantalum, gold, tin, and tungsten sourced from the Democratic Republic of the Congo or adjoining countries), are necessary to the functionality or production of a product they manufacture, or contract to have manufactured, must file a specialized disclosure form with the SEC.
We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business. Any significant system or network disruption, including, but not limited to, new system implementations, computer viruses, security breaches, facility issues or energy blackouts could have a material adverse impact on our operations and results of operations.
Any significant system or network disruption, including, but not limited to, new system implementations, computer viruses, security breaches, facility issues or energy blackouts could have a material adverse impact on our operations and results of operations.
Depending on the extent of the difference between market price and our carrying cost, this write-down could have a material adverse effect on our net earnings. We also may need to record losses for adverse purchase commitments for these materials in periods of declining prices.
Depending on the extent of the difference between market price and our carrying cost, this write-down could have a material adverse effect on our net earnings.
The IRA also includes a 1% excise tax on repurchases of stock occurring after December 31, 2022. Any of these factors may adversely affect our tax rate and decrease our profitability. The amount of income taxes we pay is subject to audit by U.S. federal, state, local, and foreign tax authorities.
Any of these factors may adversely affect our tax rate and decrease our profitability. The amount of income taxes we pay is subject to audit by U.S. federal, state, local, and foreign tax authorities. If these tax audits result in assessments, our future results may be unfavorably impacted.
Other countries in which we do business were also identified because of problems in intellectual property enforcement. The absence of harmonized intellectual property protection laws and effective enforcement makes it difficult to ensure consistent respect for patent, trade secret, and other intellectual property rights on a worldwide basis.
Among the concerns reported were trade secret theft, online piracy and counterfeiting, technology transfer requirements, and inadequate intellectual property protections and - 14 - enforcement. The absence of harmonized intellectual property protection laws and effective enforcement makes it difficult to ensure consistent respect for patent, trade secret, and other intellectual property rights on a worldwide basis.
This instability could result in wars, riots, nationalization of industry, currency fluctuations, and labor unrest or unavailability.
Some of our products are produced in Israel, India, China, and other countries which are particularly subject to risks of political, economic, health and military instability. This instability could result in wars, riots, nationalization of industry, currency fluctuations, and labor unrest or unavailability.
Removed
In China, for instance, the USTR is concerned about the urgent need to remediate a range of IP-related concerns, including trade secret theft, online piracy and counterfeiting, the high-volume manufacture and export of counterfeit - 14 - goods, technology transfer requirements imposed as a condition to access the Chinese market, the mandatory application of adverse terms to foreign IP licensors, and IP ownership and research and development localization requirements.
Added
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Removed
Structural impediments to administrative, civil, and criminal IP enforcement are also problematic. The USTR also expressed concern that in India there is a lack of sufficient measurable improvements to its IP framework on long-standing and new challenges that have negatively affected U.S. right holders over the past year.
Added
Moreover, our proprietary, confidential, and/or sensitive information could be leaked, disclosed, or revealed as a result of or in connection with the use of generative artificial intelligence technologies.
Removed
For example, in August 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law. The IRA includes a 15% corporate alternative minimum tax that applies to companies that have a three-year average of at least $1 billion in adjusted profits and is effective for taxable years beginning after December 31, 2022.
Added
Even if we are not targeted directly, cyberattacks on the U.S. government, financial markets, financial institutions, or other businesses, including our vendors, software creators, cloud providers, cybersecurity service providers, and other third parties with whom we work, may occur, and such events could disrupt our normal business operations and networks in the future.
Removed
We might require additional capital to support business growth and this capital might not be available.
Added
Interruptions in our information technology systems could adversely affect our business. We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTheir involvement at this level ensures that cybersecurity is integrated into every aspect of our operations, aligning with our broader strategic objectives. To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
Biggest changeTo date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and, to the best of our knowledge, are not reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
The Company conducts security assessments of all of its electronic information-related third-party service providers before the Company engages them, and the Company maintains policies and procedures to oversee and identify cybersecurity risks associated with its use of third-party service providers. • Education and Awareness: The Company provides regular, mandatory training for personnel regarding cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices.
The Company conducts security assessments of all of its electronic information-related third-party service providers before the Company engages them, and the Company maintains policies and procedures to oversee and identify cybersecurity risks associated with its use of third-party service providers. • Education and Awareness: The Company provides regular, mandatory training for the Company's personnel regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices.
Through third party service providers and attendance at seminars, Vice President of IT and Digital and CISO are regularly informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. This ongoing knowledge acquisition enhances our processes to identify, prevent, mitigate and remediate of cybersecurity threats and cybersecurity incidents.
Through third-party service providers and attendance at seminars, the Vice President of IT and Digital and CISO are regularly informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. This ongoing knowledge acquisition enhances our processes to identify, prevent, mitigate and remediate of cybersecurity threats and cybersecurity incidents.
To that end, the Company has implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. • Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence . • Incident Response and Recovery Planning: The Company has established and maintains comprehensive incident response and recovery plans that fully address the Company’s response to a cybersecurity incident, and such plans are tested and evaluated on a regular basis. • Third-Party Risk Management : The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
To that end, the Company has implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. • Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence . • Incident Response: The Company has established and maintains a comprehensive incident response plan that fully address the Company’s response to a cybersecurity incident, and this plan is tested and evaluated on a regular basis. • Third-Party Risk Management : The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
Added
Their involvement at this level ensures that cybersecurity is integrated into every aspect of our operations, aligning with our broader strategic objectives.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAvailable Space (square feet) United States Other Countries Total Owned facilities 226,000 471,150 697,150 Leased facilities 73,000 272,400 345,400 Total facilities 299,000 743,550 1,042,550 Our leased facility in Modi'in Israel represents approximately 45% of the total leased square footage in Other Countries. - 25 - Our corporate headquarters are located at 3 Great Valley Parkway, Suite 150, Malvern, PA 19355.
Biggest changeItem 2. PROPERTIES As of December 31, 2024, our major facilities consisted of: Approx. Available Space (square feet) United States Other Countries Total Owned facilities 226,000 471,150 697,150 Leased facilities 73,000 287,792 360,792 Total facilities 299,000 758,942 1,057,942 Our leased facility in Modi'in Israel represents approximately 42% of the total leased square footage in Other Countries.
In the opinion of management, our properties and equipment generally are in good operating condition and are adequate for our present needs. We do not anticipate difficulty in renewing leases as they expire, or in finding alternative facilities.
Our corporate headquarters are located at 3 Great Valley Parkway, Suite 150, Malvern, PA 19355. - 25 - In the opinion of management, our properties and equipment generally are in good operating condition and are adequate for our present needs. We do not anticipate difficulty in renewing leases as they expire, or in finding alternative facilities.
Removed
Item 2. PROPERTIES As of December 31, 2023, our major facilities consisted of: Approx.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS The Company is subject to various legal proceedings that constitute ordinary, routine litigation incidental to its business. The Company believes that the foregoing matters will not have a material adverse effect on the Company’s business or its financial condition, results of operations, and cash flows. Item 4.
Biggest changeItem 3. LEGAL PROCEEDINGS The Company is subject to various legal proceedings that constitute ordinary, routine litigation incidental to its business. The Company believes that the foregoing matters will not have a material adverse effect on the Company’s business or its financial condition, results of operations, or cash flows. Item 4.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 26 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 27 Item 6. [Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 44
Biggest changeItem 4. Mine Safety Disclosures 26 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 27 Item 6. [Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 43

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information about repurchases of the Company's common stock during the three-month period ended December 31, 2023 Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans (a) October 1, 2023 to November 1, 2023 37,562 $ 31.93 37,562 442,019 November 2, 2023 to December 2, 2023 68,073 $ 29.91 68,073 373,946 December 3, 2023 to December 31, 2023 47,572 $ 31.19 47,572 326,374 Total 153,207 153,207 326,374 (a) On August 8, 2022, the Board of Directors (the “Board”) of the Company authorized the repurchase of up to 600,000 shares of the Company’s outstanding common stock (the “Stock Repurchase Plan”).
Biggest changeTotal Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans (a) January 1, 2024 to March 30, 2024 84,765 $ 32.50 84,765 241,609 March 31, 2024 - June 29, 2024 96,710 $ 32.39 96,710 144,899 June 30, 2024 - September 28, 2024 63,227 $ 30.50 63,227 — September 29, 2024 - December 31, 2024 — $ — — — Total 244,702 244,702 (a) On August 8, 2022, the Board of Directors (the “Board”) of the Company authorized the repurchase of up to 600,000 shares of the Company’s outstanding common stock (the “Stock Repurchase Plan”).
The return of each new peer issuer has been weighted according to the respective issuer’s stock market capitalization. The graph and table assume that $100 had been invested at December 31, 2018, and that all dividends were reinvested. The graph and table are not necessarily indicative of future investment performance. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Vishay Precision Group, Inc.
The return of each new peer issuer has been weighted according to the respective issuer’s stock market capitalization. The graph and table assume that $100 had been invested at December 31, 2019, and that all dividends were reinvested. The graph and table are not necessarily indicative of future investment performance. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Vishay Precision Group, Inc.
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. Holders of record of our common stock totaled approximately 676 at February 29, 2024.
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. Holders of record of our common stock totaled approximately 676 at February 25, 2025.
At February 29, 2024, we had outstanding 1,022,887 shares of Class B convertible common stock, par value $0.10 per share. Currently, the holders of VPG’s Class B convertible common stock hold approximately 45.3% of the voting power of our Company. Mrs. Ruta Zandman, the widow of the late founder of our technology, Dr.
At February 25, 2025, we had outstanding 1,022,887 shares of Class B convertible common stock, par value $0.10 per share. Currently, the holders of VPG’s Class B convertible common stock hold approximately 45.5% of the voting power of our Company. Mrs. Ruta Zandman, the widow of the late founder of our technology, Dr.
From August 8, 2022 to December 31, 2023, the Company had repurchased an aggregate of 273,626 shares under the Stock Repurchase Plan. - 27 - Stock Performance Graph The graph and table below compare the cumulative total stockholder return on the Company’s common stock over a five year period, with the returns on the Russell 2000 Stock Index, and a peer group of companies selected by our management.
From August 8, 2022 to August 9, 2024, the Company had repurchased an aggregate of 518,328 shares under the Stock Repurchase. - 27 - Stock Performance Graph The graph and table below compare the cumulative total stockholder return on the Company’s common stock over a five year period, with the returns on the Russell 2000 Stock Index, and a peer group of companies selected by our management.
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.
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.
Ruta Zandman's nephew, our Chief Executive Officer and a member of our Board of Directors), approximately 76.9% of our Class B convertible common stock, representing 34.9% of the total voting power of our capital stock as of December 31, 2023.
Ruta Zandman's nephew, our Chief Executive Officer and a member of our Board of Directors), approximately 76.9% of our Class B convertible common stock, representing 35.0% of the total voting power of our capital stock as of December 31, 2024. The following table provides information about repurchases of the Company's common stock during the twelve-month period ended December 31, 2024.
Cumulative $ 100.00 112.47 104.13 122.79 127.84 112.67 Russell 2000 Index Cumulative $ 100.00 125.52 150.57 172.89 137.55 160.84 Peer Group Cumulative $ 100.00 134.43 143.41 160.90 128.11 158.93 *The management selected peer group includes: CTS Corp., Luna Innovations Inc., inTEST Corporation, Kyowa, Spectris plc, TT Electronics plc, FARO Technologies Inc., ESCO Technologies Inc.
Cumulative $ 100.00 92.59 109.18 113.66 100.18 69.00 Russell 2000 Index Cumulative $ 100.00 119.96 137.74 109.58 128.14 142.92 Peer Group Cumulative $ 100.00 106.68 119.69 95.30 118.23 105.02 *The management selected peer group includes: CTS Corp., Luna Innovations Inc., inTEST Corporation, Kyowa, Spectris plc, TT Electronics plc, FARO Technologies Inc., ESCO Technologies Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table shows net revenues, gross profit margin, the end-of-period backlog, the book-to-bill ratio, and the inventory turnover for our business as a whole during the five quarters beginning with the fourth quarter of 2022 and through the fourth quarter of 2023 (dollars in thousands) : 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2022 2023 2023 2023 2023 Net revenues $ 96,240 $ 88,864 $ 90,802 $ 85,854 $ 89,528 Gross profit margin 41.2 % 41.9 % 42.6 % 41.9 % 43.0 % End-of-period backlog $ 151,400 $ 146,800 $ 139,700 $ 128,800 $ 117,300 Book-to-bill ratio 0.76 0.94 0.94 0.90 0.84 Inventory turnover 2.63 2.39 2.34 2.20 2.27 - 31 - 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2022 2023 2023 2023 2023 Sensors Net revenues $ 36,312 $ 36,726 $ 36,266 $ 32,532 $ 34,259 Gross profit margin 37.6 % 41.2 % 40.1 % 35.9 % 40.2 % End-of-period backlog $ 72,300 $ 66,200 $ 58,900 $ 52,400 $ 49,000 Book-to-bill ratio 0.76 0.82 0.84 0.83 0.85 Inventory turnover 2.91 2.62 2.55 2.38 2.36 Weighing Solutions Net revenues $ 33,089 $ 31,859 $ 31,261 $ 28,970 $ 30,438 Gross profit margin 33.4 % 34.9 % 38.7 % 38.7 % 35.6 % End-of-period backlog $ 38,300 $ 35,400 $ 34,300 $ 30,800 $ 28,800 Book-to-bill ratio 0.82 0.90 0.97 0.89 0.91 Inventory turnover 2.72 2.63 2.41 2.18 2.46 Measurement Systems Net revenues $ 26,839 $ 20,279 $ 23,275 $ 24,352 $ 24,831 Gross profit margin 55.9 % 53.9 % 51.8 % 53.6 % 56.0 % End-of-period backlog $ 40,800 $ 45,200 $ 46,500 $ 45,600 $ 39,500 Book-to-bill ratio 0.70 1.21 1.06 0.98 0.73 Inventory turnover 2.11 1.70 1.94 1.94 1.87 Net revenues for the fourth quarter of 2023 increased 4.3% from the net revenues of $85.9 million reported in the third quarter of 2023, and decreased 7.0% from $96.2 million for the comparable prior year period.
Biggest changeThe following table shows net revenues, gross profit margin, the end-of-period backlog, the book-to-bill ratio, and the inventory turnover for our business as a whole during the five quarters beginning with the fourth quarter of 2023 and through the fourth quarter of 2024 (dollars in thousands) : 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2023 2024 2024 2024 2024 Net revenues $ 89,528 $ 80,783 $ 77,359 $ 75,727 $ 72,653 Gross profit margin 43.0 % 43.4 % 41.9 % 40.0 % 38.2 % End-of-period backlog $ 117,300 $ 109,603 $ 104,858 $ 100,191 $ 96,189 Book-to-bill ratio 0.84 0.93 0.95 0.91 1.00 Inventory turnover 2.27 2.05 1.99 2.01 2.06 - 31 - 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2023 2024 2024 2024 2024 Sensors Net revenues $ 34,259 $ 29,414 $ 28,869 $ 28,201 $ 25,755 Gross profit margin 40.2 % 36.5 % 38.3 % 31.0 % 32.0 % End-of-period backlog $ 49,000 $ 45,024 $ 41,627 $ 39,995 $ 39,605 Book-to-bill ratio 0.85 0.91 0.90 0.89 1.04 Inventory turnover 2.36 2.09 2.02 2.28 2.15 Weighing Solutions Net revenues $ 30,438 $ 28,845 $ 27,447 $ 25,174 $ 25,739 Gross profit margin 35.6 % 39.1 % 37.6 % 35.1 % 34.1 % End-of-period backlog $ 28,800 $ 27,109 $ 25,077 $ 25,590 $ 28,003 Book-to-bill ratio 0.91 0.95 0.93 1.00 1.12 Inventory turnover 2.46 2.31 2.20 2.10 2.35 Measurement Systems Net revenues $ 24,831 $ 22,524 $ 21,043 $ 22,352 $ 21,160 Gross profit margin 56.0 % 58.1 % 52.4 % 56.8 % 50.9 % End-of-period backlog $ 39,500 $ 37,470 $ 38,154 $ 34,605 $ 28,581 Book-to-bill ratio 0.73 0.94 1.04 0.82 0.78 Inventory turnover 1.87 1.62 1.65 1.55 1.62 Net revenues of $72.7 million for the fourth quarter of 2024 decreased 4.1% from the net revenues of $75.7 million reported in the third quarter of 2024, and decreased 18.8% from $89.5 million for the comparable prior year period.
As a sign of our commitment to these businesses, we signed a long-term lease for a state-of-the-art facility that has been constructed in Israel. We fully transitioned to this facility in the third quarter of fiscal 2021. Our design, research, and product development teams, in partnership with our marketing teams, drive our efforts to bring innovations to market.
As a sign of our commitment to these businesses, we signed a long-term lease for a state-of-the-art facility that has been constructed in Israel and fully transitioned to this facility in the third quarter of fiscal 2021. Our design, research, and product development teams, in partnership with our marketing teams, drive our efforts to bring innovations to market.
We expect to expand our expertise and our acquisition focus to other precision measurement solutions, including in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration. We believe acquired businesses will benefit from improvements we implement to reduce redundant functions and from our current global manufacturing and distribution footprint.
We expect to expand our expertise and acquisition focus to other precision measurement solutions, including in the fields of measurement of force, weight, pressure, torque, tilt, motion, and acceleration. We believe acquired businesses will benefit from improvements we implement to reduce redundant functions and from our current global manufacturing and distribution footprint.
Other important assumptions include the anticipated rate of future increases in compensation levels, estimated mortality, and for - 35 - postretirement medical plans, increases or trends in health care costs. Management reviews these assumptions at least annually. We use independent actuaries to assist us in formulating assumptions and making estimates.
Other important assumptions include the anticipated rate of future increases in compensation levels, estimated mortality, and for postretirement medical plans, increases or trends in health care costs. Management reviews these assumptions at least annually. We use independent actuaries to assist us in formulating assumptions and making estimates.
We utilize published long-term high-quality bond indices to determine the discount rate at the measurement date. We utilize bond yields at various maturity dates to reflect the timing of expected future benefit payments. We believe the discount rates selected are the rates at which these obligations could effectively be settled.
We utilize published long-term high-quality bond indices to determine the discount rate at the measurement date. We utilize bond yields at various maturity dates to reflect - 35 - the timing of expected future benefit payments. We believe the discount rates selected are the rates at which these obligations could effectively be settled.
The reconciliations below include certain financial measures which are not recognized in accordance with U.S. generally accepted accounting principles ("GAAP"), including adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA.
The reconciliations below include certain financial measures which are not recognized in accordance - 29 - with U.S. generally accepted accounting principles ("GAAP"), including adjusted gross profits, adjusted gross profit margin, adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted net earnings per diluted share, EBITDA, and adjusted EBITDA.
Forward-Looking Statements From time to time, information provided by us, including, but not limited to, statements in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 or other statements made by or on our behalf, may contain or constitute "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-Looking Statements From time to time, information provided by us, including, but not limited to, statements in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, or other statements made by or on our behalf, may contain or constitute "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995.
While sales to customers in Israel account for a relatively 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 manufacture products representing approximately 25 percent of our total worldwide revenues.
While sales to customers in Israel account for a relatively 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 manufacture products representing approximately 26 percent of our total worldwide revenues.
Driven by the continued proliferation of data generated by the expanding use of sensors across a widening array of industrial and non-industrial applications, precision measurement and sensing technologies help ensure and deliver required levels of quality of mission-critical or high-value data.
Driven by the continued proliferation of data generated by the expanding use of sensors across a widening array of industrial and technology-driven applications, precision measurement and sensing technologies help ensure and deliver required levels of quality of mission-critical or high-value data.
Financial Condition, Liquidity, and Capital Resources Refer to Item 7. “Financial Condition, Liquidity, and Capital Resources” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a comparison of the year ended December 31, 2022 to the year ended December 31, 2021.
Financial Condition, Liquidity, and Capital Resources Refer to Item 7. “Financial Condition, Liquidity, and Capital Resources” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a comparison of the year ended December 31, 2023 to the year ended December 31, 2022.
The Company recorded restructuring costs of $1.6 million, $1.5 million, and $0.1 million during the years ended December 31, 2023, 2022, and 2021, respectively, which were comprised primarily of employee termination costs, including severance and statutory retirement allowances. We are evaluating plans to further reduce our costs by consolidating additional manufacturing operations.
The Company recorded restructuring costs of $1.1 million, $1.6 million, and $1.5 million during the years ended December 31, 2024, 2023, and 2022, respectively, which were comprised primarily of employee termination costs, including severance and statutory retirement allowances. We are evaluating plans to further reduce our costs by consolidating additional manufacturing operations.
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 $1.6 million and $1.5 million during the years ended December 31, 2023 and 2022, respectively.
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 $1.1 million and $1.6 million during the years ended December 31, 2024 and 2023, respectively.
However, if we conclude otherwise, then we are required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing it against its carrying value. We have four reporting units to which goodwill was allocated: steel, on-board weighing, DSI, and DTS.
However, if we conclude otherwise, then we are required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing it against its carrying value. The Company has four reporting units to which goodwill was allocated: steel, on-board weighing, DSI, and DTS.
Additional information about income taxes is included in Note 6 to our consolidated financial statements. - 36 - Results of Operations – Years Ended December 31, 2023 and 2022 Refer to Item 7, "Results of Operations - Years Ended December 2022 and 2021 in our Annual Report on Form 10-K for the year ended December 31, 2022 for a comparison of the year ended December 31, 2022 to the year ended December 31, 2021.
Additional information about income taxes is included in Note 7 to our consolidated financial statements. - 36 - Results of Operations – Years Ended December 31, 2024 and 2023 Refer to Item 7, "Results of Operations - Years Ended December 2023 and 2022 in our Annual Report on Form 10-K for the year ended December 31, 2023 for a comparison of the year ended December 31, 2023 to the year ended December 31, 2022.
As of February 29, 2024, these facilities remain open and operational. 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, and we continue to take measures with regards to the safety of our employees.
As of February 25, 2025, these facilities remain open and operational. 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, and we continue to take measures with regards to the safety of our employees.
These assumptions are updated periodically to reflect the actual experience and expectations on a plan-specific basis, as appropriate. Our defined benefit plans are concentrated in the United States, Japan and the United Kingdom. Plans in these countries comprise approximately 87% of our retirement obligations at December 31, 2023.
These assumptions are updated periodically to reflect the actual experience and expectations on a plan-specific basis, as appropriate. Our defined benefit plans are concentrated in the United States, Japan and the United Kingdom. Plans in these countries comprise approximately 86% of our retirement obligations at December 31, 2024.
If the Company is not in compliance with any of these covenant restrictions, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable. Our business has historically generated significant cash flow.
If the Company is not in compliance with any of these covenant restrictions, the 2024 Revolving Facility could be terminated by the lenders, and all amounts outstanding pursuant to the 2024 Credit Agreement could become immediately payable. - 41 - Our business has historically generated significant cash flow.
The increase in gross profit margin was primarily due to improved gross profit margins in the Weighing Solutions and Measurement Systems reporting segments partially offset by decreased gross profit margin in the Sensors reporting segment. - 37 - Segments Analysis of revenues and gross profit margins for our reportable segments is provided below.
The decrease in gross profit margin was primarily due to decreased gross profit margins in the Weighing Solutions and Sensors reporting segments partially offset by increased gross profit margin in the Measurement Systems reporting segment. - 37 - Segments Analysis of revenues and gross profit margins for our reportable segments is provided below.
Effects of Foreign Exchange Rate on Operations For the year ended December 31, 2023, exchange rate impacts decreased net revenues by $2.2 million and decrease costs of products sold and selling, general, and administrative expenses by $9.1 million.
Effects of Foreign Exchange Rate on Operations For the year ended December 31, 2024, foreign exchange rate impacts decreased net revenues by $0.9 million and decrease costs of products sold and selling, general, and administrative expenses by $1.1 million.
These measures, as calculated by us, may not be comparable to similarly titled measures used by other companies. Our financial condition as of December 31, 2023 is strong, with a current ratio (current assets to current liabilities) of 3.9 to 1.0, as compared to a current ratio of 3.9 to 1.0 at December 31, 2022.
These measures, as calculated by us, may not be comparable to similarly titled measures used by other companies. - 42 - Our financial condition as of December 31, 2024 is strong, with a current ratio (current assets to current liabilities) of 4.5 to 1.0, as compared to a current ratio of 3.9 to 1.0 at December 31, 2023.
Cash paid for property and equipment for the year ended December 31, 2023 and December 31, 2022 was $15.2 million and $21.3 million, respectively. Capital spending for 2023 was comprised of building projects related to capacity expansion in Israel and Asia, and other projects related to the normal maintenance of business.
Cash paid for property and equipment for the year ended December 31, 2024 and December 31, 2023 was $9.2 million and $15.2 million, respectively. Capital spending for 2024 was comprised of building projects related to capacity expansion in Israel and Asia, and other projects related to the normal maintenance of business.
Capital expenditures for 2024 are expected to be approximately $15.0 million. As of December 31, 2023 and 2022, we did not have any off-balance sheet arrangements. Inflation Normally, inflation does not have a significant impact on our operations as our products are not generally sold on long-term contracts.
Capital expenditures for 2025 are expected to be approximately $12.4 million. As of December 31, 2024 and 2023, we did not have any off-balance sheet arrangements. Inflation Normally, inflation does not have a significant impact on our operations as our products are not generally sold on long-term contracts.
Gross Profit Margin Gross profit as a percentage of net revenues was as follows: Years ended December 31, 2023 2022 Gross profit margin 42.3 % 41.3 % The gross profit margin for the year ended December 31, 2023 increased 1.0% over the prior year.
Gross Profit Margin Gross profit as a percentage of net revenues was as follows: Years ended December 31, 2024 2023 Gross profit margin 41.0 % 42.3 % The gross profit margin for the year ended December 31, 2024 decreased 1.3% over the prior year.
These alternatives could result in higher tax expense, increased interest expense, or dilution of our earnings. We consider the majority of the undistributed earnings of our foreign subsidiaries, as of December 31, 2023, to be indefinitely reinvested. For the year ended December 31, 2023, we generated adjusted free cash flow of $30.8 million.
These alternatives could result in higher tax expense, increased interest expense, or dilution of our earnings. We consider the majority of the undistributed earnings of our foreign subsidiaries, as of December 31, 2024, to be indefinitely reinvested. For the year ended December 31, 2024, we generated adjusted free cash flow of $11.3 million.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview VPG is a global, diversified company focused on precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview VPG is a global leader in precision measurement and sensing technologies that help power the future by bridging the physical world with the digital one.
Our net cash used in financing activities for the year ended December 31, 2023 was $35.9 million, which included a pay down on the 2020 credit facility of $29.0 million, as compared to $3.6 million for the year ended December 31, 2022.
Our net cash used in financing activities for the year ended December 31, 2024 was $9.4 million, which included a pay down on the 2020 credit facility of $0.0 million, as compared to $35.9 million for the year ended December 31, 2023.
The Measurement Systems reporting segment is comprised of highly specialized systems for steel production, materials development, and safety testing. Net revenues for the year ended December 31, 2023 were $355.0 million compared to net revenues of $362.6 million for the year ended December 31, 2022.
The Measurement Systems reporting segment is comprised of highly specialized systems for steel production, materials development, and safety testing. Net revenues for the year ended December 31, 2024 were $306.5 million compared to net revenues of $355.0 million for the year ended December 31, 2023.
The amount charged to expense for research and development aggregated $20.4 million, $19.8 million, and $17.2 million for the years ended December 31, 2023, 2022, and 2021, respectively. - 33 - Cost Management To be successful, we believe we must seek new strategies for controlling operating costs.
The amount charged to expense for research and development was $20.0 million, $20.4 million, and $19.8 million for the years ended December 31, 2024, 2023, and 2022, respectively. - 33 - Cost Management To be successful, we believe we must seek new strategies for controlling operating costs.
Approximately 92% and 83% of our cash and cash equivalents balance at December 31, 2023 and 2022, respectively, was held by our non-U.S. subsidiaries.
Approximately 94% and 92% of our cash and cash equivalents balance at December 31, 2024 and 2023, respectively, was held by our non-U.S. subsidiaries.
For the year ended December 31, 2022, exchange rate impacts decreased net revenues by $16.1 million and decreased costs of products sold and selling, general, and administrative expenses by $13.3 million. - 34 - Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our consolidated financial statements.
For the year ended December 31, 2023, foreign exchange rate impacts decreased net revenues by $2.2 million and decreased costs of products sold and selling, general, and administrative expenses by $9.1 million. - 34 - Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our consolidated financial statements.
Among the factors that could cause actual results to materially differ include: general business and economic conditions; impact of inflation; potential issues respecting the United States federal government debt ceiling; global labor and supply chain challenges; difficulties or delays in identifying, negotiating and completing acquisitions and integrating acquired companies; the inability to realize anticipated synergies and expansion possibilities; difficulties in new product development; changes in competition and technology in the markets that we serve and the mix of our products required to address these changes; changes in foreign currency exchange rates; political, economic, and health (including pandemics) instabilities; instability caused by military hostilities in the regions or countries in which we operate (including Israel); difficulties in implementing our cost reduction strategies, such as underutilization of production facilities, labor unrest or legal challenges to our lay-off or termination plans, operation of redundant facilities due to difficulties in transferring production to achieve efficiencies; compliance issues under applicable laws, such as export control laws, including the outcome of our voluntary self-disclosure of export control non-compliance ; significant developments from the recent and potential changes in tariffs and trade regulation; our efforts and efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, shelter-in-place orders and business closures and the related impact on resource - 43 - allocations, manufacturing and supply chains; our status as a “critical”, “essential” or “life-sustaining” business in light of COVID-19 business closure laws, orders and guidance being challenged by a governmental body or other applicable authority; our ability to execute our new corporate strategy and business continuity, operational and budget plans; and other factors affecting our operations, markets, products, services, and prices that are set forth in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Among the factors that could cause actual results to materially differ include: general business and economic conditions; impact of inflation; potential issues respecting the United States federal government debt ceiling; global labor and supply chain challenges; difficulties or delays in identifying, negotiating and completing acquisitions and integrating acquired companies; the inability to realize anticipated synergies and expansion possibilities; difficulties in new product development; changes in competition and technology in the markets that we serve and the mix of our products required to address these changes; changes in foreign currency exchange rates; political, economic, and health (including pandemics) instabilities; instability caused by military hostilities in the regions or countries in which we operate (including Israel); difficulties in implementing our cost reduction strategies, such as underutilization of production facilities, labor unrest or legal challenges to our lay-off or termination plans, operation of redundant facilities due to difficulties in transferring production to achieve efficiencies; compliance issues under applicable laws, such as export control laws, including the outcome of our voluntary self-disclosure of export control non-compliance; significant developments from the recent and potential changes in tariffs and trade regulation; our ability to execute our new corporate strategy and business continuity, operational and budget plans; and other factors affecting our operations, markets, products, services, and prices that are set forth in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
The following items had the most significant impact on the difference between the statutory U.S. federal income tax rate and our effective tax rate: 2023 • 6.2% increase related to the effects of foreign operations primarily related to the difference between the U.S. statutory rate and foreign tax rates • 3.3% increase related to changes in valuation allowances • 2.3% increase related to residual U.S. tax on foreign earnings • 1.2% increase related to changes in reserves for uncertain tax positions • 1.4% decrease related to specialty tax credits, such as research credits 2022 • 2.8% increase related to the effects of foreign operations primarily related to the difference between the U.S. statutory rate and foreign tax rates • 1.5% increase related to foreign currency primarily attributable to our operations in India, Israel and Taiwan • 1.4% decrease related to specialty tax credits, such as research credits • 2.2% decrease related to changes in reserves for uncertain tax positions • 3.6% decrease related to changes in valuation allowances Additional information about income taxes is included in Note 6 to our consolidated financial statements.
The following items had the most significant impact on the difference between the statutory U.S. federal income tax rate and our effective tax rate: - 40 - 2024 • 15.3% increase related to the effects of foreign operations primarily related to the difference between the U.S. statutory rate and foreign tax rates • 7.6% increase related to changes in valuation allowances • 1.0% increase related to statutory tax rate changes • 2.9% decrease related to specialty tax credits, such as research credits 2023 • 6.2% increase related to the effects of foreign operations primarily related to the difference between the U.S. statutory rate and foreign tax rates • 3.3% increase related to changes in valuation allowances • 2.3% increase related to residual U.S. tax on foreign earnings • 1.2% increase related to changes in reserves for uncertain tax positions • 1.4% decrease related to specialty tax credits, such as research credits Additional information about income taxes is included in Note 7 to our consolidated financial statements.
Net earnings attributable to VPG stockholders for the year ended December 31, 2023 were $25.7 million, or $1.88 per diluted share, compared to $36.1 million, or $2.63 per diluted share, for the year ended December 31, 2022. - 29 - The results of operations for the years ended December 31, 2023 and 2022 include items affecting comparability as listed in the reconciliations below.
Net earnings attributable to VPG stockholders for the year ended December 31, 2024 were $9.9 million, or $0.74 per diluted share, compared to $25.7 million, or $1.88 per diluted share, for the year ended December 31, 2023. The results of operations for the years ended December 31, 2024 and 2023 include items affecting comparability as listed in the reconciliations below.
Our cash provided by operating activities for the year ended December 31, 2023 was $45.9 million as compared to $33.0 million for the year ended December 31, 2022. Our net cash used in investing activities for the year ended December 31, 2023 was $15.1 million, compared to $20.8 million for the year ended December 31, 2022.
Our cash provided by operating activities for the year ended December 31, 2024 was $19.8 million as compared to $45.9 million for the year ended December 31, 2023. Our net cash used in investing activities for the year ended December 31, 2024 was $12.9 million, compared to $15.1 million for the year ended December 31, 2023.
The change in foreign exchange gains / (losses) for the year ended December 31, 2023, as compared to the prior year period, is primarily due to fluctuations in the Israeli shekel, the Canadian dollar and the British pound.
The change in foreign currency exchange gains / (losses) for the year ended December 31, 2024, as compared to the prior year period, is primarily due to fluctuations in the Japanese Yen, Israeli shekel and the Canadian dollar.
In estimating the fair value of our DSI and DTS 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.
In 2024 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.
Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows: Years ended December 31, 2023 2022 Costs of products sold 57.7 % 58.7 % Gross profit 42.3 % 41.3 % Selling, general, and administrative expenses 30.1 % 28.8 % Operating income 11.8 % 12.1 % Income before taxes 10.8 % 12.4 % Net earnings 7.3 % 10.1 % Net earnings attributable to VPG stockholders 7.2 % 9.9 % Effective tax rate 32.3 % 18.9 % Net Revenues Net revenues were as follows (dollars in thousands) : Years ended December 31, 2023 2022 Net revenues $ 355,048 $ 362,580 Change versus prior year $ (7,532) Percentage change versus prior year (2.1) % Changes in net revenues were attributable to the following: 2023 vs. 2022 Change attributable to: Change in volume (3.0) % Change in average selling prices 1.6 % Foreign currency effects (0.7) % Net change (2.1) % During the year ended December 31, 2023, net revenues decreased 2.1% over the prior year.
Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows: Years ended December 31, 2024 2023 Costs of products sold 59.0 % 57.7 % Gross profit 41.0 % 42.3 % Selling, general, and administrative expenses 35.1 % 30.1 % Operating income 5.5 % 11.8 % Income before taxes 5.7 % 10.8 % Net earnings 3.2 % 7.3 % Net earnings attributable to VPG stockholders 3.2 % 7.2 % Effective tax rate 44.0 % 32.3 % Net Revenues Net revenues were as follows (dollars in thousands) : Years ended December 31, 2024 2023 Net revenues $ 306,522 $ 355,048 Change versus prior year $ (48,526) Percentage change versus prior year (13.7) % Changes in net revenues were attributable to the following: 2024 vs. 2023 Change attributable to: Change in volume (13.8) % Change in average selling prices 0.5 % Foreign currency effects (0.4) % Net change (13.7) % During the year ended December 31, 2024, net revenues decreased 13.7% over the prior year in all three reporting segments.
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. Acquisition Costs There were no acquisition costs recorded in our consolidated statements of operations for the year ended December 31, 2023 or December 31, 2022.
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. Acquisition Costs For the year ended December 31, 2024, we recorded acquisition costs in our consolidated statements of operations of $0.1 million in connection with the acquisition of Nokra.
The year-over-year decrease in revenues was primarily attributable to lower sales of advanced sensors in our Other markets for consumer applications, and in our Avionics, Military and Space ("AMS") market, and in our General Industrial market, which offset higher sales of precision resistors in the Test and Measurement market.
The year-over-year decrease in revenues was primarily attributable to lower sales of precision resistors in the Test & Measurement market and lower sales of advanced sensors in our Other markets for consumer applications.
See the following table for the percentage of cash and cash equivalents, by region, at December 31, 2023 and December 31, 2022: December 31, 2023 2022 Asia 22 % 27 % United States 8 % 17 % Israel 36 % 28 % Europe 18 % 13 % United Kingdom 5 % 10 % Canada 11 % 5 % Total 100 % 100 % We earn a significant amount of our operating income outside the United States, the majority of which is deemed to be indefinitely reinvested in the foreign jurisdictions.
See the following table for the percentage of cash and cash equivalents, by region of subsidiary, at December 31, 2024 and December 31, 2023: December 31, 2024 2023 Asia 21 % 22 % United States 6 % 8 % Israel 56 % 36 % Europe 14 % 23 % Canada 3 % 11 % Total 100 % 100 % We earn a significant amount of our operating income outside the United States, the majority of which is deemed to be indefinitely reinvested in the foreign jurisdictions.
The increase in the Sensors segment gross profit margin was primarily due to higher volume and improved manufacturing efficiencies. In the Weighing Solutions segment, gross profit margin decreased due to a reduction in inventory and unfavorable product mix, partially offset by higher volume.
In the Sensors segment, the decreased in gross profit margin was primarily due to lower volume and unfavorable product mix, which was partially offset by improved manufacturing efficiencies. In the Weighing Solutions segment, the decreased in g ross profit margin was primarily due to lower volume.
As of December 31, 2023, the Company had provided for a deferred tax liability of $2.1 million of withholding tax associated with unremitted, non-permanently reinvested earnings, including planned cash distributions of $16.6 million. Additional withholding taxes of approximately $29.2 million are estimated to be payable upon the distribution of the remaining unremitted earnings at December 31, 2023.
As of December 31, 2024, the Company had provided for a deferred tax liability of $2.3 million of withholding tax associated with $25.3 million of unremitted, non-permanently reinvested earnings. Additional withholding taxes of approximately $32.0 million are estimated to be payable upon the distribution of the remaining unremitted earnings at December 31, 2024.
Sensors Net revenues of the Sensors segment were as follows (dollars in thousands) : Years ended December 31, 2023 2022 Net revenues $ 139,783 $ 152,221 Change versus prior year $ (12,438) Percentage change versus prior year (8.2) % Changes in Sensors segment net revenues were attributable to the following: 2023 vs. 2022 Change attributable to: Change in volume (8.4) % Change in average selling prices 0.9 % Foreign currency effects (0.7) % Net change (8.2) % For the year ended December 31, 2023, net revenues decreased 8.2% as compared to the prior year, due to lower sales of precision resistors in the Test and Measurement market, and lower sales of advanced sensors products primarily in our Other markets (mainly for consumer applications), partially offset by increases in precision resistor sales in the AMS market.
Sensors Net revenues of the Sensors segment were as follows (dollars in thousands) : Years ended December 31, 2024 2023 Net revenues $ 112,238 $ 139,783 Change versus prior year $ (27,545) Percentage change versus prior year (19.7) % Changes in Sensors segment net revenues were attributable to the following: 2024 vs. 2023 Change attributable to: Change in volume (19.8) % Change in average selling prices 0.9 % Foreign currency effects (0.8) % Net change (19.7) % For the year ended December 31, 2024, net revenues decreased 19.7% as compared to the prior year, due to lower sales of precision resistors in the Test and Measurement and the AMS markets, and lower sales of advanced sensors products primarily in the AMS market.
Therefore, the backlog is not necessarily indicative of the results to be expected for future periods. Another important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period compared with the product that we ship during that period.
Another important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period compared with the product that we ship during that period.
Additional customary fees apply with respect to letters of credit. - 41 - The obligations of the Company under the 2020 Credit Agreement are secured by pledges of stock in certain domestic and foreign subsidiaries, as well as guarantees by substantially all of the Company’s domestic subsidiaries.
The obligations of the Company under the 2024 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.
Other The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands) : Years ended December 31, 2023 2022 Change Foreign exchange gain/(loss) $ (822) $ 3,579 $ (4,401) Interest income 1,651 401 1,250 Pension expense (52) (241) 189 Other (321) (181) (140) $ 456 $ 3,558 $ (3,102) Foreign currency exchange gains and losses represent the impact of changes in foreign currency exchange rates.
Other The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands) : Years ended December 31, 2024 2023 Change Foreign currency exchange gain/(loss) $ 1,878 $ (822) $ 2,700 Interest income 1,673 1,651 22 Pension expense (55) (52) (3) Other (284) (321) 37 $ 3,212 $ 456 $ 2,756 Foreign currency exchange gains and losses represent the impact of changes in foreign currency exchange rates.
Gross profit as a percentage of net revenues for the Measurement Systems segment was as follows: Years ended December 31, 2023 2022 Gross profit margin 53.8 % 53.6 % For the year ended December 31, 2023, the gross profit margin increased 0.2% from the prior year.
Gross profit as a percentage of net revenues for the Measurement Systems segment was as follows: Years ended December 31, 2024 2023 Gross profit margin 54.6 % 53.8 % For the year ended December 31, 2024, the gross profit margin increased 0.8% from the prior year mostly due to favorable product mix partially offset by lower volume.
In the Measurement Systems segment, gross profit margin increased reflecting higher volume and favorable product mix. - 32 - Compared to the fourth quarter of 2022, gross profit margins increased in all of the reporting segments.
In the Measurement Systems segment, the lower adjusted gross profit margin in the fourth quarter of 2024 reflected lower volume and unfavorable product mix. - 32 - Compared to the fourth quarter of 2023, gross profit margins decreased in all of the reporting segments.
In the Sensors segment, the increase in gross profit margin was primarily due to favorable foreign exchange rates and improved manufacturing efficiencies, which offset the impact of lower volume.
Sequentially, gross profit margins improved in the Sensors segment, decreased in the Weighing Solutions segment, and decreased in the Measurement Systems segments. Sequentially, the increase in gross profit margin in the Sensors segment was primarily due to improved manufacturing efficiencies, which offset the impact of lower volume.
Weighing Solutions Net revenues of the Weighing Solutions segment were as follows (dollars in thousands) : Years ended December 31, 2023 2022 Net revenues $ 122,528 $ 125,715 Change versus prior year $ (3,187) Percentage change versus prior year (2.5) % Changes in Weighing Solutions segment net revenues were attributable to the following: 2023 vs. 2022 Change attributable to: Change in volume (4.7) % Change in average selling prices 2.4 % Foreign currency effects (0.2) % Net change (2.5) % For the year ended December 31, 2023, net revenues decreased 2.5% from the prior year.
Weighing Solutions Net revenues of the Weighing Solutions segment were as follows (dollars in thousands) : Years ended December 31, 2024 2023 Net revenues $ 107,205 $ 122,528 Change versus prior year $ (15,323) Percentage change versus prior year (12.5) % Changes in Weighing Solutions segment net revenues were attributable to the following: 2024 vs. 2023 Change attributable to: Change in volume (12.8) % Change in average selling prices 0.0 % Foreign currency effects 0.3 % Net change (12.5) % For the year ended December 31, 2024, net revenues decreased 12.5% from the prior year. - 38 - Gross profit as a percentage of net revenues for the Weighing Solutions segment was as follows: Years ended December 31, 2024 2023 Gross profit margin 36.6 % 37.0 % For the year ended December 31, 2024, the gross profit margin decreased 0.4% as compared to the prior year, due to lower volume.
The items affecting comparability are (dollars in thousands, except per share amounts) : Gross Profit Operating Income Net Earnings Attributable to VPG Stockholders Diluted Earnings Per share Fiscal Year Ended December 31, 2023 2022 2023 2022 2023 2022 2023 2022 As reported - GAAP 150,342 149,602 41,954 43,799 $ 25,707 $ 36,063 $ 1.88 $ 2.63 As reported - GAAP Margins 42.3 % 41.3 % 11.8 % 12.1 % — — — — Acquisition purchase accounting adjustments (a) 335 1,550 335 1,550 335 1,550 0.02 0.11 COVID-19 impact (c) — 138 — 138 — 138 — 0.01 Start-up costs (d) — 150 — 150 — 150 — 0.01 Restructuring costs — — 1,560 1,518 1,560 1,518 0.11 0.11 Foreign exchange (gain)/loss (e) — — — — 822 (3,579) 0.06 (0.26) Less: Tax effect of reconciling items and discrete tax items (f) — — — — (1,245) (44) (0.10) (0.01) As Adjusted - Non GAAP $ 150,677 $ 151,440 $ 43,849 $ 47,155 $ 29,669 $ 35,884 $ 2.17 $ 2.62 As Adjusted - Non GAAP Margins 42.4 % 41.8 % 12.4 % 13.0 % Year ended December 31, 2023 December 31, 2022 Net earnings attributable to VPG stockholders $ 25,707 $ 36,063 Interest Expense 3,974 2,269 Income tax expense 12,426 8,535 Depreciation 11,798 11,504 Amortization 3,752 3,849 EBITDA $ 57,657 $ 62,220 EBITDA MARGIN 16.2 % 17.2 % Acquisition purchase accounting adjustments (a) 335 1,550 Restructuring costs 1,560 1,518 COVID-19 impact (b) — 138 Start-up costs (c) — 150 Foreign exchange (gain) loss (d) 822 (3,579) ADJUSTED EBITDA 60,374 61,997 ADJUSTED EBITDA MARGIN 17.0 % 17.1 % (a) Acquisition purchase accounting adjustments include fair market value adjustments associated with inventory recorded as a component of costs of products sold.
The items affecting comparability are (dollars in thousands, except per share amounts) : Gross Profit Operating Income Net Earnings Attributable to VPG Stockholders Diluted Earnings Per share Fiscal Year Ended December 31, 2024 2023 2024 2023 2024 2023 2024 2023 As reported - GAAP 125,532 150,342 16,864 41,954 $ 9,911 $ 25,707 $ 0.74 $ 1.88 As reported - GAAP Margins 41.0 % 42.3 % 5.5 % 11.8 % — — — — Acquisition purchase accounting adjustments (a) 79 335 79 335 79 335 0.01 0.02 Acquisition costs (b) — — 101 — 101 — 0.01 — Restructuring costs — — 1,062 1,560 1,062 1,560 0.08 0.11 Foreign exchange (gain)/loss (c ) — — — — (1,879) 822 (0.14) 0.06 Less: Tax effect of reconciling items and discrete tax items — — — — (3,079) (1,245) (0.24) (0.10) As Adjusted - Non GAAP $ 125,611 $ 150,677 $ 18,453 $ 43,849 $ 12,700 $ 29,669 $ 0.95 $ 2.17 As Adjusted - Non GAAP Margins 41.0 % 42.4 % 6.0 % 12.4 % Year ended December 31, 2024 December 31, 2023 Net earnings attributable to VPG stockholders $ 9,911 $ 25,707 Interest Expense 2,512 3,974 Income tax expense 7,730 12,426 Depreciation 12,022 11,798 Amortization 3,783 3,752 EBITDA $ 35,958 $ 57,657 EBITDA MARGIN 11.7 % 16.2 % Acquisition purchase accounting adjustments (a) 79 335 Acquisition costs (b) 101 — Restructuring costs 1,062 1,560 Severance cost 347 — Foreign exchange (gain) loss (c) (1,879) 822 ADJUSTED EBITDA 35,668 60,374 ADJUSTED EBITDA MARGIN 11.6 % 17.0 % (a) Acquisition purchase accounting adjustments include fair market value adjustments associated with inventory recorded as a component of costs of products sold.
Operationally Diversified Each of VPG's business segments maintains and deploys distinct go-to-market strategies, technical expertise, capital requirements, and acquisition opportunities. We use an operationally diversified strategy and structure to be close to our customers and to leverage our high-level engineering expertise to optimize and enhance the performance of our customers' solutions.
We use an operationally diversified strategy and structure to be close to our customers and to leverage our high-level engineering expertise to optimize and enhance the performance of our customers' solutions.
The Company is required to pay a quarterly fee of 0.25% per annum to 0.40% per annum on the unused portion of the 2020 Revolving Facility, which is determined based on the Company’s leverage ratio each quarter.
The Company is required to pay a quarterly fee of 0.20% per annum to 0.40% per annum on the unused portion of the 2024 Revolving Facility, which is also determined based on the Company’s leverage ratio. Additional customary fees apply with respect to letters of credit.
Net revenues in the fourth quarter of 2023 decreased 8.0% compared to $33.1 million in the fourth quarter of 2022 mainly due to lower revenues in our Industrial Weighing market and lower revenues from OEM customers for precision agriculture applications in our Other market segment.
Net revenues in the fourth quarter of 2024 decreased 15.4% compared to $30.4 million in the fourth quarter of 2023 mainly due to lower revenues in our Other markets from OEM customers for precision agriculture and construction applications and lower revenues in the Transportation and General Industrial markets.
The proceeds of the 2020 Revolving Facility may be used on an ongoing basis for working capital and general corporate purposes. The aggregate principal amount of the 2020 Revolving Facility may be increased by a maximum of $25.0 million upon the request of the Company, subject to the terms of the 2020 Credit Agreement.
The aggregate principal amount of the 2024 Revolving Facility may be increased by a maximum of $25.0 million upon the request of the Company, subject to the terms of the 2024 Credit Agreement.
Selling, General, and Administrative Expenses Selling, general, and administrative (“SG&A”) expenses were as follows (dollars in thousands) : Years ended December 31, 2023 2022 Total SG&A expenses $ 106,828 $ 104,285 as a percentage of net revenues 30.1 % 28.8 % SG&A expenses for the year ended December 31, 2023 increased $2.5 million as compared to the prior year due to higher personnel costs, including increases in headcount, wages and travel costs, higher IT costs and higher commissions. - 39 - Impairment of Goodwill and Indefinite-lived Intangible Assets For the years ended December 31, 2023 and December 31, 2022, as a result of our annual impairment tests performed on goodwill and indefinite-lived intangible assets there was no impairment on goodwill and indefinite-lived intangible assets.
Selling, General, and Administrative Expenses Selling, general, and administrative (“SG&A”) expenses were as follows (dollars in thousands) : Years ended December 31, 2024 2023 Total SG&A expenses $ 107,505 $ 106,828 as a percentage of net revenues 35.1 % 30.1 % SG&A expenses for the year ended December 31, 2024 increased $0.7 million as compared to the prior year mostly due to added personnel costs related to the acquisition of Nokra on September 30, 2024. - 39 - Impairment of Goodwill and Indefinite-lived Intangible Assets For the years ended December 31, 2024 and December 31, 2023, no impairment of goodwill and indefinite-lived intangible assets was recorded.
Measurement Systems Net revenues of the Measurement Systems segment were as follows (dollars in thousands) : Years ended December 31, 2023 2022 Net revenues $ 92,737 $ 84,644 Change versus prior year $ 8,093 Percentage change versus prior year 9.6 % Changes in Measurement Systems segment net revenues were attributable to the following: 2023 vs. 2022 Change attributable to: Change in volume 9.2 % Change in average selling prices 1.8 % Foreign currency effects (1.4) % Net change 9.6 % For the year ended December 31, 2023, net revenues increased 9.6% as compared to the prior year, primarily due to increased revenue in the Steel market and higher sales of DTS products in the AMS market.
Measurement Systems Net revenues of the Measurement Systems segment were as follows (dollars in thousands) : Years ended December 31, 2024 2023 Net revenues $ 87,079 $ 92,737 Change versus prior year $ (5,658) Percentage change versus prior year (6.1) % Changes in Measurement Systems segment net revenues were attributable to the following: 2024 vs. 2023 Change attributable to: Change in volume (6.0) % Change in average selling prices 0.5 % Foreign currency effects (0.6) % Net change (6.1) % For the year ended December 31, 2024, net revenues decreased 6.1% as compared to the prior year, primarily attributable to lower sales of DSI and DTS products partially offset by the added revenue related to the acquisition of Nokra on September 30, 2024.
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.
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, the backlog is not necessarily indicative of the results to be expected for future periods.
Gross profit is generally net revenues less costs of products sold, but could also include certain other period costs. Gross profit margin is clearly a function of net revenues, but also reflects our cost-cutting programs and our ability to contain fixed costs. End-of-period backlog is one indicator of potential future sales.
Gross profit margin is clearly a function of net revenues, but also reflects our cost-cutting programs and our ability to contain fixed costs. End-of-period backlog is one indicator of potential future sales. We include in our backlog only open orders that have been released by the customer for shipment in the next twelve months.
Financial Metrics We utilize several financial measures and metrics to evaluate the performance and assess the future direction of our business. These key financial measures and metrics include net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover. Gross profit margin is gross profit shown as a percentage of net revenues.
These key financial measures and metrics include net revenues, gross profit margin, end-of-period backlog, book-to-bill ratio, and inventory turnover. Gross profit margin is gross profit shown as a percentage of net revenues. Gross profit is generally net revenues less costs of products sold, but could also include certain other period costs.
Gross profit as a percentage of net revenues for the Sensors segment was as follows: Years ended December 31, 2023 2022 Gross profit margin 39.4 % 40.1 % For the year ended December 31, 2023, the gross profit margin decreased 0.7% as compared to the prior year primarily due to volume decreases and manufacturing inefficiencies, which were partially offset by favorable foreign currency exchange rates.
Gross profit as a percentage of net revenues for the Sensors segment was as follows: Years ended December 31, 2024 2023 Gross profit margin 34.5 % 39.4 % For the year ended December 31, 2024, the gross profit margin decreased 4.9% as compared to the prior year primarily due to lower volume.
Our effective tax rate was higher in 2023 compared to 2022 primarily due to increases in valuation allowances, increases in reserves for uncertain tax positions and changes in our geographical mix of income. - 40 - We reassessed our ability to realize our U.S. deferred tax assets during 2023 and have concluded that realization of those deferred tax assets is still not "more likely than not".
We reassessed our ability to realize our U.S. deferred tax assets during 2024 and have concluded that realization of those deferred tax assets is still not "more likely than not".
The impact of the recent Israel-Hamas war In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel.
The impact of the recent Israel-Hamas war In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. resulting in extensive casualties and military engagement. In addition, Hezbollah, another terrorist organization based in Lebanon began attacking Israel.
We define “adjusted free cash flow,” a measure which management uses to evaluate our ability to fund acquisitions, as the amount of cash provided by operating activities ($45.9 million) in excess of our capital expenditures ($15.2 million) and net of proceeds from the sale of assets ($0.1 million). - 42 - The following table summarizes the components of net cash at December 31, 2023 and at December 31, 2022 (in thousands) : December 31, 2023 2022 Cash and cash equivalents $ 83,965 $ 88,562 Third-party debt, including current and long-term Revolving debt 32,000 61,000 Deferred financing costs (144) (201) Total third-party debt 31,856 60,799 Net cash $ 52,109 $ 27,763 Measurements such as “adjusted free cash flow” and “net cash" do not have uniform definitions and are not recognized in accordance with U.S.
The following table summarizes the components of net cash at December 31, 2024 and at December 31, 2023 (in thousands) : December 31, 2024 2023 Cash and cash equivalents $ 79,272 $ 83,965 Third-party debt, including current and long-term Revolving debt 32,000 32,000 Deferred financing costs (559) (144) Total third-party debt 31,441 31,856 Net cash $ 47,831 $ 52,109 Measurements such as “adjusted free cash flow” and “net cash" do not have uniform definitions and are not recognized in accordance with U.S.
Net revenues in the Measurement Systems segment of $24.8 million in the fourth quarter of 2023 increased 2.0% from $24.4 million in the third quarter of 2023 and decreased 7.5% from $26.8 million in the fourth quarter of 2022. The sequential increase in revenue was primarily attributable to higher sales of Diversified Technical Systems, Inc.
Net revenues in the Measurement Systems segment of $21.2 million in the fourth quarter of 2024 decreased 5.3% from $22.4 million in the third quarter of 2024 and decreased 14.8% from $24.8 million in the fourth quarter of 2023.
Other Income (Expense) Interest Expense The Company recorded interest expense of $4.0 million, and $2.3 million for the years ended December 31, 2023 and 2022, respectively. Interest expense was higher in 2023 compared to 2022 mainly due to higher borrowing rates during 2023.
There were no acquisition costs recorded in our consolidated statements of operations for the year ended December 31, 2023. Other Income (Expense) Interest Expense The Company recorded interest expense of $2.5 million, and $4.0 million for the years ended December 31, 2024 and 2023, respectively.
The obligations of the Company and the guarantors under the 2020 Credit Agreement are secured by substantially all the assets (excluding real estate) of the Company and such guarantors. The 2020 Credit Agreement restricts the Company from paying cash dividends and requires the Company to comply with other customary covenants, representations, and warranties, including the maintenance of specific financial ratios.
The obligations of the Company and the guarantors under the 2024 Credit Agreement are secured by substantially all the assets (excluding real estate) of the Company and such guarantors.
On March 20, 2020, the Company entered into a Third Amended and Restated Credit Agreement (the “2020 Credit Agreement”) among the Company, the lenders named therein, Citizens Bank, National Association and Wells Fargo Bank, National Association as joint lead arrangers and JPMorgan Chase Bank, National Association as agent for such lenders (the “Agent”), pursuant to which the terms of the Company’s multi-currency, secured credit facility were revised to provide a secured revolving facility (the “2020 Revolving Facility”) in an aggregate principal amount of $75.0 million, with a sublimit of $10.0 million which can be used for letters of credit for the account of the Company or its subsidiaries that are parties to the Credit Agreement.
The 2024 Credit Agreement provides for a multi-currency, secured credit facility (the “2024 Revolving Facility”) in an aggregate principal amount of $75.0 million, with a sublimit of $10.0 million which can be used for letters of credit for the account of the Company or its subsidiaries that are parties to the 2024 Credit Agreement, the proceeds of which may be used for working capital and general corporate purposes, and a portion of which were used to refinance the Company’s existing revolving credit facility.
The year-over-year decline in revenues was primarily attributable to lower sales of DSI and KELK products to the steel market and lower sales of DTS products to the Transportation market, which was partially offset by higher sales of DTS products to the AMS market.
The sequential decline in revenue was primarily attributable to lower sales of DSI products, which was partially offset by the added revenues related to the acquisition of Nokra on September 30, 2024.
Net revenues in the Sensors segment of $34.3 million in the fourth quarter of 2023 increased 5.3% from $32.5 million in the third quarter of 2023, and decreased 5.7% from $36.3 million in the fourth quarter of 2022. Sequentially, the increase in revenues primarily reflected higher precision resistor sales in the Test and Measurement market.
Net revenues in the Sensors segment of $25.8 million in the fourth quarter of 2024 decreased 8.7% from $28.2 million in the third quarter of 2024, and decreased 24.8% from $34.3 million in the fourth quarter of 2023.
Depending upon the Company’s leverage ratio, an interest rate margin ranging from 1.50% to 2.75% per annum is added to the applicable SOFR rate to determine the interest payable on the SOFR loans.
The 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.
As of February 29, 2024 (the date of this filing), our operations in Israel have operated at near normal levels.
While Israel has entered into ceasefire agreements with Hamas and Hezbollah, the threat of new attacks remains, including from additional extremist groups. As of February 25, 2025 (the date of this filing), our operations in Israel have operated at normal levels.
The change in the dollar-shekel exchange rate resulted in a unfavorable currency exchange impact primarily related to the shekel-denominated lease liability for the Sensors facility in Israel. Income Taxes Our effective tax rate for the year ended December 31, 2023 was 32.3%, as compared to 18.9% for the year ended December 31, 2022.
Income Taxes Our effective tax rate for the year ended December 31, 2024 was 44.0%, as compared to 32.3% for the year ended December 31, 2023. Our effective tax rate was higher in 2024 compared to 2023 primarily due to increases in valuation allowances and changes in our geographical mix of income.
The sequential increase in revenues was primarily attributable to increased revenues from OEM customers for precision agriculture and construction applications in our Other market segment and higher revenue in our General Industrial market, partially offset by lower sales in the Transportation market.
Net revenues in the Weighing Solutions segment of $25.7 million in the fourth quarter of 2024 increased 2.2% compared to revenues of $25.2 million in the third quarter of 2024. The sequential increase in revenues reflected higher revenue in our Industrial Weighing market and in our Other markets, which offset lower revenue in the Transportation market.
Removed
These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks.
Added
(b) Acquisition costs associated with the acquisition of Nokra in September 2024 (c) Impact of foreign currency exchange rates on assets and liabilities. - 30 - Financial Metrics We utilize several financial measures and metrics to evaluate the performance and assess the future direction of our business.
Removed
(b) COVID-19 impact is the net impact to the Company of costs incurred as a result of the COVID-19 pandemic, net of government subsidies received. (c) Start-up costs in 2022 are associated with the ramp up of our new manufacturing facility in Israel. - 30 - (d) Impact of foreign currency exchange rates on assets and liabilities.
Added
Sequentially, the decline in revenues primarily reflected lower sales of advanced sensors in our Other markets for consumer applications and lower precision resistor sales in the Test and Measurement market.
Removed
Net revenues in the Weighing Solutions segment of $30.4 million in the fourth quarter of 2023 increased 5.1% compared to revenues of $29.0 million in the third quarter of 2023.
Added
The year-over-year decline in revenues was primarily attributable to lower sales of DTS products, which offset the added revenue related to the acquisition of Nokra on September 30, 2024. The gross profit margin for the fourth quarter of 2024 decreased 1.8% compared to the third quarter of 2024, and decreased 4.8% from the fourth quarter of 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company entered into a third amended and restated revolving credit facility on March 20, 2020. Interest payable on the facility is based upon the Agent’s prime rate, the Federal Funds rate or SOFR, plus a spread. At December 31, 2023, the Company had $32.0 million of borrowings outstanding under the revolving credit facility.
Biggest changeInterest payable on the facility is based upon a floating rate plus a specified margin, as described in Item 7. “Financial Condition, Liquidity, and Capital - 43 - Resources” in this Annual Report on Form 10-K. At December 31, 2024, we had $32.0 million of borrowings outstanding under the revolving credit facility.
Furthermore, the timing of cash receipts and disbursements - 44 - could result in materially different actual results versus the hypothetical 10% movement in the value of the U.S. dollar, particularly if there are significant changes in exchange rates in a short period of time.
Furthermore, the timing of cash receipts and disbursements could result in materially different actual results versus the hypothetical 10% movement in the value of the U.S. dollar, particularly if there are significant changes in exchange rates in a short period of time.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this Item are included herein, commencing on page F-1 of this report. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this Item are included herein, commencing on page F-1 of this report. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
We have performed a sensitivity analysis as of December 31, 2023 and 2022, respectively, using a model that measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
We have performed a sensitivity analysis as of December 31, 2024 and 2023, respectively, using a model that measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
The foreign currency exchange rates we used were based on market rates in effect at December 31, 2023 and 2022, respectively.
The foreign currency exchange rates we used were based on market rates in effect at December 31, 2024 and 2023, respectively.
Based on the debt and cash positions at December 31, 2023 and 2022, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our annualized net earnings by $0.2 million and $0.1 million in 2023 and 2022, respectively. See Note 7 to our consolidated financial statements for additional information about our long-term debt.
Based on the debt and cash positions at December 31, 2024 and 2023, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our annualized net earnings by $0.2 million and $0.2 million in 2024 and 2023, respectively. See Note 8 to our consolidated financial statements for additional information about our long-term debt.
The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would impact our net earnings by approximately $3.7 million and $3.6 million for the years ended December 31, 2023 and December 31, 2022, respectively, although individual line items in our consolidated statements of operations could be materially affected.
The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would impact our net earnings by approximately $4.1 million and $3.7 million for the years ended December 31, 2024 and December 31, 2023, respectively, although individual line items in our consolidated statements of operations could be materially affected.
We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $1.2 million and $2.5 million for the years ended December 31, 2023 and December 31, 2022, respectively, assuming that such changes in our costs have no impact on the selling prices of our products, and that we have no pending commitments to purchase metals at fixed prices.
We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $1.0 million and $1.2 million for the years ended December 31, 2024 and December 31, 2023, respectively, assuming that such changes in our costs have no impact on the selling prices of our products, and that we have no pending commitments to purchase metals at fixed prices. - 44 - Item 8.
We monitor our underlying market risk exposures on an ongoing basis and believe that we can modify or adapt our strategies as needed. Interest Rate Risk We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances.
We monitor our underlying market risk exposures on an ongoing basis and believe that we can modify or adapt our strategies as needed. Interest Rate Risk We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. We entered into a fourth amended and restated revolving credit facility on August 15, 2024.
At December 31, 2023, we had $84.0 million of cash and cash equivalents, which accrue interest at various variable rates.
At December 31, 2024, we had $79.3 million of cash and cash equivalents, which accrue interest at various variable rates.

Other VPG 10-K year-over-year comparisons