Acquired. I'm not talking about IT data, I'm talking about real-world sensing data where it's acquired, digitized, then analyzed, processed, and then transmitted. The point I want to make is that at the first step where we are, if you don't get that first step right, then everything downstream related to that data value stream doesn't work to spec. And of course, in some applications, that's absolutely critical. So our customers are helping, I mean, our solutions are helping customers in a lot of markets, as you can see on this next slide. We have, as you can see on the pie on the right-hand side of the slide, we have what we believe is probably among the most diversified set of markets for a sensor company our size. We hold the number 1 or number 2 positions in most of the markets we address.
We have very sticky customer relationships with Fortune 1000 companies, and our engagements with these customers are really done at an engineer level. It's very technical. In some cases, we are sole-sourced, designed in. Our products, though, even though they're the small part of the bill of materials for what our customers are doing, they provide disproportionately high value. And it's this diversity of markets and customers which we think provides us with some advantages in terms of consistency of financial results and cash flow. So the diversity of our markets is certainly one of the cornerstones of what makes VPG a strong business. But you can see we're coming off the second-best year in our company's history. We have the highlights here in the middle part of this slide. But really, what we're focused on is on the right-hand side of the slide.
It's to achieve long-term growth in the low teens, and that's a combination of both organic and inorganic growth. Also, you can see by these numbers, we have the back there for a moment, you can see that we have the potential to deliver really best-in-class performance. We have a lot of leverage in our operating model and can deliver as much as 40% flow-through on incremental revenue. These are aggressive goals, but we do see a clear path to getting there, and the pieces to achieve them are indeed coming together. So what is our strategy and how specifically relating to our long-term revenue goal? It's really reflected on this slide. So for the majority of our history, we've served a number of niche markets. Some of these are industrial-focused. Increasingly, they become technology-focused.
But really, what we're now seeing is the opportunity to really address larger, faster-growing markets that are being driven by a number of external trends. And it's not just the external drivers. It's also what's reflected on this side. It's a convergence of the investments that we've been making internally to develop operational capabilities to really address these new, higher-volume markets. So to give you context in terms of what these investments that we've been making from a capital spending point of view, over the last five years, we've invested over $75 million, close to $80 million of capital in the business. And really, last year reflected a slowing of our capital spending to around 4%. But with the four years prior to that, we've actually invested over $60 million at a 7% of our revenue.
So we're now coming off of a very aggressive period of internal investment in the company. And we think that, combined with now an increased focus on business development, an increased focus on R&D investment, will enable us to capture a greater portion of the opportunities that we see in front of us. Our business today, we operate in three segments: sensors, weighing solutions, and measurement systems. I think of these really very simplistically as sensors being components, weighing solutions being modules which include components, and then measurement systems being standalone, application-specific products or systems. Each of these segments has its own business strategy: manufacturing, R&D, go-to-market strategies, as well as different margin and revenue growth profiles. And we think it's the blend of these that actually provide us with greater consistency of cash flow and financial performance. So first, sensors.
We think this can grow organically in the mid- to high-single digits. It has a gross margin of 40%-plus. Weighing solutions, it grows more like GDP-plus with gross margins approaching those of sensors. Actually, the gross margin story in weighing solutions is of great success given our investments that I described just a moment ago. In terms of operational capability and projects to move manufacturing from high-cost to low-cost centers, we've actually made significant improvement in the weighing solutions gross margin over the last several years. And then measurement systems growing in mid-single digits with the highest gross margins for our business at around 50%. So I touched on the external trends driving our opportunities, but what are these specifically? We've tried to capture those on this slide, and they're really four trends as we define them: electrification, industrial automation, digital transformation, and then defense and space technologies.
In the next few minutes of the presentation, I'll walk through each of these and give you a highlight of what we're doing today and then. So first, electrification. This trend speaks for itself. But the point I want to make here, it's not just automobiles. It really describes using electricity to power things in ways it didn't before. So it's bikes, it's aircraft, industrial equipment, among many, many other emerging applications. So I'll highlight three applications we're currently addressing that are being driven by electrification. So first, we have sensors on some e-bikes that use pedal-assist technology, and our sensors are actually allowing those e-bikes to extend the battery range so deliver a better experience for the rider. Second, we've been involved with safety testing of new vehicles as part of our BTS business, which we acquired a couple of years ago.
But we're now doing more testing related to electric vehicles, not just cars, but also aircraft. And then we're also involved with the testing of EV batteries during manufacturing. So the next trend I want to highlight is related to industrial automation. Of course, this is not a new trend, but it's one that we believe is accelerating. So on one hand, we see advances in artificial intelligence and connectivity, which are driving industrial automation. But on the other hand, you have what the world experienced coming out of the pandemic, in other words, labor shortages, higher costs, and increased global competition. So those are some of the factors which we believe are driving increased investments and innovation in industrial automation. So I'm highlighting two applications here among many others. The first on the left-hand side of the screen is robotics.
Now, this is a market we've served for many years, but now we're seeing new opportunities emerge. And it's not just with traditional industrial kinds of robots. It's with new generations of multipurpose robots as well as surgical robots. So it's not just the robotic arm that you see here in this picture. It's also in new humanoid form factor robots. And we announced in November that we're now engaged with a leading developer of a humanoid robot, which, if their plans come to fruition, could mean $tens of millions of incremental revenue to us. So this is an exciting area. The application on the right-hand side, which is involved with precision agriculture, is also an exciting space. And you can see that we've been addressing this market.
It's been a very strong market for us for the last couple of years, and we see new opportunities ahead relating to our product technology to increase both the safety and productivity of some of these new precision agricultural systems and equipment. So turning to the next trend, it's more of a need rather than a trend, particularly given the current conflicts and tensions around the world. We address a number of areas within what we call the avionics, military, and space market. I'm highlighting four of these today in today's presentation. We're involved with space programs in terms of power monitoring circuits and navigation systems, as well as the testing of parachute reentry systems like this one. So, of course, I know there's a SpaceX launch, which is supposed to happen today. So those kinds of programs, both commercial and government-run, are providing more opportunities for us.
The second example is relating to specialized mannequins or dummies that are being used by the Army to develop ways to better protect soldiers. So that's actually an opportunity for us as we see other friendly country states to the U.S. very interested in our technology here for the same purpose to defend and protect their soldiers better. Third, we're involved with a number of missile and defense systems, including the hypersonic missile systems. And then, of course, we're involved with unmanned vehicles, both air, land, and marine vehicles. And then the fourth and final trend is what we label as digital transformation. We define this as really any application or integration of digital technology into a physical process. This is not a new trend similar to the others, but one which we're seeing acceleration, especially with continued adoption and development of AI and machine learning.
So I'm highlighting four of these here. I won't go into much detail. We don't have time. But they involve consumer electronics, semiconductor test and production equipment, data center and fiber optic systems, as well as medical implants. So I mentioned I talked about sort of this convergence between external trends and our internal investments. And so this slide tries to capture what those internal capabilities that we've been investing in and also showing on the right-hand side, which is really the most important piece, showing how we believe that these internal capabilities are driving our financial performance.
So you can see on the left-hand side, innovation, using our deep technical expertise, being able to identify opportunities to add high-value, growing, profitable businesses to our platform to create more shareholder value, continuing to invest in operational excellence to be able to not only reduce our costs but also to be able to address these higher-volume opportunities that I've talked about. We have a strong sustainability policy. And indeed, many of our products play an important role in terms of sustainability. The Precision Ag example is a great one where our products are being used to maximize crop yields and reduce the amount of fertilizer and other materials that are being used in agriculture. And then, of course, we're now increasingly focused on sales and marketing and R&D in terms of capturing more and more of these opportunities that are presenting themselves.
I did mention earlier about the capital investments we've been making. Indeed, they represent one of three priorities we have for the company's capital. I did indicate that we're now coming off of an aggressive period of investment. You should see our free cash flow as a % of cash flow increase here in 2024. We continue to invest internally, but the capital projects, obviously, are becoming less as we now have achieved significant progress in terms of our operational excellence. The second priority is around M&A. We continue to look for attractive businesses to acquire. We have a very strong balance sheet in which to fund those acquisitions. We believe that this is an important lever in order to achieve our long-term financial targets and to realize and grow our shareholder value. Third, we've been buying back our stock.
We had a stock repurchase program, which started back in August of 2022. Thus far, we've repurchased through the end of the year almost $9 million of stock. And so we continue to be active in that. We've added a fourth use of capital recently by using our cash to pay down our revolver debt. Even though we're in a net cash position on our balance sheet, we're using some of the cash to reduce our revolving credit outstanding as a way of reducing our net interest expense. And we expect to see about $1 million of net interest expense savings in 2024. So all in all, a balanced capital allocation strategy. And as you hopefully have gathered through this short presentation, we think we're really in a great position as we move forward here in 2024 to capture more and more of these emerging opportunities.
We think we have the operational capability in place, and we think we have the right products, the right business model to really deliver very attractive financial returns long-term for our shareholders. And with that, I will now turn it back to John for Q&A. All right.
Thank you, Steve. If you have a question, please put it in the Q&A section, and I will present it to management. Jim, I'd like to start off with your bookings profile. Book-to-bill is a relevant number to follow for your company. It's been negative for quite some time. Can you talk a little bit about what's driving the booking profile and when do you see that troughing? Steve, you're muted. I'm sorry.
Sorry about that. Yeah. So as we saw in the fourth quarter, even though we had a book-to-bill below 1 for the last five quarters, we began to see at least the orders sequentially grow in Sensors and Weighing Solutions. I think there's still a continuation of the stocking at some of our distributors, but yet we began to see at least an increase. So at least the momentum for at least those two segments was moving in the positive direction. With Measurement Systems, it's that spiky business where a few quarters we have large orders, and then the next quarter we have large shipments. And we saw that during 2023 with Measurement Systems where we had record steel orders for the first six months. Then we had record DTS orders in the third quarter, and then close to $25 million of revenue in the fourth quarter.
But we think at least the trends going forward that we should see a continuation with steel and with safety, with DTS improving in the right direction during 2024.
Okay. Fair enough. You mentioned M&A acquisitions as something you're looking at. You've been fairly successful, I would say, in your recent M&A activity. Can you talk about what you're looking for? Is it adjacent product lines, geographic expansion? What are you prioritizing in M&A, and what's the M&A environment look like today?
Yeah. So John, from an M&A perspective, I mean, obviously, we've always been quite diligent in our review of acquisitions. And the fact that over the last few years with our financial performance, we've been invited to participate in many more opportunities. We're beginning to see, I think, some of the valuations level off. And even though we have not disclosed anything, we have been participating. We have a good pipeline, whether it's in existing technology or it could be branching out to other areas, say, potentially new opportunities like MEMS technology or machine vision. These are opportunities for us to grow and expand further the product portfolio for VPG. But we do see a good pipeline. And hopefully, I don't have a crystal ball, that we would achieve something during 2024.
Okay. You do have a fair amount of exposure to the transportation and steel market. The outlook in some of those marketplaces are not particularly exciting for the year ahead. What are you hearing from your customer base about those particular markets?
Yeah. So in the transportation market, we actually serve some fairly narrow niches. First, around overload monitoring for trucks. We do that for heavy-use trucks like mining and forestry and waste management, as well as for commercial utility fleets in the U.K. And so that's actually been a fairly stable and solid market. We actually saw some improved bookings in Q4. But I think in the U.K. specifically, some of the demand is driven more by the economic trends. And so we're watching sort of the economic trends in Europe carefully. The other part of transportation is around safety testing. So that continues to be a good market for us.
The more new model of vehicles that are being introduced, the more new kinds of avionics platforms, including electric aircraft, that's all good because we're on the front end, on the development side of that before those products actually get to market. In terms of steel, steel is a cyclical market. It has softened in the second half of 2023, but we feel really good about our position. We're now looking at other growth areas independent of what we're currently doing today, such as in aluminum manufacturing. We're also expanding our footprint in India, which is investing in steel production. So that market, we think, comes back, and we're in an even better position to address those requirements.
Okay. Fair enough. Steve, your prepared remarks, you mentioned the operating leverage embedded in the company. It may be useful if we just kind of briefly discuss the incremental, decremental operating margins and at what points, in general, is the revenue line that you need to hit the bogey one way or the other?
Yeah, John. So I would say our incremental, yeah. So we still have that for every incremental $1 of revenue, like 40% goes down to the operating line. That is true. Unfortunately, it also works the other way. But in those respects, we try and solidify or reduce the reduction as much as possible, whether it's through maybe a cutback in spending or, more importantly, we have cost reduction programs that we've had in place and continue to put in place that when things are tight, they're further reduced to minimize the impact. But for us, more importantly, it's the growth potential and the earning potential. As we saw in the fourth quarter, we had a really, really good gross margin and an EBITDA margin given on that revenue profile, and that was a record gross margin.
That continuation, if we can continue to at least maintain that with our production and our reduction programs, have the ability to continue to grow those margins to further work towards our 3-5-year goals.
Since you brought it up, Bill, talk a little bit about your manufacturing footprint. Is it optimal at this point? Where do things stand? Do you need to add capacity in any particular regions or lines? A little bit about that might be helpful.
Sure. No. So for manufacturing footprint, over the last few years, we've added building a brand new facility in Israel. We've added capacity with our Japanese facility, with our India facility. So capacity perspective, we are fine. And in fact, we have spent a lot of and I think Steve mentioned this, a lot of investments over the last few years for infrastructure and capital equipment. We'll be back to more normal 4%-4.5% of spending for revenue. So I think our footprint looks good. For us, it's the continuation of growing with the macroeconomy, but also being more VPG-specific with our product portfolios, engagements with customers to generate that additional volume above and beyond the GDP that we're seeing today.
Okay. And I guess I'd be remiss not to bring this up since you also brought it up in your response. You have two facilities in Israel. Can you give us a status update?
Yeah. So from an Israeli perspective, everything is running as normal. We have no issues, no slowdowns. Everybody is 100% back to work. But basically, John, it's business as normal in Israel.
Okay. Seems that way. All right, gentlemen, we're just about out of time. I don't see any questions in the Q&A. Steve, Bill, thank you very much for presenting today. Do you have any closing comments?
Well, again, thank you for the opportunity to tell you and other investors about VPG.
All right. Thank you all, and thanks for presenting at the Sidoti & Company conference. Have a great day.
Thank you. Appreciate it. Thank you again, John.
You're welcome. Bye-bye.