NOTE B — INVESTMENTS

The Company owns a 30% interest in Grupo Vasconia S.A.B. (“Vasconia”). The Company accounts for its investment in Vasconia using the equity method of accounting and records its proportionate share of Vasconia’s net income in the Company’s statements of operations. Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (reduced for amortization expense related to excess purchase price) for the three and six month periods ended June 30, 2012 and 2011 in the accompanying condensed consolidated statements of operations. The value of the Company’s investment balance has been translated from Mexican Pesos (“MXN”) to U.S. Dollars (“USD”) using the spot rate of MXN 13.47 at June 30, 2012 and MXN 13.95 at December 31, 2011. The Company’s proportionate share of Vasconia’s net income has been translated from MXN to USD using the average daily exchange rate of MXN 13.51 and MXN 11.74 during the three months ended June 30, 2012 and 2011, respectively, and MXN 13.24 to MXN 13.29 and MXN 11.91 to MXN 11.92 during the six months ended June 30, 2012 and 2011, respectively. The effect of the translation of the Company’s investment resulted in an increase to the investment balance of $0.2 million during the six months ended June 30, 2012 and an increase to the investment balance of $1.0 million during the six months ended June 30, 2011 (also see Note J). These translation effects are recorded in accumulated other comprehensive loss. Included in prepaid expenses and other current assets at June 30, 2012 and December 31, 2011 are amounts due from Vasconia of $84,000 and $216,000, respectively. During the three months ended June 30, 2012, the Company received a cash dividend of $416,000 from Vasconia related to its 2011 earnings, which is accounted for as a reduction to the cost basis of the investment.

Summarized statement of comprehensive income information for Vasconia in USD and MXN is as follows:


	Three Months Ended June 30,
	2012				2011
	(in thousands)
	USD		MXN		USD		MXN
Net Sales	$	40,195	$	543,184	$	30,909	$	362,784
Gross Profit		8,664		117,081		8,364		98,168
Income from operations		3,144		42,481		3,127		36,697
Net Income		2,252		30,426		2,116		24,838


	Six Months Ended June 30,
	2012				2011
	(in thousands)
	USD		MXN		USD		MXN
Net Sales	$	68,882	$	915,673	$	59,480	$	708,261
Gross Profit		16,832		223,145		16,447		195,905
Income from operations		6,465		85,615		6,452		76,903
Net Income		4,216		55,937		4,247		50,606

The Company recorded equity in earnings of Vasconia, net of taxes, of $0.6 million for the three months ended June 30, 2012 and $0.5 million for the three months ended June 30, 2011 and $1.1 million and $1.0 million for the six months ended June 30, 2012 and 2011, respectively.

The Company has a 40% equity interest in GS Internacional S/A (“GSI”), a leading wholesale distributor of branded housewares products in Brazil. In June 2012, the Company paid $2.6 million to GSI for the remaining consideration with respect to the acquisition of the 40% interest. The Company recorded equity in losses of GSI, net of taxes, of $0.1 million for the three months ended June 30, 2012 and $0.2 million for the six months ended June 30, 2012.

In February 2012, the Company entered into a joint venture to distribute Mikasa® products in China, in which it expects to make an initial investment of approximately $500,000.