NOTE B — INVESTMENTS

The Company owns approximately a 30% interest in Grupo Vasconia S.A.B. (“Vasconia”), an integrated manufacturer of aluminum products and one of Mexico’s largest housewares companies. Shares of Vasconia’s capital stock are traded on the Bolsa Mexicana de Valores, the Mexican Stock Exchange (www.bmv.com.mx). The Quotation Key is VASCONI. 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 statement of operations. Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (loss) (reduced for amortization expense related to the customer relationships acquired) for the three and nine month periods ended September 30, 2013 and 2012 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 13.15 and MXN 12.97 at September 30, 2013 and December 31, 2012, respectively. The Company’s proportionate share of Vasconia’s net income (loss) has been translated from MXN to USD using the average exchange rate of MXN 12.90 and MXN 13.15 during the three months ended September 30, 2013 and 2012, respectively, and MXN 12.41 to MXN 12.77 and MXN 13.21 to MXN 13.24 during the nine months ended September 30, 2013 and 2012, respectively. The effect of the translation of the Company’s investment resulted in a decrease to the investment of $0.5 million during the nine months ended September 30, 2013 and an increase to the investment of $1.2 million during the nine months ended September 30, 2012 (also see Note J). These translation effects are recorded in accumulated other comprehensive loss. Included in prepaid expenses and other current assets at September 30, 2013 and December 31, 2012 are amounts due from Vasconia of $73,000 and $71,000, respectively. Included in accrued expenses at September 30, 2013 are amounts due to Vasconia of $98,000.

Summarized statement of income (loss) information for Vasconia in USD and MXN is as follows:


	Three Months Ended September 30,
	2013						2012
	(in thousands)
	USD			MXN			USD		MXN
Net Sales	$	37,306		$	481,222		$	48,377	$	636,347
Gross Profit		6,215			80,167			9,913		130,391
Income (loss) from operations		(131	)		(1,686	)		3,754		49,384
Net Income (Loss)		(853	)		(11,003	)		2,702		35,545


	Nine Months Ended September 30,
	2013				2012
	(in thousands)
	USD		MXN		USD		MXN
Net Sales	$	116,117	$	1,472,703	$	117,259	$	1,552,020
Gross Profit		20,085		254,861		26,745		353,536
Income from operations		1,423		18,172		10,220		134,999
Net Income		1,794		22,273		6,918		91,482

The Company recorded equity in losses of Vasconia, net of taxes, of $5.3 million (including a charge of $5.0 million, net of tax, for the reduction in its fair value, as discussed in the following paragraph) for the three months ended September 30, 2013 and equity in earnings of Vasconia, net of taxes, of $0.8 million for the three months ended September 30, 2012, and equity in losses of Vasconia, net of taxes, of $4.7 million and equity in earnings of Vasconia, net of taxes, of $1.9 million for the nine months ended September 30, 2013 and 2012, respectively.

As a result of a decline in the quoted stock price and the 2013 quarterly decline in the operating results of Vasconia, the carrying amount of the Company’s investment in Vasconia exceeded its fair value and, therefore, the Company reduced its investment value by $5.0 million, net of tax, to its fair value. As of September 30, 2013, the fair value (based upon the quoted stock price) and carrying value of the Company’s investment in Vasconia was $29.5 million.

The Company has a 40% equity interest in GS Internacional S/A (“GSI”), a leading wholesale distributor of branded housewares products in Brazil, which the Company acquired in December 2011. The Company recorded equity in losses of GSI of $132,000 and $45,000, net of taxes, for the three months ended September 30, 2013 and 2012, respectively, and $398,000 and $217,000, net of taxes, for the nine months ended September 30, 2013 and 2012, respectively.