XML 27 R12.htm IDEA: XBRL DOCUMENT
v3.5.0.2

EQUITY INVESTMENTS | 12 Months Ended
--- | ---
Dec. 31, 2015
EQUITY INVESTMENTS | NOTE C — EQUITY INVESTMENTS The Company owns approximately 30% of the outstanding capital stock of 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. 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 (reduced for amortization expense related to the customer relationships acquired) for the years ended December 31, 2015, 2014, and 2013 in the accompanying 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 17.38 and MXN 14.74 at December 31, 2015 and 2014, respectively. The Company’s proportionate share of Vasconia’s net income has been translated from MXN to USD using the average exchange rates of MXN 14.94 to 16.76, MXN 12.99 to 13.87 and MXN 12.46 to 13.01, during the years ended December 31, 2015, 2014, and 2013, respectively. The effect of the translation of the Company’s investment resulted in a decrease of the investment of $4.9 million, $4.0 million and $0.3 million during the years ended December 31, 2015, 2014, and 2013, respectively. These translation effects are recorded in accumulated other comprehensive loss. The Company received cash dividends of $226,000, $230,000, and $571,000 from Vasconia during the years ended December 31, 2015, 2014, and 2013, respectively. Included in prepaid expenses and other current assets at December 31, 2015 and 2014 was $55,000 and $33,000 due from Vasconia. Included within accrued expenses at December 31, 2015 and 2013 was $28,000 and $152,000 due to Vasconia. Summarized income statement information for the years ended December 31, 2015, 2014, and 2013, as well as summarized balance sheet information as of December 31, 2015 and 2014, for Vasconia in USD and MXN is as follows:
|  | Year Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
|  | (in thousands) |
Income Statement |  | USD |  |  | MXN |  |  | USD |  |  | MXN |  |  | USD |  |  | MXN |
Net Sales |  | $ | 178,832 |  |  | $ | 2,824,399 |  |  | $ | 188,863 |  |  | $ | 2,514,294 |  |  | $ | 159,574 |  |  | $ | 2,038,200 |
Gross Profit |  |  | 33,982 |  |  |  | 534,285 |  |  |  | 35,592 |  |  |  | 474,482 |  |  |  | 28,775 |  |  |  | 367,944 |
Income from operations |  |  | 10,551 |  |  |  | 165,507 |  |  |  | 7,790 |  |  |  | 103,658 |  |  |  | 5,438 |  |  |  | 70,430 |
Net Income |  |  | 7,353 |  |  |  | 117,194 |  |  |  | 5,328 |  |  |  | 71,732 |  |  |  | 4,315 |  |  |  | 55,077 |
Adjustments(1) |  |  | — |  |  |  | — |  |  |  | 1,131 |  |  |  | 15,679 |  |  |  | (1,205 | ) |  |  | (15,630 | )
Net Income as reported by Vasconia(2) |  |  | 7,353 |  |  |  | 117,194 |  |  |  | 6,459 |  |  |  | 87,411 |  |  |  | 3,110 |  |  |  | 39,447 |
(1) | Certain adjustments were identified and not recorded in Vasconia’s consolidated financial statements for the year ended December 31, 2013 and were subsequently recorded by Vasconia in the year ended December 31, 2014. The Company recorded its proportionate share of the adjustments, approximately $0.3 million, net of tax, in the correct period in connection with its equity method accounting for its investment in Vasconia.
(2) | Vasconia’s consolidated financial statements for the years ended December 31, 2014 and 2013 were included as Exhibit 99.1 to Amendment 1 to the Company’s fiscal year 2014 Form 10-K.
|  | December 31, |
|  | 2015 |  |  | 2014 |
|  | (in thousands) |
Balance Sheet |  | USD |  |  | MXN |  |  | USD |  |  | MXN |
Current assets |  | $ | 100,482 |  |  | $ | 1,745,922 |  |  | $ | 110,865 |  |  | $ | 1,634,154 |
Non-current assets |  |  | 87,118 |  |  |  | 1,513,724 |  |  |  | 86,888 |  |  |  | 1,280,723 |
Current liabilities |  |  | 38,983 |  |  |  | 677,355 |  |  |  | 37,032 |  |  |  | 545,852 |
Non-current liabilities |  |  | 56,339 |  |  |  | 978,910 |  |  |  | 58,753 |  |  |  | 866,022 |
The Company recorded equity in earnings (losses) of Vasconia, net of taxes, of $0.6 million, $0.2 million and $(4.0) million for the years ended December 31, 2015, 2014, and 2013, respectively. Equity in earnings in 2015 and 2014 includes deferred tax expense of $1.3 million and $1.1 million, respectively, due to the requirement to record tax benefits for foreign currency translation losses through other comprehensive income (loss), with a corresponding adjustment to deferred tax liabilities. Equity in losses in 2013 includes a charge of $5.0 million, net of tax, for the reduction in Vasconia’s fair value as a result of a decline in the quoted stock price and the 2013 quarterly decline in the operating results of Vasconia. As of December 31, 2015, the fair value (based upon the quoted stock price) of the Company’s investment in Vasconia was $35.9 million. The carrying value of the Company’s investment in Vasconia was $24.7 million. The Company owns a 40% equity interest in GS Internacional S/A (“GSI”), a wholesale distributor of branded housewares products in Brazil, which the Company acquired in December 2011. As a result of the decline in operating results of GSI and the current business environment in Brazil, the Company evaluated its carrying value of the investment for other-than-temporary impairment under the equity-method of accounting. Management performed an evaluation of quantitative factors and concluded that the investment was other-than-temporarily impaired as of September 30, 2014. The estimate of fair value was based upon the median of the income-approach (discounted cash flow method) and market-approach valuation methodology using Level 3 unobservable inputs. During the fourth quarter of 2014, the Company purchased 40% of newly issued common stock of GSI for R$2.0 million ($764,000). The Company assessed the valuation of its fourth quarter investment in GSI and determined there were no significant changes to the assumptions used in the valuation of GSI performed during the third quarter. As a result, the new investment was also determined to be impaired. Accordingly, the Company recorded a total $6.0 million impairment charge, net of tax, in equity in earnings (losses), net of tax during the third and fourth quarters 2014. As of December 31, 2015 and 2014, the carrying value of the Company’s investment in GSI was $0 and therefore the Company has not recorded its share of equity in losses in the year ended December 31, 2015. In February 2012, the Company entered into Grand Venture Holdings Limited (“Grand Venture”), a joint venture with Manweal Development Limited (“Manweal”), a Chinese corporation, to distribute Mikasa® products in China, which included an initial investment of $500,000. The Company and Manweal each own 50% of Grand Venture and have rights and obligations proportionate to their ownership percentages. The Company accounts for its investment in Grand Venture using the equity method of accounting and has recorded its proportionate share of Grand Venture’s net loss as equity in earnings (losses) in the Company’s consolidated statements of operations. The Company recorded equity in losses of the joint venture of $20,000, $39,000 and $83,000 for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015 and 2014, the carrying value of the Company’s investment in Grand Venture was $246,000 and $251,000, respectively. The Company evaluated the disclosure requirements of ASC Topic No. 860, Transfers and Servicing, and determined that at December 31, 2015, the Company did not have a controlling voting interest or variable interest in any of its investments and therefore continued accounting for the investments using the equity method of accounting.

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=49116238&loc=d3e32847-111569 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=49116238&loc=d3e32787-111569 + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration