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INVESTMENTS
 6 Months Ended
Jun. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]  
INVESTMENTS INVESTMENTS
As of June 30, 2022, the Company owned 24.7% 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. For the period ended June 30, 2021, the Company's investment ownership was 30.0%. The Company's investment ownership decreased to approximately 27.0% on June 30, 2021 and was further reduced to 24.7% on July 29, 2021 as a result of transactions that occurred in those periods. 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 condensed consolidated statements 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 three and six months ended June 30, 2022 and 2021 in the accompanying unaudited condensed consolidated statements of operations.
On June 30, 2021, Vasconia issued additional shares of its stock, which diluted the Company’s investment ownership from approximately 30% to approximately 27%. The Company recorded a non-cash gain of $1.7 million, increasing the Company’s
investment balance. Additionally, a loss of $2.0 million was recognized for the proportionate share of the diluted ownership for amounts previously recognized in accumulated other comprehensive loss. The net loss of $0.3 million was included in equity in earnings, net of taxes, in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021.
The value of the Company’s investment balance has been translated from Mexican Pesos (“MXN”) to U.S. Dollars (“USD”) using the spot rates of MXN 20.15 and MXN 20.46 at June 30, 2022 and December 31, 2021, respectively.
The Company’s proportionate share of Vasconia’s net income has been translated from MXN to USD using the following exchange rates:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Average exchange rate (USD to MXN)
20.02
20.02
20.02 - 20.50
20.02 - 20.33
The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in a decrease to the investment of $0.9 million and an increase of $1.6 million during the six months ended June 30, 2022 and 2021, respectively. These translation effects are recorded in accumulated other comprehensive loss.
Summarized income statement information for the three and six months ended June 30, 2022 and 2021 for Vasconia in USD and MXN is as follows (in thousands):
Three Months Ended
June 30,
20222021
USDMXNUSDMXN
Net sales$66,195 $1,325,237 $59,079 $1,182,752 
Gross profit
10,804 216,297 15,921 318,737 
Income from operations
518 10,366 6,499 130,110 
Net income
1,403 28,091 2,380 47,661 
Six Months Ended
June 30,
20222021
USDMXNUSDMXN
Net Sales$130,513 $2,643,750 $112,685 $2,272,569 
Gross profit
25,224 511,915 27,879 561,840 
Income from operations
5,203 106,406 10,283 207,043 
Net income
3,134 63,570 1,610 32,000 
The Company recorded equity in earnings of Vasconia, net of taxes, of $0.3 million and $0.8 million for the three and six months ended June 30, 2022, respectively. The Company recorded equity in earnings of Vasconia, net of taxes, of $0.7 million and $0.5 million for the three and six months ended June 30, 2021, respectively.
Included within the Company's unaudited condensed consolidated balance sheets were the following amounts due to and due from Vasconia (in thousands):
Vasconia due to and due from balancesBalance Sheet LocationJune 30, 2022December 31, 2021
Amounts due from VasconiaPrepaid expenses and other current assets$168 $80 
Amounts due to VasconiaAccrued expenses and Accounts payable(13)(146)
As of June 30, 2022 and December 31, 2021, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $21.3 million and $31.5 million, respectively. The carrying value of the Company’s investment in Vasconia was $22.1 million and $22.3 million as of June 30, 2022 and December 31, 2021, respectively The Company evaluated the decline in fair value of the investment