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EQUITY INVESTMENTS
 12 Months Ended
Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY INVESTMENTS EQUITY INVESTMENTS
The Company owns 24.7% of the outstanding capital stock of 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, 2022, 2021 and 2020 in the accompanying 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 consolidated statements of operations for the year ended December 31, 2021.
On July 29, 2021, the Company sold 2.2 million shares further reducing its ownership from approximately 27% to 24.7% in Vasconia for net cash proceeds of approximately $3.1 million, as a result the Company recorded a gain of $1.0 million, after decreasing the Company’s investment balance. The gain on the sale resulted in a tax expense of $0.1 million. Additionally, a loss of $1.4 million was recognized for the proportionate share of the reduced ownership for amounts previously recognized in accumulated other comprehensive loss. The net loss, including taxes, of $0.5 million was included in equity in earnings, net of taxes, in the accompanying consolidated statements of operations for the year ended December 31, 2021. The Company continues to apply the equity method of accounting.
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 19.47 and MXN 20.46 at December 31, 2022 and 2021, respectively.
The Company's proportionate share of Vasconia's net income (loss) has been translated from MXN to USD using the following exchange rates:
Year Ended December 31,
202220212020
Average exchange rate (MXN to USD)
19.67 - 20.50
20.01 - 20.74
19.91 - 23.31
The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in a decrease of the investment of $0.3 million during the year ended December 31, 2022 and an increase of the investment of $1.0 million during the year ended December 31, 2021. These translation effects are recorded in accumulated other comprehensive loss. The Company received cash dividends of $0.2 million and $0.1 million, from Vasconia during the years ended December 31, 2021 and 2020, respectively. There was no cash dividend received during the year ended December 31, 2022.
The amounts due to and due from Vasconia as of December 31, 2022 and 2021 are as follows (in thousands):
Vasconia due to and due from balancesBalance Sheet LocationDecember 31, 2022December 31, 2021
Amounts due from VasconiaPrepaid expenses and other current assets$48 $80 
Amounts due to VasconiaAccrued expenses and Accounts payable(16)(146)
Summarized income statement information for the years ended December 31, 2022, 2021 and 2020, as well as summarized balance sheet information as of December 31, 2022 and 2021, for Vasconia, calculated in accordance with U.S. GAAP, in USD and MXN is as follows:
Year Ended December 31,
202220212020
(in thousands)
USDMXNUSDMXNUSDMXN
Income Statement
Net sales$240,910 $4,846,328 $240,186 $4,871,845 $156,391 $3,330,855 
Gross profit39,874 802,496 52,574 1,064,557 24,947 540,244 
Loss (income) from operations
(1,596)(30,323)15,536 313,156 (102)6,674 
Net income(13,207)(262,251)7,017 141,972 5,566 108,678 
December 31,
20222021
(in thousands)
USDMXNUSDMXN
Balance Sheet
Current assets$129,449 $2,519,905 $127,544 $2,609,038 
Non-current assets144,356 2,810,082 123,938 2,535,273 
Current liabilities93,112 1,812,546 93,365 1,909,870 
Non-current liabilities95,065 1,850,568 57,753 1,181,398 
The Company recorded equity in (losses) earnings of Vasconia, net of taxes, of $(3.3) million, $1.8 million and $1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.
The fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia declined during the third quarter of 2022. As a result of the decline in the quoted stock price and the quarterly decline in the operating results of Vasconia, the Company determined the decline in fair value was other than temporary. The Company reduced its investment by $6.2 million as of September 30, 2022 to its fair value, and recognized the non-cash impairment charge within Equity in (losses) earnings, net of taxes, in the consolidated statement of operations. As of December 31, 2022, the fair value of the Company's investment in Vasconia was $15.0 million. The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $12.5 million.
Lifetime Brands Do Brasil Participacoes Ltda., a 100% owned subsidiary of Lifetime Brands, Inc., was dissolved on May 5, 2020. The subsidiary held a note receivable relating to the 2016 sale of its 40% equity interest in GS International S/A (“GSI”), a wholesale distributor of branded housewares products in Brazil, which was accounted for as an equity method investment. The final installment due on the note receivable was received prior to dissolution of the subsidiary. Foreign currency translation losses of $0.2 million, which were previously recorded as a component of stockholder’s equity within accumulated other comprehensive loss, were recognized in earnings upon dissolution of this subsidiary during the year ended December 31, 2020. The Company included this loss within equity in earnings, net of taxes.