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INVESTMENTS
 6 Months Ended
Jun. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]  
INVESTMENTS INVESTMENTS
As of June 30, 2023, 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. 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, 2023 and 2022 in the accompanying unaudited condensed consolidated statements of operations.
The Company’s equity in (losses) earnings, net of taxes, for the three and six months ended June 30, 2023 and 2022 included the following:
Three Months Ended
June 30, 		Six Months Ended
June 30,
2023
2022
2023
2022
Vasconia equity in (losses) earnings, net of taxes
$(1,422)$334 $(2,146)$750 
Impairment on investment in Vasconia(4,441)— (6,494)— 
Equity in (losses) earnings, net of taxes
$(5,863)$334 $(8,640)$750 
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 17.11 and MXN 19.47 at June 30, 2023 and December 31, 2022, respectively.
The Company’s proportionate share of Vasconia’s net (loss) income has been translated from MXN to USD using the following exchange rates:
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Average exchange rate (USD to MXN)
17.68
20.02
17.68 - 18.66
20.02 - 20.50
The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in an increase to the investment of $1.4 million and a decrease of $0.9 million during the six months ended June 30, 2023 and 2022, respectively. These translation effects are recorded in accumulated other comprehensive loss.
Summarized income statement information for the three and six months ended June 30, 2023 and 2022 for Vasconia in USD and MXN is as follows (in thousands):
Three Months Ended
June 30,
20232022
USDMXNUSDMXN
Net sales$42,051 $743,462 $66,195 $1,325,237 
Gross profit
9,680 171,152 10,804 216,297 
Income from operations
193 3,401 518 10,366 
Net (loss) income
(5,755)(101,737)1,403 28,091 
Six Months Ended
June 30,
20232022
USDMXNUSDMXN
Net sales$82,792 $1,503,692 $130,513 $2,643,750 
Gross profit
18,336 332,665 25,224 511,915 
(Loss) income from operations
(814)(15,383)5,203 106,406 
Net (loss) income
(8,686)(156,433)3,134 63,570 
The Company recorded equity in (losses) earnings of Vasconia, net of taxes, of $(1.4) million and $(2.1) million for the three and six months ended June 30, 2023, respectively. 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.
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, 2023December 31, 2022
Amounts due from VasconiaPrepaid expenses and other current assets$24 $48 
Amounts due to VasconiaAccrued expenses and Accounts payable(93)(16)
The fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia declined in 2023. As a result of the decline in the quoted stock price, the continued decline in the operating results of Vasconia and the recent downgrade in Vasconia’s debt rating, the Company determined the decline in fair value was other than temporary. The Company reduced its investment by $4.4 million during the three months ended June 30, 2023 to its fair value, and recognized the non-cash impairment charge within equity in (losses) earnings in the unaudited condensed consolidated statement of operations. The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $5.3 million as of June 30, 2023. For the six months ended June 30, 2023, the Company has recognized non-cash impairment charges of $6.5 million.
As of December 31, 2022, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $15.0 million, respectively. The carrying value of the Company’s investment in Vasconia was $12.5 million as of December 31, 2022.