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INVESTMENTS | 9 Months Ended
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Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENTS | INVESTMENTS As of September 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 nine months ended September 30, 2023 and 2022 in the accompanying unaudited condensed consolidated statements of operations. The Company’s equity in losses, net of taxes, for the three and nine months ended September 30, 2023 and 2022 included the following:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Vasconia equity in losses, net of taxes | $ | (707) |  |  | $ | (1,991) |  |  | $ | (2,853) |  |  | $ | (1,241) |
Impairment on investment in Vasconia | (340) |  |  | (6,168) |  |  | (6,834) |  |  | (6,168) |
Equity in losses, net of taxes | $ | (1,047) |  |  | $ | (8,159) |  |  | $ | (9,687) |  |  | $ | (7,409) |
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 17.41 and MXN 19.47 at September 30, 2023 and December 31, 2022, respectively. The Company’s proportionate share of Vasconia’s net loss has been translated from MXN to USD using the following exchange rates:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Average exchange rate (USD to MXN) | 17.06 |  | 20.22 |  | 17.06 - 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 $1.1 million and a decrease of $0.5 million during the nine months ended September 30, 2023 and 2022, respectively. These translation effects are recorded in accumulated other comprehensive loss. Summarized income statement information for the three and nine months ended September 30, 2023 and 2022 for Vasconia in USD and MXN is as follows (in thousands):
| Three Months Ended September 30,
| 2023 |  | 2022
| USD |  | MXN |  | USD |  | MXN
Net sales | $ | 38,745 |  |  | $ | 660,991 |  |  | $ | 56,488 |  |  | $ | 1,142,171 |
Gross profit | 10,994 |  |  | 187,559 |  |  | 4,405 |  |  | 89,061 |
Loss from operations | (1,060) |  |  | (18,081) |  |  | (5,459) |  |  | (110,380) |
Net loss | (2,858) |  |  | (48,771) |  |  | (8,009) |  |  | (161,936) |
| Nine Months Ended September 30,
| 2023 |  | 2022
| USD |  | MXN |  | USD |  | MXN
Net sales | $ | 121,537 |  |  | $ | 2,164,683 |  |  | $ | 187,001 |  |  | $ | 3,785,921 |
Gross profit | 29,330 |  |  | 520,224 |  |  | 29,629 |  |  | 600,976 |
Loss from operations | (1,874) |  |  | (33,464) |  |  | (256) |  |  | (3,974) |
Net loss | (11,544) |  |  | (205,204) |  |  | (4,875) |  |  | (98,366) |
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 balances | Balance Sheet Location |  | September 30, 2023 |  | December 31, 2022
Amounts due from Vasconia | Prepaid expenses and other current assets |  | $ | 42 |  |  | $ | 48 |
Amounts due to Vasconia | Accrued expenses and Accounts payable |  | (220) |  |  | (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 $0.3 million during the three months ended September 30, 2023 to its fair value, and recognized the non-cash impairment charge within equity in losses in the unaudited condensed consolidated statement of operations. The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $4.0 million as of September 30, 2023. For the nine months ended September 30, 2023, the Company has recognized non-cash impairment charges of $6.8 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.

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- 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/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 323 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481543/323-740-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org//323/tableOfContent + Details
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