NOTE D —INVESTMENTS

The Company owns approximately a 30% interest in 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 three month periods ended March 31, 2018 and 2017 in the accompanying condensed 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 rates of MXN 18.16 and MXN 19.68 at March 31, 2018 and December 31, 2017, 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 18.71 and MXN 20.30 during the three months ended March 31, 2018 and 2017, respectively. The effect of the translation of the Company’s investment resulted in an increase to the investment of $0.7 million and $1.3 million during the three months ended March 31, 2018 and 2017, respectively (also see Note M). These translation effects are recorded in accumulated other comprehensive income (loss). Included within prepaid expenses and other current assets at March 31, 2018 and December 31, 2017 are amounts due from Vasconia of $112,000 and $64,000, respectively. Included within accrued expenses and accounts payable at March 31, 2018 and December 31, 2017 are amounts due to Vasconia of $7,000 and $0, respectively.

A summarized statement of income information for Vasconia in USD and MXN is as follows:


	Three Months Ended
	March 31,
	2018						2017
	(in thousands)
	USD			MXN			USD		MXN
Net sales	$	39,570		$	740,406		$	36,823	$	747,495
Gross profit		7,119			133,207			7,853		159,421
Income from operations		1,149			21,503			2,430		49,329
Net (loss) income		(362	)		(6,776	)		1,234		25,043

The Company recorded equity in earnings of Vasconia, net of taxes, of $77,000 and $0.5 million, for the three months ended March 31, 2018 and 2017, respectively. Equity in earnings for the three months ended March 31, 2018 and 2017, includes deferred tax benefit of $0.2 million in both periods, due to the requirement to record tax benefits for foreign currency translation gains and losses through other comprehensive income (loss), with a corresponding adjustment to deferred tax liabilities.

As of March 31, 2018 and December 31, 2017, the fair value (based upon Vasconia’s quoted stock price) of the Company’s investment in Vasconia was $35.9 million and $31.8 million, respectively. The carrying value of the Company’s investment in Vasconia was $24.3 million and $23.8 million as of March 31, 2018 and December 31, 2017, respectively.