certain accounting estimates are particularly important to the understanding of the company 's financial position and results of operations and require the application of significant judgment by the company 's management and can be materially affected by changes from period to period in economic factors or conditions that are outside the control of management . the company 's management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates . those estimates are based on historical operations , future business plans and projected financial results , the terms of existing contracts , the observance of trends in the industry , information provided by customers and information available from other outside sources , as appropriate . the following discusses the company 's critical accounting policies and estimates : estimates . operating results may be affected by certain accounting estimates . the most sensitive and significant accounting estimates in the financial statements relate to customer rebates , valuation allowances for deferred income tax assets , obsolete and slow moving inventories , potentially uncollectible accounts receivable , pension liability and accruals for income taxes . although the company 's management has used available information to make judgments on the appropriate estimates to account for the above matters , there can be no assurance that future events will not significantly affect the estimated amounts related to these areas where estimates are required . however , historically , actual results have not been materially different than original estimates . revenue recognition . the company recognizes revenue from the sales of its products when ownership transfers to the customers , which occurs either at the time of shipment or upon delivery based upon contractual terms with the customer . the company recognizes customer program costs , including rebates , cooperative advertising , slotting fees and other sales related discounts , as a reduction to sales . allowance for doubtful accounts . the company provides an allowance for doubtful accounts based upon a review of outstanding accounts receivable , historical collection information and existing economic conditions . the allowance for doubtful accounts represents estimated uncollectible accounts receivables associated with potential customer defaults on contractual obligations , usually due to potential insolvencies . the allowance includes amounts for certain customers where a risk of default has been specifically identified . in addition , the allowance includes a provision for customer defaults based on historical experience . the company actively monitors its accounts receivable balances and its historical experience of annual accounts receivable write offs has been negligible . customer rebates . customer rebates and incentives are a common practice in the office products industry . we incur customer rebate costs to obtain favorable product placement , to promote sell-through of products and to maintain competitive pricing . customer rebate costs and incentives , including volume rebates , promotional funds , catalog allowances and slotting fees , are accounted for as a reduction to gross sales . these costs are recorded at the time of sale and are based on individual customer contracts . management periodically reviews accruals for these rebates and allowances , and adjusts accruals when appropriate . obsolete and slow moving inventory . inventories are stated at the lower of cost , determined on the first-in , first-out method , or market . an allowance is established to adjust the cost of inventory to its net realizable value . inventory allowances are recorded for obsolete or slow moving inventory based on assumptions about future demand and marketability of products , the impact of new product introductions and specific identification of items , such as discontinued products . these estimates could vary significantly from actual requirements if future economic conditions , customer inventory levels or competitive conditions differ from expectations . income taxes . deferred income tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse . a valuation allowance is recorded to reduce deferred income tax assets to an amount that is more likely than not to be realized . 15 intangible assets . intangible assets with finite useful lives are recorded at cost upon acquisition and amortized over the term of the related contract , if any , or useful life , as applicable . intangible assets held by the company with finite useful lives include patents and trademarks . the weighted average amortization period for intangible assets at december 31 , 2013 was 14 years . the company periodically reviews the values recorded for intangible assets to assess recoverability from future operations whenever events or changes in circumstances indicate that its carrying amount may not be recoverable . at december 31 , 2013 and 2012 , the company assessed the recoverability of its long-lived assets and believed that there were no events or circumstances present that would that would require a test of recoverability on those assets . as a result , there was no impairment of the carrying amounts of such assets and no reduction in their estimated useful lives . the net book value of the company 's intangible assets was $ 4,071,897 as of december 31 , 2013 compared to $ 4,240,401 as of december 31 , 2012. pension obligation . the pension benefit obligation is based on various assumptions used by third-party actuaries in calculating this amount . these assumptions include discount rates , expected return on plan assets , mortality rates and other factors . revisions in assumptions and actual results that differ from the assumptions affect future expenses , cash funding requirements and obligations . our funding policy is to fund the plan in accordance with applicable requirements of the internal revenue code and regulations . story_separator_special_tag these assumptions are reviewed annually and updated as required . the company has a frozen defined benefit pension plan . two assumptions , the discount rate and the expected return on plan assets , are important elements of expense and liability measurement . we determine the discount rate used to measure plan liabilities as of the december 31 measurement date . the discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year . in estimating this rate , we look at rates of return on fixed-income investments of similar duration to the liabilities in the plan that receive high , investment grade ratings by recognized ratings agencies . using these methodologies , we determined a discount rate of 3.78 % to be appropriate as of december 31 , 2013 , which is an increase of .79 percentage points from the rate used as of december 31 , 2012. the expected long-term rate of return on assets considers the company 's historical results and projected returns for similar allocations among asset classes . in accordance with generally accepted accounting principles , actual results that differ from the company 's assumptions are accumulated and amortized over future periods and , therefore , affect expense and obligation in future periods . for the u.s. pension plan , our assumption for the expected return on plan assets was 6.0 % for 2013. for more information concerning these costs and obligations , see the discussion in note 6 – pension and profit sharing , in the notes to the company 's consolidated financial statements in this report . accounting for stock-based compensation . stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period . the company uses the black-scholes option - pricing model to determine fair value of the awards , which involves certain subjective assumptions . these assumptions include estimating the length of time employees will retain their vested stock options before exercising them ( “ expected term ” ) , the estimated volatility of the company 's common stock price over the expected term ( “ volatility ” ) and the number of options for which vesting requirements will not be completed ( “ forfeitures ” ) . changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation , and the related amount recognized on the consolidated statements of operations . refer to note 11 - stock option plans - in the notes to consolidated financial statements in this report for a more detailed discussion . results of operations 2013 compared with 2012 on june 7 , 2012 , the company purchased certain assets of the c-thru ruler company , a leading supplier of drafting , measuring , lettering and stencil products . the company purchased inventory and intellectual property related to c-thru 's lettering and ruler business for approximately $ 1.47 million using funds borrowed under its revolving loan agreement with hsbc . the company recorded approximately $ 0.42 million for inventory , as well as approximately $ 1.05 million for intangible assets , consisting primarily of customer relationships . on august 30 , 2013 , the company purchased a manufacturing and distribution center in rocky mount , north carolina for approximately $ 2.8 million . the company acquired the facility in the bankruptcy liquidation of roomstore , inc. the property consists of approximately 340,000 square feet of office , manufacturing and warehouse space on 33 acres . the facility will be used to consolidate the company 's two distribution centers in north carolina and to provide space for growth . the company expects to invest a total of approximately $ 1.3 million by the end of the first quarter of 2014 to upgrade the building and equipment . as of december 31 , 2013 , the company paid approximately $ 900,000 towards upgrading the building . 16 net sales in 2013 , sales increased by $ 5,207,007 or 6 % to $ 89,576,777 compared to $ 84,369,770 in 2012. the u.s. segment sales increased by $ 6,099,000 or 9 % in 2013 compared to 2012. sales in canada decreased by $ 716,000 or 8 % in both u.s. dollars and local currency in 2013 compared to 2012. european sales decreased by 2 % in u.s. dollars and 5 % in local currency in 2013 compared to 2012. the increase in net sales for the twelve months ended december 31 , 2013 in the u.s. segment was primarily due to higher sales of camillus knives and back-to-school products as well as increased distribution of first aid products . the decline in net sales in canada for the twelve months ended december 31 , 2013 was primarily due to general softness in the office products industry . the decrease in sales in europe was primarily due to the loss of schlecker , a major customer , due to their liquidation in the second quarter of 2012. gross profit gross profit was 35.5 % of net sales in 2013 compared to 35.3 % in 2012. selling , general and administrative selling , general and administrative expenses were $ 25,945,000 in 2013 compared with $ 24,386,000 in 2012 , an increase of $ 1,559,000 or 6 % . sg & a expenses were 29 % of net sales in 2013 and 2012 , respectively . the increase in sg & a expenses was primarily the result of higher personnel related expenses which includes salaries and recruiting ( $ 1.1 million ) and higher delivery costs and sales commissions as a result of higher sales ( $ 200,000 ) . operating income operating income was $ 5,879,000 in 2013 , compared with $ 5,361,000 in 2012 , an increase of $ 518,000. operating income in the u.s. increased by approximately $ 689,000 primarily as a result of higher sales . operating income in the european segment

liquidity and capital resources during 2013 , working capital increased by approximately $ 431,000 compared to december 31 , 2012. inventory decreased by approximately $ 2.1 million . inventory turnover , calculated using a twelve month average inventory balance , remained constant at 1.9 for december 31 , 2013 compared to december 31 , 2012. receivables decreased approximately $ 815,000 at december 31 , 2013 compared to december 31 , 2012. the average number of days sales outstanding in accounts receivable was 64 days in 2013 compared to 61 days in 2012 . 17 the company 's working capital , current ratio and long-term debt to equity ratio follow : replace_table_token_3_th at december 31 , 2013 , total debt outstanding under the company 's revolving credit facility ( referred to below ) decreased by approximately $ 1.4 million compared to total debt at december 31 , 2012. the decrease in total debt outstanding is primarily due to the receipt of $ 1.7 million from early repayment of the company 's mortgage receivable , cash generated from earnings and the reduction of inventory partially offset by the purchase of the new distribution facility in rocky mount , nc . as of december 31 , 2013 , $ 22,911,829 was outstanding and $ 17,088,171 was available for borrowing under the revolving credit facility .


 Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```certain accounting estimates are particularly important to the understanding of the company 's financial position and results of operations and require the application of significant judgment by the company 's management and can be materially affected by changes from period to period in economic factors or conditions that are outside the control of management . the company 's management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates . those estimates are based on historical operations , future business plans and projected financial results , the terms of existing contracts , the observance of trends in the industry , information provided by customers and information available from other outside sources , as appropriate . the following discusses the company 's critical accounting policies and estimates : estimates . operating results may be affected by certain accounting estimates . the most sensitive and significant accounting estimates in the financial statements relate to customer rebates , valuation allowances for deferred income tax assets , obsolete and slow moving inventories , potentially uncollectible accounts receivable , pension liability and accruals for income taxes . although the company 's management has used available information to make judgments on the appropriate estimates to account for the above matters , there can be no assurance that future events will not significantly affect the estimated amounts related to these areas where estimates are required . however , historically , actual results have not been materially different than original estimates . revenue recognition . the company recognizes revenue from the sales of its products when ownership transfers to the customers , which occurs either at the time of shipment or upon delivery based upon contractual terms with the customer . the company recognizes customer program costs , including rebates , cooperative advertising , slotting fees and other sales related discounts , as a reduction to sales . allowance for doubtful accounts . the company provides an allowance for doubtful accounts based upon a review of outstanding accounts receivable , historical collection information and existing economic conditions . the allowance for doubtful accounts represents estimated uncollectible accounts receivables associated with potential customer defaults on contractual obligations , usually due to potential insolvencies . the allowance includes amounts for certain customers where a risk of default has been specifically identified . in addition , the allowance includes a provision for customer defaults based on historical experience . the company actively monitors its accounts receivable balances and its historical experience of annual accounts receivable write offs has been negligible . customer rebates . customer rebates and incentives are a common practice in the office products industry . we incur customer rebate costs to obtain favorable product placement , to promote sell-through of products and to maintain competitive pricing . customer rebate costs and incentives , including volume rebates , promotional funds , catalog allowances and slotting fees , are accounted for as a reduction to gross sales . these costs are recorded at the time of sale and are based on individual customer contracts . management periodically reviews accruals for these rebates and allowances , and adjusts accruals when appropriate . obsolete and slow moving inventory . inventories are stated at the lower of cost , determined on the first-in , first-out method , or market . an allowance is established to adjust the cost of inventory to its net realizable value . inventory allowances are recorded for obsolete or slow moving inventory based on assumptions about future demand and marketability of products , the impact of new product introductions and specific identification of items , such as discontinued products . these estimates could vary significantly from actual requirements if future economic conditions , customer inventory levels or competitive conditions differ from expectations . income taxes . deferred income tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse . a valuation allowance is recorded to reduce deferred income tax assets to an amount that is more likely than not to be realized . 15 intangible assets . intangible assets with finite useful lives are recorded at cost upon acquisition and amortized over the term of the related contract , if any , or useful life , as applicable . intangible assets held by the company with finite useful lives include patents and trademarks . the weighted average amortization period for intangible assets at december 31 , 2013 was 14 years . the company periodically reviews the values recorded for intangible assets to assess recoverability from future operations whenever events or changes in circumstances indicate that its carrying amount may not be recoverable . at december 31 , 2013 and 2012 , the company assessed the recoverability of its long-lived assets and believed that there were no events or circumstances present that would that would require a test of recoverability on those assets . as a result , there was no impairment of the carrying amounts of such assets and no reduction in their estimated useful lives . the net book value of the company 's intangible assets was $ 4,071,897 as of december 31 , 2013 compared to $ 4,240,401 as of december 31 , 2012. pension obligation . the pension benefit obligation is based on various assumptions used by third-party actuaries in calculating this amount . these assumptions include discount rates , expected return on plan assets , mortality rates and other factors . revisions in assumptions and actual results that differ from the assumptions affect future expenses , cash funding requirements and obligations . our funding policy is to fund the plan in accordance with applicable requirements of the internal revenue code and regulations . story_separator_special_tag these assumptions are reviewed annually and updated as required . the company has a frozen defined benefit pension plan . two assumptions , the discount rate and the expected return on plan assets , are important elements of expense and liability measurement . we determine the discount rate used to measure plan liabilities as of the december 31 measurement date . the discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year . in estimating this rate , we look at rates of return on fixed-income investments of similar duration to the liabilities in the plan that receive high , investment grade ratings by recognized ratings agencies . using these methodologies , we determined a discount rate of 3.78 % to be appropriate as of december 31 , 2013 , which is an increase of .79 percentage points from the rate used as of december 31 , 2012. the expected long-term rate of return on assets considers the company 's historical results and projected returns for similar allocations among asset classes . in accordance with generally accepted accounting principles , actual results that differ from the company 's assumptions are accumulated and amortized over future periods and , therefore , affect expense and obligation in future periods . for the u.s. pension plan , our assumption for the expected return on plan assets was 6.0 % for 2013. for more information concerning these costs and obligations , see the discussion in note 6 – pension and profit sharing , in the notes to the company 's consolidated financial statements in this report . accounting for stock-based compensation . stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period . the company uses the black-scholes option - pricing model to determine fair value of the awards , which involves certain subjective assumptions . these assumptions include estimating the length of time employees will retain their vested stock options before exercising them ( “ expected term ” ) , the estimated volatility of the company 's common stock price over the expected term ( “ volatility ” ) and the number of options for which vesting requirements will not be completed ( “ forfeitures ” ) . changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation , and the related amount recognized on the consolidated statements of operations . refer to note 11 - stock option plans - in the notes to consolidated financial statements in this report for a more detailed discussion . results of operations 2013 compared with 2012 on june 7 , 2012 , the company purchased certain assets of the c-thru ruler company , a leading supplier of drafting , measuring , lettering and stencil products . the company purchased inventory and intellectual property related to c-thru 's lettering and ruler business for approximately $ 1.47 million using funds borrowed under its revolving loan agreement with hsbc . the company recorded approximately $ 0.42 million for inventory , as well as approximately $ 1.05 million for intangible assets , consisting primarily of customer relationships . on august 30 , 2013 , the company purchased a manufacturing and distribution center in rocky mount , north carolina for approximately $ 2.8 million . the company acquired the facility in the bankruptcy liquidation of roomstore , inc. the property consists of approximately 340,000 square feet of office , manufacturing and warehouse space on 33 acres . the facility will be used to consolidate the company 's two distribution centers in north carolina and to provide space for growth . the company expects to invest a total of approximately $ 1.3 million by the end of the first quarter of 2014 to upgrade the building and equipment . as of december 31 , 2013 , the company paid approximately $ 900,000 towards upgrading the building . 16 net sales in 2013 , sales increased by $ 5,207,007 or 6 % to $ 89,576,777 compared to $ 84,369,770 in 2012. the u.s. segment sales increased by $ 6,099,000 or 9 % in 2013 compared to 2012. sales in canada decreased by $ 716,000 or 8 % in both u.s. dollars and local currency in 2013 compared to 2012. european sales decreased by 2 % in u.s. dollars and 5 % in local currency in 2013 compared to 2012. the increase in net sales for the twelve months ended december 31 , 2013 in the u.s. segment was primarily due to higher sales of camillus knives and back-to-school products as well as increased distribution of first aid products . the decline in net sales in canada for the twelve months ended december 31 , 2013 was primarily due to general softness in the office products industry . the decrease in sales in europe was primarily due to the loss of schlecker , a major customer , due to their liquidation in the second quarter of 2012. gross profit gross profit was 35.5 % of net sales in 2013 compared to 35.3 % in 2012. selling , general and administrative selling , general and administrative expenses were $ 25,945,000 in 2013 compared with $ 24,386,000 in 2012 , an increase of $ 1,559,000 or 6 % . sg & a expenses were 29 % of net sales in 2013 and 2012 , respectively . the increase in sg & a expenses was primarily the result of higher personnel related expenses which includes salaries and recruiting ( $ 1.1 million ) and higher delivery costs and sales commissions as a result of higher sales ( $ 200,000 ) . operating income operating income was $ 5,879,000 in 2013 , compared with $ 5,361,000 in 2012 , an increase of $ 518,000. operating income in the u.s. increased by approximately $ 689,000 primarily as a result of higher sales . operating income in the european segment
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 Narrative : liquidity and capital resources during 2013 , working capital increased by approximately $ 431,000 compared to december 31 , 2012. inventory decreased by approximately $ 2.1 million . inventory turnover , calculated using a twelve month average inventory balance , remained constant at 1.9 for december 31 , 2013 compared to december 31 , 2012. receivables decreased approximately $ 815,000 at december 31 , 2013 compared to december 31 , 2012. the average number of days sales outstanding in accounts receivable was 64 days in 2013 compared to 61 days in 2012 . 17 the company 's working capital , current ratio and long-term debt to equity ratio follow : replace_table_token_3_th at december 31 , 2013 , total debt outstanding under the company 's revolving credit facility ( referred to below ) decreased by approximately $ 1.4 million compared to total debt at december 31 , 2012. the decrease in total debt outstanding is primarily due to the receipt of $ 1.7 million from early repayment of the company 's mortgage receivable , cash generated from earnings and the reduction of inventory partially offset by the purchase of the new distribution facility in rocky mount , nc . as of december 31 , 2013 , $ 22,911,829 was outstanding and $ 17,088,171 was available for borrowing under the revolving credit facility .

