Liquidity and Capital Resources
| | | | | | |
| | Three Months Ended |
| | March 31, | | April 1, |
| | 2023 | | 2022 |
| | (in thousands) |
Net cash provided by (used in): | | | | | | |
Operating activities | | $ | 17,292 | | $ | (7,754) |
Investing activities | | | (3,475) | | | (2,064) |
Financing activities | | | (15,449) | | | 6,248 |
Net increase (decrease) in cash and cash equivalents | | $ | (1,632) | | $ | (3,570) |
Sources of Cash
Our primary sources of liquidity for the next 12 months and beyond are our cash generated from operations, cash and cash equivalents, and borrowings under our revolving credit facility under the Credit Agreement (the “Revolving Credit Facility”). We believe that our cash and cash equivalents, cash generated by operating activities, and available borrowings under our Revolving Credit Facility will be sufficient to finance our operating activities for at least the next 12 months. A recent amendment to our Revolving Credit Facility limited our borrowing capacity under our Revolving Credit Facility to no more than $10.0 million at any time during the period from November 1, 2022 through April 28, 2023, which was the date on which required financial statements and compliance documents were submitted to the administrative agent under the Credit Agreement for the fiscal quarter ending March 31, 2023. Such submission documented our compliance with all restrictive covenants under the Credit Agreement and thus removed the limit on our borrowing capacity and increased our borrowing capacity under our Revolving Credit Facility to the full $50.0 million. For more information, see Part I, Item 1, Note 5, “Debt Obligations”, and Note 12, “Subsequent Events”, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
As of March 31, 2023, we had a fully drawn $100 million Term A Loan with $62.5 million outstanding (the “Term A Loan”), a $50.0 million Revolving Credit Facility with no borrowed amounts outstanding and $4.1 million in letters of credit issued, and a fully drawn $50.0 million Delayed Draw Term Loan with $38.3 million outstanding (the “Delayed Draw Term Loan” and, collectively with the Term A Loan and the Revolving Credit Facility, the “Credit Facilities”), each scheduled to mature on June 26, 2024. In addition, as of March 31, 2023, we had $17.9 million of unrestricted cash and cash equivalents.
As of March 31, 2023, borrowings under our Credit Facilities, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, bore interest at 8.9%. With the submission of the financial statements and compliance documentation noted above, the applicable margin on outstanding principal balances is reduced by an annual 2.0% compared to our applicable margin in the past two fiscal quarters. See Part I, Item 1, Note 5, “Debt Obligations”, and Note 12, “Subsequent Events”, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, and Part II, Item 8, Note 5, “Debt Obligations”, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2022, for information regarding our indebtedness, including information about new borrowings and repayments, principal repayment terms, interest rates, covenants, and other key terms of our outstanding indebtedness.
Cash Flows from Operating Activities
Cash flows provided by operating activities were $17.3 million for the three months ended March 31, 2023, as compared to cash flows used in operating activities of $7.8 million for the three months ended April 1, 2022. Cash flows from operating activities primarily consists of net income, adjusted for non-cash charges, such as depreciation and amortization and stock-based compensation, plus or minus changes in current operating assets and liabilities. Cash flows provided by operating activities for the three months ended March 31, 2023, resulted primarily from the changing mix of revenues, combined with lower working capital requirements. Cash flows used in operating activities for the three months ended April 1, 2022, resulted primarily from the changing mix of revenues, combined with the increased demand