Cash used in operating activities in the first nine months of 2012 was $1.1 million as compared to $2.6 million used in the prior year period. The improved cash flow was primarily due to an increase in cash from net working capital and a lower operating loss. The Company had net borrowings on its revolving credit facility of $1.5 million in the first nine months of 2012 which was primarily used to fund the $1.1 million used for operating activities, the purchase of EOC and the payment of fees related to our new revolving credit facility with Gibraltar Business Capital, LLC and the termination of our credit facility with First Business Capital. Outstanding borrowings on the revolving credit facility at September 29, 2012 were approximately $2.4 million.
Commenting on these results, Ronald H. Butler, Chairman and Chief Executive Officer, said, “Despite the continuing low consumer confidence in the economy and the very difficult retail operating environment, we increased sales in the third quarter of 2012 as compared to the prior year period, largely due to increased sales of our commercial furniture products to the health care industry, primarily through our purchase of EOC. The ongoing difficult operating environment in the residential furniture market will continue to be challenging into the first quarter of 2013. We believe the recent signs of marginal improvement in the housing market are tempered by the uncertainty over the outcome of the upcoming federal “fiscal cliff” at the end of 2012 and its impact on consumer spending.
“Our acquisition of California-based EOC, with its commercial product lines, especially an extensive health care line, complement our current product line of seating, tables, and waiting area furniture. In addition, the three year contract we were awarded late in 2011 with the Premier healthcare alliance is expected to boost our sales in this product line. The health care sector continues to grow significantly and we believe this alliance continues to position the commercial line of our Chromcraft division favorably for the future.”
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