We fund our operations and working capital needs through cash generated from operations and borrowings under our credit facilities.
In our typical operational cash flow cycle, inventory is purchased in U.S. dollars to meet expected demand plus a safety stock. Because the majority of our suppliers are based in Asia, inventory takes from three to four weeks to arrive from Asia to the various distribution points we maintain in the United States, Canada and the United Kingdom. Payment terms for these vendors are approximately 60-90 days from the date the product ships from Asia, therefore we are generally paying for the product a short time after it is physically received in the United States. In turn, sales to customers generally have payment terms of 30 to 60 days, resulting in an accounts receivable and increasing the amount of cash required to fund working capital. To bridge the gap between paying our suppliers and receiving payment from our customers for goods sold, we rely on our credit facilities.
The majority of our capital expenditures are for tools and molds related to new product introductions. We receive indications from retailers generally around the middle of each year as to what products the retailer will be taking into its product line for the upcoming year. Based on these indications, we will then acquire the tools and molds required to build and produce the products. In most cases, the payments for the tools are spread out over a three to four month period.
For the three months ended March 31, 2014, net cash provided by operating activities totaled $2,187. For the three months ended March 31, 2013, net cash provided by operating activities totaled $2,143. The small change in net cash relating to operating activities in 2014 as compared to 2013 is attributable to continued strong working capital management in collections, vendor management, and inventory.
For the three months ended March 31, 2014, net cash used in investing activities was approximately $548. For the three months ended March 31, 2013, net cash used in investing activities was $614. The decline in net cash used in investing activities was primarily attributable to continued prudent capital investment management in 2014.
AI
