Basic and Diluted Net Income (Loss) per Common Share
Net income for the three months ended March 31, 2019 was approximately $82,000, or $0.01 per basic and diluted share. The basic and diluted weighted-average number of common shares outstanding for the three months ended March 31, 2019 was approximately 9,085,000 and 9,189,000, respectively. Net income for the three months ended April 1, 2018 was approximately $998,000, or $0.13 per basic and diluted share. There were approximately 7,407,000 basic and diluted weighted-average shares outstanding for the three months ended April 1, 2018.
Financial Condition, Liquidity and Capital Resources
Our balance of unrestricted cash and cash equivalents was approximately $8.9 million and $11.6 million as of
March 31, 2019
and December 30, 2018, respectively.
We used cash to purchase four stores in Colorado.
We expect to utilize cash on hand to reinvest into our brand, including refreshing current corporate stores, repurchasing select franchise-operated stores, and the development of a new concept. In 2018, we entered into agreements with Clark Championship Products LLC to develop the Clark Crew BBQ restaurant concept, which we also have the exclusive licensing rights to the Clark Crew BBQ brand. Pursuant to that agreement, we will provide financing in the amount of $1.4 million for the build out of the inaugural Clark Crew BBQ restaurant.
Our current ratio, which measures our immediate short-term liquidity, was 1.50 as of March 31, 2019, compared to 2.15 as of December 30, 2018. The current ratio is computed by dividing total current assets by total current liabilities. The decrease in our current ratio was primarily due to increases in our current liabilities related to the current portion of lease liabilities, as well as decreases in our accounts receivable due to collection efforts and cash paid for the acquisition in the Colorado market.
Net cash provided by operating activities for the three months ended March 31, 2019 was approximately $1.6 million, which reflects net income of approximately $82,000 increased by non-cash charges of approximately $785,000. Changes in operating assets and liabilities for the three months ended March 31, 2019 primarily included cash inflows for accounts receivable of $743,000 and other assets of $53,000. These cash inflows were partially offset by cash outflows related to a decrease in accounts payable of $9,000 and a decrease in accrued and other liabilities of $24,000.
Net cash provided by operating activities for the three months ended April 1, 2018 was approximately $176,000, reflecting net income of approximately $998,000 decreased by non-cash charges of approximately $42,000. Changes in operating assets and liabilities included cash outflows from an increase in other assets of $6,000 and a decrease in accrued and other liabilities of $879,000. These cash outflows were partially offset by a decrease in accounts receivable of $61,000 and an increase in accounts payable of $32,000.
Net cash used for investing activities was approximately $4.2 million for the three months ended March 31, 2019, related to payments for acquired restaurants of $3.8 million, advances on notes receivable of $150,000 and the purchase of property, equipment and leasehold improvements of $221,000, partially offset by proceeds from the sale of fixed assets of $6,000. Net cash used for investing activities was $498,000 for the three months ended April 1, 2018, related to the purchases of property and equipment of $41,000 and advances on notes receivable of $458,000.
Net cash used for financing activities for the three months ended March 31, 2019 of $152,000, primarily related to the debt repayments of $137,000 and payments for debt issuance costs of $15,000. Net cash provided by financing activities for the three months ended April 1, 2018 of $69,000, primarily related to the proceeds from exercise of stock options of $389,000, partially offset by debt repayments of $320,000.
We are subject to various financial and non-financial covenants on our long-term debt, including a debt-service coverage ratio. As of March 31, 2019, we were in compliance with all of our covenants.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that either have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.