Pizza International, Incorporated, reported the following information (in thousands): Net Income Depreciation Operating Activities Increase in receivables Decrease in inventory Increase in prepaid expenses Decrease in accounts payable Increase in accrued liabilities Decrease in income taxes payable Payments on notes payable Cash paid for equipment $ 678 33,390 187 677 681 8,737 736 2,755 12,708 29,090 The following is the summarized income statement for Pizza International, Incorporated (in thousands): Revenues Cost of Sales Gross Profit Salary and Wages Expense Depreciation Office Expense Net Income before Income Tax Expense Income Tax Expense Net Income Required: $ 145,251 46,350 98,901 56,920 33,390 7,798 793 115 678 1. Based on this information, compute cash flow from operating activities using the direct method. Assume Prepaid Expenses and Accrued Liabilities relate to office expenses. 2. What was the primary reason that Pizza International was able to report large positive cash flow from operations despite nearly having a net loss?