DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Jun. 30, 2011

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

7.  DERIVATIVE FINANCIAL INSTRUMENTS

The Company purchased in the fourth quarter of fiscal year 2010, a foreign currency put option contract to manage the risk associated with foreign currency exchange rate fluctuations on an anticipated obligation and transaction.  The foreign currency put option contract was paid in full at execution and was related to our activities in Europe. The put option contract provided us with the option to exchange Euros for U.S. dollars at a fixed exchange rate such that, if the Euro were to depreciate against the U.S. dollar to predetermined levels as set by the contract, we could exercise our option and mitigate our foreign currency exchange losses. This contract did not qualify for hedge accounting treatment and was marked-to-market through the results of operations until it was settled.  This contract was sold during the second quarter ending September 30, 2010.  The Company recorded net mark-to-market income for this contract of $1,142,000, which is included in other income and expense in the Condensed Consolidated Statements of Operations in the quarter ended June 30, 2010.  The Company had no option contracts outstanding as of and for the quarter ended June 30, 2011.