DERIVATIVE FINANCIAL INSTRUMENTS

6 Months Ended

Sep. 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 a then-anticipated obligation and transaction.  The foreign currency put option contract was paid in full at execution and was related to the Company’s activities in Europe. The put option contract provided the Company 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, the Company could exercise its option and mitigate its 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 (expense) for this contract of ($1,020,000) and $122,000 in the three and six months ended September 30, 2010, respectively, which is included in other income and expense in the Condensed Consolidated Statements of Operations.  The Company had no option contracts outstanding during the three and six months ended September 30, 2011.