2.ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company accounts for stock-based awards made to its employees and Board of Directors in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 718, Compensation—Stock Compensation, which requires the measurement and recognition of all compensation costs for stock-based awards made to employees and the Board of Directors based upon fair value over the requisite service period for awards expected to vest.

The Company recognized $991,000 and $333,000 of stock-based compensation costs for the three months ended September 30, 2014 and September 30, 2013, respectively. The Company recognized $1,770,000 and $641,000 of stock-based compensation costs for the six months ended September 30, 2014 and September 30, 2013, respectively. The income tax benefit recognized related to the compensation costs for the three months ended September 30, 2014 and September 30, 2013 was approximately $332,000 and $112,000 respectively. The income tax benefit recognized related to the compensation costs for the six months ended September 30, 2014 and September 30, 2013 was approximately $593,000 and $211,000, respectively.

The following table summarizes stock-based compensation costs included in the Company’s consolidated statements of operations and comprehensive income (loss):

	Three Months Ended				Six Months Ended
(In thousands)	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Cost of revenues	$	297	$	104	$	523	$	217
Selling, general and administrative	694		229		1,247		424
Total share-based compensation expense before tax	$	991	$	333	$	1,770	$	641

Stock Option and Other Compensation Plans

The Company has various stock option and other compensation plans for directors, officers, and employees. The Company had the following stock plans outstanding as of September 30, 2014: the 2002 Combination Plan, the 2003 Stock Plan for Non-Employee Directors, the 2005 Equity and Incentive Plan and the 2014 Equity and Incentive Plan. There are 513,000 shares remaining available for issuance under these plans. Vesting periods are at the discretion of the Board of Directors and typically range from one to three years. Certain of the options granted vest upon the achievement of certain performance based goals as well as service time incurred. Options under these plans are granted at fair market value and have a term of ten years from the date of grant.

Stock Options

The following tables summarize stock option activity for the six months ended September 30, 2014:

	Number of Shares		Weighted Average Exercise Price ($)		Weighted Average Contractual Life (years)	Aggregate Intrinsic Value

Options outstanding at March 31, 2014	224,964		$	62.75	3.57
Grants	—		—
Exercises	(22,224	)	39.90			$	588,000
Cancellations	(906	)	61.40
Options outstanding at September 30, 2014	201,834		$	65.27	3.29
Options exercisable at September 30, 2014	201,834

Information related to the stock options outstanding as of September 30, 2014 is as follows:

Range of Exercise Prices	Number of Shares	Weighted-Average Remaining Contractual Life (years)	Weighted-Average Exercise Price ($)		Exercisable Number of Shares	Exercisable Weighted-Average Exercise Price ($)
$ 46.68-$60.00	36,933	1.01	$	52.76	36,933	$	52.76
$ 60.01-$75.82	164,901	3.80	68.07		164,901	68.07
$ 46.68-$75.82	201,834	3.29	$	65.27	201,834	$	65.27

The Company deems the Black-Scholes option pricing model as the most appropriate method for determining the estimated fair value of stock-based awards. The Black-Scholes method of valuation requires several assumptions: (1) the expected term of the stock-based award; (2) the expected future stock volatility over the expected term; (3) a risk-free interest rate; and (4) the expected dividend yield. The expected term represents the expected period of time that the Company believes the options will be outstanding based on historical information. Estimates of expected future stock price volatility are based on the historic volatility of the Company’s common stock and the risk-free interest rate is based on the U.S. Zero-Bond rate. The expected dividend yield is based on the assumption that the Company would continue paying dividends on its common stock at the same rate for the foreseeable future.

There were no options granted in the six month periods ended September 30, 2014 or September 30, 2013.

As of September 30, 2014, there was no remaining unrecognized compensation cost related to options granted.

Restricted Stock and Restricted Stock Units

The Company has instituted long-term incentive plans for certain key employees. These plans call for the issuance of restricted stock, restricted stock units, restricted stock options, and/or cash incentives which vest or are paid upon the achievement of certain performance-based goals as well as service time incurred. Restricted stock and restricted stock units may also be granted to other employees with vesting periods that range from one to three years. In addition, annually the non-employee directors are granted restricted stock. Restricted stock shares granted to our non-employee directors vest on a pro-rata basis, based on service time performed over a one-year period. The fair values of the restricted stock and restricted stock unit awards are equal to the market price per share of the Company’s common stock on the date of grant.

Non-vested restricted stock and restricted stock unit awards are subject to the risk of forfeiture until the fulfillment of specified conditions. As of September 30, 2014, there was $4,320,000 of total unrecognized compensation costs related to non-vested restricted stock and restricted stock unit awards granted under the Company’s stock plans. These costs are expected to be recognized over a weighted average period of 1.15 years.

The following table summarizes the status of the Company’s non-vested restricted stock and restricted stock unit awards for the six months ended September 30, 2014:

	Number of Shares		Weighted Average Grant Date Fair Value ($)
Outstanding at March 31, 2014	72,000		$	61.30
Granted	64,950		63.84
Vested	(26,028	)	61.19
Forfeited	(7,009	)	61.64
Outstanding at September 30, 2014	103,913		$	62.89