COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2015

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

In the normal course of business, the Company enters into purchase orders with its vendors for the purchase of materials or services to meet its production needs. At March 31, 2015, the Company had $20,344,000 of open purchase orders which are expected to be substantially fulfilled within the next two years. Certain single source vendors, or vendors producing custom material, require significant lead times from order to delivery of their material. Should the demand for the Company’s products decline significantly, or should there be a significant shift in the mix of products being demanded, the Company may incur cancellation charges related to these commitments, that could be material to the Company’s results of operations. To date, the Company has not experienced any material losses related to cancellation penalties.

Retirement Savings Plan

The Company maintains a 401(k) Retirement Savings Plan (the “Plan”) for all employees.   Employees are eligible to participate on the first of the month following date of employment.  The Plan is funded by elective employee contributions of up to 100% of their compensation up to IRS limits. Under the Plan the Company at its discretion matches 50% of the first 6% of employee contributions for each participant in the form of Company common stock or cash. Expenses under the Plan, consisting of Company contributions which were made solely in cash and Plan administrative expenses paid by the Company, totaled $969,000, $927,000 and $1,091,000 in 2015, 2014 and 2013, respectively.

Legal Issues

The Company received a subpoena from the Office of the Inspector General (“OIG”) of the U.S. General Services Administration (“GSA”) on April 17, 2015 to initiate an investigation being conducted by the GSA and the Department of Defense.  The subpoena covers the period from January 1, 2006 to the present, and requests a range of documents, including documents relating to the Company’s discount practices and compliance with the pricing provisions of the GSA Schedule contract. The Company is cooperating fully with the investigation.  Management is unable at this time to predict the outcome of the investigation.  The Company will incur legal costs in connection with the investigation, and could incur other costs, damages or penalties, depending on its outcome. It is possible that the investigation could lead to claims or findings of violations of the False Claims Act in connection with the Company’s GSA contracting activity. Violations of the False Claims Act could result in the imposition of damages, including up to treble damages, plus civil penalties in some cases. Management is unable at this time to estimate the amount of the possible loss or range of loss that the Company may incur as a result of the investigation.