BENEFIT PLANS:

12 Months Ended

Apr. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Compensation and Employee Benefit Plans [Text Block]

(11)   BENEFIT PLANS:

Retirement plan

Due to the closing of certain facilities in connection with the consolidation of the Company’s Subscription Fulfillment Services business and the associated work force reduction, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations thereunder have accorded to the Pension Benefit Guaranty Corporation (the “PBGC”) the right to require the Company to accelerate the funding of approximately $11,700,000 of accrued pension-related obligations to the Company’s defined benefit plan (“Plan”).  The Company and the PBGC have reached an agreement in principle to deal with the funding obligation which provides for the Company to make a $3,000,000 cash contribution to the Plan, which is to be made within ten days after a formal agreement is signed.  If, before the expiration of one year, the Company is unable to pay the remaining liability or adequately secure it with collateral acceptable to the PBGC, the Company will be required to (i) provide a letter of credit equal to 110% of the remaining liability or establish a cash escrow for 100% of the remaining liability, or (ii) discharge the remaining liability in quarterly installments over a five year period with security acceptable to the PBGC.  In the event the Company fails to meet the terms of the agreement, the PBGC could seek immediate payment of the amount due or attempt to force a termination of the plan. The Company is unable to offer any assurance that it will be able to discharge the Plan funding obligation within one year or meet the PBGC’s requirements for securing or paying the undischarged amount, nor can it offer any assurance that upon such inability it will be able to negotiate with the PBGC to obtain further relief.  

Net periodic pension cost for 2012, 2011 and 2010 was comprised of the following components:

	Year Ended April 30,
	2012			2011			2010
				(Thousands)
Interest cost on projected benefit obligation	$	1,681		$	1,706		$	1,918
Expected return on assets		(1,675	)		(1,565	)		(1,307	)
Plan expenses		220			227			190
Recognized net actuarial loss		1,145			1,155			1,160
Total cost recognized in pretax income		1,371			1,523			1,961
Cost recognized in pretax other comprehensive income		5,094			96			389
Net periodic pension cost	$	6,465		$	1,619		$	2,350

The estimated net loss, transition obligation and prior service cost for the Plan that will be amortized from accumulated other comprehensive income into net periodic pension cost over the next fiscal year are $1,801,000, $0 and $0, respectively.  Assumptions used in determining net periodic pension cost and the benefit obligations were:

	Year Ended April 30,
	2012	2011	2010
Discount rate used to determine net periodic pension cost	5.05%	5.44%	7.08%
Discount rate used to determine pension benefit obligation	3.97%	5.05%	5.44%
Expected long-term rate of return on assets	8.00%	8.00%	8.00%

The following table sets forth changes in the Plan’s benefit obligations and assets, and summarizes components of amounts recognized in the Company’s consolidated balance sheets (in thousands):

	April 30,
	2012			2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	34,550		$	32,568		$	28,247
Interest cost		1,681			1,706			1,918
Actuarial (gain) loss		3,992			2,861			4,833
Benefits paid		(2,324	)		(2,585	)		(2,430	)
Benefit obligation at end of year		37,899		$	34,550		$	32,568
Change in plan assets:
Fair value of plan assets at beginning of year	$	21,931		$	20,493		$	17,582
Company contributions		1,407			1,075			940
Actual return on plan assets		(568	)		3,168			4,628
Benefits paid		(2,324	)		(2,585	)		(2,430	)
Plan expenses		(224	)		(220	)		(227	)
Fair value of plan assets at end of year	$	20,222		$	21,931		$	20,493
Funded (underfunded) status:	$	(17,677	)	$	(12,619	)	$	(12,075	)
Recognition of underfunded status:
Accrued pension cost	$	(17,677	)	$	(12,619	)	$	(12,075	)

 The funded status of the Plan is equal to the net liability recognized in the consolidated balance sheet.  The following table summarizes the amounts recorded in accumulated other comprehensive loss, which have not yet been recognized as a component of net periodic pension costs (in thousands):

	2012		2011		2010
Pre-tax accumulated comprehensive loss	$	19,991	$	14,897	$	14,800

The following table summarizes the changes in accumulated other comprehensive loss related to the Plan for the years ended April 30, 2012 and 2011 (in thousands):

	Pension Benefits
	Pre-tax			Net of Tax
Accumulated comprehensive loss, May 1, 2010	$	14,800		$	9,080
Net actuarial loss		1,252			776
Amortization of net loss		(1,155	)		(716	)
Accumulated comprehensive loss,  April 30, 2011		14,897			9,140
Net actuarial loss		6,239			3,868
Amortization of net loss		(1,145	)		(710	)
Accumulated comprehensive loss,  April 30, 2012	$	19,991		$	12,298

The Company recorded other comprehensive income (loss), net of tax, of ($3,158,000) in 2012, ($60,000) in 2011 and ($234,000) in 2010 to account for the net effect of changes to the unfunded pension liability.

The average asset allocation for the retirement plan by asset category was as follows:

	April 30,
	2012	2011
Equity securities	76%	79%
Fixed income securities	20	18
Other (principally cash and cash equivalents)	4	3
Total	100%	100%

The investment mix between equity securities and fixed income securities is based upon seeking to achieve a desired return by balancing more volatile equity securities and less volatile fixed income securities.  Plan assets are invested in portfolios of diversified public-market equity securities and fixed income securities.  The Plan holds no securities of the Company.  Investment allocations are made across a range of markets, industry sectors, capitalization sizes and, in the case of fixed income securities, maturities and credit quality.  The Company has established long-term target allocations of approximately 78% for equity securities, 21% for fixed income securities and 1% for other.

The expected return on assets for the Plan is based on management’s expectation of long-term average rates of return to be achieved by the underlying investment portfolios.  In establishing this assumption, management considers historical and expected returns for the asset classes in which the Plan is invested, as well as current economic and market conditions.  The Company is currently using an 8.0% assumed rate of return for purposes of the expected return rate on assets for the development of net periodic pension costs for the Plan.

The Company funds the Plan in compliance with IRS funding requirements.  The Company’s contributions to the Plan totaled $1,407,000, $1,075,000 and $940,000 in 2012, 2011 and 2010.  The Company expects to make required contributions of approximately $1,730,000 to the Plan in fiscal year 2013, in accordance with minimum funding requirements as computed by the plan actuary, with additional contributions expected subject to discussions with the PBGC as discussed in the first paragraph of this Note 11.

The amount of future annual benefit payments is expected to be between $2,400,000 and $2,700,000 in fiscal years 2013 through 2017, and an aggregate of approximately $12,000,000 is expected to be paid in the fiscal five-year period 2018 through 2022.

The Company has adopted the disclosure requirements in ASC 715, which requires additional fair value disclosures consistent with those required by ASC 820. The following is a description of the valuation methodologies used for Plan assets measured at fair value:  Common stock – valued at the closing price reported on a listed stock exchange; Corporate bonds and debentures – valued at the closing price reported in the active market in which the bond is traded; and U.S. Treasury and government agency securities – valued at the closing price reported in the active market in which the security is traded.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following tables set forth by level within the fair value hierarchy the Plan’s assets at fair value as of April 30, 2012 and 2011 (in thousands):

2012:	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	780	$	780	$	-	$	-
Investments at fair value:
Equity securities		15,376		15,376		-		-
Corporate bonds and debentures		1,773		1,773		-		-
U.S. Treasury and government agency securities		2,293		2,293		-		-
Total assets at fair value	$	20,222	$	20,222	$	-	$	-

2011:	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	625	$	625	$	-	$	-
Investments at fair value:
Equity securities		17,311		17,311		-		-
Corporate bonds and debentures		1,815		1,815		-		-
U.S. Treasury and government agency securities		2,180		2,180		-		-
Total assets at fair value	$	21,931	$	21,931	$	-	$	-

Savings and salary deferral plans

The Company has a Savings and Salary Deferral Plan, commonly referred to as a 401(k) plan, in which all full-time employees (other than Palm Coast employees) with more than one year of service are eligible to participate and contribute to through salary deductions.  The Company may make discretionary matching contributions, subject to the approval of its Board of Directors.  Effective May 1, 2009, the Company suspended the matching contribution to the plan.

The Company also has a 401(k) plan in which all Palm Coast employees with more than six months of service are eligible to participate and contribute to through salary deductions.  Effective May 1, 2009, the Company suspended the matching contribution to the plan.

Equity compensation plan

The Company adopted the 2006 Equity Compensation Plan in September 2006 that provides for the issuance of up to 400,000 shares of common stock of the Company pursuant to options, grants or other awards made under the plan.  As of April 30, 2012, the Company had not issued any options, grants or other awards under the plan.

Stock option plan

The Company had a stock option plan that provided for the automatic issuance of an option to purchase 500 shares of common stock to each non-employee director annually at the fair market value at the date of grant.  The options were exercisable in one year and expired five years after the date of grant.  The Board of Directors terminated the plan following the annual grants that were made in September 2005, and all remaining options outstanding at April 30, 2010 expired in September 2010 with none being exercised.

A summary of activity in this non-employee director stock option plan for the years ended April 30, 2011 and 2010 is as follows:

	Year ended April 30,
	2011					2010
				Weighted					Weighted
	Number			Average		Number			Average
	of Shares			Exercise Price		of Shares			Exercise Price
Options outstanding at beginning of year		2,000		$	24.88		3,500		$	21.74
Granted		-			-		-			-
Exercised		-			-		-			-
Expired or canceled		(2,000	)		-		(1,500	)		-
Options outstanding at
end of year		-			-		2,000		$	24.88
Available for grant at
end of year		-					-
Options exercisable at   end of year		-					2,000
Range of exercise prices    for options exercisable    at end of year		-				$	24.88