Note 8 - Stock-Based Compensation Plans

9 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 8.    Stock-Based Compensation Plans

The Company has various stock-based compensation plans and recognized stock-based compensation (exclusive of deferred tax benefits) for awards granted under the Company’s stock-based compensation plans in the following line items in the Condensed Consolidated Statements of Operations:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2012		2011		2012		2011
Cost of sales	$	16	$	8	$	43	$	34
Selling, general and administrative expenses		247		132		745		436
Stock-based compensation expense before income tax benefits	$	263	$	140	$	788	$	470

The Company granted 257,500 stock options to employees during the nine months ended December 31, 2012, which vest 25% during fiscal 2014, 25% during fiscal 2015 and 50% during fiscal 2016.  The options expire 10 years from date of grant and have a weighted average exercise price equal to $3.61, have a weighted average remaining contractual term of 9.3 years and weighted average grant date fair value of $2.01 per share determined based upon a Black-Scholes option valuation model.  In addition to the above employee stock option grants, the Company granted 67,500 stock options to members of the Company’s board of directors during the nine months ended December 31, 2012, which became fully vested upon issuance.  These options have a weighted average exercise price equal to $3.46, have a weighted average remaining contractual term of 9.6 years and a weighted average grant date fair value of $1.92 per share based upon a Black-Scholes option valuation model.

The fair value of stock options on the date of grant, and the weighted average assumptions used to estimate the fair value of the stock options granted during the respective periods using the Black-Scholes option valuation model were as follows:

	Three Months Ended December 31,					Nine Months Ended December 31,
	2012			2011		2012			2011
Dividend yield		n/a			n/a		n/a			n/a
Weighted-average expected volatility		60.2	%		n/a		63.4	%		n/a
Risk-free interest rate		1.6	%		n/a		1.6	%		n/a
Expected life of options (in years)		5.3			n/a		5.3			n/a
Fair value of options granted	$	1.40			n/a	$	1.99			n/a

No stock options were granted during the three or nine months ended December 31, 2011.

The following is a summary of the changes in outstanding options for all of the Company’s plans during the nine months ended December 31, 2012:

	Shares			Weighted Average Exercise Price		Remaining Weighted Average Contract Life (Years)		Aggregate Intrinsic Value
Outstanding at April 1, 2012		1,348,437		$	12.44		5.2	$	14
Granted		325,000		$	3.58
Exercised		-		$	-
Expired/forfeited		(168,187	)	$	9.63
Outstanding at December 31, 2012		1,505,250		$	10.86		5.8	$	1
Options exercisable at December 31, 2012		958,687		$	12.79		4.4	$	1
Expected to vest as of December 31, 2012		525,953		$	7.53		8.3	$	-

The total intrinsic value of options exercised during the nine months ended December 31, 2012 and 2011 was $0 and $47, respectively. As of December 31, 2012, there was approximately $2,234 of unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company’s plans and that cost is expected to be recognized over a period of 2.9 years.

The following is a summary of the changes in non-vested stock options for the nine months ended December 31, 2012:

	Shares			Average Grant Date Fair Value
Outstanding at April 1, 2012		413,533		$	5.89
Granted		325,000		$	1.99
Vested		(157,720	)	$	4.22
Expired/forfeited		(34,250	)	$	5.36
Outstanding at December 31, 2012		546,563		$	4.09

Grants of restricted stock are common stock awards granted to recipients with specified vesting provisions. The restricted stock issued vests based upon the recipients continued service over time (five-year vesting period). The Company estimates the fair value of restricted stock based on the Company’s closing stock price on the date of grant.

The following is a summary of restricted stock activity in our 1994 Stock Incentive Plan for the nine months ended December 31, 2012:

	Shares			Weighted Average Grant Price
Outstanding at April 1, 2012		7,500		$	12.58
Granted		-		$	-
Vested		(1,875	)	$	12.58
Expired/forfeited		-		$	-
Outstanding at December 31, 2012		5,625		$	12.58
Expected to vest as of December 31, 2012		4,891		$	12.58