Note 11 - Stockholders' Equity and Stock Plans

12 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

11.  STOCKHOLDERS’ EQUITY AND STOCK PLANS

The Company accounts for its three stock-based compensation plans in accordance with the provisions of ASC 718, Stock Compensation.  Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the related award, and is recognized as an expense over the service period applicable to the grantee.  The service period is the period of time that the grantee must provide services to the Company before the stock-based compensation is fully vested.

STOCK OPTIONS

The Company currently grants stock options under the 1989 Non-Qualified Stock Option Plan (the “Non-Qualified Option Plan”), the 1994 Stock Incentive Plan (the “Incentive Plan”) and the 1996 Non-Employee Director Stock Option Plan (the “Director Plan”). The Non-Qualified Option Plan was approved by the Company’s Board of Directors and stockholders and provides for the grant of stock options with an exercise price equal to the fair market price or at a value that is not less than 85% of the fair market value on the date of grant and are exercisable in three installments on the second, third and fourth anniversary of the date of grant. The Incentive Plan was adopted by the Company’s Board of Directors and stockholders and provides for the granting of incentive stock options, shares of restricted stock and non-qualified stock options to all officers and key employees of the Company and its affiliates at an exercise price that may not be less than the fair market value of a share of common stock at the time of grant. The Director Plan was approved by the stockholders in August 1996 and as amended, grants each non-employee director of the Company an option to purchase 7,500 shares of the Company’s common stock after each year of service. All options granted under the above plans expire from five to ten years from the date of grant unless the employment is terminated, in which event, subject to certain exceptions, the options terminate two months subsequent to date of termination.

RESTRICTED STOCK AWARDS

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 the changes in restricted stock granted under the Incentive Plan for the fiscal years presented:

	Fiscal Year Ended March 31,
	2014					2013					2012
	Shares			Weighted Average Price		Shares			Weighted Average Price		Shares			Weighted Average Price
Beginning Balance		5,625		$	12.58		7,500		$	12.58		7,967		$	12.74
Granted		-			-		-			-		-			-
Vested		(1,875	)	$	12.58		(1,875	)	$	12.58		(467	)	$	15.31
Cancelled		-			-		-			-		-			-
Ending Balance		3,750		$	12.58		5,625		$	12.58		7,500		$	12.58

VALUATION ASSUMPTIONS FOR STOCK OPTION GRANTS

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes options pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. The expected term of the options is based on evaluations of historical and expected future employee exercise behavior.  The risk-free rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the life of the grant.  The expected volatility is based on the historical volatility of the Company’s stock. The following table summarizes the assumptions used to determine the fair value of options granted during the following periods:

	Fiscal Year Ended March, 31
	2014			2013			2012
Expected dividend yield		0.0	%		0.0	%		0.0	%
Expected volatility		63.02	%		63.34	%		64.44	%
Risk-free interest rate		1.04	%		1.64	%		2.36	%
Expected life (years)		5.37			5.33			5.33
Weighted average fair value of options granted	$	4.37		$	1.99		$	2.99

STOCK-BASED COMPENSATION EXPENSE

The Company recognized stock-based compensation expense (before deferred income tax benefits) for awards granted under the Company’s stock-based compensation plans in the following line items in the consolidated statements of operations for fiscal 2014, 2013, and 2012:

	2014		2013		2012
Cost of sales	$	4	$	16	$	11
Selling, general and administrative expenses		848		974		566
Stock-based compensation expense before income tax benefits	$	852	$	990	$	577

Information regarding the Company's stock option activity for fiscal 2012, 2013 and 2014 are summarized below:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Options outstanding at March 31, 2011		1,328,937		$	12.62
Granted		30,000			5.24
Exercised		(7,500	)		2.67
Forfeited		(3,000	)		8.87
Options outstanding at March 31, 2012		1,348,437		$	12.44
Granted		327,500			3.58
Exercised		-			-
Forfeited		(196,937	)		10.00
Options outstanding at March 31, 2013		1,479,000		$	10.80
Granted		511,000			8.00
Exercised		-			-
Forfeited		(297,250	)		9.85
Options outstanding at March 31, 2014		1,692,750		$	10.12		6.2	$	982
Exercisable at March 31, 2014		945,500		$	12.18		4.3	$	346
Vested and expected to vest at March 31, 2014		1,606,829		$	10.27		6.0	$	928

The total fair value of shares vested during the fiscal year ended March 31, 2014 was $1,078.  As of March 31, 2014, there was $3,083 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company’s plans, which is expected to be recognized over a weighted average period of 1.94 years.

Summarized information about stock options outstanding as of March 31, 2014 and 2013 is as follows:

			2014
			Outstanding						Exercisable
					Weighted Average		Weighted Average				Weighted Average
Range of Exercise Prices per Common Share			Options		Remaining Contractual Life (Years)		Exercise Price Per Common Share		Options		Exercise Price Per Common Share
$2.62	-	$10.97		1,022,500		8.0	$	7.38		357,750	$	8.12
$ 10.98	-	$ 19.36		573,550		3.4	$	13.06		491,050	$	13.26
$ 19.37	-	$ 23.27		96,700		3.1	$	21.72		96,700	$	21.72
$   2.62	-	$ 23.27		1,692,750		6.2	$	10.12		945,500	$	12.18

			2013
			Outstanding						Exercisable
					Weighted Average		Weighted Average				Weighted Average
Range of Exercise Prices per Common Share			Options		Remaining Contractual Life (Years)		Exercise Price Per Common Share		Options		Exercise Price Per Common Share
$2.62	-	$10.97		724,250		6.9	$	7.04		328,937	$	8.57
$ 10.98	-	$ 19.36		640,550		4.5	$	13.11		495,800	$	13.46
$ 19.37	-	$ 23.27		114,200		4.2	$	21.72		114,200	$	21.72
$   2.62	-	$ 23.27		1,479,000		5.6	$	10.80		938,937	$	12.75

The aggregate pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of fiscal 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2014 was $982.  This amount changes based on the fair market value of the Company’s stock.  The total intrinsic value of options exercised for fiscal 2014, 2013, and 2012 to amounted to $0, $0, and $47, respectively.

The following is a summary of changes in non-vested stock options for the fiscal year ended March 31, 2014:

	Shares			Weighted Average Grant Date Fair Value
Non-vested shares at April 1, 2013		540,063		$	4.09
Granted		511,000			4.37
Forfeited		(90,000	)		3.11
Vested		(213,813	)		5.04
Non-vested shares at March 31, 2014		747,250		$	4.13

The options and restricted stock available for future issuance as of March 31, 2014 are shown below:

	1989 Non- Qualified Option Plan			1994 Stock Incentive Plan			1996 Non- Employee Stock Option Plan			Total
Authorized by Directors and Stockholders		3,975,000			3,525,000			750,000			8,250,000
Options previously exercised		(3,214,687	)		(2,025,187	)		(100,000	)		(5,339,874	)
Restricted stock previously granted		-			(93,750	)		-			(93,750	)
Options outstanding		(436,000	)		(1,051,750	)		(205,000	)		(1,692,750	)
Remaining for future issuance		324,313			354,313			445,000			1,123,626