STOCK-BASED COMPENSATION

3 Months Ended

Sep. 30, 2011

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

NOTE 7 – STOCK-BASED COMPENSATION

Stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity grant).  Total stock-based compensation for the three months ended September 30, 2011 and 2010 was $119 thousand ($20 thousand included in cost of revenues and $99 thousand included in general and administrative expense in the Company's condensed consolidated statement of operations) and $215 thousand ($19 thousand included in cost of revenues and $196 thousand included in general and administrative expense in the Company's condensed consolidated statement of operations), respectively. Reductions in taxes payable resulting from tax deductions that exceed the recognized tax benefit associated with compensation expense (excess tax benefits) are classified as financing cash flows and as an increase to additional paid in capital. The Company's excess tax benefits included in its cash flows from financing activities for the three months ended September 30, 2011 and 2010 was $12 thousand and $7 thousand, respectively.

In conjunction with the retirement and separation agreement of Dr. Burton Kunik, effective September 30, 2010, the Company recognized an additional $73 thousand in stock-based compensation expense which is included in the Special Charge on the accompanying statement of operations for the three months ended September 30, 2010.