Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | 28-May-14 | Sep. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'AMERICAN SCIENCE & ENGINEERING, INC. | ' | ' |
Entity Central Index Key | '0000005768 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--03-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $465,806,000 |
Entity Common Stock, Shares Outstanding | ' | 7,886,015 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $62,143 | $40,418 |
Restricted cash | 14,603 | 12,618 |
Short-term investments, at fair value | 88,649 | 108,546 |
Accounts receivable, net of allowances of $323 at March 31, 2014 and $351 at March 31, 2013 | 34,317 | 28,477 |
Unbilled costs and fees | 2,491 | 4,875 |
Inventories | 32,935 | 48,051 |
Prepaid expenses and other current assets | 5,459 | 8,829 |
Deferred income taxes | 4,775 | 3,155 |
Total current assets | 245,372 | 254,969 |
Building, equipment and leasehold improvements, net | 12,969 | 16,451 |
Restricted cash | 313 | 899 |
Deferred income taxes | 6,318 | 8,325 |
Other assets, net | 539 | 805 |
Total assets | 265,511 | 281,449 |
Current liabilities: | ' | ' |
Accounts payable | 10,618 | 8,371 |
Accrued salaries and benefits | 10,805 | 9,974 |
Accrued warranty costs | 404 | 397 |
Accrued income taxes | 2,338 | 2,094 |
Deferred revenue | 10,934 | 15,770 |
Customer deposits | 16,589 | 16,199 |
Current portion of lease financing liability | 1,511 | 1,489 |
Other current liabilities | 9,292 | 14,194 |
Total current liabilities | 62,491 | 68,488 |
Lease financing liability, net of current portion | 1,404 | 2,914 |
Deferred revenue | 3,941 | 5,535 |
Other long term liabilities | 280 | 267 |
Total liabilities | 68,116 | 77,204 |
Commitments and contingencies (Notes 2 and 9) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, no par value Authorized-100,000 shares Issued-None | ' | ' |
Common stock, $0.66 2/3 par value Authorized-20,000,000 shares Issued and outstanding-7,884,015 shares at March 31, 2014 and 7,980,202 shares at March 31, 2013 | 5,255 | 5,320 |
Capital in excess of par value | 35,236 | 41,458 |
Accumulated other comprehensive income (loss), net | 13 | -4 |
Retained earnings | 156,891 | 157,471 |
Total stockholders' equity | 197,395 | 204,245 |
Total liabilities and stockholders' equity | $265,511 | $281,449 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowances (in dollars) | $323 | $351 |
Preferred stock, no par value (in dollars per share) | ' | ' |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.67 | $0.67 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 7,884,015 | 7,980,202 |
Common stock, shares outstanding | 7,884,015 | 7,980,202 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 |
Net sales and contract revenues: | ' | ' | ' |
Net product sales and contract revenues | $121,251 | $98,489 | $114,124 |
Net service revenues | 68,998 | 88,191 | 89,428 |
Total net sales and contract revenues | 190,249 | 186,680 | 203,552 |
Cost of sales and contracts: | ' | ' | ' |
Cost of product sales and contracts | 76,952 | 68,214 | 65,500 |
Cost of service revenues | 36,647 | 39,047 | 44,935 |
Total cost of sales and contracts | 113,599 | 107,261 | 110,435 |
Gross profit | 76,650 | 79,419 | 93,117 |
Operating expenses: | ' | ' | ' |
Selling, general and administrative expenses | 31,805 | 29,533 | 35,624 |
Research and development expenses | 22,089 | 23,618 | 25,544 |
Total operating expenses | 53,894 | 53,151 | 61,168 |
Operating income | 22,756 | 26,268 | 31,949 |
Other income (expense): | ' | ' | ' |
Interest and investment income, net | 373 | 657 | 655 |
Interest expense | -53 | -65 | -91 |
Other, net | -343 | -414 | -55 |
Total other income (expense) | -23 | 178 | 509 |
Income before provision for income taxes | 22,733 | 26,446 | 32,458 |
Provision for income taxes | 7,616 | 8,992 | 11,036 |
Net income | 15,117 | 17,454 | 21,422 |
Other comprehensive income (loss): | ' | ' | ' |
Unrealized gain (loss) on available for sale securities (net of tax) | 17 | -20 | -5 |
Comprehensive income | $15,134 | $17,434 | $21,417 |
Income per share - Basic (in dollars per share) | $1.92 | $2.08 | $2.37 |
Income per share - Diluted (in dollars per share) | $1.91 | $2.07 | $2.34 |
Weighted average shares - Basic (in shares) | 7,846 | 8,394 | 9,046 |
Weighted average shares - Diluted (in shares) | 7,881 | 8,448 | 9,148 |
Dividends declared per share (in dollars per share) | $2 | $2 | $1.60 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comp. Income (Loss) |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Mar. 31, 2011 | $266,080 | $6,113 | $110,087 | $149,859 | $21 |
Balance (in shares) at Mar. 31, 2011 | ' | 9,169,965 | ' | ' | ' |
Increase (decrease) in stockholders' equity | ' | ' | ' | ' | ' |
Net income | 21,422 | ' | ' | 21,422 | ' |
Repurchase of common stock | -20,051 | -213 | -19,838 | ' | ' |
Repurchase of common stock (in shares) | ' | -320,207 | ' | ' | ' |
Exercise of stock options | 4,287 | 50 | 4,237 | ' | ' |
Exercise of stock options (in shares) | ' | 75,714 | ' | ' | ' |
Vesting of restricted stock units | ' | 1 | -1 | ' | ' |
Vesting of restricted stock units (in shares) | ' | 2,341 | ' | ' | ' |
Issuances of restricted stock, net of forfeitures | ' | 10 | -10 | ' | ' |
Issuances of restricted stock, net of forfeitures (in shares) | ' | 14,980 | ' | ' | ' |
Tax benefit accrued on stock option exercises / (reversal) associated with stock options | -303 | ' | -303 | ' | ' |
Compensation expense on stock options | 597 | ' | 597 | ' | ' |
Compensation expense on restricted stock and restricted stock units | 1,202 | ' | 1,202 | ' | ' |
Dividends declared | -14,423 | ' | ' | -14,423 | ' |
Net change in unrealized gains (losses) on investment securities, available-for-sale, net of tax | -5 | ' | ' | ' | -5 |
Balance at Mar. 31, 2012 | 258,806 | 5,961 | 95,971 | 156,858 | 16 |
Balance (in shares) at Mar. 31, 2012 | ' | 8,942,793 | ' | ' | ' |
Increase (decrease) in stockholders' equity | ' | ' | ' | ' | ' |
Net income | 17,454 | ' | ' | 17,454 | ' |
Repurchase of common stock | -57,633 | -675 | -56,958 | ' | ' |
Repurchase of common stock (in shares) | ' | -1,013,655 | ' | ' | ' |
Exercise of stock options | 2,160 | 34 | 2,126 | ' | ' |
Exercise of stock options (in shares) | ' | 50,505 | ' | ' | ' |
Vesting of restricted stock units | ' | 1 | -1 | ' | ' |
Vesting of restricted stock units (in shares) | ' | 1,743 | ' | ' | ' |
Issuances of restricted stock, net of forfeitures | ' | -1 | 1 | ' | ' |
Issuances of restricted stock, net of forfeitures (in shares) | ' | -1,184 | ' | ' | ' |
Tax benefit accrued on stock option exercises / (reversal) associated with stock options | 135 | ' | 135 | ' | ' |
Compensation expense on stock options | -106 | ' | -106 | ' | ' |
Compensation expense on restricted stock and restricted stock units | 290 | ' | 290 | ' | ' |
Dividends declared | -16,841 | ' | ' | -16,841 | ' |
Net change in unrealized gains (losses) on investment securities, available-for-sale, net of tax | -20 | ' | ' | ' | -20 |
Balance at Mar. 31, 2013 | 204,245 | 5,320 | 41,458 | 157,471 | -4 |
Balance (in shares) at Mar. 31, 2013 | 7,980,202 | 7,980,202 | ' | ' | ' |
Increase (decrease) in stockholders' equity | ' | ' | ' | ' | ' |
Net income | 15,117 | ' | ' | 15,117 | ' |
Repurchase of common stock | -12,306 | -134 | -12,172 | ' | ' |
Repurchase of common stock (in shares) | ' | -201,192 | ' | ' | ' |
Exercise of stock options | 3,525 | 56 | 3,469 | ' | ' |
Exercise of stock options (in shares) | ' | 84,853 | ' | ' | ' |
Vesting of restricted stock units | ' | 5 | -5 | ' | ' |
Vesting of restricted stock units (in shares) | ' | 7,307 | ' | ' | ' |
Issuances of restricted stock, net of forfeitures | ' | 8 | -8 | ' | ' |
Issuances of restricted stock, net of forfeitures (in shares) | ' | 12,845 | ' | ' | ' |
Tax benefit accrued on stock option exercises / (reversal) associated with stock options | 9 | ' | 9 | ' | ' |
Stock-based compensation | 2,501 | ' | 2,485 | 16 | ' |
Dividends declared | -15,713 | ' | ' | -15,713 | ' |
Net change in unrealized gains (losses) on investment securities, available-for-sale, net of tax | 17 | ' | ' | ' | 17 |
Balance at Mar. 31, 2014 | $197,395 | $5,255 | $35,236 | $156,891 | $13 |
Balance (in shares) at Mar. 31, 2014 | 7,884,015 | 7,884,015 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $15,117 | $17,454 | $21,422 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 5,303 | 5,114 | 5,768 |
Provisions for contracts, inventory, and accounts receivable reserves | 1,328 | 5,405 | 2,998 |
Amortization of bond premium | 1,551 | 2,700 | 2,689 |
Stock compensation expense | 2,501 | 184 | 1,799 |
Other | ' | -59 | -47 |
Deferred income taxes | 378 | -2,966 | 1,750 |
Change in assets and liabilities: | ' | ' | ' |
Accounts receivable | -5,813 | -3,382 | 11,819 |
Unbilled costs and fees | 2,384 | -1,669 | 13,876 |
Inventories | 13,761 | -4,933 | -4,333 |
Prepaid expenses and other assets | 3,636 | 813 | -3,609 |
Accrued income taxes | 244 | 2,094 | -1,936 |
Accounts payable | 2,247 | 910 | -1,917 |
Deferred revenue | -6,430 | 1,661 | -568 |
Customer deposits | 390 | 1,168 | 5,838 |
Accrued expenses and other current liabilities | -4,051 | 6,663 | -4,530 |
Total adjustments | 17,429 | 13,703 | 29,597 |
Net cash provided by operating activities | 32,546 | 31,157 | 51,019 |
Cash flows from investing activities: | ' | ' | ' |
Proceeds from sales and maturities of short-term investments | 88,040 | 200,089 | 220,293 |
Purchases of short-term instruments | -69,668 | -140,532 | -283,685 |
Proceeds from sale of fixed assets | ' | 110 | 51 |
Purchases of property and equipment | -1,821 | -3,618 | -5,211 |
Net cash provided by (used for) investing activities | 16,551 | 56,049 | -68,552 |
Cash flows from financing activities: | ' | ' | ' |
(Increase) decrease in restricted cash | -1,399 | 2,373 | 13,570 |
Repurchase of shares of common stock | -12,306 | -57,633 | -20,051 |
Payment of common stock dividends | -15,713 | -16,841 | -14,423 |
Repayment of leasehold financing | -1,488 | -1,351 | -1,322 |
Proceeds from exercise of stock options | 3,525 | 2,160 | 4,287 |
Reduction of (increase in) income taxes paid due to the tax benefit (expense) from employee stock option expense | 9 | 135 | -303 |
Net cash used for financing activities | -27,372 | -71,157 | -18,242 |
Net increase (decrease) in cash and cash equivalents | 21,725 | 16,049 | -35,775 |
Cash and cash equivalents at beginning of year | 40,418 | 24,369 | 60,144 |
Cash and cash equivalents at end of year | 62,143 | 40,418 | 24,369 |
Supplemental disclosures of cash flow information: | ' | ' | ' |
Interest paid | 53 | 73 | 91 |
Income taxes paid | $8,723 | $7,367 | $13,744 |
NATURE_OF_OPERATIONS_AND_SUMMA
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Nature of Operations and Basis of Presentation | ||||||||||||||
American Science and Engineering, Inc., a Massachusetts corporation formed in 1958, develops, manufactures, markets, and sells X-ray inspection and other detection products for homeland security, force protection and other critical defense applications. | ||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. | ||||||||||||||
Use of Estimates | ||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all investments with original maturities of 90 days or less to be cash equivalents. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances, and management believes its risk of loss to be minimal. | ||||||||||||||
Restricted Cash | ||||||||||||||
Restricted cash consists of collateral for performance bonds issued related to customer contracts and certain facility lease agreements. | ||||||||||||||
Short-term Investments and Cash Equivalents | ||||||||||||||
Short-term investments and cash equivalents consist of investments in corporate debentures/bonds, government agency bonds, treasury bills, money market funds, commercial paper and certificates of deposit. These investments are classified as available-for-sale and are recorded at their fair values using the specific identification method. The unrealized holding gains or losses on these securities are included as a component of comprehensive income in the Consolidated Statements of Operations and Comprehensive Income. | ||||||||||||||
Accounts Receivable and Unbilled Costs and Fees | ||||||||||||||
Accounts receivable are recorded at the invoiced amount. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. It is the Company’s policy to write off uncollectible receivables when management determines the receivable has become uncollectible. Activity in the allowance for doubtful accounts is as follows: | ||||||||||||||
(In thousands) | Balance at | Charged to | Deductions | Balance at | ||||||||||
Beginning | Costs and | or Write- | End of | |||||||||||
of Year | Expenses | offs | Year | |||||||||||
Charged to | ||||||||||||||
Reserves | ||||||||||||||
Fiscal 2014 | $ | 351 | $ | (27 | ) | $ | 1 | $ | 323 | |||||
Fiscal 2013 | $ | 255 | $ | 344 | $ | 248 | $ | 351 | ||||||
Fiscal 2012 | $ | 334 | $ | (79 | ) | $ | — | $ | 255 | |||||
Included in accounts receivable and unbilled costs and fees at March 31, 2014 and 2013 are $15,961,000 and $12,973,000, respectively, attributable to both prime and subcontracts with federal and state governments. The Company establishes a reserve against unbilled costs and fees based on known troubled accounts or contracts, historical experience, and other currently available evidence. There was no activity in the reserve for unbilled costs and fees during fiscal 2014, 2013 and 2012. | ||||||||||||||
Inventories | ||||||||||||||
Inventories consist of material, labor and manufacturing overhead and are recorded at the lower of cost, using the weighted average cost method, or net realizable value. Excessive manufacturing overhead costs attributable to idle facility expenses, freight, handling costs and wasted material (spoilage) attributable to abnormally low production volumes (levels that materially differ from budgeted production plans due primarily to changes in customer demand) are excluded from inventory and recorded as an expense in the period incurred. | ||||||||||||||
The components of inventories at March 31, 2014 and 2013, net of inventory reserves, were as follows: | ||||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Raw materials, completed subassemblies and spare parts | $ | 18,482 | $ | 21,450 | ||||||||||
Work-in-process | 13,199 | 21,129 | ||||||||||||
Finished goods | 1,254 | 5,472 | ||||||||||||
Total | $ | 32,935 | $ | 48,051 | ||||||||||
The Company periodically reviews quantities of inventory on hand and compares these amounts to expected usage of each particular product or product line. The Company records, as a charge to cost of sales, any amounts required to reduce the carrying value to net realizable value. | ||||||||||||||
Activity in the reserve for excess or obsolete inventory is as follows: | ||||||||||||||
(In thousands) | Balance at | Charged to | Deductions | Balance at | ||||||||||
Beginning | Costs and | / Write- | End of | |||||||||||
of Year | Expenses | offs | Year | |||||||||||
Charged to | ||||||||||||||
Reserves | ||||||||||||||
Fiscal 2014 | $ | 11,052 | $ | 1,355 | $ | 1,542 | $ | 10,865 | ||||||
Fiscal 2013 | $ | 6,210 | $ | 5,061 | $ | 219 | $ | 11,052 | ||||||
Fiscal 2012 | $ | 4,882 | $ | 3,076 | $ | 1,748 | $ | 6,210 | ||||||
Building, Equipment and Leasehold Improvements | ||||||||||||||
The Company provides for depreciation and amortization of its fixed assets on a straight-line basis over estimated useful lives of 1-25 years or remaining lease terms. Expenditures for normal maintenance and repairs are charged to expense as incurred. Significant additions, renewals or betterments that extend the useful lives of the assets are capitalized at cost. The cost and accumulated depreciation applicable to equipment and leasehold improvements sold, or otherwise disposed of, are removed from the accounts, and any resulting gain or loss is included in the Consolidated Statements of Operations and Comprehensive Income. | ||||||||||||||
Building, equipment and leasehold improvements consisted of the following at March 31, 2014 and 2013. | ||||||||||||||
(In thousands) | Estimated Useful Lives | 2014 | 2013 | |||||||||||
Building and leasehold improvements | Lesser of 25 years or remaining lease term | $ | 21,265 | $ | 21,245 | |||||||||
Equipment and tooling | 5-10 years | 5,517 | 5,284 | |||||||||||
Computer equipment and software | 3-5 years | 23,922 | 23,135 | |||||||||||
Furniture and fixtures | 5-7 years | 2,560 | 2,553 | |||||||||||
Demo and test equipment | 2-5 years | 8,331 | 7,579 | |||||||||||
Leased equipment | 1-2 years or life of lease | 63 | 63 | |||||||||||
Motor vehicles | 3-5 years | 72 | 72 | |||||||||||
Total | 61,730 | 59,931 | ||||||||||||
Less accumulated depreciation and amortization | (48,761 | ) | (43,480 | ) | ||||||||||
Building, equipment and leasehold improvements, net | $ | 12,969 | $ | 16,451 | ||||||||||
Revenue Recognition | ||||||||||||||
The Company recognizes certain Cargo Inspection , Mobile Cargo Inspection, Parcel and Personnel Screening Systems, and after-market part sales, in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 605-10, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. | ||||||||||||||
Infrequently, the Company receives requests from customers to hold product being purchased for a valid business purpose. The Company recognizes revenue for such arrangements provided the transaction meets, at a minimum, the following criteria: a valid business purpose for the arrangement exists; risk of ownership of the purchased product has transferred to the buyer; there is a fixed delivery date that is reasonable and consistent with the buyer’s business purpose; the product is ready for shipment; the Company has no continuing performance obligation in regards to the product and the products have been segregated from its inventories and cannot be used to fill other orders received. There was no product being held under these arrangements at March 31, 2014 or March 31, 2013. | ||||||||||||||
Certain of the Company’s contracts are multiple-element arrangements, which include standard products, custom-built systems or contract engineering projects, services (such as training), and service and maintenance contracts. In accordance with FASB ASC 605-25, Revenue Recognition — Multiple Element Arrangements, revenue arrangements that include multiple elements are analyzed to determine whether the deliverables can be divided into separate units of accounting or treated as a single unit of accounting. The Company allocates arrangement consideration at the inception of the arrangement to all deliverables using the relative selling price method. The selling price used for each deliverable is based on (a) vendor-specific objective evidence if available; (b) third-party evidence if vendor-specific objective evidence is not available; or (c) estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. Discounts, if applicable, are allocated proportionally on the basis of the relative selling price of each deliverable. Generally, there is no customer right of return provision in the Company’s sales agreements. Revenues are allocated to a delivered product or service when the following criteria are met: (1) the delivered item has value to the customer on a standalone basis; and (2) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the Company's control. | ||||||||||||||
Revenues for certain long-term, custom-built systems or contract engineering projects are recognized on a percentage of completion basis. The lengths of these contracts typically range from one to four years from order to delivery and acceptance. Percentages-of-completion are determined by relating the actual costs of work performed to date for each contract to its estimated final costs. Revisions in costs and profit estimates are reflected in the period in which the facts causing the revision become known. | ||||||||||||||
For all fixed price and long-term contracts, if a loss is anticipated on the contract, a provision is made in the period in which such losses are determined. | ||||||||||||||
The Company recognizes sales for its systems that are produced in a standard manufacturing operation, have minimal customer site installation requirements and have shorter order to delivery cycles, when title passes and when other revenue recognition criteria are met. Management believes the customer’s post-delivery acceptance provisions and installation requirements on certain of these systems are perfunctory and inconsequential and the costs of installation at the customer’s site are accrued at the time of revenue recognition. The Company has demonstrated a history of customer acceptance subsequent to shipment and installation of these systems. For systems which entail more significant installation efforts and site work and/or have non-standard customer acceptance provisions, revenue recognition is deferred until installation is complete and customer acceptance has occurred. | ||||||||||||||
Service revenues are recognized on time and materials engagements as the services are provided. Service contract revenues are recognized as service is performed over the length of the contract which reasonably approximates the period service revenues are earned. | ||||||||||||||
The Company records billed shipping and handling fees and billed out-of-pocket expenses as revenue and the associated costs as cost of goods sold in the accompanying consolidated statements of operations. | ||||||||||||||
Training and service contracts deliverables are accounted for separately from the delivered product elements as the Company’s undelivered products have value to its customers on a stand-alone basis. Accordingly, this service revenue is deferred and recognized as such services are performed. | ||||||||||||||
Certain contracts require payments from the customer upon execution of the agreement that are included in customer deposits. Individual customer deposits are reduced by the amount of revenue recognized on the contract until a zero balance is reached. Revenue recognized in excess of billings under the contracts is included in unbilled costs and fees in the accompanying consolidated balance sheets. Of the amounts in unbilled costs and fees at March 31, 2014, $2,484,000 (99%) is expected to be billed and collected during fiscal 2015. | ||||||||||||||
Under the terms of certain cost reimbursement contracts, the Company is not permitted to bill customers a specified portion of the contract value until completion. Such retainages (approximately $36,000 and $80,000 at March 31, 2014 and March 31, 2013, respectively) result from both commercial contract retentions and government contract withholdings generally for up to 15% of fees, as well as the difference between the actual and provisional indirect cost billing rates. Retainages are included in the accompanying consolidated balance sheets as components of unbilled costs and fees. The accuracy and appropriateness of the Company’s direct and indirect costs and expenses under these cost reimbursement contracts and its accounts receivable recorded pursuant to such contracts, are subject to regulation and audit, including by the U.S. Defense Contract Audit Agency (“DCAA”) or by other appropriate agencies of the U.S. government. Such agencies have the right to challenge the Company’s cost estimates or allocations with respect to any government contract. Additionally, a portion of the payments to the Company under government contracts are provisional payments that are subject to potential adjustment upon audit by such agencies. Historically, such audits have not resulted in any significant disallowed costs. Although the Company can give no assurances, in the opinion of management, any adjustments likely to result from inquiries or audits of its contracts will not have a material adverse impact on the Company’s financial condition or results of operations. | ||||||||||||||
Warranty Costs | ||||||||||||||
The Company generally provides on certain of its products a one year parts and labor warranty with the purchase of domestic equipment, and a one year parts only or parts and labor warranty on international equipment. The anticipated cost for this one year warranty is accrued for at the time of the sale based upon historical experience and management’s estimates of future liabilities and is recorded as accrued warranty costs (see Note 5). | ||||||||||||||
Deferred Revenue | ||||||||||||||
The Company offers to its customers extended warranty and service contracts. These contracts typically have a coverage period of one to five years, and include advance payments that are recorded as deferred revenue. Revenue is recognized as service is performed over the life of the contract, which represents the period over which these revenues are earned. Costs associated with these extended warranty and service contracts are expensed to cost of goods sold as incurred. | ||||||||||||||
Impairment of Long-Lived Assets | ||||||||||||||
Long-lived assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. | ||||||||||||||
Impairment is assessed by comparing the estimated undiscounted cash flows over the asset’s remaining life to the carrying amount of the asset. If the estimated cash flows are insufficient to recover the asset, an impairment loss is recognized based on the difference between the carrying value of the asset and the fair value of the asset less any costs of disposal. No impairment costs were recorded in the fiscal years ended March 31, 2014, 2013 and 2012. | ||||||||||||||
Accrued Salaries and Benefits | ||||||||||||||
Accrued salaries and benefits at March 31, 2014 and March 31, 2013 include the following: | ||||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Accrued payroll and payroll related taxes | $ | 2,154 | $ | 1,995 | ||||||||||
Accrued incentive compensation | 6,360 | 4,633 | ||||||||||||
Accrued vacation | 1,885 | 1,739 | ||||||||||||
Accrued severance | 406 | 1,607 | ||||||||||||
Total accrued salaries and benefits | $ | 10,805 | $ | 9,974 | ||||||||||
Customer Deposits | ||||||||||||||
For most international orders, the Company generally includes, as part of its terms and conditions, an advance deposit with order acceptance. For long-term international contracts, the Company will generally include milestone payments tied to a specific event and/or passage of time. These deposit amounts are recorded as a liability under customer deposits until reduced by revenue recognized against the specific contract. | ||||||||||||||
Other Current Liabilities | ||||||||||||||
Other current liabilities at March 31, 2014 and March 31, 2013 include the following: | ||||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Accrued accounts payable and other expenses | $ | 2,196 | $ | 4,213 | ||||||||||
Accrued contract related costs | 4,904 | 7,596 | ||||||||||||
Accrued professional fees | 361 | 375 | ||||||||||||
Accrued sales commissions | 1,831 | 2,010 | ||||||||||||
Total other current liabilities | $ | 9,292 | $ | 14,194 | ||||||||||
Research and Development | ||||||||||||||
Internally funded research and development costs including direct labor, material, subcontractor expenses and related overheads are expensed as incurred. Internally funded research and development costs were $22,089,000, $23,618,000 and $25,544,000, in fiscal 2014, 2013, and 2012, respectively. In addition, the Company recognized revenues of $698,000, $2,124,000 and $4,409,000, in fiscal 2014, 2013, and 2012, respectively related to government-sponsored research and development earned primarily on a cost reimbursement and fee basis as discussed above. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, unbilled costs and fees, accounts payable and letters of credit. The recorded amounts of these instruments approximate their fair value (see Note 8). | ||||||||||||||
Income per Common and Potential Common Shares | ||||||||||||||
Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during the year. Share-based payment awards entitling holders to receive non-forfeitable dividends before vesting are considered participating securities and thus are included in the calculation of basic earnings per share under the two-class method. Diluted earnings per share include the dilutive impact of options and restricted stock units using the average share price of the Company’s common stock for the period. For the years ended March 31, 2014, 2013, and 2012, respectively, common stock equivalents of approximately 176,000, 182,000, and 64,000 are excluded from diluted earnings per share, as their effect is anti-dilutive. | ||||||||||||||
(In thousands except per share amounts) | March 31, | March 31, | March 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Earnings per Share — Basic: | ||||||||||||||
Net income | $ | 15,117 | $ | 17,454 | $ | 21,422 | ||||||||
Less: Distributed and undistributed earnings to unvested restricted stock units | (44 | ) | — | — | ||||||||||
Distributed and undistributed earnings to common shareholders — Basic | $ | 15,073 | $ | 17,454 | $ | 21,422 | ||||||||
Weighted average number of common shares outstanding — basic | 7,846 | 8,394 | 9,046 | |||||||||||
Income per share — basic | $ | 1.92 | $ | 2.08 | $ | 2.37 | ||||||||
Earnings per Share — Diluted: | ||||||||||||||
Weighted average number of common shares outstanding — basic | 7,846 | 8,394 | 9,046 | |||||||||||
Assumed exercise of stock options, warrants, restricted stock and restricted stock units | 35 | 54 | 102 | |||||||||||
Weighted average number of common and potential common shares outstanding — diluted | 7,881 | 8,448 | 9,148 | |||||||||||
Income per share — diluted | $ | 1.91 | $ | 2.07 | $ | 2.34 | ||||||||
Income Taxes | ||||||||||||||
The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes. Accordingly, the Company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return. The Company records a valuation allowance against any net deferred tax assets if it is more likely than not that they will not be realized. The Company recognizes interest and penalties related to income tax matters in other income and expenses. | ||||||||||||||
Concentrations of Credit Risk | ||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, restricted cash, short-term investments and accounts and unbilled receivables. The Company maintains cash balances in excess of insured limits. The Company maintains its cash and cash equivalents with major financial institutions. The Company’s credit risk is managed by investing its cash in high quality money market funds, commercial paper, investment grade corporate bonds, treasury bills, government agency bonds, and certificates of deposit. | ||||||||||||||
Two customers, one agency of the U.S. government and one international customer, accounted for 55% of the accounts receivable balance at March 31, 2014. The Company generally requires letters of credit and/or deposits or prepayments from international customers. The Company has not experienced any significant losses from uncollectible accounts. | ||||||||||||||
Common Stock Dividends | ||||||||||||||
In May of 2007, the Company began declaring quarterly cash dividends for its common stock shareholders. Common stock cash dividends declared during the fiscal year ended March 31, 2014 were as follows: | ||||||||||||||
Date Declared | Dividend per | |||||||||||||
common share | ||||||||||||||
May 7, 2013 | $ | 0.5 | ||||||||||||
August 5, 2013 | 0.5 | |||||||||||||
November 12, 2013 | 0.5 | |||||||||||||
February 5, 2014 | 0.5 | |||||||||||||
Fiscal year ended March 31, 2014 | $ | 2 | ||||||||||||
On May 22, 2014, the Company declared a quarterly dividend of $0.50 for holders of record on June 2, 2014 to be paid June 9, 2014. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Compensation expense for the fair value of stock based awards made to employees and the Board of Directors is recognized over the requisite service period for awards expected to vest. The Company estimates the fair value of share-based awards on the date of grant using the Black-Scholes option pricing model. The Black-Scholes method of valuation requires several assumptions: (1) the expected term of the stock award, (2) the expected future stock volatility over the expected term, (3) the expected dividend yield and (4) risk-free interest rate. The expected term represents the expected period of time the Company believes the options will be outstanding based on historical information. Estimates of expected future stock price volatility are based on the historic volatility of the Company’s common stock. The expected dividend yield was based on the expectation the Company would continue paying dividends on the Company's common stock at the same rate for the foreseeable future. The risk free interest rate is based on the U.S. Zero-Bond rate. | ||||||||||||||
The Company recognized $2,501,000, $184,000 and $1,799,000 of stock-based compensation costs in the Consolidated Statements of Operations and Comprehensive Income for the year ended March 31, 2014, 2013 and 2012, respectively. The income tax benefit related to such compensation for the years ended March 31, 2014, 2013 and 2012 was approximately $833,000, $63,000 and $612,000, respectively. | ||||||||||||||
The following table summarizes share-based compensation costs included in the Company’s Consolidated Statements of Operations and Comprehensive Income. The credit for the year ended March 31, 2013 in selling, general and administrative expenses is attributable to the reversal of certain incentive compensation plan costs previously accrued for, which were terminated as a result of the announced retirement of the Company’s former Chief Executive Officer in September of 2012. | ||||||||||||||
Fiscal Year Ended | ||||||||||||||
(In thousands) | March 31, | March 31, | March 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Cost of revenues | $ | 867 | $ | 188 | $ | 438 | ||||||||
Selling, general and administrative | 1,634 | (4 | ) | 1,361 | ||||||||||
Total share-based compensation expense before tax | 2,501 | $ | 184 | $ | 1,799 | |||||||||
LEASE_AGREEMENTS
LEASE AGREEMENTS | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
LEASE AGREEMENTS | ' | |||||||
LEASE AGREEMENTS | ' | |||||||
2. LEASE AGREEMENTS | ||||||||
The Company leases certain facilities under non-cancelable operating leases with various renewal options. For operating leases which contain fixed escalations in rental payments, the Company records the total rent payable on a straight-line basis over the original lease term. The Company incurred $1,030,000, $787,000 and $730,000 of operating rent expense in the fiscal years ended March 31, 2014, 2013, and 2012, respectively. In conjunction with the Company’s lease for its headquarters, the Company has issued security in the form of a standby letter of credit in the amount of $300,000 with an original expiration date of March 1, 2006 which contains automatic extensions through April 15, 2016. | ||||||||
In March 2005, the Company renewed its lease agreement for its corporate headquarters and manufacturing facilities in Billerica, Massachusetts. As part of the lease agreement, the Company’s landlord agreed to certain renovations to the Billerica facility including the construction of additional high bay manufacturing space. The Company was responsible for a portion of the construction costs and was deemed to be the owner of the building during the construction period. In January 2007, the Company amended this lease agreement to expand its lease to include the remaining available space in the building. During the fiscal year ended March 31, 2007, the Company capitalized $2,029,000 to record the facility on its books with an offsetting amount to the Lease Financing Liability. In addition, amounts paid for construction were recorded as construction in progress and the landlord construction allowances of $367,000 in 2008 were recorded as additional lease financing liability. | ||||||||
At the completion of the construction of the initial renovations in February 2006, the lease was reviewed for potential sale-leaseback treatment in accordance with ASC 840 Leases. Based on this review, it was determined that the lease did not qualify for sale-leaseback treatment. As a result, building and tenant improvements and associated lease financing liabilities remained on the Company’s financial statements. The Lease Financing Liability is being amortized over the lease term based on the payments designated in the agreement, and the building and tenant improvement assets are being depreciated on a straight line basis over the remaining lease term. | ||||||||
Future minimum rental payments under the Company’s non-cancelable leases, excluding real estate taxes, insurance and operating costs paid by the Company, required over the initial terms of the leases are as follows (in thousands): | ||||||||
Year Ending March 31, | Operating Leases | Capital Leases | ||||||
2015 | $ | 532 | $ | 1,542 | ||||
2016 | 225 | 1,414 | ||||||
Total payments | $ | 757 | 2,956 | |||||
Imputed interest | (41 | ) | ||||||
Lease financing liability | 2,915 | |||||||
Less: Current portion of lease financing liability | 1,511 | |||||||
Lease financing liability, net of current portion | $ | 1,404 | ||||||
LETTERS_OF_CREDIT
LETTERS OF CREDIT | 12 Months Ended |
Mar. 31, 2014 | |
LETTERS OF CREDIT | ' |
LETTERS OF CREDIT | ' |
3. LETTERS OF CREDIT | |
In the normal course of business, the Company may provide certain customers and potential customers with performance guarantees, which are generally backed by standby letters of credit. In general, the Company would only be liable for the amount of these guarantees in the event of default in the performance of its obligations, the probability of which is remote in management’s opinion. At March 31, 2014, the Company had outstanding $28,060,000 in standby letters of credit. These outstanding standby letters of credit are cash-secured at amounts ranging from 51% to 74% of the outstanding letters of credit. This resulted in a restricted cash balance of $14,916,000 at March 31, 2014 of which $313,000 was considered long-term restricted cash due to the expiration date of the underlying letters of credit. | |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
INCOME TAXES | ' | |||||||||||||
INCOME TAXES | ' | |||||||||||||
4. INCOME TAXES | ||||||||||||||
The provision (benefit) for income taxes for the years ended March 31, 2014, 2013, and 2012 consisted of the following: | ||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||
Current: | ||||||||||||||
Federal | $ | 6,870 | $ | 11,339 | $ | 9,082 | ||||||||
State | 281 | 595 | 197 | |||||||||||
Foreign | 88 | 22 | 7 | |||||||||||
7,239 | 11,956 | 9,286 | ||||||||||||
Deferred: | ||||||||||||||
Federal | 528 | (2,743 | ) | 1,610 | ||||||||||
State | (358 | ) | (375 | ) | 212 | |||||||||
Change in valuation allowance | 207 | 154 | (72 | ) | ||||||||||
377 | (2,964 | ) | 1,750 | |||||||||||
Provision for income taxes | $ | 7,616 | $ | 8,992 | $ | 11,036 | ||||||||
The difference between the total expected provision for income taxes computed by applying the statutory federal income tax rate to income before provision for income taxes and the recorded provision for income taxes for the three years in the period ended March 31, 2014 is as follows: | ||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||
Provision for income taxes at statutory rate | $ | 7,957 | $ | 9,253 | $ | 11,360 | ||||||||
State tax provision (benefit) net of federal effect | (50 | ) | 143 | 265 | ||||||||||
Stock based compensation | 51 | (60 | ) | 107 | ||||||||||
Research tax credits | (294 | ) | (589 | ) | (289 | ) | ||||||||
Qualifying manufacturing credits | (288 | ) | (154 | ) | (315 | ) | ||||||||
Change in valuation allowance | 207 | 154 | (72 | ) | ||||||||||
Other | 33 | 245 | (20 | ) | ||||||||||
Provision for income taxes | $ | 7,616 | $ | 8,992 | $ | 11,036 | ||||||||
The significant components of the net deferred tax assets at March 31, 2014 and 2013 are as follows: | ||||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||
(In thousands) | Current | Non-current | Current | Non-current | ||||||||||
Deferred tax assets (liabilities): | ||||||||||||||
Accounts receivable and unbilled costs and fees | $ | — | $ | 115 | $ | — | $ | 125 | ||||||
Inventory | 240 | 3,880 | 248 | 3,935 | ||||||||||
Deferred revenue | — | 1,783 | — | 1,778 | ||||||||||
Accrued vacation | 606 | — | 558 | — | ||||||||||
Accrued warranty costs | 144 | — | 141 | — | ||||||||||
Depreciation | — | (125 | ) | — | (495 | ) | ||||||||
Accrued contract costs | 1,073 | (1,356 | ) | — | — | |||||||||
Unearned compensation | 2,464 | 2,221 | 1,738 | 2,573 | ||||||||||
State credit carryforwards | — | 1,151 | — | 944 | ||||||||||
Other | 248 | (200 | ) | 470 | 409 | |||||||||
Deferred income tax assets | 4,775 | 7,469 | 3,155 | 9,269 | ||||||||||
Valuation allowance | — | (1,151 | ) | — | (944 | ) | ||||||||
Net deferred income taxes | $ | 4,775 | $ | 6,318 | $ | 3,155 | $ | 8,325 | ||||||
As of March 31, 2014 and March 31, 2013, the Company has $1,770,000 and $1,452,000 of state credit carryforwards, respectively. Of these amounts, approximately $263,000 and $201,000 at March 31, 2014 and March 31, 2013, respectively, have unlimited carryforward and the remaining balances expire in various years through 2028. | ||||||||||||||
At March 31, 2014 and March 31, 2013, the Company had a deferred tax valuation allowance of $1,151,000 and $944,000, respectively, on state credit carryforwards and other deferred tax assets for which management believes it is more-likely-than-not that realization of these assets will not occur. | ||||||||||||||
The Company closed its examination by the Internal Revenue Service for tax year ended March 31, 2011 resulting in no material impact on the Company’s financial position or results of operations. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending March 31, 2011 through 2013 and for various state taxing authorities for the years ending March 31, 2007 through 2013. | ||||||||||||||
In April 2013, the Company received an outstanding refund from the Massachusetts Department of Revenue for tax years ending March 31, 2006 through 2008 related to its sales apportionment methodology. The Company received proceeds of approximately $1,500,000 related to this settlement which had been recorded as a receivable at March 31, 2013. | ||||||||||||||
WARRANTY_OBLIGATIONS
WARRANTY OBLIGATIONS | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
WARRANTY OBLIGATIONS | ' | |||||||
WARRANTY OBLIGATIONS | ' | |||||||
5. WARRANTY OBLIGATIONS | ||||||||
Certain of the Company’s products carry a one-year warranty, the costs of which are accrued for at time of shipment or delivery. Accrual rates are based upon historical experience over the preceding twelve months and management’s judgment of future exposure. Warranty experience for the years ended March 31, 2014 and 2013 is as follows: | ||||||||
(In thousands) | 2014 | 2013 | ||||||
Warranty accrual at beginning of period | $ | 397 | $ | 358 | ||||
Accruals for warranties issued during the period | 564 | 548 | ||||||
Adjustment of preexisting accrual estimates | (179 | ) | 152 | |||||
Warranty costs incurred during period | (378 | ) | (661 | ) | ||||
Warranty accrual at end of period | $ | 404 | $ | 397 | ||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
6. STOCKHOLDERS’ EQUITY | |||||||||||||||||
Preferred Stock | |||||||||||||||||
The Company’s articles of organization authorize its Board of Directors to issue up to 100,000 shares of preferred stock in one or more series, to determine and fix certain relative rights and preferences of the shares of any series, to fix the number of shares constituting any such series, and to fix the designation of any such series, without further vote or action by its shareholders. The Company has no present plans to issue shares of preferred stock. In 1998, the Company designated a series of Preferred Stock (the “Series A Preferred Stock”) to be issued upon the exercise of Rights issued under the Company’s Shareholder Rights Plan. Under the Shareholder Rights Plan, adopted in 1998 and reissued upon its expiration in April 2008, its stockholders are entitled to purchase shares of its Series A Preferred Stock under certain circumstances. These circumstances include the purchase of 15% or more of the outstanding shares of common stock by a person or group, or the announcement of a tender or exchange offer to acquire 15% or more of the outstanding common stock. | |||||||||||||||||
Stock Repurchase Program | |||||||||||||||||
On August 2, 2012, the Board of Directors announced the approval of the Company’s fourth Stock Repurchase Program which authorized the Company to repurchase up to $35 million of additional shares of its common stock from time to time on the open market or in privately negotiated transactions. This program was completed in May of 2013. On May 7, 2013, the Board of Directors announced the approval of its fifth Stock Repurchase Program which authorized the Company to repurchase up to an additional $35 million of shares of its common stock from time to time on the open market or in privately negotiated transactions. | |||||||||||||||||
During the fiscal year ended March 31, 2014, the Company repurchased 201,192 shares of common stock under this Program at an average price of $61.16. As of March 31, 2014, the remaining balance available under the programs to repurchase shares was $35,000,000. | |||||||||||||||||
Stock Option and Other Compensation Plans | |||||||||||||||||
The Company has various stock option and other compensation plans for directors, officers, and employees. The Company had the following stock option plans outstanding as of March 31, 2014: the 1998 Non-Qualified Option Plan, the 1999 Combination Plan, the 2002 Combination Plan, the 2003 Stock Plan for Non-Employee Directors and the 2005 Equity and Incentive Plan. There are 3,040,000 shares authorized under these plans. Vesting periods are at the discretion of the Board of Directors and typically range from one to three years. Certain of the options granted vest upon the achievement of certain performance based goals as well as service time incurred. Options under these plans are granted at fair market value and have a term of ten years from the date of grant. | |||||||||||||||||
Stock Options: A summary of the Company’s stock option activity is as follows: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||
of Shares | Average | of Shares | Average | of Shares | Average | ||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||
Price | Price | Price | |||||||||||||||
Options outstanding, beginning of year | 315,162 | $ | 56.72 | 376,331 | $ | 55.1 | 472,446 | $ | 55.77 | ||||||||
Options granted | — | — | — | — | — | — | |||||||||||
Options exercised | (84,853 | ) | 41.55 | (50,505 | ) | 42.75 | (75,714 | ) | 56.63 | ||||||||
Options canceled or expired | (5,345 | ) | 43.66 | (10,664 | ) | 65.72 | (20,401 | ) | 65.01 | ||||||||
Options outstanding, end of year | 224,964 | $ | 62.75 | 315,162 | $ | 56.72 | 376,331 | $ | 55.1 | ||||||||
Options exercisable, end of year | 223,150 | $ | 62.76 | 312,895 | $ | 56.68 | 370,400 | $ | 55 | ||||||||
Options available for grant | 187,000 | 284,000 | 292,000 | ||||||||||||||
The following summarizes certain data for options outstanding and exercisable at March 31, 2014: | |||||||||||||||||
Number of | Range of Exercise | Weighted | Weighted | ||||||||||||||
Shares | Prices | Average | Average | ||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Contractual Life | |||||||||||||||||
Options outstanding: | 9,950 | $ | 19.85-$40.00 | $ | 27.85 | 0.44 | |||||||||||
49,207 | $ | 40.01-$60.00 | 51.99 | 1.73 | |||||||||||||
165,807 | $ | 60.01-$75.82 | 68.04 | 4.31 | |||||||||||||
224,964 | $ | 19.85-$75.82 | $ | 62.75 | 3.57 | ||||||||||||
Options exercisable: | 9,950 | $ | 19.85-$40.00 | $ | 27.85 | ||||||||||||
49,207 | $ | 40.01-$60.00 | 51.99 | ||||||||||||||
163,993 | $ | 70.01-$75.82 | 68.11 | ||||||||||||||
223,150 | $ | 19.85-$75.82 | $ | 62.76 | |||||||||||||
The total intrinsic value, representing the difference between market value on the date of exercise and the option price, of stock options exercised during fiscal 2014, 2013 and 2012 was $1,906,000, $986,000 and $1,815,000, respectively. Non-vested stock option awards are subject to the risk of forfeiture until the fulfillment of specified conditions. As of March 31, 2014, there was no unrecognized compensation cost related to non-vested stock option awards granted under the Company’s stock plans. | |||||||||||||||||
The Company realizes a tax deduction upon the exercise of non-qualified stock options and disqualifying dispositions of incentive stock options due to the recognition of compensation expense in the calculation of its taxable income. The amount of the compensation recognized for tax purposes is based on the difference between the market value of the common stock and the option price at the date the options are exercised and/or sold. The Company receives an additional tax deduction when restricted stock vests at a higher value than the value used to recognize compensation expense at the date of grant. These tax benefits are credited to additional paid-in capital if it is considered more likely than not that they will be realized. During fiscal 2014, 2013 and 2012, a tax benefit (expense) of $9,000, $135,000 and ($303,000), respectively, was recorded to additional paid-in capital for exercises and/or sales of stock options or stock. | |||||||||||||||||
Restricted Stock and Restricted Stock Units: The Company has instituted long term incentive plans for certain key employees. These plans call for the issuance of restricted stock, restricted stock units, stock options, and/or cash awards which vest upon the achievement of certain performance based goals as well as service time incurred. In fiscal year 2014, this award consisted of restricted stock unit awards and cash. In fiscal 2013 and 2012, the Company opted to issue this long term incentive plan with only a cash award which resulted in fewer restricted stock awards and stock options being granted. | |||||||||||||||||
Restricted stock and restricted stock units may also be granted to other employees with vesting periods that range from one to three years. In addition, annually the Board of Directors is granted restricted stock. These restricted stock shares vest on a pro-rata basis on service time performed over a one year period. The fair values of these restricted stock awards are equal to the market price per share of the Company’s common stock on the date of grant. | |||||||||||||||||
Non-vested restricted stock and stock unit awards are subject to the risk of forfeiture until the fulfillment of specified conditions. As of March 31, 2014 there was $2,389,000 of total unrecognized compensation cost related to non-vested restricted stock and stock unit awards granted under the Company’s stock plans. This cost is expected to be recognized over a weighted average of 1.3 years. | |||||||||||||||||
A summary of the Company’s restricted stock and stock unit activity is as follows: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||
of Shares | Average | of Shares | Average | of Shares | Average | ||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||
Price | Price | Price | |||||||||||||||
Unvested restricted stock and units outstanding, beginning of year | 28,109 | $ | 66.2 | 40,599 | $ | 68.63 | 32,882 | $ | 65.03 | ||||||||
Granted | 70,515 | 60.52 | 19,657 | 61 | 24,006 | 73.03 | |||||||||||
Vested | (22,561 | ) | 64.53 | (17,463 | ) | 68.08 | (12,523 | ) | 68.7 | ||||||||
Forfeited | (4,063 | ) | 63.73 | (14,684 | ) | 63.71 | (3,766 | ) | 65.07 | ||||||||
Unvested restricted stock and units outstanding, end of year | 72,000 | $ | 61.3 | 28,109 | $ | 66.2 | 40,599 | $ | 68.63 | ||||||||
BUSINESS_SEGMENT_INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
BUSINESS SEGMENT INFORMATION | ' | ||||||||||||||||
BUSINESS SEGMENT INFORMATION | ' | ||||||||||||||||
7. BUSINESS SEGMENT INFORMATION | |||||||||||||||||
In accordance with the provisions of FASB ASC 280-10, Segment Reporting, the Company has determined that it has only one operating segment, the X-ray product segment. This includes X-ray detection and imaging products used primarily for the detection of illegal drugs, weapons and explosives, and smuggled goods. The equipment is purchased by sophisticated government and commercial clients focused on the detection of organic material in complex backgrounds and the ability to see the contents of containers with precision. | |||||||||||||||||
Geographical Data | |||||||||||||||||
All of the Company’s export sales originate from the United States. At March 31, 2014, approximately 2.1% of the Company’s assets were in foreign countries. The foreign assets were comprised of cash in foreign banks, and inventory in international depots for field replacements or systems shipped internationally but not accepted by fiscal year end. | |||||||||||||||||
The following table shows the breakdown of net sales and contract revenues to international and domestic customers based upon customer’s country of domicile and the major regions of international activity: | |||||||||||||||||
Net Sales and Contract Revenues | |||||||||||||||||
Fiscal Year | |||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||
Domestic | $ | 94,427 | 50 | % | $ | 123,652 | 66 | % | $ | 133,441 | 66 | % | |||||
International | 95,822 | 50 | % | 63,028 | 34 | % | 70,111 | 34 | % | ||||||||
Net Sales and Contract Revenues | $ | 190,249 | 100 | % | $ | 186,680 | 100 | % | $ | 203,552 | 100 | % | |||||
Middle East & Africa | 72 | % | 54 | % | 63 | % | |||||||||||
Americas — Non-US | 11 | % | 29 | % | 20 | % | |||||||||||
Asia / Pacific | 11 | % | 13 | % | 11 | % | |||||||||||
Europe | 6 | % | 4 | % | 6 | % | |||||||||||
In fiscal 2014, the Company had international sales to one country which accounted for 15% of the total sales of the Company. In fiscal 2013, international sales to one individual country did not exceed 10% of total sales. In fiscal 2012, the Company had international sales to one country which accounted for 11% of the total sales of the Company. | |||||||||||||||||
Major Customers: Sales to major customers (representing in excess of 10% of consolidated revenues) consisted of the following: | |||||||||||||||||
Fiscal 2014: $33,886,000, $25,863,000, and $25,078,000, respectively, to three customers. | |||||||||||||||||
Fiscal 2013: $44,850,000 and $30,874,000, respectively, to two customers. | |||||||||||||||||
Fiscal 2012: $46,167,000 to one customer. | |||||||||||||||||
Domestically, the Company’s primary client base is comprised of agencies of the U.S. government. Approximately 46%, 63% and 62% of the Company’s sales in fiscal 2014, 2013, and 2012 respectively, were derived from either (i) contracting directly with the U.S. government, or (ii) contracting with contractors working directly with the U.S. government. Certain of the Company’s contracts with the U.S. government provide the U.S. government with the standard unilateral right to terminate these contracts for convenience. In fiscal year ended March 31, 2012, one of the Company’s contracts with the U.S. government was terminated in whole or in part for convenience by the U.S. government. This termination did not result in any material losses to the Company. There were no terminations for convenience in the fiscal years ended March 31, 2013 or 2014. | |||||||||||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
8. FAIR VALUE MEASUREMENTS | ||||||||||||||
FASB ASC 820, Fair Value Measurements and Disclosures, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company categorized the Company's financial assets, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. | ||||||||||||||
Financial assets recorded on the Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows: | ||||||||||||||
Level 1 - Financial assets whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date (examples include active exchange-traded equity securities, listed derivatives, and most U.S. government and agency securities). | ||||||||||||||
Level 2 - Financial assets whose values are based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 2 inputs include the following: | ||||||||||||||
· Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds which trade infrequently); | ||||||||||||||
· Inputs other than quoted prices that are observable for substantially the full term of the asset or liability (examples include interest rate and currency swaps); and | ||||||||||||||
· Inputs that are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability (examples include certain securities and derivatives). | ||||||||||||||
Level 3 - Financial assets whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s assumptions about the assumptions a market participant would use in pricing the asset or liability. The Company currently does not have any Level 3 financial assets or liabilities. | ||||||||||||||
The following table presents the financial assets and liabilities the Company measures at fair value on a recurring basis, based on the fair value hierarchy as of March 31, 2014 and March 31, 2013: | ||||||||||||||
(In thousands) | March 31, | March 31, | ||||||||||||
2014 | 2013 | |||||||||||||
Level 1 — Financial Assets | ||||||||||||||
Money market funds | $ | 33,623 | $ | 16,549 | ||||||||||
Treasury bills | 17,722 | — | ||||||||||||
Total Level 1 Financial Assets | 51,345 | 16,549 | ||||||||||||
Level 2 — Financial Assets | ||||||||||||||
Corporate debentures/bonds | 41,424 | 75,572 | ||||||||||||
Commercial paper | 6,193 | 28,974 | ||||||||||||
Government agency bonds | 26,660 | — | ||||||||||||
Certificates of deposit | — | 4,000 | ||||||||||||
Total Level 2 Financial Assets | 74,277 | 108,546 | ||||||||||||
Total cash equivalents and short-term investments | $ | 125,622 | $ | 125,095 | ||||||||||
These investments are classified as available-for-sale and are recorded at their fair market values using the specific identification method. The unrealized holding gains or losses on these securities are included as a component of comprehensive income in the Consolidated Statements of Stockholders’ Equity and Comprehensive Income. | ||||||||||||||
Amortized | Gross | Gross | Fair Value | |||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
2014:00:00 | ||||||||||||||
Short-term investments: | ||||||||||||||
Corporate debentures/bonds | $ | 38,076 | $ | 9 | $ | (11 | ) | $ | 38,074 | |||||
Commercial paper | 6,193 | — | — | 6,193 | ||||||||||
Government agency bonds | 26,652 | 10 | (2 | ) | 26,660 | |||||||||
Treasury bills | 17,708 | 14 | — | 17,722 | ||||||||||
Total short-term investments | $ | 88,629 | $ | 33 | $ | (13 | ) | $ | 88,649 | |||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 33,623 | $ | — | $ | — | $ | 33,623 | ||||||
Corporate debentures/bonds | 3,350 | — | — | 3,350 | ||||||||||
Total cash equivalents | $ | 36,973 | $ | — | $ | — | $ | 36,973 | ||||||
Amortized | Gross | Gross | Fair Value | |||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
2013:00:00 | ||||||||||||||
Short-term investments: | ||||||||||||||
Corporate debentures/bonds | $ | 75,578 | $ | 14 | $ | (20 | ) | $ | 75,572 | |||||
Commercial paper | 28,974 | — | — | 28,974 | ||||||||||
Certificates of deposit | 4,000 | — | — | 4,000 | ||||||||||
Total short-term investments | $ | 108,552 | $ | 14 | $ | (20 | ) | $ | 108,546 | |||||
Cash equivalents: | ||||||||||||||
Money market funds | 16,549 | — | — | 16,549 | ||||||||||
Total cash equivalents | $ | 16,549 | $ | — | $ | — | $ | 16,549 | ||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||||
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, 2014, the Company had $25,119,000 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. | ||||||||||||||||||||||||||
Employment Agreements | ||||||||||||||||||||||||||
On March 13, 2013, the Company signed an offer of employment with Charles P. Dougherty for the position of President and Chief Executive Officer. Mr. Dougherty commenced employment on April 8, 2013. Under the terms of this agreement, Mr. Dougherty is entitled to receive base compensation in the amount of $550,000 per year, a performance-based annual incentive bonus equal to 100% of his base compensation per year (guaranteed for the fiscal year ended March 31, 2014), and to participate in the long-term incentive program with awards equal to 200% of base compensation upon achievement of certain long-term strategic goals. These awards may be comprised of restricted stock, restricted stock units, stock options and/or cash as determined by the Compensation Committee of the Board of Directors. | ||||||||||||||||||||||||||
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 $927,000, $1,091,000 and $1,152,000, in 2014, 2013, and 2012, respectively. | ||||||||||||||||||||||||||
AMERICAN SCIENCE AND ENGINEERING, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||
UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA | ||||||||||||||||||||||||||
FOR THE YEARS ENDED MARCH 31, 2014 AND MARCH 31, 2013 | ||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||
2014 by quarter | 2013 by quarter | |||||||||||||||||||||||||
1st | 2nd | 3rd | 4th(1) | 1st | 2nd | 3rd | 4th(2) | |||||||||||||||||||
Net sales and contract revenues | $ | 43,084 | $ | 43,816 | $ | 37,773 | $ | 65,576 | $ | 47,344 | $ | 46,253 | $ | 50,803 | $ | 42,280 | ||||||||||
Gross profit | $ | 19,147 | $ | 19,206 | $ | 16,868 | $ | 21,429 | $ | 21,473 | $ | 20,997 | $ | 22,700 | $ | 14,249 | ||||||||||
Operating income | $ | 7,324 | $ | 7,121 | $ | 2,333 | $ | 5,978 | $ | 6,360 | $ | 9,597 | $ | 9,178 | $ | 1,133 | ||||||||||
Net income | $ | 4,865 | $ | 4,739 | $ | 1,558 | $ | 3,955 | $ | 4,202 | $ | 6,399 | $ | 6,093 | $ | 760 | ||||||||||
Net income per share | ||||||||||||||||||||||||||
— Basic | $ | 0.62 | $ | 0.61 | $ | 0.2 | $ | 0.5 | $ | 0.47 | $ | 0.77 | $ | 0.74 | $ | 0.09 | ||||||||||
— Diluted | $ | 0.62 | $ | 0.6 | $ | 0.2 | $ | 0.5 | $ | 0.47 | $ | 0.76 | $ | 0.73 | $ | 0.09 | ||||||||||
(1) The fourth quarter of fiscal 2014 gross profit was negatively impacted by the completion of a large integrated cargo contract with a custom configuration that had lower than average profit margins. In addition, margin was impacted by lower margins from the services division due to lower revenues. | ||||||||||||||||||||||||||
(2) The fourth quarter of fiscal 2013 gross profit was impacted by the accrual of $4.1 million to settle a contractual issue in the Middle East and $1.3 million incurred in severance related costs due to a force reduction. | ||||||||||||||||||||||||||
(3) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share. |
NATURE_OF_OPERATIONS_AND_SUMMA1
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
Nature of Operations and Basis of Presentation | ' | |||||||||||||
Nature of Operations and Basis of Presentation | ||||||||||||||
American Science and Engineering, Inc., a Massachusetts corporation formed in 1958, develops, manufactures, markets, and sells X-ray inspection and other detection products for homeland security, force protection and other critical defense applications. | ||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. | ||||||||||||||
Use of Estimates | ' | |||||||||||||
Use of Estimates | ||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||
Cash and Cash Equivalents | ' | |||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all investments with original maturities of 90 days or less to be cash equivalents. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances, and management believes its risk of loss to be minimal. | ||||||||||||||
Restricted Cash | ' | |||||||||||||
Restricted Cash | ||||||||||||||
Restricted cash consists of collateral for performance bonds issued related to customer contracts and certain facility lease agreements. | ||||||||||||||
Short-term Investments and Cash Equivalents | ' | |||||||||||||
Short-term Investments and Cash Equivalents | ||||||||||||||
Short-term investments and cash equivalents consist of investments in corporate debentures/bonds, government agency bonds, treasury bills, money market funds, commercial paper and certificates of deposit. These investments are classified as available-for-sale and are recorded at their fair values using the specific identification method. The unrealized holding gains or losses on these securities are included as a component of comprehensive income in the Consolidated Statements of Operations and Comprehensive Income. | ||||||||||||||
Accounts Receivable and Unbilled Costs and Fees | ' | |||||||||||||
Accounts Receivable and Unbilled Costs and Fees | ||||||||||||||
Accounts receivable are recorded at the invoiced amount. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. It is the Company’s policy to write off uncollectible receivables when management determines the receivable has become uncollectible. Activity in the allowance for doubtful accounts is as follows: | ||||||||||||||
(In thousands) | Balance at | Charged to | Deductions | Balance at | ||||||||||
Beginning | Costs and | or Write- | End of | |||||||||||
of Year | Expenses | offs | Year | |||||||||||
Charged to | ||||||||||||||
Reserves | ||||||||||||||
Fiscal 2014 | $ | 351 | $ | (27 | ) | $ | 1 | $ | 323 | |||||
Fiscal 2013 | $ | 255 | $ | 344 | $ | 248 | $ | 351 | ||||||
Fiscal 2012 | $ | 334 | $ | (79 | ) | $ | — | $ | 255 | |||||
Included in accounts receivable and unbilled costs and fees at March 31, 2014 and 2013 are $15,961,000 and $12,973,000, respectively, attributable to both prime and subcontracts with federal and state governments. The Company establishes a reserve against unbilled costs and fees based on known troubled accounts or contracts, historical experience, and other currently available evidence. There was no activity in the reserve for unbilled costs and fees during fiscal 2014, 2013 and 2012. | ||||||||||||||
Inventories | ' | |||||||||||||
Inventories | ||||||||||||||
Inventories consist of material, labor and manufacturing overhead and are recorded at the lower of cost, using the weighted average cost method, or net realizable value. Excessive manufacturing overhead costs attributable to idle facility expenses, freight, handling costs and wasted material (spoilage) attributable to abnormally low production volumes (levels that materially differ from budgeted production plans due primarily to changes in customer demand) are excluded from inventory and recorded as an expense in the period incurred. | ||||||||||||||
The components of inventories at March 31, 2014 and 2013, net of inventory reserves, were as follows: | ||||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Raw materials, completed subassemblies and spare parts | $ | 18,482 | $ | 21,450 | ||||||||||
Work-in-process | 13,199 | 21,129 | ||||||||||||
Finished goods | 1,254 | 5,472 | ||||||||||||
Total | $ | 32,935 | $ | 48,051 | ||||||||||
The Company periodically reviews quantities of inventory on hand and compares these amounts to expected usage of each particular product or product line. The Company records, as a charge to cost of sales, any amounts required to reduce the carrying value to net realizable value. | ||||||||||||||
Activity in the reserve for excess or obsolete inventory is as follows: | ||||||||||||||
(In thousands) | Balance at | Charged to | Deductions | Balance at | ||||||||||
Beginning | Costs and | / Write- | End of | |||||||||||
of Year | Expenses | offs | Year | |||||||||||
Charged to | ||||||||||||||
Reserves | ||||||||||||||
Fiscal 2014 | $ | 11,052 | $ | 1,355 | $ | 1,542 | $ | 10,865 | ||||||
Fiscal 2013 | $ | 6,210 | $ | 5,061 | $ | 219 | $ | 11,052 | ||||||
Fiscal 2012 | $ | 4,882 | $ | 3,076 | $ | 1,748 | $ | 6,210 | ||||||
Building, Equipment and Leasehold Improvements | ' | |||||||||||||
Building, Equipment and Leasehold Improvements | ||||||||||||||
The Company provides for depreciation and amortization of its fixed assets on a straight-line basis over estimated useful lives of 1-25 years or remaining lease terms. Expenditures for normal maintenance and repairs are charged to expense as incurred. Significant additions, renewals or betterments that extend the useful lives of the assets are capitalized at cost. The cost and accumulated depreciation applicable to equipment and leasehold improvements sold, or otherwise disposed of, are removed from the accounts, and any resulting gain or loss is included in the Consolidated Statements of Operations and Comprehensive Income. | ||||||||||||||
Building, equipment and leasehold improvements consisted of the following at March 31, 2014 and 2013. | ||||||||||||||
(In thousands) | Estimated Useful Lives | 2014 | 2013 | |||||||||||
Building and leasehold improvements | Lesser of 25 years or remaining lease term | $ | 21,265 | $ | 21,245 | |||||||||
Equipment and tooling | 5-10 years | 5,517 | 5,284 | |||||||||||
Computer equipment and software | 3-5 years | 23,922 | 23,135 | |||||||||||
Furniture and fixtures | 5-7 years | 2,560 | 2,553 | |||||||||||
Demo and test equipment | 2-5 years | 8,331 | 7,579 | |||||||||||
Leased equipment | 1-2 years or life of lease | 63 | 63 | |||||||||||
Motor vehicles | 3-5 years | 72 | 72 | |||||||||||
Total | 61,730 | 59,931 | ||||||||||||
Less accumulated depreciation and amortization | (48,761 | ) | (43,480 | ) | ||||||||||
Building, equipment and leasehold improvements, net | $ | 12,969 | $ | 16,451 | ||||||||||
Revenue Recognition | ' | |||||||||||||
Revenue Recognition | ||||||||||||||
The Company recognizes certain Cargo Inspection , Mobile Cargo Inspection, Parcel and Personnel Screening Systems, and after-market part sales, in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 605-10, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. | ||||||||||||||
Infrequently, the Company receives requests from customers to hold product being purchased for a valid business purpose. The Company recognizes revenue for such arrangements provided the transaction meets, at a minimum, the following criteria: a valid business purpose for the arrangement exists; risk of ownership of the purchased product has transferred to the buyer; there is a fixed delivery date that is reasonable and consistent with the buyer’s business purpose; the product is ready for shipment; the Company has no continuing performance obligation in regards to the product and the products have been segregated from its inventories and cannot be used to fill other orders received. There was no product being held under these arrangements at March 31, 2014 or March 31, 2013. | ||||||||||||||
Certain of the Company’s contracts are multiple-element arrangements, which include standard products, custom-built systems or contract engineering projects, services (such as training), and service and maintenance contracts. In accordance with FASB ASC 605-25, Revenue Recognition — Multiple Element Arrangements, revenue arrangements that include multiple elements are analyzed to determine whether the deliverables can be divided into separate units of accounting or treated as a single unit of accounting. The Company allocates arrangement consideration at the inception of the arrangement to all deliverables using the relative selling price method. The selling price used for each deliverable is based on (a) vendor-specific objective evidence if available; (b) third-party evidence if vendor-specific objective evidence is not available; or (c) estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. Discounts, if applicable, are allocated proportionally on the basis of the relative selling price of each deliverable. Generally, there is no customer right of return provision in the Company’s sales agreements. Revenues are allocated to a delivered product or service when the following criteria are met: (1) the delivered item has value to the customer on a standalone basis; and (2) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the Company's control. | ||||||||||||||
Revenues for certain long-term, custom-built systems or contract engineering projects are recognized on a percentage of completion basis. The lengths of these contracts typically range from one to four years from order to delivery and acceptance. Percentages-of-completion are determined by relating the actual costs of work performed to date for each contract to its estimated final costs. Revisions in costs and profit estimates are reflected in the period in which the facts causing the revision become known. | ||||||||||||||
For all fixed price and long-term contracts, if a loss is anticipated on the contract, a provision is made in the period in which such losses are determined. | ||||||||||||||
The Company recognizes sales for its systems that are produced in a standard manufacturing operation, have minimal customer site installation requirements and have shorter order to delivery cycles, when title passes and when other revenue recognition criteria are met. Management believes the customer’s post-delivery acceptance provisions and installation requirements on certain of these systems are perfunctory and inconsequential and the costs of installation at the customer’s site are accrued at the time of revenue recognition. The Company has demonstrated a history of customer acceptance subsequent to shipment and installation of these systems. For systems which entail more significant installation efforts and site work and/or have non-standard customer acceptance provisions, revenue recognition is deferred until installation is complete and customer acceptance has occurred. | ||||||||||||||
Service revenues are recognized on time and materials engagements as the services are provided. Service contract revenues are recognized as service is performed over the length of the contract which reasonably approximates the period service revenues are earned. | ||||||||||||||
The Company records billed shipping and handling fees and billed out-of-pocket expenses as revenue and the associated costs as cost of goods sold in the accompanying consolidated statements of operations. | ||||||||||||||
Training and service contracts deliverables are accounted for separately from the delivered product elements as the Company’s undelivered products have value to its customers on a stand-alone basis. Accordingly, this service revenue is deferred and recognized as such services are performed. | ||||||||||||||
Certain contracts require payments from the customer upon execution of the agreement that are included in customer deposits. Individual customer deposits are reduced by the amount of revenue recognized on the contract until a zero balance is reached. Revenue recognized in excess of billings under the contracts is included in unbilled costs and fees in the accompanying consolidated balance sheets. Of the amounts in unbilled costs and fees at March 31, 2014, $2,484,000 (99%) is expected to be billed and collected during fiscal 2015. | ||||||||||||||
Under the terms of certain cost reimbursement contracts, the Company is not permitted to bill customers a specified portion of the contract value until completion. Such retainages (approximately $36,000 and $80,000 at March 31, 2014 and March 31, 2013, respectively) result from both commercial contract retentions and government contract withholdings generally for up to 15% of fees, as well as the difference between the actual and provisional indirect cost billing rates. Retainages are included in the accompanying consolidated balance sheets as components of unbilled costs and fees. The accuracy and appropriateness of the Company’s direct and indirect costs and expenses under these cost reimbursement contracts and its accounts receivable recorded pursuant to such contracts, are subject to regulation and audit, including by the U.S. Defense Contract Audit Agency (“DCAA”) or by other appropriate agencies of the U.S. government. Such agencies have the right to challenge the Company’s cost estimates or allocations with respect to any government contract. Additionally, a portion of the payments to the Company under government contracts are provisional payments that are subject to potential adjustment upon audit by such agencies. Historically, such audits have not resulted in any significant disallowed costs. Although the Company can give no assurances, in the opinion of management, any adjustments likely to result from inquiries or audits of its contracts will not have a material adverse impact on the Company’s financial condition or results of operations. | ||||||||||||||
Warranty Costs | ' | |||||||||||||
Warranty Costs | ||||||||||||||
The Company generally provides on certain of its products a one year parts and labor warranty with the purchase of domestic equipment, and a one year parts only or parts and labor warranty on international equipment. The anticipated cost for this one year warranty is accrued for at the time of the sale based upon historical experience and management’s estimates of future liabilities and is recorded as accrued warranty costs (see Note 5). | ||||||||||||||
Deferred Revenue | ' | |||||||||||||
Deferred Revenue | ||||||||||||||
The Company offers to its customers extended warranty and service contracts. These contracts typically have a coverage period of one to five years, and include advance payments that are recorded as deferred revenue. Revenue is recognized as service is performed over the life of the contract, which represents the period over which these revenues are earned. Costs associated with these extended warranty and service contracts are expensed to cost of goods sold as incurred. | ||||||||||||||
Impairment of Long-Lived Assets | ' | |||||||||||||
Impairment of Long-Lived Assets | ||||||||||||||
Long-lived assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. | ||||||||||||||
Impairment is assessed by comparing the estimated undiscounted cash flows over the asset’s remaining life to the carrying amount of the asset. If the estimated cash flows are insufficient to recover the asset, an impairment loss is recognized based on the difference between the carrying value of the asset and the fair value of the asset less any costs of disposal. No impairment costs were recorded in the fiscal years ended March 31, 2014, 2013 and 2012. | ||||||||||||||
Accrued Salaries and Benefits | ' | |||||||||||||
Accrued Salaries and Benefits | ||||||||||||||
Accrued salaries and benefits at March 31, 2014 and March 31, 2013 include the following: | ||||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Accrued payroll and payroll related taxes | $ | 2,154 | $ | 1,995 | ||||||||||
Accrued incentive compensation | 6,360 | 4,633 | ||||||||||||
Accrued vacation | 1,885 | 1,739 | ||||||||||||
Accrued severance | 406 | 1,607 | ||||||||||||
Total accrued salaries and benefits | $ | 10,805 | $ | 9,974 | ||||||||||
Customer Deposits | ' | |||||||||||||
Customer Deposits | ||||||||||||||
For most international orders, the Company generally includes, as part of its terms and conditions, an advance deposit with order acceptance. For long-term international contracts, the Company will generally include milestone payments tied to a specific event and/or passage of time. These deposit amounts are recorded as a liability under customer deposits until reduced by revenue recognized against the specific contract. | ||||||||||||||
Research and Development | ' | |||||||||||||
Research and Development | ||||||||||||||
Internally funded research and development costs including direct labor, material, subcontractor expenses and related overheads are expensed as incurred. Internally funded research and development costs were $22,089,000, $23,618,000 and $25,544,000, in fiscal 2014, 2013, and 2012, respectively. In addition, the Company recognized revenues of $698,000, $2,124,000 and $4,409,000, in fiscal 2014, 2013, and 2012, respectively related to government-sponsored research and development earned primarily on a cost reimbursement and fee basis as discussed above. | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, unbilled costs and fees, accounts payable and letters of credit. The recorded amounts of these instruments approximate their fair value (see Note 8). | ||||||||||||||
Income per Common and Potential Common Shares | ' | |||||||||||||
Income per Common and Potential Common Shares | ||||||||||||||
Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during the year. Share-based payment awards entitling holders to receive non-forfeitable dividends before vesting are considered participating securities and thus are included in the calculation of basic earnings per share under the two-class method. Diluted earnings per share include the dilutive impact of options and restricted stock units using the average share price of the Company’s common stock for the period. For the years ended March 31, 2014, 2013, and 2012, respectively, common stock equivalents of approximately 176,000, 182,000, and 64,000 are excluded from diluted earnings per share, as their effect is anti-dilutive. | ||||||||||||||
(In thousands except per share amounts) | March 31, | March 31, | March 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Earnings per Share — Basic: | ||||||||||||||
Net income | $ | 15,117 | $ | 17,454 | $ | 21,422 | ||||||||
Less: Distributed and undistributed earnings to unvested restricted stock units | (44 | ) | — | — | ||||||||||
Distributed and undistributed earnings to common shareholders — Basic | $ | 15,073 | $ | 17,454 | $ | 21,422 | ||||||||
Weighted average number of common shares outstanding — basic | 7,846 | 8,394 | 9,046 | |||||||||||
Income per share — basic | $ | 1.92 | $ | 2.08 | $ | 2.37 | ||||||||
Earnings per Share — Diluted: | ||||||||||||||
Weighted average number of common shares outstanding — basic | 7,846 | 8,394 | 9,046 | |||||||||||
Assumed exercise of stock options, warrants, restricted stock and restricted stock units | 35 | 54 | 102 | |||||||||||
Weighted average number of common and potential common shares outstanding — diluted | 7,881 | 8,448 | 9,148 | |||||||||||
Income per share — diluted | $ | 1.91 | $ | 2.07 | $ | 2.34 | ||||||||
Income Taxes | ' | |||||||||||||
Income Taxes | ||||||||||||||
The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes. Accordingly, the Company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return. The Company records a valuation allowance against any net deferred tax assets if it is more likely than not that they will not be realized. The Company recognizes interest and penalties related to income tax matters in other income and expenses. | ||||||||||||||
Concentrations of Credit Risk | ' | |||||||||||||
Concentrations of Credit Risk | ||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, restricted cash, short-term investments and accounts and unbilled receivables. The Company maintains cash balances in excess of insured limits. The Company maintains its cash and cash equivalents with major financial institutions. The Company’s credit risk is managed by investing its cash in high quality money market funds, commercial paper, investment grade corporate bonds, treasury bills, government agency bonds, and certificates of deposit. | ||||||||||||||
Two customers, one agency of the U.S. government and one international customer, accounted for 55% of the accounts receivable balance at March 31, 2014. The Company generally requires letters of credit and/or deposits or prepayments from international customers. The Company has not experienced any significant losses from uncollectible accounts. | ||||||||||||||
Common Stock Dividends | ' | |||||||||||||
Common Stock Dividends | ||||||||||||||
In May of 2007, the Company began declaring quarterly cash dividends for its common stock shareholders. Common stock cash dividends declared during the fiscal year ended March 31, 2014 were as follows: | ||||||||||||||
Date Declared | Dividend per | |||||||||||||
common share | ||||||||||||||
May 7, 2013 | $ | 0.5 | ||||||||||||
August 5, 2013 | 0.5 | |||||||||||||
November 12, 2013 | 0.5 | |||||||||||||
February 5, 2014 | 0.5 | |||||||||||||
Fiscal year ended March 31, 2014 | $ | 2 | ||||||||||||
On May 22, 2014, the Company declared a quarterly dividend of $0.50 for holders of record on June 2, 2014 to be paid June 9, 2014. | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ||||||||||||||
Compensation expense for the fair value of stock based awards made to employees and the Board of Directors is recognized over the requisite service period for awards expected to vest. The Company estimates the fair value of share-based awards on the date of grant using the Black-Scholes option pricing model. The Black-Scholes method of valuation requires several assumptions: (1) the expected term of the stock award, (2) the expected future stock volatility over the expected term, (3) the expected dividend yield and (4) risk-free interest rate. The expected term represents the expected period of time the Company believes the options will be outstanding based on historical information. Estimates of expected future stock price volatility are based on the historic volatility of the Company’s common stock. The expected dividend yield was based on the expectation the Company would continue paying dividends on the Company's common stock at the same rate for the foreseeable future. The risk free interest rate is based on the U.S. Zero-Bond rate. | ||||||||||||||
The Company recognized $2,501,000, $184,000 and $1,799,000 of stock-based compensation costs in the Consolidated Statements of Operations and Comprehensive Income for the year ended March 31, 2014, 2013 and 2012, respectively. The income tax benefit related to such compensation for the years ended March 31, 2014, 2013 and 2012 was approximately $833,000, $63,000 and $612,000, respectively. | ||||||||||||||
The following table summarizes share-based compensation costs included in the Company’s Consolidated Statements of Operations and Comprehensive Income. The credit for the year ended March 31, 2013 in selling, general and administrative expenses is attributable to the reversal of certain incentive compensation plan costs previously accrued for, which were terminated as a result of the announced retirement of the Company’s former Chief Executive Officer in September of 2012. | ||||||||||||||
Fiscal Year Ended | ||||||||||||||
(In thousands) | March 31, | March 31, | March 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Cost of revenues | $ | 867 | $ | 188 | $ | 438 | ||||||||
Selling, general and administrative | 1,634 | (4 | ) | 1,361 | ||||||||||
Total share-based compensation expense before tax | 2,501 | $ | 184 | $ | 1,799 | |||||||||
NATURE_OF_OPERATIONS_AND_SUMMA2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||||||
Schedule of activity in the allowance for doubtful accounts | ' | |||||||||||||
(In thousands) | Balance at | Charged to | Deductions | Balance at | ||||||||||
Beginning | Costs and | or Write- | End of | |||||||||||
of Year | Expenses | offs | Year | |||||||||||
Charged to | ||||||||||||||
Reserves | ||||||||||||||
Fiscal 2014 | $ | 351 | $ | (27 | ) | $ | 1 | $ | 323 | |||||
Fiscal 2013 | $ | 255 | $ | 344 | $ | 248 | $ | 351 | ||||||
Fiscal 2012 | $ | 334 | $ | (79 | ) | $ | — | $ | 255 | |||||
Schedule of components of inventories, net of inventory reserves | ' | |||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Raw materials, completed subassemblies and spare parts | $ | 18,482 | $ | 21,450 | ||||||||||
Work-in-process | 13,199 | 21,129 | ||||||||||||
Finished goods | 1,254 | 5,472 | ||||||||||||
Total | $ | 32,935 | $ | 48,051 | ||||||||||
Schedule of activity in the reserve for excess or obsolete inventory | ' | |||||||||||||
(In thousands) | Balance at | Charged to | Deductions | Balance at | ||||||||||
Beginning | Costs and | / Write- | End of | |||||||||||
of Year | Expenses | offs | Year | |||||||||||
Charged to | ||||||||||||||
Reserves | ||||||||||||||
Fiscal 2014 | $ | 11,052 | $ | 1,355 | $ | 1,542 | $ | 10,865 | ||||||
Fiscal 2013 | $ | 6,210 | $ | 5,061 | $ | 219 | $ | 11,052 | ||||||
Fiscal 2012 | $ | 4,882 | $ | 3,076 | $ | 1,748 | $ | 6,210 | ||||||
Schedule of building, equipment and leasehold improvements | ' | |||||||||||||
(In thousands) | Estimated Useful Lives | 2014 | 2013 | |||||||||||
Building and leasehold improvements | Lesser of 25 years or remaining lease term | $ | 21,265 | $ | 21,245 | |||||||||
Equipment and tooling | 5-10 years | 5,517 | 5,284 | |||||||||||
Computer equipment and software | 3-5 years | 23,922 | 23,135 | |||||||||||
Furniture and fixtures | 5-7 years | 2,560 | 2,553 | |||||||||||
Demo and test equipment | 2-5 years | 8,331 | 7,579 | |||||||||||
Leased equipment | 1-2 years or life of lease | 63 | 63 | |||||||||||
Motor vehicles | 3-5 years | 72 | 72 | |||||||||||
Total | 61,730 | 59,931 | ||||||||||||
Less accumulated depreciation and amortization | (48,761 | ) | (43,480 | ) | ||||||||||
Building, equipment and leasehold improvements, net | $ | 12,969 | $ | 16,451 | ||||||||||
Schedule of accrued salaries and benefits | ' | |||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Accrued payroll and payroll related taxes | $ | 2,154 | $ | 1,995 | ||||||||||
Accrued incentive compensation | 6,360 | 4,633 | ||||||||||||
Accrued vacation | 1,885 | 1,739 | ||||||||||||
Accrued severance | 406 | 1,607 | ||||||||||||
Total accrued salaries and benefits | $ | 10,805 | $ | 9,974 | ||||||||||
Schedule of other current liabilities | ' | |||||||||||||
(In thousands) | 2014 | 2013 | ||||||||||||
Accrued accounts payable and other expenses | $ | 2,196 | $ | 4,213 | ||||||||||
Accrued contract related costs | 4,904 | 7,596 | ||||||||||||
Accrued professional fees | 361 | 375 | ||||||||||||
Accrued sales commissions | 1,831 | 2,010 | ||||||||||||
Total other current liabilities | $ | 9,292 | $ | 14,194 | ||||||||||
Schedule of calculation of basic and diluted earnings per share | ' | |||||||||||||
(In thousands except per share amounts) | March 31, | March 31, | March 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Earnings per Share — Basic: | ||||||||||||||
Net income | $ | 15,117 | $ | 17,454 | $ | 21,422 | ||||||||
Less: Distributed and undistributed earnings to unvested restricted stock units | (44 | ) | — | — | ||||||||||
Distributed and undistributed earnings to common shareholders — Basic | $ | 15,073 | $ | 17,454 | $ | 21,422 | ||||||||
Weighted average number of common shares outstanding — basic | 7,846 | 8,394 | 9,046 | |||||||||||
Income per share — basic | $ | 1.92 | $ | 2.08 | $ | 2.37 | ||||||||
Earnings per Share — Diluted: | ||||||||||||||
Weighted average number of common shares outstanding — basic | 7,846 | 8,394 | 9,046 | |||||||||||
Assumed exercise of stock options, warrants, restricted stock and restricted stock units | 35 | 54 | 102 | |||||||||||
Weighted average number of common and potential common shares outstanding — diluted | 7,881 | 8,448 | 9,148 | |||||||||||
Income per share — diluted | $ | 1.91 | $ | 2.07 | $ | 2.34 | ||||||||
Schedule of common stock cash dividends declared | ' | |||||||||||||
Date Declared | Dividend per | |||||||||||||
common share | ||||||||||||||
May 7, 2013 | $ | 0.5 | ||||||||||||
August 5, 2013 | 0.5 | |||||||||||||
November 12, 2013 | 0.5 | |||||||||||||
February 5, 2014 | 0.5 | |||||||||||||
Fiscal year ended March 31, 2014 | $ | 2 | ||||||||||||
Summary of share-based compensation costs included in the consolidated statements of operations | ' | |||||||||||||
Fiscal Year Ended | ||||||||||||||
(In thousands) | March 31, | March 31, | March 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||||
Cost of revenues | $ | 867 | $ | 188 | $ | 438 | ||||||||
Selling, general and administrative | 1,634 | (4 | ) | 1,361 | ||||||||||
Total share-based compensation expense before tax | 2,501 | $ | 184 | $ | 1,799 | |||||||||
LEASE_AGREEMENTS_Tables
LEASE AGREEMENTS (Tables) | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
LEASE AGREEMENTS | ' | |||||||
Schedule of future minimum rental payments under the Company's non-cancelable leases, excluding real estate taxes, insurance and operating costs paid by the entity, required over the initial terms of the leases | ' | |||||||
Future minimum rental payments under the Company’s non-cancelable leases, excluding real estate taxes, insurance and operating costs paid by the Company, required over the initial terms of the leases are as follows (in thousands): | ||||||||
Year Ending March 31, | Operating Leases | Capital Leases | ||||||
2015 | $ | 532 | $ | 1,542 | ||||
2016 | 225 | 1,414 | ||||||
Total payments | $ | 757 | 2,956 | |||||
Imputed interest | (41 | ) | ||||||
Lease financing liability | 2,915 | |||||||
Less: Current portion of lease financing liability | 1,511 | |||||||
Lease financing liability, net of current portion | $ | 1,404 | ||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
INCOME TAXES | ' | |||||||||||||
Schedule of components of provision (benefit) for income taxes | ' | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||
Current: | ||||||||||||||
Federal | $ | 6,870 | $ | 11,339 | $ | 9,082 | ||||||||
State | 281 | 595 | 197 | |||||||||||
Foreign | 88 | 22 | 7 | |||||||||||
7,239 | 11,956 | 9,286 | ||||||||||||
Deferred: | ||||||||||||||
Federal | 528 | (2,743 | ) | 1,610 | ||||||||||
State | (358 | ) | (375 | ) | 212 | |||||||||
Change in valuation allowance | 207 | 154 | (72 | ) | ||||||||||
377 | (2,964 | ) | 1,750 | |||||||||||
Provision for income taxes | $ | 7,616 | $ | 8,992 | $ | 11,036 | ||||||||
Schedule of the difference between the total expected provision for income taxes computed by applying the statutory federal income tax rate to income before provision for income taxes and the recorded provision for income taxes | ' | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||
Provision for income taxes at statutory rate | $ | 7,957 | $ | 9,253 | $ | 11,360 | ||||||||
State tax provision (benefit) net of federal effect | (50 | ) | 143 | 265 | ||||||||||
Stock based compensation | 51 | (60 | ) | 107 | ||||||||||
Research tax credits | (294 | ) | (589 | ) | (289 | ) | ||||||||
Qualifying manufacturing credits | (288 | ) | (154 | ) | (315 | ) | ||||||||
Change in valuation allowance | 207 | 154 | (72 | ) | ||||||||||
Other | 33 | 245 | (20 | ) | ||||||||||
Provision for income taxes | $ | 7,616 | $ | 8,992 | $ | 11,036 | ||||||||
Schedule of the significant components of the net deferred tax assets | ' | |||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||
(In thousands) | Current | Non-current | Current | Non-current | ||||||||||
Deferred tax assets (liabilities): | ||||||||||||||
Accounts receivable and unbilled costs and fees | $ | — | $ | 115 | $ | — | $ | 125 | ||||||
Inventory | 240 | 3,880 | 248 | 3,935 | ||||||||||
Deferred revenue | — | 1,783 | — | 1,778 | ||||||||||
Accrued vacation | 606 | — | 558 | — | ||||||||||
Accrued warranty costs | 144 | — | 141 | — | ||||||||||
Depreciation | — | (125 | ) | — | (495 | ) | ||||||||
Accrued contract costs | 1,073 | (1,356 | ) | — | — | |||||||||
Unearned compensation | 2,464 | 2,221 | 1,738 | 2,573 | ||||||||||
State credit carryforwards | — | 1,151 | — | 944 | ||||||||||
Other | 248 | (200 | ) | 470 | 409 | |||||||||
Deferred income tax assets | 4,775 | 7,469 | 3,155 | 9,269 | ||||||||||
Valuation allowance | — | (1,151 | ) | — | (944 | ) | ||||||||
Net deferred income taxes | $ | 4,775 | $ | 6,318 | $ | 3,155 | $ | 8,325 | ||||||
WARRANTY_OBLIGATIONS_Tables
WARRANTY OBLIGATIONS (Tables) | 12 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
WARRANTY OBLIGATIONS | ' | |||||||
Schedule of warranty experience | ' | |||||||
(In thousands) | 2014 | 2013 | ||||||
Warranty accrual at beginning of period | $ | 397 | $ | 358 | ||||
Accruals for warranties issued during the period | 564 | 548 | ||||||
Adjustment of preexisting accrual estimates | (179 | ) | 152 | |||||
Warranty costs incurred during period | (378 | ) | (661 | ) | ||||
Warranty accrual at end of period | $ | 404 | $ | 397 | ||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||
of Shares | Average | of Shares | Average | of Shares | Average | ||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||
Price | Price | Price | |||||||||||||||
Options outstanding, beginning of year | 315,162 | $ | 56.72 | 376,331 | $ | 55.1 | 472,446 | $ | 55.77 | ||||||||
Options granted | — | — | — | — | — | — | |||||||||||
Options exercised | (84,853 | ) | 41.55 | (50,505 | ) | 42.75 | (75,714 | ) | 56.63 | ||||||||
Options canceled or expired | (5,345 | ) | 43.66 | (10,664 | ) | 65.72 | (20,401 | ) | 65.01 | ||||||||
Options outstanding, end of year | 224,964 | $ | 62.75 | 315,162 | $ | 56.72 | 376,331 | $ | 55.1 | ||||||||
Options exercisable, end of year | 223,150 | $ | 62.76 | 312,895 | $ | 56.68 | 370,400 | $ | 55 | ||||||||
Options available for grant | 187,000 | 284,000 | 292,000 | ||||||||||||||
Summary of certain data for options outstanding and exercisable by exercise price range | ' | ||||||||||||||||
Number of | Range of Exercise | Weighted | Weighted | ||||||||||||||
Shares | Prices | Average | Average | ||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Contractual Life | |||||||||||||||||
Options outstanding: | 9,950 | $ | 19.85-$40.00 | $ | 27.85 | 0.44 | |||||||||||
49,207 | $ | 40.01-$60.00 | 51.99 | 1.73 | |||||||||||||
165,807 | $ | 60.01-$75.82 | 68.04 | 4.31 | |||||||||||||
224,964 | $ | 19.85-$75.82 | $ | 62.75 | 3.57 | ||||||||||||
Options exercisable: | 9,950 | $ | 19.85-$40.00 | $ | 27.85 | ||||||||||||
49,207 | $ | 40.01-$60.00 | 51.99 | ||||||||||||||
163,993 | $ | 70.01-$75.82 | 68.11 | ||||||||||||||
223,150 | $ | 19.85-$75.82 | $ | 62.76 | |||||||||||||
Summary of the restricted stock and stock unit activity | ' | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||
of Shares | Average | of Shares | Average | of Shares | Average | ||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||
Price | Price | Price | |||||||||||||||
Unvested restricted stock and units outstanding, beginning of year | 28,109 | $ | 66.2 | 40,599 | $ | 68.63 | 32,882 | $ | 65.03 | ||||||||
Granted | 70,515 | 60.52 | 19,657 | 61 | 24,006 | 73.03 | |||||||||||
Vested | (22,561 | ) | 64.53 | (17,463 | ) | 68.08 | (12,523 | ) | 68.7 | ||||||||
Forfeited | (4,063 | ) | 63.73 | (14,684 | ) | 63.71 | (3,766 | ) | 65.07 | ||||||||
Unvested restricted stock and units outstanding, end of year | 72,000 | $ | 61.3 | 28,109 | $ | 66.2 | 40,599 | $ | 68.63 | ||||||||
BUSINESS_SEGMENT_INFORMATION_T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
BUSINESS SEGMENT INFORMATION | ' | ||||||||||||||||
Schedule of breakdown of net sales and contract revenues to international and domestic customers based upon customer's country of domicile and the major regions of international activity | ' | ||||||||||||||||
Fiscal Year | |||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||
Domestic | $ | 94,427 | 50 | % | $ | 123,652 | 66 | % | $ | 133,441 | 66 | % | |||||
International | 95,822 | 50 | % | 63,028 | 34 | % | 70,111 | 34 | % | ||||||||
Net Sales and Contract Revenues | $ | 190,249 | 100 | % | $ | 186,680 | 100 | % | $ | 203,552 | 100 | % | |||||
Middle East & Africa | 72 | % | 54 | % | 63 | % | |||||||||||
Americas — Non-US | 11 | % | 29 | % | 20 | % | |||||||||||
Asia / Pacific | 11 | % | 13 | % | 11 | % | |||||||||||
Europe | 6 | % | 4 | % | 6 | % | |||||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
Schedule of financial assets and liabilities measured at fair value on recurring basis, based on the fair value hierarchy | ' | |||||||||||||
(In thousands) | March 31, | March 31, | ||||||||||||
2014 | 2013 | |||||||||||||
Level 1 — Financial Assets | ||||||||||||||
Money market funds | $ | 33,623 | $ | 16,549 | ||||||||||
Treasury bills | 17,722 | — | ||||||||||||
Total Level 1 Financial Assets | 51,345 | 16,549 | ||||||||||||
Level 2 — Financial Assets | ||||||||||||||
Corporate debentures/bonds | 41,424 | 75,572 | ||||||||||||
Commercial paper | 6,193 | 28,974 | ||||||||||||
Government agency bonds | 26,660 | — | ||||||||||||
Certificates of deposit | — | 4,000 | ||||||||||||
Total Level 2 Financial Assets | 74,277 | 108,546 | ||||||||||||
Total cash equivalents and short-term investments | $ | 125,622 | $ | 125,095 | ||||||||||
Schedule of available-for-sale securities | ' | |||||||||||||
Amortized | Gross | Gross | Fair Value | |||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
2014:00:00 | ||||||||||||||
Short-term investments: | ||||||||||||||
Corporate debentures/bonds | $ | 38,076 | $ | 9 | $ | (11 | ) | $ | 38,074 | |||||
Commercial paper | 6,193 | — | — | 6,193 | ||||||||||
Government agency bonds | 26,652 | 10 | (2 | ) | 26,660 | |||||||||
Treasury bills | 17,708 | 14 | — | 17,722 | ||||||||||
Total short-term investments | $ | 88,629 | $ | 33 | $ | (13 | ) | $ | 88,649 | |||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 33,623 | $ | — | $ | — | $ | 33,623 | ||||||
Corporate debentures/bonds | 3,350 | — | — | 3,350 | ||||||||||
Total cash equivalents | $ | 36,973 | $ | — | $ | — | $ | 36,973 | ||||||
Amortized | Gross | Gross | Fair Value | |||||||||||
Cost | Unrealized | Unrealized | ||||||||||||
Gains | Losses | |||||||||||||
2013:00:00 | ||||||||||||||
Short-term investments: | ||||||||||||||
Corporate debentures/bonds | $ | 75,578 | $ | 14 | $ | (20 | ) | $ | 75,572 | |||||
Commercial paper | 28,974 | — | — | 28,974 | ||||||||||
Certificates of deposit | 4,000 | — | — | 4,000 | ||||||||||
Total short-term investments | $ | 108,552 | $ | 14 | $ | (20 | ) | $ | 108,546 | |||||
Cash equivalents: | ||||||||||||||
Money market funds | 16,549 | — | — | 16,549 | ||||||||||
Total cash equivalents | $ | 16,549 | $ | — | $ | — | $ | 16,549 | ||||||
NATURE_OF_OPERATIONS_AND_SUMMA3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Accounts Receivable and Unbilled Costs and Fees | ' | ' | ' |
Accounts receivable and unbilled costs and fees attributable to both prime and subcontracts with federal and state governments | $15,961,000 | $12,973,000 | ' |
Inventories | ' | ' | ' |
Raw materials, completed sub-assemblies, and spare parts | 18,482,000 | 21,450,000 | ' |
Work-in-process | 13,199,000 | 21,129,000 | ' |
Finished goods | 1,254,000 | 5,472,000 | ' |
Total | 32,935,000 | 48,051,000 | ' |
Allowance for doubtful accounts | ' | ' | ' |
Activity | ' | ' | ' |
Balance at Beginning of Year | 351,000 | 255,000 | 334,000 |
Charged to Costs and Expenses | -27,000 | 344,000 | -79,000 |
Deductions or Write-offs Charged to Reserves | 1,000 | 248,000 | ' |
Balance at End of Year | 323,000 | 351,000 | 255,000 |
Reserve for excess or obsolete inventory | ' | ' | ' |
Activity | ' | ' | ' |
Balance at Beginning of Year | 11,052,000 | 6,210,000 | 4,882,000 |
Charged to Costs and Expenses | 1,355,000 | 5,061,000 | 3,076,000 |
Deductions or Write-offs Charged to Reserves | 1,542,000 | 219,000 | 1,748,000 |
Balance at End of Year | $10,865,000 | $11,052,000 | $6,210,000 |
NATURE_OF_OPERATIONS_AND_SUMMA4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | Minimum | Maximum | Building and leasehold improvements | Building and leasehold improvements | Building and leasehold improvements | Equipment and tooling | Equipment and tooling | Equipment and tooling | Equipment and tooling | Computer equipment and software | Computer equipment and software | Computer equipment and software | Computer equipment and software | Furniture and fixtures | Furniture and fixtures | Furniture and fixtures | Furniture and fixtures | Demo and test equipment | Demo and test equipment | Demo and test equipment | Demo and test equipment | Leased equipment | Leased equipment | Leased equipment | Leased equipment | Motor vehicles | Motor vehicles | Motor vehicles | Motor vehicles | ||
Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | |||||||||||||||||||
Building, Equipment and Leasehold Improvements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated Useful Lives | ' | ' | '1 year | '25 years | ' | ' | '25 years | ' | ' | '5 years | '10 years | ' | ' | '3 years | '5 years | ' | ' | '5 years | '7 years | ' | ' | '2 years | '5 years | ' | ' | '1 year | '2 years | ' | ' | '3 years | '5 years |
Total | $61,730 | $59,931 | ' | ' | $21,265 | $21,245 | ' | $5,517 | $5,284 | ' | ' | $23,922 | $23,135 | ' | ' | $2,560 | $2,553 | ' | ' | $8,331 | $7,579 | ' | ' | $63 | $63 | ' | ' | $72 | $72 | ' | ' |
Less accumulated depreciation and amortization | -48,761 | -43,480 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Building, equipment and leasehold improvements, net | $12,969 | $16,451 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NATURE_OF_OPERATIONS_AND_SUMMA5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Revenue Recognition | ' | ' | ' |
Unbilled costs and fees expected to be billed and collected during fiscal 2015 | $2,484,000 | ' | ' |
Percentage of unbilled costs and fees expected to be billed and collected during fiscal 2015 | 99.00% | ' | ' |
Retainages | 36,000 | 80,000 | ' |
Commercial contract retentions and government contract withholdings as a percent of fees | 15.00% | ' | ' |
Warranty Costs | ' | ' | ' |
Parts and labor warranty period for certain of the company's products with purchase of domestic equipment | '1 year | ' | ' |
Parts only or parts and labor warranty period for certain of the products with purchase of international equipment | '1 year | ' | ' |
Deferred Revenue | ' | ' | ' |
Minimum period covered under extended warranty and service contracts | '1 year | ' | ' |
Maximum period covered under extended warranty and service contracts | '5 years | ' | ' |
Impairment of Long-Lived Assets | ' | ' | ' |
Impairment costs | 0 | 0 | 0 |
Accrued Salaries and Benefits | ' | ' | ' |
Accrued payroll and payroll related taxes | 2,154,000 | 1,995,000 | ' |
Accrued incentive compensation | 6,360,000 | 4,633,000 | ' |
Accrued vacation | 1,885,000 | 1,739,000 | ' |
Accrued severance | 406,000 | 1,607,000 | ' |
Total accrued salaries and benefits | 10,805,000 | 9,974,000 | ' |
Other Current Liabilities | ' | ' | ' |
Accrued accounts payable and other expenses | 2,196,000 | 4,213,000 | ' |
Accrued contract related costs | 4,904,000 | 7,596,000 | ' |
Accrued professional fees | 361,000 | 375,000 | ' |
Accrued sales commissions | 1,831,000 | 2,010,000 | ' |
Total other current liabilities | 9,292,000 | 14,194,000 | ' |
Research and Development | ' | ' | ' |
Research and development costs | 22,089,000 | 23,618,000 | 25,544,000 |
Revenue recognized related to government-sponsored research and development | 698,000 | 2,124,000 | 4,409,000 |
Income per Common and Potential Common Shares | ' | ' | ' |
Common stock equivalents excluded from diluted earnings per share as their effect is anti-dilutive (in shares) | 176,000 | 182,000 | 64,000 |
Earnings per Share - Basic: | ' | ' | ' |
Net income | 15,117,000 | 17,454,000 | 21,422,000 |
Less: Distributed and undistributed earnings to unvested restricted stock units | -44,000 | ' | ' |
Distributed and undistributed earnings to common shareholders - Basic | $15,073,000 | $17,454,000 | $21,422,000 |
Weighted average number of common shares outstanding - basic (in shares) | 7,846,000 | 8,394,000 | 9,046,000 |
Income per share - basic (in dollars per share) | $1.92 | $2.08 | $2.37 |
Earnings per Share - Diluted: | ' | ' | ' |
Weighted average number of common shares outstanding - basic (in shares) | 7,846,000 | 8,394,000 | 9,046,000 |
Assumed exercise of stock options, warrants, restricted stock and restricted stock units (in shares) | 35,000 | 54,000 | 102,000 |
Weighted average number of common and potential common shares outstanding - diluted (in shares) | 7,881,000 | 8,448,000 | 9,148,000 |
Income per share - diluted (in dollars per share) | $1.91 | $2.07 | $2.34 |
Minimum | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Period of certain long-term, custom-built systems or contract engineering projects | '1 year | ' | ' |
Maximum | ' | ' | ' |
Revenue Recognition | ' | ' | ' |
Period of certain long-term, custom-built systems or contract engineering projects | '4 years | ' | ' |
NATURE_OF_OPERATIONS_AND_SUMMA6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||
Feb. 05, 2014 | Nov. 12, 2013 | Aug. 05, 2013 | 7-May-13 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | 22-May-14 | Jun. 09, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Customer | Customer | Customer | Subsequent event | Subsequent event | Credit risk | Credit risk | Credit risk | Accounts receivable | |||||
Forecast | Customer | U.S. government | International customer | Credit risk | |||||||||
Customer | Customer | ||||||||||||
Concentrations of credit risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of major customers | ' | ' | ' | ' | 3 | 2 | 1 | ' | ' | 2 | 1 | 1 | ' |
Percentage of concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55.00% |
Common Stock Dividends | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends declared per common share (in dollars per share) | $0.50 | $0.50 | $0.50 | $0.50 | $2 | $2 | $1.60 | $0.50 | ' | ' | ' | ' | ' |
Dividends paid (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $0.50 | ' | ' | ' | ' |
NATURE_OF_OPERATIONS_AND_SUMMA7
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Stock-Based Compensation | ' | ' | ' |
Total share-based compensation expense before tax | $2,501,000 | $184,000 | $1,799,000 |
Income tax benefit recognized related to the compensation | 833,000 | 63,000 | 612,000 |
Cost of revenues | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' |
Total share-based compensation expense before tax | 867,000 | 188,000 | 438,000 |
Selling, general and administrative | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' |
Total share-based compensation expense before tax | $1,634,000 | ($4,000) | $1,361,000 |
LEASE_AGREEMENTS_Details
LEASE AGREEMENTS (Details) (USD $) | 12 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | Mar. 31, 2008 | Mar. 31, 2007 | |
Lease Agreements | ' | ' | ' | ' | ' |
Operating lease, rent expense | $1,030,000 | $787,000 | $730,000 | ' | ' |
Amount capitalized | ' | ' | ' | ' | 2,029,000 |
Landlord construction allowances recorded as additional lease financing liability | ' | ' | ' | 367,000 | ' |
Operating Leases | ' | ' | ' | ' | ' |
2015 | 532,000 | ' | ' | ' | ' |
2016 | 225,000 | ' | ' | ' | ' |
Total payments | 757,000 | ' | ' | ' | ' |
Capital Leases | ' | ' | ' | ' | ' |
2015 | 1,542,000 | ' | ' | ' | ' |
2016 | 1,414,000 | ' | ' | ' | ' |
Total payments | 2,956,000 | ' | ' | ' | ' |
Imputed interest | -41,000 | ' | ' | ' | ' |
Lease financing liability | 2,915,000 | ' | ' | ' | ' |
Less: Current portion of lease financing liability | 1,511,000 | 1,489,000 | ' | ' | ' |
Lease financing liability, net of current portion | 1,404,000 | 2,914,000 | ' | ' | ' |
Standby letters of credit | ' | ' | ' | ' | ' |
Lease Agreements | ' | ' | ' | ' | ' |
Letter of credit issued as security for lease | 28,060,000 | ' | ' | ' | ' |
Headquarters | Standby letters of credit | ' | ' | ' | ' | ' |
Lease Agreements | ' | ' | ' | ' | ' |
Letter of credit issued as security for lease | $300,000 | ' | ' | ' | ' |
LETTERS_OF_CREDIT_Details
LETTERS OF CREDIT (Details) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
Credit facilities | ' | ' |
Long-term restricted cash, as determined by the expiration date of the underlying letters of credit | $313,000 | $899,000 |
Standby letters of credit | ' | ' |
Credit facilities | ' | ' |
Outstanding Amount | 28,060,000 | ' |
Restricted cash balance | 14,916,000 | ' |
Long-term restricted cash, as determined by the expiration date of the underlying letters of credit | $313,000 | ' |
Standby letters of credit | Minimum | ' | ' |
Credit facilities | ' | ' |
Percentage of outstanding amount that is cash secured | 51.00% | ' |
Standby letters of credit | Maximum | ' | ' |
Credit facilities | ' | ' |
Percentage of outstanding amount that is cash secured | 74.00% | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 |
Current: | ' | ' | ' |
Federal | $6,870 | $11,339 | $9,082 |
State | 281 | 595 | 197 |
Foreign | 88 | 22 | 7 |
Total | 7,239 | 11,956 | 9,286 |
Deferred: | ' | ' | ' |
Federal | 528 | -2,743 | 1,610 |
State | -358 | -375 | 212 |
Change in valuation allowance | 207 | 154 | -72 |
Total | 377 | -2,964 | 1,750 |
Provision for income taxes | $7,616 | $8,992 | $11,036 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 |
INCOME TAXES | ' | ' | ' |
Provision for income taxes at statutory rate | $7,957 | $9,253 | $11,360 |
State tax provision (benefit) net of federal effect | -50 | 143 | 265 |
Stock based compensation | 51 | -60 | 107 |
Research tax credits | -294 | -589 | -289 |
Qualifying manufacturing credits | -288 | -154 | -315 |
Change in valuation allowance | 207 | 154 | -72 |
Other | 33 | 245 | -20 |
Provision for income taxes | $7,616 | $8,992 | $11,036 |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
Current | ' | ' |
Inventory | $240,000 | $248,000 |
Accrued vacation | 606,000 | 558,000 |
Accrued warranty costs | 144,000 | 141,000 |
Accrued contract costs | 1,073,000 | ' |
Unearned compensation | 2,464,000 | 1,738,000 |
Other | 248,000 | 470,000 |
Deferred income tax assets | 4,775,000 | 3,155,000 |
Net deferred income taxes | 4,775,000 | 3,155,000 |
Non-current | ' | ' |
Accounts receivable and unbilled costs and fees | 115,000 | 125,000 |
Inventory | 3,880,000 | 3,935,000 |
Deferred revenue | 1,783,000 | 1,778,000 |
Depreciation | -125,000 | -495,000 |
Accrued contract costs | -1,356,000 | ' |
Unearned compensation | 2,221,000 | 2,573,000 |
State credit carryforwards | 1,151,000 | 944,000 |
Other | -200,000 | 409,000 |
Deferred income tax assets | 7,469,000 | 9,269,000 |
Valuation allowance | -1,151,000 | -944,000 |
Net deferred income taxes | 6,318,000 | 8,325,000 |
Tax credit carryforwards | ' | ' |
Proceeds receivable related to settlement with Massachusetts Department of Revenue | ' | 1,500,000 |
State and local jurisdiction | ' | ' |
Tax credit carryforwards | ' | ' |
State credit carryforwards | 1,770,000 | 1,452,000 |
Unlimited carryforwards amount | $263,000 | $201,000 |
WARRANTY_OBLIGATIONS_Details
WARRANTY OBLIGATIONS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
WARRANTY OBLIGATIONS | ' | ' |
Warranty period for certain products | '1 year | ' |
Historical experience trailing period based on how product warranty accrual rates are determined | '12 months | ' |
Warranty Experience | ' | ' |
Warranty accrual at beginning of period | $397 | $358 |
Accruals for warranties issued during the period | 564 | 548 |
Adjustment of preexisting accrual estimates | -179 | 152 |
Warranty costs incurred during the period | -378 | -661 |
Warranty accrual at end of period | $404 | $397 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Minimum | Series A Preferred Stock | |||
item | Minimum | |||
Preferred Stock | ' | ' | ' | ' |
Preferred stock, shares authorized | 100,000 | 100,000 | ' | ' |
Number of series in which preferred stock authorized is to be issued | ' | ' | 1 | ' |
Percentage of common stock that need to be purchased by a person or group or acquired under the announcement of a tender or exchange offer | ' | ' | ' | 15.00% |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (USD $) | 0 Months Ended | 12 Months Ended | |
Aug. 02, 2012 | 7-May-13 | Mar. 31, 2014 | |
Fourth Stock Repurchase Program | Fifth Stock Repurchase Program | Stock Repurchase Program | |
Stock Repurchase Program | ' | ' | ' |
Authorized amount of repurchase of common stock | $35,000,000 | $35,000,000 | ' |
Number of shares repurchased under the stock repurchase program | ' | ' | 201,192 |
Average price of repurchased shares of stock (in dollars per share) | ' | ' | $61.16 |
Remaining balance available under the programs to repurchase shares | ' | ' | $35,000,000 |
STOCKHOLDERS_EQUITY_Details_3
STOCKHOLDERS' EQUITY (Details 3) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Stock Option and Other Compensation Plans | ' | ' | ' |
Number of shares authorized under the plans | 3,040,000 | ' | ' |
Minimum | ' | ' | ' |
Stock Option and Other Compensation Plans | ' | ' | ' |
Vesting period for awards granted under the plans | '1 year | ' | ' |
Maximum | ' | ' | ' |
Stock Option and Other Compensation Plans | ' | ' | ' |
Vesting period for awards granted under the plans | '3 years | ' | ' |
Stock options | ' | ' | ' |
Stock Option and Other Compensation Plans | ' | ' | ' |
Term of awards from the date of grant | '10 years | ' | ' |
Number of Shares | ' | ' | ' |
Options outstanding, beginning of year (in shares) | 315,162 | 376,331 | 472,446 |
Options exercised (in shares) | -84,853 | -50,505 | -75,714 |
Options canceled or expired (in shares) | -5,345 | -10,664 | -20,401 |
Options outstanding, end of year (in shares) | 224,964 | 315,162 | 376,331 |
Options exercisable, end of year (in shares) | 223,150 | 312,895 | 370,400 |
Options available for grant (in shares) | 187,000 | 284,000 | 292,000 |
Weighted Average Exercise Price | ' | ' | ' |
Options outstanding, beginning of year (in dollars per share) | $56.72 | $55.10 | $55.77 |
Options exercised (in dollars per share) | $41.55 | $42.75 | $56.63 |
Options canceled or expired (in dollars per share) | $43.66 | $65.72 | $65.01 |
Options outstanding, end of year (in dollars per share) | $62.75 | $56.72 | $55.10 |
Options exercisable, end of year (in dollars per share) | $62.76 | $56.68 | $55 |
STOCKHOLDERS_EQUITY_Details_4
STOCKHOLDERS' EQUITY (Details 4) (USD $) | 12 Months Ended |
Mar. 31, 2014 | |
$19.85 - $40.00 | ' |
Data for options outstanding and exercisable | ' |
Exercise price, low end of range (in dollars per share) | $19.85 |
Exercise price, high end of range (in dollars per share) | $40 |
Options outstanding: | ' |
Number of Shares | 9,950 |
Weighted Average Exercise Price (in dollars per share) | $27.85 |
Weighted Average Remaining Contractual Life | '5 months 8 days |
Options exercisable: | ' |
Number of Shares | 9,950 |
Weighted Average Exercise Price (in dollars per share) | $27.85 |
$40.01 - $60.00 | ' |
Data for options outstanding and exercisable | ' |
Exercise price, low end of range (in dollars per share) | $40.01 |
Exercise price, high end of range (in dollars per share) | $60 |
Options outstanding: | ' |
Number of Shares | 49,207 |
Weighted Average Exercise Price (in dollars per share) | $51.99 |
Weighted Average Remaining Contractual Life | '1 year 8 months 23 days |
Options exercisable: | ' |
Number of Shares | 49,207 |
Weighted Average Exercise Price (in dollars per share) | $51.99 |
$60.01 - $75.82 | ' |
Data for options outstanding and exercisable | ' |
Exercise price, low end of range (in dollars per share) | $60.01 |
Exercise price, high end of range (in dollars per share) | $75.82 |
Options outstanding: | ' |
Number of Shares | 165,807 |
Weighted Average Exercise Price (in dollars per share) | $68.04 |
Weighted Average Remaining Contractual Life | '4 years 3 months 22 days |
Options exercisable: | ' |
Number of Shares | 163,993 |
Weighted Average Exercise Price (in dollars per share) | $68.11 |
$19.85 - $75.82 | ' |
Data for options outstanding and exercisable | ' |
Exercise price, low end of range (in dollars per share) | $19.85 |
Exercise price, high end of range (in dollars per share) | $75.82 |
Options outstanding: | ' |
Number of Shares | 224,964 |
Weighted Average Exercise Price (in dollars per share) | $62.75 |
Weighted Average Remaining Contractual Life | '3 years 6 months 25 days |
Options exercisable: | ' |
Number of Shares | 223,150 |
Weighted Average Exercise Price (in dollars per share) | $62.76 |
STOCKHOLDERS_EQUITY_Details_5
STOCKHOLDERS' EQUITY (Details 5) (Stock options, USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Stock options | ' | ' | ' |
Stockholder's equity | ' | ' | ' |
Total intrinsic value of stock options exercised (in dollars) | $1,906,000 | $986,000 | $1,815,000 |
Unrecognized compensation costs | 0 | ' | ' |
Tax benefit (expense) recorded to additional paid-in capital for exercises and/or sales of stock options or stock | $9,000 | $135,000 | ($303,000) |
STOCKHOLDERS_EQUITY_Details_6
STOCKHOLDERS' EQUITY (Details 6) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Minimum | ' | ' | ' |
Stockholder's equity | ' | ' | ' |
Vesting period for awards granted under the plans | '1 year | ' | ' |
Maximum | ' | ' | ' |
Stockholder's equity | ' | ' | ' |
Vesting period for awards granted under the plans | '3 years | ' | ' |
Restricted Stock and Restricted Stock Units | ' | ' | ' |
Stockholder's equity | ' | ' | ' |
Unrecognized compensation costs | $2,389,000 | ' | ' |
Expected period to recognize unrecognized compensation costs | '1 year 3 months 18 days | ' | ' |
Number of Shares | ' | ' | ' |
Unvested restricted stock and units outstanding, beginning of year (in shares) | 28,109 | 40,599 | 32,882 |
Granted (in shares) | 70,515 | 19,657 | 24,006 |
Vested (in shares) | -22,561 | -17,463 | -12,523 |
Forfeited (in shares) | -4,063 | -14,684 | -3,766 |
Unvested restricted stock and units outstanding, end of year (in shares) | 72,000 | 28,109 | 40,599 |
Weighted Average Exercise Price | ' | ' | ' |
Unvested restricted stock and units outstanding, beginning of year (in dollars per share) | $66.20 | $68.63 | $65.03 |
Granted (in dollars per share) | $60.52 | $61 | $73.03 |
Vested (in dollars per share) | $64.53 | $68.08 | $68.70 |
Forfeited (in dollars per share) | $63.73 | $63.71 | $65.07 |
Unvested restricted stock and units outstanding, end of year (in dollars per share) | $61.30 | $66.20 | $68.63 |
Restricted Stock and Restricted Stock Units | Employees | Minimum | ' | ' | ' |
Stockholder's equity | ' | ' | ' |
Vesting period for awards granted under the plans | '1 year | ' | ' |
Restricted Stock and Restricted Stock Units | Employees | Maximum | ' | ' | ' |
Stockholder's equity | ' | ' | ' |
Vesting period for awards granted under the plans | '3 years | ' | ' |
Restricted Stock | Board of Directors | ' | ' | ' |
Stockholder's equity | ' | ' | ' |
Vesting period for awards granted under the plans | '1 year | ' | ' |
BUSINESS_SEGMENT_INFORMATION_D
BUSINESS SEGMENT INFORMATION (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 |
segment | |||
BUSINESS SEGMENT INFORMATION | ' | ' | ' |
Number of operating segments | 1 | ' | ' |
Geographical Data | ' | ' | ' |
Net Sales and Contract Revenues | $190,249 | $186,680 | $203,552 |
Domestic | ' | ' | ' |
Geographical Data | ' | ' | ' |
Net Sales and Contract Revenues | 94,427 | 123,652 | 133,441 |
International | ' | ' | ' |
Geographical Data | ' | ' | ' |
Net Sales and Contract Revenues | $95,822 | $63,028 | $70,111 |
Assets | International | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 2.10% | ' | ' |
Net sales and contract revenues | Customer Concentration | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 100.00% | 100.00% | 100.00% |
Net sales and contract revenues | Customer Concentration | Domestic | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 50.00% | 66.00% | 66.00% |
Net sales and contract revenues | Customer Concentration | International | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 50.00% | 34.00% | 34.00% |
Net sales and contract revenues | Customer Concentration | Middle East & Africa | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 72.00% | 54.00% | 63.00% |
Net sales and contract revenues | Customer Concentration | Americas - Non-US | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 11.00% | 29.00% | 20.00% |
Net sales and contract revenues | Customer Concentration | Asia / Pacific | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 11.00% | 13.00% | 11.00% |
Net sales and contract revenues | Customer Concentration | Europe | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 6.00% | 4.00% | 6.00% |
Sales | Customer Concentration | International | One individual country | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | 15.00% | ' | 11.00% |
Sales | Customer Concentration | International | One individual country | Maximum | ' | ' | ' |
Geographical Data | ' | ' | ' |
Percentage of concentration risk | ' | 10.00% | ' |
BUSINESS_SEGMENT_INFORMATION_D1
BUSINESS SEGMENT INFORMATION (Details 2) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
Customer | Customer | Customer | |
Major Customers | ' | ' | ' |
Number of major customers | 3 | 2 | 1 |
Major customer - one customer | ' | ' | ' |
Major Customers | ' | ' | ' |
Major customers amount | ' | ' | 46,167,000 |
Major customer - two customer A | ' | ' | ' |
Major Customers | ' | ' | ' |
Major customers amount | ' | 44,850,000 | ' |
Major customer - two customer B | ' | ' | ' |
Major Customers | ' | ' | ' |
Major customers amount | ' | 30,874,000 | ' |
Major customer - three customer A | ' | ' | ' |
Major Customers | ' | ' | ' |
Major customers amount | 33,886,000 | ' | ' |
Major customer - three customer B | ' | ' | ' |
Major Customers | ' | ' | ' |
Major customers amount | 25,863,000 | ' | ' |
Major customer - three customer C | ' | ' | ' |
Major Customers | ' | ' | ' |
Major customers amount | 25,078,000 | ' | ' |
Agencies of the U.S. government | ' | ' | ' |
Major Customers | ' | ' | ' |
Number of contracts terminated | 0 | 0 | 1 |
Agencies of the U.S. government | Sales | ' | ' | ' |
Major Customers | ' | ' | ' |
Major customers percentage | 46.00% | 63.00% | 62.00% |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (Recurring basis, USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | ||
Level 1 | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | $51,345 | $16,549 |
Level 1 | Money market funds | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | 33,623 | 16,549 |
Level 1 | Treasury bills | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | 17,722 | ' |
Level 2 | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | 74,277 | 108,546 |
Level 2 | Corporate debentures/bonds | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | 41,424 | 75,572 |
Level 2 | Commercial paper | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | 6,193 | 28,974 |
Level 2 | Government agency bonds | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | 26,660 | ' |
Level 2 | Certificates of deposit | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | ' | 4,000 |
Total fair value | ' | ' |
Financial Assets | ' | ' |
Total cash equivalents and short-term investments | $125,622 | $125,095 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 2) (USD $) | Mar. 31, 2014 | Mar. 31, 2013 |
In Thousands, unless otherwise specified | ||
Short-term investments | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | $88,629 | $108,552 |
Gross Unrealized Gains | 33 | 14 |
Gross Unrealized Losses | -13 | -20 |
Fair Value | 88,649 | 108,546 |
Short-term investments | Certificates of deposit | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | ' | 4,000 |
Fair Value | ' | 4,000 |
Short-term investments | Treasury bills | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 17,708 | ' |
Gross Unrealized Gains | 14 | ' |
Fair Value | 17,722 | ' |
Short-term investments | Corporate debentures/bonds | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 38,076 | 75,578 |
Gross Unrealized Gains | 9 | 14 |
Gross Unrealized Losses | -11 | -20 |
Fair Value | 38,074 | 75,572 |
Short-term investments | Commercial paper | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 6,193 | 28,974 |
Fair Value | 6,193 | 28,974 |
Short-term investments | Government agency bonds | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 26,652 | ' |
Gross Unrealized Gains | 10 | ' |
Gross Unrealized Losses | -2 | ' |
Fair Value | 26,660 | ' |
Cash equivalents | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 36,973 | 16,549 |
Fair Value | 36,973 | 16,549 |
Cash equivalents | Money market funds | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 33,623 | 16,549 |
Fair Value | 33,623 | 16,549 |
Cash equivalents | Corporate debentures/bonds | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 3,350 | ' |
Fair Value | $3,350 | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | 1 Months Ended |
Mar. 31, 2014 | Mar. 31, 2013 | |
Employment agreement with Charles P. Dougherty | ||
COMMITMENTS AND CONTINGENCIES | ' | ' |
Amount of open purchase orders | $25,119,000 | ' |
Expected period for fulfillment of open purchase orders | '2 years | ' |
Employment Agreements | ' | ' |
Base compensation payable per year | ' | $550,000 |
Performance-based annual incentive bonus as a percentage of base compensation per year | ' | 100.00% |
Long-term incentive program with awards as a percentage of base compensation upon achievement of certain long-term strategic goals | ' | 200.00% |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | |
401(k) Retirement Savings Plan | ' | ' | ' |
Maximum percentage of employee gross pay the employee may contribute to a defined contribution plan | 100.00% | ' | ' |
Percentage of employer matching contribution | 50.00% | ' | ' |
Percentage of employees' gross pay for which the employer contributes a matching contribution to a defined contribution plan | 6.00% | ' | ' |
Expenses under the Plan, consisting of employer contributions and Plan administrative expenses | $927,000 | $1,091,000 | $1,152,000 |