Cyanotech (CYAN) 10-Q 7 Aug 15 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Jun. 30, 2015	Aug. 03, 2015
Entity Registrant Name	Cyanotech Corp
Entity Central Index Key	768,408
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		5,564,799
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015
Current assets:
Cash and cash equivalents	$ 1,502	$ 2,226
Accounts receivable, net of allowance for doubtful accounts of $6 at June 30, 2015 and $6 at March 31, 2015	3,548	3,258
Inventories, net	5,839	5,678
Deferred tax assets	315	315
Prepaid expenses and other current assets	401	317
Total current assets	11,605	11,794
Equipment and leasehold improvements, net	15,533	14,754
Restricted cash	328	486
Deferred tax assets	3,169	3,035
Other assets	929	846
Total assets	31,564	$ 30,915
Current liabilities:
Note payable	500
Current maturities of long-term debt	233	$ 234
Customer deposits	83	31
Accounts payable	3,090	2,926
Accrued expenses	1,055	1,124
Total current liabilities	4,961	4,315
Long-term debt, excluding current maturities	5,053	5,109
Deferred rent	8	8
Total liabilities	$ 10,022	9,432
Commitments and contingencies
Stockholders’ equity:
Common stock of $0.02 par value, shares authorized 50,000,000; 5,564,799 shares issued and outstanding at June 30, 2015 and 5,564,799 at March 31, 2015	$ 111	111
Additional paid-in capital	31,010	30,846
Accumulated deficit	(9,579)	(9,474)
Total stockholders’ equity	21,542	21,483
Total liabilities and stockholders’ equity	$ 31,564	$ 30,915

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015
Accounts receivable, allowance for doubtful accounts	$ 6	$ 6
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, authorized shares (in shares)	50,000,000	50,000,000
Common stock, issued shares (in shares)	5,564,799	5,564,799
Common stock, outstanding shares (in shares)	5,564,799	5,564,799

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
NET SALES	$ 7,594,000	$ 7,624,000
COST OF SALES	4,670,000	4,565,000
Gross Profit	2,924,000	3,059,000
OPERATING EXPENSES:
General and administrative	1,210,000	2,747,000
Sales and marketing	1,732,000	1,234,000
Research and development	$ 177,000	116,000
Loss on disposal of equipment and leasehold improvements		10,000
Total operating expenses	$ 3,119,000	4,107,000
Loss from operations	(195,000)	(1,048,000)
Interest expense, net	24,000	25,000
Loss before income tax	(219,000)	(1,073,000)
INCOME TAX BENEFIT	(114,000)	(692,000)
NET LOSS	$ (105,000)	$ (381,000)
NET LOSS PER SHARE:
Basic (in dollars per share)	$ (0.02)	$ (0.07)
Diluted (in dollars per share)	$ (0.02)	$ (0.07)
SHARES USED IN CALCULATION OF NET LOSS PER SHARE:
Basic (in shares)	5,565	5,488
Diluted (in shares)	5,565	5,488

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (105)	$ (381)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of equipment and leasehold improvements		10
Depreciation and amortization	$ 313	303
Amortization of debt issue costs and other assets	12	12
Share based compensation expense	$ 163	192
Reduction of inventory reserve		(1)
Deferred income tax benefit	$ (134)	(716)
Net (increase) decrease in assets:
Accounts receivable	(290)	113
Inventories	(161)	130
Prepaid expenses	(84)	$ (50)
Other assets	(94)
Net increase (decrease) in liabilities:
Customer deposits	52	$ 33
Accounts payable	164	132
Accrued expenses	(69)	5
Net cash used in operating activities	(233)	(218)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from restricted cash	158	253
Investment in equipment and leasehold improvements	(1,092)	(903)
Net cash used in investing activities	(934)	$ (650)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short term note payable	500
Principal payments on long-term debt	(57)	$ (51)
Net cash provided by (used in) financing activities	443	(51)
Net decrease in cash and cash equivalents	(724)	(919)
Cash and cash equivalents at beginning of period	2,226	4,312
Cash and cash equivalents at end of period	1,502	3,393
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest	83	75
Income taxes	$ 21	$ 5

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]	1. BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission (SEC). These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows for the periods presented in accordance with GAAP. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. The Condensed Consolidated Balance Sheet as of March 31, 2015 was derived from the audited consolidated financial statements. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements for the year ended March 31, 2015, contained in the Company’s annual report on Form 10-K as filed with the SEC on July 15, 2015. The accompanying condensed consolidated financial statements include the accounts of Cyanotech Corporation and its wholly owned subsidiary, Nutrex Hawaii, Inc. (“Nutrex Hawaii” or “Nutrex”, collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of any contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods reported. Management reviews these estimates and assumptions periodically and reflects the effect of revisions in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-09, " Revenue from Contracts with Customers Revenue from Contracts with Customers In April 2015, the FASB issued ASU No. 2015-03, “ Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Note 2 - Inventories

Note 2 - Inventories	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Inventory Disclosure [Text Block]	2. INVENTORIES Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Inventories consist of the following: June 30, 201 5 March 31, 201 5 (in thousands) Raw materials $ 309 $ 931 Work in process 3,245 1,509 Finished goods (1) 2,113 2,895 Supplies 172 343 $ 5,839 $ 5,678 (1) Net of reserve for obsolescence of $4,000 and $4,000, at June 30, 2015 and March 31, 2015, respectively. The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, as an expense in the period incurred. Start-up costs for our extraction facility of $170,000 and non-inventoriable fixed costs related to astaxanthin production of $44,000 were charged to cost of sales for the quarter ended June 30, 2015. Abnormal production costs of $64,000 and non-inventoriable fixed costs of $17,000 were charged to cost of sales for the quarter ended June 30, 2014.

Note 3 - Equipment and Leasehol

Note 3 - Equipment and Leasehold Improvements, Net	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Property, Plant and Equipment Disclosure [Text Block]	3. EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Equipment and leasehold improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives for equipment and furniture and fixtures, or the shorter of the land lease term or estimated useful lives for leasehold improvements as follows: Years Equipment to 10 Furniture and fixtures to 7 Leasehold improvements to 25 Equipment and leasehold improvements consist of the following: June 30, 201 5 March 31, 201 5 (in thousands) Equipment $ 10,009 $ 9,782 Leasehold improvements 10,232 10,216 Furniture and fixtures 298 298 20,539 20,296 Less accumulated depreciation and amortization (12,862 ) (12,549 ) Construction-in-progress 7,856 7,007 Equipment and leasehold improvements, net $ 15,533 $ 14,754 The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amount to forecasted undiscounted future cash flows expected to be generated by the asset. If the carrying amount exceeds its estimated future cash flows, then an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. Management has determined no asset impairment existed as of June 30, 2015. The Company recognized no loss on disposal of equipment for the three months ended June 30, 2015. The Company recognized a loss on disposal of equipment in the amount of $10,000 for the three months ended June 30, 2014. The Company has capitalized $59,000 and $55,000 of interest for the three months ended June 30, 2015 and 2014, respectively.

Note 4 - Note Payable

Note 4 - Note Payable	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Short-term Debt [Text Block]	4 . NOTE PAYABLE The Company executed a short term loan agreement with a lender on April 21, 2015 in the amount of $500,000, with an interest rate of 6% and a maturity date of September 18, 2015. The proceeds of the loan were used to acquire new processing equipment and leasehold improvements at the Company's Kona, Hawaii facility.

Note 5 - Accrued Expenses

Note 5 - Accrued Expenses	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Accounts Payable and Accrued Liabilities Disclosure [Text Block]	5 . ACCRUED EXPENSES Accrued expenses consist of the following: June 30, 201 5 March 31, 201 5 (in thousands) Wages and profit sharing $ 824 $ 930 Customer rebates 74 74 Other accrued expenses 157 120 $ 1,055 $ 1,124

Note 6 - Long-term Debt

Note 6 - Long-term Debt	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Long-term Debt [Text Block]	6 . LONG-TERM DEBT Long-term debt consists of the following: June 30, 201 5 March 31, 201 5 (in thousands) Term loans $ 5,286 $ 5,343 Less current maturities (233 ) (234 ) Long-term debt, excluding current maturities $ 5,053 $ 5,109 Term Loan Agreements The Company executed a loan agreement with a lender providing for $5,500,000 in aggregate credit facilities (the “Loan”) secured by substantially all the Company’s assets, pursuant to a Term Loan Agreement dated August 14, 2012 (the “Loan Agreement”). The Loan Agreement is evidenced by promissory notes in the amounts of $2,250,000 and $3,250,000, the repayment of which is partially guaranteed under the provisions of a United States Department of Agriculture (“USDA”) Rural Development Guarantee program (the “Guarantees”). The proceeds of the Loan were used to acquire new processing equipment and leasehold improvements at its Kona, Hawaii facility. The provisions of the Loan require the payment of interest only for the first 12 months of the term; thereafter, and until its maturity on August 14, 2032, the obligation fully amortizes over nineteen (19) years. Interest on the Loan accrues on the outstanding principal balance at an annual variable rate equal to the published Wall Street Journal prime rate (3.25% at June 30, 2015) plus 1.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter. At no time shall the annual interest rate be less than 5.50%. The Loan has a prepayment penalty of 5% for any prepayment made prior to the first anniversary of the date of the Loan Agreement, which penalty is reduced by 1% each year thereafter until the fifth anniversary of such date, after which there is no prepayment penalty. The balance under this Loan was $5,191,000 at June 30, 2015. Proceeds from the Loan are classified as restricted cash until drawn upon to acquire new processing equipment and leasehold improvements. The Loan includes a one-time origination and guaranty fee totaling $214,500 and an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year, beginning December 31, 2012. The USDA has guaranteed 80% of all amounts owing under the Loan. The Company is subject to financial covenants and customary affirmative and negative covenants. The Company was in compliance with these financial covenants at June 30, 2015. The Company has two equipment loans with John Deere credit providing for $103,000 in equipment financing; these loans are payable in 48 equal monthly principal payments. At June 30, 2015 and March 31, 2015, the total outstanding combined balance was approximately $11,000 and $16,000, respectively. The equipment loans mature in November 2015 and June 2016, respectively. The loans are at a 0% rate of interest and are net of an immaterial unamortized discount at June 30, 2015 and March 31, 2015, respectively. In September 2011, the Company executed a Term Loan Agreement with Nissan Motor Acceptance Corporation providing for $23,000 in equipment financing, secured by the equipment. The Term Loan has a maturity date of September 13, 2016 and is payable in 60 equal monthly principal payments. The interest rate under this Term Loan is 0%. Imputed interest at a rate of 2% (cash discount offered by seller) has been recorded and is being amortized as interest over the term of the loan. The balance outstanding under the Term Loan was $5,000 and $7,000 at June 30, 2015 and March 31, 2015, respectively, less an immaterial unamortized discount at June 30, 2015 and March 31, 2015, respectively. Capital Lease In March 2015, the Company executed a capital lease agreement with Thermo Fisher Financial providing for $86,000 in equipment, secured by the equipment financed. The capital lease matures in March 2018 and is payable in 36 equal monthly payments. The interest rate under this capital lease is 6.5%. The balance under this lease was $79,000 and $84,000 at June 30, 2015 and March 31, 2015, respectively. Future principal payments under the term loan and capital lease agreements as of June 30, 2015 are as follows: Payments Due (in Next 12 Months $ 233 Year 2 232 Year 3 236 Year 4 225 Year 5 237 Thereafter 4,123 Total principal payments $ 5,286

Note 7 - Leases

Note 7 - Leases	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Leases of Lessee Disclosure [Text Block]	7 . LEASES The Company leases facilities, equipment and land under operating leases expiring through 2035. The land lease provides for contingent rentals in excess of minimum rental commitments based on a percentage of the Company’s sales. Management has accrued for the estimated contingent rent as of June 30, 2015. Future minimum lease payments under all non-cancelable operating leases at June 30, 2015 are as follows: Payments Due (in Next 12 Months $ 414 Year 2 410 Year 3 400 Year 4 403 Year 5 388 Thereafter 4,638 Total minimum lease payments $ 6,653

Note 8 - Commitments and Contin

Note 8 - Commitments and Contingencies	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	8 . COMMITMENTS AND CONTINGENCIES On September 12, 2012, the Company entered into an agreement with ThyssenKrupp Industrial Solutions (USA), Inc. (“TKIS”), formerly Uhde Corporation of America, for the purchase of supercritical carbon dioxide extraction equipment to be used in the processing of its natural astaxanthin (“Equipment”). Pursuant to the terms of the agreement, TKIS will build, ship and provide assistance in installing the Equipment. The Equipment, which was originally scheduled for delivery approximately 14 months from the date of the agreement, was delivered in the third quarter of fiscal year 2015. The Company will pay TKIS an aggregate of $3,222,000 for the equipment and services, of which $323,000 remains unpaid as of June 30, 2015. Progress payments through June 30, 2015 of $2,899,000 have been classified in construction in progress in the consolidated balance sheet.

Note 9 - Share-based Compensati

Note 9 - Share-based Compensation	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	9 . SHARE-BASED COMPENSATION The Company accounts for share-based payment arrangements using fair value. If an award vests or becomes exercisable based on the achievement of a condition other than service, such as for meeting certain performance or market conditions, the award is classified as a liability. Liability-classified awards are remeasured to fair value at each balance sheet date until the award is settled. The Company currently has no liability-classified awards. Equity-classified awards, including grants of employee stock options, are measured at the grant-date fair value of the award and are not subsequently remeasured unless an award is modified. The cost of equity-classified awards is recognized in the statement of operations over the period during which an employee is required to provide the service in exchange for the award, or the vesting period. All of the Company’s stock options are service-based awards, and because the Company’s stock options are “plain vanilla,” as defined by the U.S. Securities and Exchange Commission in Staff Accounting Bulletin No. 107, they are reflected only in equity and compensation expense accounts. Stock Options As of June 30, 2015, the Company had three equity-based compensation plans: the Independent Director Stock Option and Restricted Stock Grant Plan (the “2014 Directors Plan”); the 2005 Stock Option Plan (the “2005 Plan”); and the 2004 Independent Director Stock Option and Stock Grant Plan (the “2004 Directors Plan”). The Company’s equity based compensation plans provide for the awarding of stock options and shares of restricted common stock for eligible employees, certain outside consultants and independent directors. On August 28, 2014, the Company’s shareholders approved the 2014 Directors Plan. This plan authorizes the Board of Directors to provide additional incentive to the Company’s independent directors through equity based compensation in the form of stock options and restricted stock. Awards under the 2014 Directors Plan are limited to the authorized amount of 350,000 shares. As of June 30, 2015, there were 333,439 shares available for grant under the 2014 Directors Plan. Under the 2005 Plan, eligible employees and certain independent consultants may be granted options to purchase shares of the Company’s common stock. The shares issuable under the 2005 Plan will either be shares of the Company’s authorized but previously unissued common stock or shares reacquired by the Company, including shares purchased on the open market. As of June 30, 2015, there were 400,318 options available for grant under the 2005 Plan. The 2004 Directors Plan was terminated on August 28, 2014. As a result, no additional awards will be issued under this plan. The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans: As of June 3 0 , 201 5 Authorized Available Outstanding 2014 Plan 350,000 333,439 — 2005 Plan 2,075,000 400,318 1,419,716 2004 Directors Plan — — 12,000 Total 2,425,000 733,757 1,431,716 All stock option grants made under the equity-based compensation plans were issued at exercise prices no less than the Company’s closing stock price on the date of grant. Options under the 2005 Plan and 2014 Directors Plan were determined by the Board of Directors or the Compensation and Stock Option Committee of the Board of Directors in accordance with the provisions of the respective plans. The terms of each option grant include vesting, exercise, and other conditions are set forth in a Stock Option Agreement evidencing each grant. No option can have a life in excess of ten (10) years. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The model requires various assumptions, including a risk-free interest rate, the expected term of the options, the expected stock price volatility over the expected term of the options, and the expected dividend yield. Compensation expense for employee stock options is recognized ratably over the vesting term. Compensation expense recognized for options issued under the 2005 Plan was $163,000 and $192,000 for the three months ended June 30, 2015 and 2014, respectively. Compensation expense recognized for restricted stock issued under the 2014 Directors Plan and the 2004 Directors Plan was $0 and $74,000 for the three months ended June 30, 2015 and 2014, respectively. All stock-based compensation has been classified as general and administrative expense in the consolidated statement of operations. A summary of option activity under the Company’s stock plans for the three months ended June 30, 2015 is presented below: Option Activity Shares Weighted Weighted Average Aggregate Outstanding at March 31, 2015 1,433,216 $ 4.08 6.4 $ 6,221,909 Granted — $ — Exercised — $ — Forfeited (1,500 ) $ 5.84 Outstanding at June 30, 2015 1,431,716 $ 4.08 6.2 $ 7,721,341 Exercisable at March 31, 2015 818,800 $ 3.73 5.8 $ 4,703,645 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $9.47 for such day. A summary of the Company’s non-vested options for the three months ended June 30, 2015 is presented below: Nonvested Options Shares Weighted Nonvested at March 31, 2015 614,416 $ 3.25 Granted — — Vested — — Forfeited (1,500 ) 4.04 Nonvested at June 30, 2015 612,916 $ 3.25 The following table summarizes the weighted average characteristics of outstanding stock options as of June 30, 2015: Outstanding Options Exercisable Options Range of Number Remaining Weighted Number of Weighted $1.60 - $3.70 395,820 5.2 $ 2.93 395,820 $ 2.93 $3.71 - $4.42 695,396 6.2 $ 3.82 291,480 $ 3.82 $4.43 - $5.40 117,500 7.6 $ 5.00 41,000 $ 5.18 $5.41 - $7.08 223,000 7.1 $ 6.42 90,500 $ 6.23 Total stock options 1,431,716 6.2 $ 4.08 818,800 $ 3.73 The range of fair value assumptions related to options granted during the year ended March 31, 2015 were as follows: 201 5 Exercise Price $4.72 Volatility 64.00% Risk Free Rate 1.74% Vesting Period (years) 3 Forfeiture Rate 4.51% Expected Life (in years) 5.73 Dividend Rate 0% As of June 30, 2015, total unrecognized stock-based compensation expense related to all unvested stock options was $1,380,000, which is expected to be expensed over a weighted average period of 2.6 years.

Note 10 - Income Taxes

Note 10 - Income Taxes	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Income Tax Disclosure [Text Block]	10 . INCOME TAXES We utilize our estimated annual effective tax rate to determine our provision (benefit) for income taxes for interim periods. The income tax provision (benefit) is computed by taking the estimated annual effective tax rate and multiplying it by the year to date pre-tax book income (loss). We recorded income tax benefits of $114,000 and $692,000 for the three months ended June 30, 2015 and 2014, respectively. Our effective tax rate was 52.1% and 64.5% for the quarters ended June 30, 2015 and June 30, 2014, respectively. The effective tax rate for the three months ended June 30, 2015 differs from the statutory rate of 34% as a result of non deductible stock option expense and the state taxes (net of federal benefit) and permanent differences. The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (“uncertain tax positions”) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. As of June 30, 2015, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its consolidated condensed statements of operations, which is consistent with the recognition of these items in prior reporting periods. With few exceptions, the Company is no longer subject to U.S. federal, state, local, and non-U.S. income tax examination by tax authorities for tax years before 2010.

Note 11 - Earnings (Loss) Per S

Note 11 - Earnings (Loss) Per Share	3 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Earnings Per Share [Text Block]	1 1 . EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is computed on the basis of the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed on the basis of the weighted average number of common shares outstanding plus the potentially dilutive effect of outstanding stock options using the “treasury stock” method. Reconciliations between the numerator and the denominator of the basic and diluted earnings (loss) per share computations for the three months ended June 30, 2015 and 2014 are as follows: Three Months Ended June 30, 201 5 Net Loss Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic loss per share $ (105 ) 5,565 $ (0.02 ) Effect of dilutive securities—Common stock options — — — Diluted loss per share $ (105 ) 5,565 $ (0.02 ) Three Months Ended June 30, 201 4 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic income per share $ (381 ) 5,488 $ (0.07 ) Effect of dilutive securities — Common stock options — — — Diluted income per share $ (381 ) 5,488 $ (0.07 ) Basic and diluted loss per share are the same in periods of a net loss, because common share equivalents are anti-dilutive when a net loss is recorded.

Note 2 - Inventories (Tables)

Note 2 - Inventories (Tables)	3 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 30, 201 5 March 31, 201 5 (in thousands) Raw materials $ 309 $ 931 Work in process 3,245 1,509 Finished goods (1) 2,113 2,895 Supplies 172 343 $ 5,839 $ 5,678

Note 3 - Equipment and Leaseh18

Note 3 - Equipment and Leasehold Improvements, Net (Tables)	3 Months Ended
	Jun. 30, 2015
Notes Tables
Property, Plant, and Equipment, Estimated Useful Lives [Table Text Block]	Years Equipment to 10 Furniture and fixtures to 7 Leasehold improvements to 25
Property, Plant and Equipment [Table Text Block]	June 30, 201 5 March 31, 201 5 (in thousands) Equipment $ 10,009 $ 9,782 Leasehold improvements 10,232 10,216 Furniture and fixtures 298 298 20,539 20,296 Less accumulated depreciation and amortization (12,862 ) (12,549 ) Construction-in-progress 7,856 7,007 Equipment and leasehold improvements, net $ 15,533 $ 14,754

Note 5 - Accrued Expenses (Tabl

Note 5 - Accrued Expenses (Tables)	3 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Accrued Liabilities [Table Text Block]	June 30, 201 5 March 31, 201 5 (in thousands) Wages and profit sharing $ 824 $ 930 Customer rebates 74 74 Other accrued expenses 157 120 $ 1,055 $ 1,124

Note 6 - Long-term Debt (Tables

Note 6 - Long-term Debt (Tables)	3 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Long-term Debt Instruments [Table Text Block]	June 30, 201 5 March 31, 201 5 (in thousands) Term loans $ 5,286 $ 5,343 Less current maturities (233 ) (234 ) Long-term debt, excluding current maturities $ 5,053 $ 5,109
Schedule of Maturities of Long-term Debt [Table Text Block]	Payments Due (in Next 12 Months $ 233 Year 2 232 Year 3 236 Year 4 225 Year 5 237 Thereafter 4,123 Total principal payments $ 5,286

Note 7 - Leases (Tables)

Note 7 - Leases (Tables)	3 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]	Payments Due (in Next 12 Months $ 414 Year 2 410 Year 3 400 Year 4 403 Year 5 388 Thereafter 4,638 Total minimum lease payments $ 6,653

Note 9 - Share-based Compensa22

Note 9 - Share-based Compensation (Tables)	3 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Share-based Compensation Shares Authorized Available and Outstanding by Plan [Table Text Block]	As of June 3 0 , 201 5 Authorized Available Outstanding 2014 Plan 350,000 333,439 — 2005 Plan 2,075,000 400,318 1,419,716 2004 Directors Plan — — 12,000 Total 2,425,000 733,757 1,431,716
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Option Activity Shares Weighted Weighted Average Aggregate Outstanding at March 31, 2015 1,433,216 $ 4.08 6.4 $ 6,221,909 Granted — $ — Exercised — $ — Forfeited (1,500 ) $ 5.84 Outstanding at June 30, 2015 1,431,716 $ 4.08 6.2 $ 7,721,341 Exercisable at March 31, 2015 818,800 $ 3.73 5.8 $ 4,703,645
Schedule of Nonvested Share Activity [Table Text Block]	Nonvested Options Shares Weighted Nonvested at March 31, 2015 614,416 $ 3.25 Granted — — Vested — — Forfeited (1,500 ) 4.04 Nonvested at June 30, 2015 612,916 $ 3.25
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]	Outstanding Options Exercisable Options Range of Number Remaining Weighted Number of Weighted $1.60 - $3.70 395,820 5.2 $ 2.93 395,820 $ 2.93 $3.71 - $4.42 695,396 6.2 $ 3.82 291,480 $ 3.82 $4.43 - $5.40 117,500 7.6 $ 5.00 41,000 $ 5.18 $5.41 - $7.08 223,000 7.1 $ 6.42 90,500 $ 6.23 Total stock options 1,431,716 6.2 $ 4.08 818,800 $ 3.73
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	201 5 Exercise Price $4.72 Volatility 64.00% Risk Free Rate 1.74% Vesting Period (years) 3 Forfeiture Rate 4.51% Expected Life (in years) 5.73 Dividend Rate 0%

Note 11 - Earnings (Loss) Per23

Note 11 - Earnings (Loss) Per Share (Tables)	3 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended June 30, 201 5 Net Loss Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic loss per share $ (105 ) 5,565 $ (0.02 ) Effect of dilutive securities—Common stock options — — — Diluted loss per share $ (105 ) 5,565 $ (0.02 ) Three Months Ended June 30, 201 4 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic income per share $ (381 ) 5,488 $ (0.07 ) Effect of dilutive securities — Common stock options — — — Diluted income per share $ (381 ) 5,488 $ (0.07 )

Note 2 - Inventories (Details T

Note 2 - Inventories (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2015
Inventory Valuation Reserves	$ 4,000		$ 4,000
Inventory Abnormal Production Costs	170,000	$ 64,000
Non Inventoriable Fixed Costs	$ 44,000	$ 17,000

Note 2 - Components of Inventor

Note 2 - Components of Inventory (Details) - USD ($) $ in Thousands		Jun. 30, 2015	Mar. 31, 2015
Raw materials		$ 309	$ 931
Work in process		3,245	1,509
Finished goods (1)	[1]	2,113	2,895
Supplies		172	343
		$ 5,839	$ 5,678
[1]	Net of reserve for obsolescence of $4,000 and $4,000, at June 30, 2015 and March 31, 2015, respectively.

Note 3 - Equipment and Leaseh26

Note 3 - Equipment and Leasehold Improvements, Net (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Gain (Loss) on Disposition of Assets	$ 0	$ (10,000)
Impairment of Long-Lived Assets Held-for-use	0
Interest Costs Capitalized	$ 59,000	$ 55,000

Note 3 - Estimated Useful Lives

Note 3 - Estimated Useful Lives (Details)	3 Months Ended
	Jun. 30, 2015
Equipment [Member] | Minimum [Member]
Estimated useful lives	3 years
Equipment [Member] | Maximum [Member]
Estimated useful lives	10 years
Furniture and Fixtures [Member] | Minimum [Member]
Estimated useful lives	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Estimated useful lives	7 years
Leasehold Improvements [Member] | Minimum [Member]
Estimated useful lives	10 years
Leasehold Improvements [Member] | Maximum [Member]
Estimated useful lives	25 years

Note 3 - Components of Equipmen

Note 3 - Components of Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015
Equipment [Member]
Equipment and leasehold improvements, gross	$ 10,009	$ 9,782
Leasehold Improvements [Member]
Equipment and leasehold improvements, gross	10,232	10,216
Furniture and Fixtures [Member]
Equipment and leasehold improvements, gross	298	298
Equipment and leasehold improvements, gross	20,539	20,296
Less accumulated depreciation and amortization	(12,862)	(12,549)
Construction-in-progress	7,856	7,007
Equipment and leasehold improvements, net	$ 15,533	$ 14,754

Note 4 - Note Payable (Details

Note 4 - Note Payable (Details Textual) - Apr. 21, 2015 - Notes Payable to Banks [Member] - USD ($)	Total
Debt Instrument, Face Amount	$ 500,000
Debt Instrument, Interest Rate, Stated Percentage	6.00%

Note 5 - Components of Accrued

Note 5 - Components of Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015
Wages and profit sharing	$ 824	$ 930
Customer rebates	74	74
Other accrued expenses	157	120
	$ 1,055	$ 1,124

Note 6 - Long-term Debt (Detail

Note 6 - Long-term Debt (Details Textual)	Aug. 14, 2012USD ($)	Mar. 31, 2015USD ($)	Sep. 30, 2011USD ($)	Jun. 30, 2015USD ($)
Equipment Loans with John Deere [Member] | Maximum [Member]
Debt Instrument Periodic Payments Number				48
Equipment Loans with John Deere [Member]
Debt Instrument, Interest Rate, Stated Percentage		0.00%		0.00%
Proceeds from Issuance of Debt				$ 103,000
Long-term Debt and Capital Lease Obligations, Current and Noncurrent		$ 16,000		$ 11,000
Term Loan Agreement, Maturing on August 14, 2032 [Member] | Minimum [Member]
Debt Instrument, Interest Rate During Period				5.50%
Term Loan Agreement, Maturing on August 14, 2032 [Member]
Proceeds from Issuance of Debt	$ 5,500,000
Debt Instrument Interest Payment Period	1 year
Debt Instrument Amortization Period	19 years
Debt Instrument Reference Rate				3.25%
Debt Instrument, Basis Spread on Variable Rate				1.00%
Debt Instrument Prepayment Penalty Percentage				5.00%
Debt Instrument Prepayment Penalty Percentage Reduction During Each Year				1.00%
Long-term Debt and Capital Lease Obligations, Current and Noncurrent				$ 5,191,000
Debt Instrument One Time Origination and Guaranty Fees				$ 214,500
Debt Instrument Annual Renewal Fee Payable Percentage				0.25%
Debt Instrument Guaranteed Portion				80.00%
Term Loan Agreement, Promissory Note One [Member]
Proceeds from Issuance of Debt	$ 2,250,000
Term Loan Agreement, Promissory Note Two [Member]
Proceeds from Issuance of Debt	$ 3,250,000
Term Loan Agreement with Nissan Motor Acceptance Corporation, Maturing on September 13, 2016 [Member]
Debt Instrument, Interest Rate, Stated Percentage			0.00%
Long-term Debt and Capital Lease Obligations, Current and Noncurrent			$ 23,000
Debt Instrument Periodic Payments Number			60
Debt Instrument, Interest Rate, Effective Percentage			2.00%
Debt Instrument, Face Amount		$ 7,000		$ 5,000
Capital Lease Obligations [Member]
Debt Instrument, Interest Rate, Stated Percentage		6.50%
Long-term Debt and Capital Lease Obligations, Current and Noncurrent		$ 86,000		79,000
Debt Instrument Periodic Payments Number		36
Long-term Debt and Capital Lease Obligations, Current and Noncurrent		$ 5,343,000		$ 5,286,000

Note 6 - Summary of Long-Term D

Note 6 - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015
Total principal payments	$ 5,286	$ 5,343
Less current maturities	(233)	(234)
Long-term debt, excluding current maturities	$ 5,053	$ 5,109

Note 6 - Future Payments (Detai

Note 6 - Future Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2015
Next 12 Months	$ 233
Year 2	232
Year 3	236
Year 4	225
Year 5	237
Thereafter	4,123
Total principal payments	$ 5,286

Note 7 - Summary of Future Mini

Note 7 - Summary of Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands	Jun. 30, 2015USD ($)
Next 12 Months	$ 414
Year 2	410
Year 3	400
Year 4	403
Year 5	3,883
Thereafter	4,638
Total minimum lease payments	$ 6,653

Note 8 - Commitments and Cont35

Note 8 - Commitments and Contingencies (Details Textual) - USD ($)	Sep. 12, 2012	Jun. 30, 2015
Long-Term Purchase Commitment, Estimated Delivery Period	1 year 60 days
Long-term Purchase Commitment, Amount	$ 3,222,000
Long-term Purchase Commitment Amount Payable		$ 323,000
Long-term Purchase Commitment Amount Classified in Construction in Progress		$ 2,899,000

Note 9 - Share-based Compensa36

Note 9 - Share-based Compensation (Details Textual)	3 Months Ended
	Jun. 30, 2015USD ($)$ / sharesshares	Jun. 30, 2014USD ($)
2004 Directors Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
2014 Directors Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	333,439
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	350,000
2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	400,318
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2,075,000
Allocated Share-based Compensation Expense | $	$ 163,000	$ 192,000
2014 Directors Plan and 2004 Directors Plan [Member] | Restricted Stock [Member]
Allocated Share-based Compensation Expense | $	$ 0	$ 74,000
Employee Stock Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 1,380,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 219 days
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	733,757
Number of Shareholder Approved Share-based Compensation Plans	3
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2,425,000
Share Price | $ / shares	$ 9.47

Note 9 - Shares Authorized, Ava

Note 9 - Shares Authorized, Available for Future Grant and Outstanding Under Each Plan (Details) - shares	Jun. 30, 2015
2014 Directors Plan [Member]
Authorized (in shares)	350,000
Available (in shares)	333,439
Outstanding (in shares)
2005 Plan [Member]
Authorized (in shares)	2,075,000
Available (in shares)	400,318
Outstanding (in shares)	1,419,716
2004 Directors Plan [Member]
Authorized (in shares)
Available (in shares)	0
Outstanding (in shares)	12,000
Authorized (in shares)	2,425,000
Available (in shares)	733,757
Outstanding (in shares)	1,431,716

Note 9 - Summary of Option Acti

Note 9 - Summary of Option Activity Under Stock Plans (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2015	Mar. 31, 2015
Outstanding (in shares)	1,431,716	1,433,216
Outstanding. (in dollars per share)	$ 4.08	$ 4.08
Outstanding	6 years 73 days	6 years 146 days
Outstanding	$ 7,721,341	$ 6,221,909
Forfeited (in shares)	(1,500)
Forfeited. (in dollars per share)	$ 5.84
Exercisable at March 31, 2015 (in shares)		818,800
Exercisable at March 31, 2015 (in dollars per share)		$ 3.73
Exercisable at March 31, 2015		5 years 292 days
Exercisable at March 31, 2015		$ 4,703,645

Note 9 - Summary of Non-Vested

Note 9 - Summary of Non-Vested Options (Details) - 3 months ended Jun. 30, 2015 - $ / shares	Total
Nonvested at March 31, 2015 (in shares)	614,416
Nonvested at March 31, 2015 (in dollars per share)	$ 3.25
Forfeited (in shares)	(1,500)
Forfeited (in dollars per share)	$ 4.04
Nonvested at June 30, 2015 (in shares)	612,916
Nonvested at June 30, 2015 (in dollars per share)	$ 3.25

Note 9 - Summary of the Weighte

Note 9 - Summary of the Weighted-Average Characteristics of Outstanding Stock Options (Details) - Jun. 30, 2015 - $ / shares	Total
Range 01 [Member]
Range of Exercise Prices (Minimum) (in dollars per share)	$ 1.60
Range of Exercise Prices (Maximum) (in dollars per share)	$ 3.70
Outstanding Options Number of Shares (in shares)	395,820
Outstanding Options Remaining Life	5 years 73 days
Outstanding Options Weighted-Average Price (in dollars per share)	$ 2.93
Exercisable Options Number of Shares (in shares)	395,820
Exercisable Options Weighted-Average Price (in dollars per share)	$ 2.93
Range 02 [Member]
Range of Exercise Prices (Minimum) (in dollars per share)	3.71
Range of Exercise Prices (Maximum) (in dollars per share)	$ 4.42
Outstanding Options Number of Shares (in shares)	695,396
Outstanding Options Remaining Life	6 years 73 days
Outstanding Options Weighted-Average Price (in dollars per share)	$ 3.82
Exercisable Options Number of Shares (in shares)	291,480
Exercisable Options Weighted-Average Price (in dollars per share)	$ 3.82
Range 03 [Member]
Range of Exercise Prices (Minimum) (in dollars per share)	4.43
Range of Exercise Prices (Maximum) (in dollars per share)	$ 5.40
Outstanding Options Number of Shares (in shares)	117,500
Outstanding Options Remaining Life	7 years 219 days
Outstanding Options Weighted-Average Price (in dollars per share)	$ 5
Exercisable Options Number of Shares (in shares)	41,000
Exercisable Options Weighted-Average Price (in dollars per share)	$ 5.18
Range 04 [Member]
Range of Exercise Prices (Minimum) (in dollars per share)	5.41
Range of Exercise Prices (Maximum) (in dollars per share)	$ 7.08
Outstanding Options Number of Shares (in shares)	223,000
Outstanding Options Remaining Life	7 years 36 days
Outstanding Options Weighted-Average Price (in dollars per share)	$ 6.42
Exercisable Options Number of Shares (in shares)	90,500
Exercisable Options Weighted-Average Price (in dollars per share)	$ 6.23
Outstanding Options Number of Shares (in shares)	1,431,716
Outstanding Options Remaining Life	6 years 73 days
Outstanding Options Weighted-Average Price (in dollars per share)	$ 4.08
Exercisable Options Number of Shares (in shares)	818,800
Exercisable Options Weighted-Average Price (in dollars per share)	$ 3.73

Note 9 - Summary of Valuation A

Note 9 - Summary of Valuation Assumptions Related to Options Granted (Details) - Jun. 30, 2015 - $ / shares	Total
Exercise Price (in dollars per share)	$ 4.72
Volatility	64.00%
Risk Free Rate	1.74%
Vesting Period (years)	3 years
Forfeiture Rate	4.51%
Expected Life (in years)	5 years 266 days
Dividend Rate	0.00%

Note 10 - Income Taxes (Details

Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2014
Unrecognized Tax Benefits	$ 0
Income Tax Expense (Benefit)	$ (114,000)	$ (692,000)	$ (692,000)
Effective Income Tax Rate Reconciliation, Percent	52.10%	64.50%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	34.00%

Note 11 - Summary of Reconcilia

Note 11 - Summary of Reconciliations between the Numerator and the Denominator of the Basic and Diluted Earnings Per Share Computations (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Net loss	$ (105)	$ (381)
Basic (in shares)	5,565	5,488
Basic (in dollars per share)	$ (0.02)	$ (0.07)
Effect of dilutive securities—Common stock options (in shares)
Diluted income (loss)	$ (105)	$ (381)
Diluted (in shares)	5,565	5,488
Diluted (in dollars per share)	$ (0.02)	$ (0.07)