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Stockholders' Equity
 12 Months Ended
Mar. 31, 2012
Stockholders' Equity [Abstract]  
Stockholders' Equity

11. Stockholders' Equity

Public Offering

     In November 2010, the Company issued 4,600,000 shares of common stock at a price of $35.50 per share in a public equity offering, which resulted in net proceeds to the Company of approximately $155.2 million, after deducting the underwriting costs and offering expenses of $8.1 million.

Stock-Based Compensation

     The components of employee stock-based compensation for the years ended March 31, 2012, 2011 and 2010 were as follows (in thousands):

    For the years ended
    March 31,
    2012   2011   2010
Stock options $ 6,177 $ 6,374 $ 5,895
Restricted stock and stock awards   3,633   6,919   7,535
Employee stock purchase plan   54   119   64
Total stock-based compensation expense $ 9,864 $ 13,412 $ 13,494

 

     The estimated fair value of the Company's stock-based awards, less expected annual forfeitures, is amortized over the awards' service period. The total unrecognized compensation cost for unvested outstanding stock options was $6.1 million and $10.3 million for the years ended March 31, 2012 and 2011, respectively. This expense will be recognized over a weighted-average expense period of approximately 1.9 years. The total unrecognized compensation cost for unvested outstanding restricted stock was $5.0 million and $6.3 million for the years ended March 31, 2012 and 2011, respectively. This expense will be recognized over a weighted-average expense period of approximately 1.7 years.

 

     The following table summarizes employee stock-based compensation expense by financial statement line item for the years ended March 31, 2012, 2011 and 2010 (in thousands):

    For the years ended
    March 31,
    2012   2011   2010
Cost of revenues $ 1,121 $ 1,188 $ 1,199
Research and development   2,562   1,977   2,023
Selling, general and administrative   6,181   10,247   10,272
Total stock-based compensation expense $ 9,864 $ 13,412 $ 13,494

 

     The following table summarizes the information concerning currently outstanding and exercisable employee and non-employee options:

          Weighted-    
        Weighted- Average    
        Average Remaining   Aggregate
  Options/     Exercise Contractual   Intrinsic Value
  Shares     Price Term   (thousands)
Outstanding at March 31, 2011 2,004,725   $ 22.29      
Granted at fair value 835,450     9.76      
Exercised (2,700 )   8.91      
Cancelled/forfeited (547,059 )   22.15      
Outstanding at March 31, 2012 2,290,416   $ 17.77 6.9 $ 13.9
 
Exercisable at March 31, 2012 1,122,320   $ 18.05 5.2 $ 8.4
 
Fully vested and expected to vest at March 31, 2012 2,198,771   $ 17.76 6.8 $ 13.2

 

     The weighted-average grant-date fair value of stock option awards granted during the years ended March 31, 2012, 2011 and 2010 was $6.02 per share, $17.43 per share and $28.29 per share, respectively. Intrinsic value represents the amount by which the market price of the common stock exceeds the exercise price of the options. Given the decline in the Company's stock price, exercisable options as of March 31, 2012 had minimal intrinsic value. The aggregate intrinsic value of exercisable options at March 31, 2011 and 2010 was $8.7 million and $16.4 million, respectively. The aggregate intrinsic value of options exercised at March 31, 2011 and 2010 was $13.0 million and $11.4 million, respectively. Given the decline in the Company's stock price, the aggregate intrinsic value of options exercised at March 31, 2012 was minimal.

     The weighted average assumptions used in the Black-Scholes valuation model for stock options granted during the years ended March 31, 2012, 2011, and 2010 are as follows:

      For the years ended      
      March 31,      
  2012   2011   2010  
Dividend yield None   None   None  
Expected volatility 70.0 % 64.2 % 68.9 %
Risk-free interest rate 1.8 % 2.2 % 2.6 %
Expected life (years) 5.9   5.8   5.6  

 

     The expected volatility rate was estimated based on an equal weighting of the historical volatility of the Company's common stock and the implied volatility of the Company's traded options. The expected term was estimated based on an analysis of the Company's historical experience of exercise, cancellation, and expiration patterns. The risk-free interest rate is based on the average of the five and seven year U.S. Treasury rates.

The following table summarizes the employee and non-employee restricted stock activity for the year ended March 31, 2012:

 

        Weighted   Intrinsic
        Average   Aggregate
        Grant Date   Value
  Shares     Fair Value   (thousands)
Outstanding at April 1, 2011 626,527   $ 27.31    
Granted 867,661     6.48    
Vested (406,773 )   23.86    
Forfeited (157,926 )   23.46    
Outstanding at March 31, 2012 929,489   $ 10.00 $ 3,829

 

     The total fair value of restricted stock that was granted during the years ended March 31, 2012, 2011 and 2010 was $5.6 million, $10.4 million and $6.8 million, respectively. The total fair value of restricted stock that vested during the years ended March 31, 2012, 2011 and 2010 was $4.1 million, $5.5 million and $8.4 million, respectively.

     The restricted stock granted during the year ended March 31, 2012 includes approximately 109,211 shares of performance-based restricted stock, which would vest upon achievement of certain financial performance measurements. At March 31, 2011, the Company determined that certain performance measures relating to prior restricted stock grants were not met. As a result, the Company reversed $1.8 million that had been recorded as stock-based compensation expense related to performance-based awards. Such shares were cancelled in May 2011. Included in the table above are 20,250 shares of restricted stock units.

     The remaining shares granted vest upon the passage of time. For awards that vest upon the passage of time, expense is being recorded over the vesting period.

Stock-Based Compensation Plans

     As of March 31, 2011, the Company had two active stock plans: the 2007 Stock Incentive Plan (the "2007 Plan") and the 2007 Director Stock Option Plan (the "2007 Director Plan"). The 2007 Plan replaced the Company's 2004 Stock Incentive Plan upon the approval by the Company's stockholders on August 3, 2007. The 2007 Director Plan replaced the Second Amended and Restated 1997 Director Stock Option Plan, which expired pursuant to its terms on May 2, 2007.

     The Plans provide for the issuance of restricted stock, incentive stock options and non-qualified stock options to purchase the Company's common stock. In the case of incentive stock options, the exercise price shall be equal to at least the fair market value of the common stock, as determined by the Board of Directors, on the date of grant. The contractual life of options is generally 10 years. Options generally vest over a 3-5 year period while restricted stock generally vests over a 2-5 year period. The 2007 Director Plan is for members of the Board of Directors who are not also employees of the Company (outside directors). Under an amendment to the 2007 Director Plan effective April, 2009, outside directors are entitled to receive an annual award of 3,000 fully-vested shares of common stock.

     As of March 31, 2012, the 2007 Plan had 1,608,057 shares and the 2007 Director Plan had 198,000 shares available for future issuance.

Employee Stock Purchase Plan

     The Company has an employee stock purchase plan (ESPP) which provides employees with the opportunity to purchase shares of common stock at a price equal to the market value of the common stock at the end of the offering period, less a 15% purchase discount. The Company recognized compensation expense of $0.1 million for each of the years ended March 31, 2012, 2011, and 2010, respectively, related to the ESPP. The Company issued 88,553 shares of common stock related to the ESPP during the year ended March 31, 2012. As of March 31, 2012, the ESPP had 439,204 shares available for future issuance.