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Fair Value Measurements
 9 Months Ended
Dec. 31, 2012
Fair Value Measurements [Abstract]  
Fair Value Measurements
13. Fair Value Measurements

The following table summarizes the Company's financial assets and liabilities measured at fair value, by level within the fair value hierarchy as of December 31, 2012 and March 31, 2012:

   
December 31, 2012
  
March 31, 2012
 
      
Fair Value Measurements
     
Fair Value Measurements
 
      
Using Inputs Considered as
     
Using Inputs Considered as
 
   
Fair Value
  
Level 1
  
Level 2
  
Level 3
  
Fair Value
  
Level 1
  
Level 2
  
Level 3
 
Assets
                        
Short-term investments                                 
Mutual funds
 $383,000  $383,000   -   -  $342,000  $342,000   -   - 
Prepaid expenses and other current assets                                
Forward foreign currency exchange contracts
  239,000   -  $239,000   -   -   -   -   - 
                                  
Liabilities
                                
Other current liabilities
                                
Deferred compensation
  383,000   383,000   -   -   342,000   342,000   -   - 
Forward foreign currency exchange contracts
  -   -   -   -   121,000   -  $121,000   - 
Other liabilities
                                
Warrant liability
  2,450,000   -   -  $2,450,000   -   -   -   - 

The Company's short-term investments, which fund its deferred compensation liabilities, consist of investments in mutual funds. These investments are classified as Level 1 as the shares of these mutual funds trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis.

The forward foreign currency exchange contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. During the three months ended December 31, 2012 and 2011, a gain of $20,000 and $488,000, respectively, was recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts subsequent to entering into the contracts. During the nine months ended December 31, 2012 and 2011, a gain of $360,000 and a loss of $1,399,000, respectively, was recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts subsequent to entering into the contracts.

The Company estimates the fair value of the warrant liability using level 3 inputs and the Monte Carlo simulation model at each balance sheet date. This amount is recorded as a warrant liability which is included in other liabilities in the consolidated balance sheet at December 31, 2012. Any subsequent changes in the fair value of the warrant liability will be recorded in current period earnings as a general and administrative expense. During the three and nine months ended December 31, 2012, a loss of $882,000 and $825,000, respectively, was recorded in general and administrative expenses due to the change in the fair value of the warrant liability.

The assumptions used to determine the fair value of the Cerberus Warrant and the Supplier Warrant recorded as warrant liability were:

   
December 31, 2012
 
 
 
Cerberus Warrant
  
Supplier Warrant
 
        
Risk free interest rate
  0.63 %  0.68 %
Expected life in years
  4.40   4.75 
Expected volatility
  54.85 %  55.20 %
Dividend yield
  -   - 
Probability of future financing
  0 %  0 %

The risk free interest rate used was based on U.S. treasury-note yields with terms commensurate with the remaining term of the warrants. The expected life is based on the remaining contractual term of the warrants and the expected volatility is based on the Company's daily historical volatility over a period commensurate with the remaining term of the warrants.

A summary of the change to the Company's warrant liability, as measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is presented below:

   
Three Months Ended
  
Nine Months Ended
 
 
 
December 31,
  
December 31,
 
 
 
2012
  
2011
  
2012
  
2011
 
              
Beginning balance
 $1,568,000  $-  $-  $- 
Newly issued
  -   -   1,625,000   - 
Total (gain) loss included in net loss
  882,000   -   825,000   - 
Warrants exercised
  -   -   -   - 
Net transfers in (out) of Level 3
  -   -   -   - 
Ending balance
 $2,450,000  $-  $2,450,000  $- 

During the three and nine months ended December 31, 2012, the Company had no significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

The carrying amounts of cash, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these instruments. The carrying amounts of the revolving loans, term loans and other long-term liabilities approximate their fair value based on current rates for instruments with similar characteristics.