Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Mar. 31, 2012	Jun. 06, 2012	Sep. 30, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	ORION ENERGY SYSTEMS, INC.
Entity Central Index Key	0001409375
Document Type	10-K
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
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			$ 60,978,230
Entity Common Stock, Shares Outstanding		22,562,258

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Mar. 31, 2011
Assets
Cash and cash equivalents	$ 23,011	$ 11,560
Short-term investments	1,016	1,011
Accounts receivable, net of allowances of $757 and $947	19,167	23,401
Inventories, net	18,132	15,877
Deferred contract costs	2,193	9,589
Deferred tax assets	1,549	1,049
Prepaid expenses and other current assets	2,174	1,727
Total current assets	67,242	64,214
Property and equipment, net	30,225	30,017
Long-term inventory	12,328	13,212
Patents and licenses, net	1,689	1,620
Deferred tax assets	2,609	2,354
Long-term accounts receivable	7,555	7,251
Other long-term assets	4,002	2,419
Total assets	125,650	121,087
Liabilities and Shareholders' Equity
Accounts payable	14,300	12,483
Accrued expenses	3,018	2,184
Deferred revenue	2,614	8,427
Current maturities of long-term debt	2,791	1,137
Total current liabilities	22,723	24,231
Long-term debt, less current maturities	6,704	4,225
Deferred revenue	3,048	1,777
Other long-term liabilities	406	399
Total liabilities	32,881	30,632
Commitments and contingencies (See Note F)
Shareholders' equity:
Preferred stock, $0.01 par value: Shares authorized: 30,000,000 shares at March 31, 2011 and 2012; no shares issued and outstanding at March 31, 2011 and 2012
Common stock, no par value: Shares authorized: 200,000,000 at March 31, 2011 and 2012; shares issued: 30,312,758 and 30,445,479 at March 31, 2011 and 2012; shares outstanding: 22,893,803 and 22,785,258 at March 31, 2011 and 2012
Additional paid-in capital	126,753	124,132
Treasury stock: 7,431,897 common shares at March 31, 2011 and 7,660,221 at March 31, 2012	(32,470)	(31,708)
Shareholder notes receivable	(221)	(193)
Retained deficit	(1,293)	(1,776)
Total shareholders' equity	92,769	90,455
Total liabilities and shareholders' equity	$ 125,650	$ 121,087

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2012	Mar. 31, 2011
Consolidated Balance Sheets [Abstract]
Allowances for accounts receivable	$ 947	$ 757
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	30,000,000	30,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, no par value
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	30,445,479	30,312,758
Common stock, shares outstanding	22,785,258	22,893,803
Treasury stock, shares	7,660,221	7,431,897

Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2010
Consolidated Statements of Operations [Abstract]
Product revenue	$ 90,782	$ 75,870	$ 60,882
Service revenue	9,780	6,167	7,191
Total revenue	100,562	82,037	68,073
Cost of product revenue	62,842	49,809	40,063
Cost of service revenue	7,682	4,589	5,266
Total cost of revenue	70,524	54,398	45,329
Gross profit	30,038	27,639	22,744
Operating expenses:
General and administrative	11,399	11,686	12,836
Sales and marketing	15,599	13,674	12,596
Research and development	2,518	2,333	1,891
Total operating expenses	29,516	27,693	27,323
Income (loss) from operations	522	(54)	(4,579)
Other income (expense):
Interest expense	(551)	(406)	(256)
(Loss) gain on sale of OTA contract receivables	32	(1,012)	(561)
Extinguishment of debt			250
Dividend and interest income	850	571	670
Total other income (expense)	331	(847)	103
Income (loss) before income tax	853	(901)	(4,476)
Income tax expense (benefit)	370	(1,242)	(1,003)
Net income (loss)	$ 483	$ 341	$ (3,473)
Basic net income (loss) per share attributable to common shareholders	$ 0.02	$ 0.02	$ (0.16)
Weighted-average common shares outstanding	22,953,037	22,678,411	21,844,150
Diluted net income (loss) per share	$ 0.02	$ 0.01	$ (0.16)
Weighted-average common shares and share equivalents outstanding	23,386,525	23,198,063	21,844,150

Statement of Shareholders' Equity (USD $) In Thousands, except Share data	Total USD ($)	Common Stock	Common Stock Additional Paid-in Capital USD ($)	Treasury Stock USD ($)	Stockholders' Notes Receivable USD ($)	Accumulated Other Comprehensive Loss USD ($)	Retained Earnings (Deficit) USD ($)
Beginning balance at Mar. 31, 2009	$ 88,695		$ 118,907	$ (31,536)	$ 0	$ (32)	$ 1,356
Beginning balance, shares at Mar. 31, 2009		21,528,783
Issuance of stock and warrants for services, shares		11,211
Issuance of stock and warrants for services	48		48
Exercise of stock options and warrants for cash, shares		1,024,113
Exercise of stock options and warrants for cash	1,989		1,989
Tax benefit from exercise of stock options	80		80
Stock-based compensation	1,491		1,491
Treasury stock purchase, shares		(121,727)
Treasury stock purchase	(475)			(475)
Net income (loss)	(3,473)						(3,473)
Unrealized gain on short-term investments	32					32
Comprehensive income (loss)	(3,441)
Ending balance at Mar. 31, 2010	88,387		122,515	(32,011)	0	0	(2,117)
Ending balance, shares at Mar. 31, 2010		22,442,380
Issuance of stock and warrants for services, shares		15,475
Issuance of stock and warrants for services	51		51
Exercise of stock options and warrants for cash, shares		386,080
Exercise of stock options and warrants for cash	529		529
Shares issued under Employee Stock Purchase Plan, shares		65,776
Shares issued under Employee Stock Purchase Plan	25		(132)	353	(196)
Tax benefit from exercise of stock options	(132)		(132)
Collection of shareholder notes receivable	3				3
Stock-based compensation	1,301		1,301
Treasury stock purchase, shares		(15,908)
Treasury stock purchase	(50)			(50)
Net income (loss)	341						341
Comprehensive income (loss)	341
Ending balance at Mar. 31, 2011	90,455		124,132	(31,708)	(193)	0	(1,776)
Ending balance, shares at Mar. 31, 2011		22,893,803
Issuance of stock and warrants for services, shares		29,308
Issuance of stock and warrants for services	85		85
Exercise of stock options and warrants for cash, shares		103,413
Exercise of stock options and warrants for cash	147		147
Shares issued under Employee Stock Purchase Plan, shares		37,034
Shares issued under Employee Stock Purchase Plan	27		133	(22)	(84)
Tax benefit from exercise of stock options	989		989
Collection of shareholder notes receivable	56				56
Stock-based compensation	1,267		1,267
Treasury stock purchase, shares		(278,300)
Treasury stock purchase	(740)			(740)
Net income (loss)	483						483
Comprehensive income (loss)	483
Ending balance at Mar. 31, 2012	$ 92,769		$ 126,753	$ (32,470)	$ (221)	$ 0	$ (1,293)
Ending balance, shares at Mar. 31, 2012		22,785,258

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2010
Operating activities
Net income (loss)	$ 483	$ 341	$ (3,473)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	4,236	3,270	2,673
Stock-based compensation expense	1,267	1,301	1,491
Deferred income tax (benefit)	(755)	(1,184)	(1,112)
Loss on sale of assets	133	1,025	546
Change in bad debt expense	190	375	458
Extinguishment of debt			(139)
Other	85	51	48
Accounts receivable	3,740	(12,944)	(4,579)
Inventories	(1,371)	(3,098)	(6,409)
Prepaid expenses and other assets	(2,025)	(2,542)	(1,979)
Deferred contract costs	7,396	(8,036)
Deferred revenue	(4,542)	9,680
Accounts payable	1,817	4,722	(56)
Accrued expenses	841	(1,606)	1,813
Net cash provided by (used in) operating activities	11,495	(8,645)	(10,718)
Investing activities
Purchase of property and equipment	(4,324)	(2,611)	(5,649)
Purchase of property and equipment leased to customers under PPAs	(3)	(2,343)	(2,651)
Purchase of short-term investments	(5)	(11)
Sale of short-term investments			5,522
Additions to patents and licenses	(224)	(157)	(299)
Proceeds from disposal of equipment	24	1	7
Net cash used in investing activities	(4,532)	(5,121)	(3,070)
Financing activities
Proceeds from issuance of long-term debt	5,989	3,721	200
Proceeds from shareholder notes	56	3
Deferred financing and offering costs	(124)	(57)
Repurchase of common stock into treasury	(740)		(475)
Payment of long-term debt	(1,856)	(2,077)	(805)
Excess benefit for deferred taxes on stock-based compensation	989	(132)	80
Proceeds from issuance of common stock	174	504	1,989
Net cash provided by financing activities	4,488	1,962	989
Net increase (decrease) in cash and cash equivalents	11,451	(11,804)	(12,799)
Cash and cash equivalents at beginning of period	11,560	23,364	36,163
Cash and cash equivalents at end of period	23,011	11,560	23,364
Supplemental cash flow information:
Cash paid for interest	488	368	277
Cash paid for income taxes	104	34	32
Supplemental disclosure of non-cash investing and financing activities:
Shares issued from treasury for stock note receivable	84	196
Shares surrendered into treasury for stock option exercise		$ 50

Description of Business

12 Months Ended

Mar. 31, 2012

Description of Business [Abstract]

DESCRIPTION OF BUSINESS

NOTE A — DESCRIPTION OF BUSINESS

Organization

The Company includes Orion Energy Systems, Inc., a Wisconsin corporation, and all consolidated subsidiaries. The Company is a developer, manufacturer and seller of lighting and energy management systems and a seller and integrator of renewable energy technologies to commercial and industrial businesses, predominantly in North America.

In August 2009, the Company created Orion Engineered Systems, a new operating division offering additional alternative renewable energy systems. The Company first introduced the presentation of operating segments for the quarter ended December 31, 2010. See Note I “Segment Reporting” of these financial statements for further discussion of our reportable segments.

The corporate offices and manufacturing operations are located in Manitowoc, Wisconsin and an operations facility occupied by Orion Engineered Systems is located in Plymouth, Wisconsin. The company leases office space for sales offices located in New Jersey and Texas.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

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+ Details

Summary of Significant Accounting Policies

12 Months Ended

Mar. 31, 2012

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Orion Energy Systems, Inc. and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Reclassifications

Where appropriate, certain reclassifications have been made to prior years’ financial statements to conform to the current year presentation.

Use of Estimates

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 disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during that reporting period. Areas that require the use of significant management estimates include revenue recognition, inventory obsolescence and bad debt reserves, accruals for warranty expenses, income taxes and certain equity transactions. Accordingly, actual results could differ from those estimates.

The Company’s valuation allowance for deferred tax assets is based upon estimates of future taxable income. It is reasonably possible that this estimate may change in the near term and this change could be material to the financial statements.

Cash and cash equivalents

The Company considers all highly liquid, short-term investments with original maturities of three months or less to be cash equivalents.

Short-term investments available for sale

The amortized cost and fair value of short-term investments, with gross unrealized gains and losses, as of March 31, 2011 and 2012 were as follows (in thousands):


March 31, 2011
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Short-Term Investments
Money market funds	$	485	$	—	$	—	$	485	$	485	$	—
Bank certificates of deposit		1,011		—		—		1,011		—		1,011

Total	$	1,496	$	—	$	—	$	1,496	$	485	$	1,011


March 31, 2012
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Short-Term Investments
Money market funds	$	486	$	—	$	—	$	486	$	486	$	—
Bank certificate of deposit		1,016		—		—		1,016		—		1,016

Total	$	1,502	$	—	$	—	$	1,502	$	486	$	1,016

As of March 31, 2011 and 2012, the Company’s financial assets described in the table above were measured at cost which approximates fair value due to the short-term nature of the investment (level 1 inputs).

The Company’s certificate of deposit is pledged as security for an equipment lease.

Fair value of financial instruments

The Company’s financial instruments consist of cash, short-term investments, accounts receivable, accounts payable, accrued liabilities and long-term debt. The carrying amounts of the Company’s financial instruments approximate their respective fair values due to the relatively short-term nature of these instruments, or in the case of long-term, because of the interest rates currently available to the Company for similar obligations. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP describes a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

Level 1 — Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 — Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

Level 3 — Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

Accounts receivable

The majority of the Company’s accounts receivable are due from companies in the commercial, industrial and agricultural industries, as well as wholesalers. Credit is extended based on an evaluation of a customer’s financial condition. Generally, collateral is not required for end users; however, the payment of certain trade accounts receivable from wholesalers is secured by irrevocable standby letters of credit. Accounts receivable are generally due within 30-60 days. Accounts receivable are stated at the amount the Company expects to collect from outstanding balances. The Company provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after the Company has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable.

Financing receivables

The Company considers its lease balances included in consolidated current and long-term accounts receivable from its Orion Throughput Agreement, or OTA, sales-type leases to be financing receivables. Additional disclosures on the credit quality of the Company’s sold sales-type leases and lease balances included in accounts receivable are as follows:

Age Analysis as of March 31, 2011 (in thousands):


	Not past due		1-90 days past due		Greater than 90 days past due			Total Past Due			Total Sales- Type Leases
Lease balances included in consolidated accounts receivable—current	$	1,190	$	17	$	5		$	22		$	1,212

Lease balances included in consolidated accounts receivable—long-term		3,696		—		—			—			3,696

Total gross sales-type leases		4,886		17		5			22			4,908
Allowance		—		—		(2	)		(2	)		(2	)

Total net sales type leases	$	4,886	$	17	$	3		$	20		$	4,906

Age Analysis as of March 31, 2012 (in thousands):


	Not past due		1-90 days past due			Greater than 90 days past due			Total Past Due			Total Sales- Type Leases
Lease balances included in consolidated accounts receivable - current	$	2,833	$	40		$	20		$	60		$	2,893
Lease balances included in consolidated accounts receivable - long-term		5,521		—			—			—			5,521

Total gross sales-type leases		8,354		40			20			60			8,414
Allowance		—		(4	)		(20	)		(24	)		(24	)

Total net sales type leases	$	8,354	$	36		$	—		$	36		$	8,390

Allowance for credit losses on finance receivables

The Company’s allowance for credit losses is based on management’s assessment of the collectability of customer accounts. A considerable amount of judgment is required in order to make this assessment including a detailed analysis of the aging of the lease receivables and the current credit worthiness of our customers and an analysis of historical bad debts and other adjustments. If there is a deterioration of a major customer’s credit worthiness or actual defaults are higher than historical experience, the estimate of the recoverability of amounts due could be adversely affected. The Company reviews in detail the allowance for doubtful accounts on a quarterly basis and adjusts the allowance estimate to reflect actual portfolio performance and any changes in future portfolio performance expectations. The Company believes that there is no impairment of the receivables for the sales-type leases. The Company’s provision write-off’s and credit losses against the OTA sales-lease receivable balances in fiscal 2011 and fiscal 2012, respectively, was as follows:


		Balance at beginning of period		Provisions charged to expense		Write offs and other		Balance at end of period
March 31,		(in Thousands)
2011	Allowance for Doubtful Accounts on finance receivables	$	0	$	2	$	0	$	2
2012	Allowance for Doubtful Accounts on finance receivables	$	2	$	81	$	59	$	24

Inventories

Inventories consist of raw materials and components, such as ballasts, metal sheet and coil stock and molded parts; work in process inventories, such as frames and reflectors; and finished goods, including completed fixtures or systems, wireless energy management systems and accessories, such as lamps, meters and power supplies. All inventories are stated at the lower of cost or market value with cost determined using the first-in, first-out (FIFO) method. The Company reduces the carrying value of its inventories for differences between the cost and estimated net realizable value, taking into consideration usage in the preceding 12 months, expected demand, and other information indicating obsolescence. The Company records as a charge to cost of product revenue the amount required to reduce the carrying value of inventory to net realizable value. As of March 31, 2011 and 2012, the Company had inventory obsolescence reserves of $1.3 million and $1.5 million.

Costs associated with the procurement and warehousing of inventories, such as inbound freight charges and purchasing and receiving costs, are also included in cost of product revenue.

Inventories were comprised of the following (in thousands):


	March 31,		March 31,
	2011		2012
Raw materials and components	$	12,005	$	10,466
Work in process		459		969
Finished goods		3,413		6,697

	$	15,877	$	18,132

Deferred Contract Costs

Deferred contract costs consist primarily of the costs of products delivered, and services performed, that are subject to additional performance obligations or customer acceptance. These deferred contract costs are expensed at the time the related revenue is recognized. Current deferred costs amounted to $9.6 million and $2.2 million as of March 31, 2011 and March 31, 2012, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist primarily of prepaid insurance premiums, prepaid license fees, purchase deposits, advance payments to contractors, prepaid taxes and miscellaneous receivables.

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. Properties sold, or otherwise disposed of, are removed from the property accounts, with gains or losses on disposal credited or charged to income from operations.

The Company periodically reviews the carrying values of property and equipment for impairment in accordance with ASC 360, Property, Plant and Equipment, if events or changes in circumstances indicate that the assets may be impaired. The estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition are compared to the assets’ carrying amount to determine if a write down to market value is required. No write downs were recorded in fiscal 2010, 2011 or 2012.

Property and equipment were comprised of the following (in thousands):


	March 31,
	2011			2012
Land and land improvements	$	1,474		$	1, 545
Buildings		15,104			14,717
Furniture, fixtures and office equipment		8,323			11,000
Leasehold improvements		9			54
Equipment leased to customers under Power Purchase Agreements		4,994			4,997
Plant equipment		8,067			9,990
Construction in progress		2,272			1,080

		40,243			43,383
Less: accumulated depreciation and amortization		(10,226	)		(13,158	)

Net property and equipment	$	30,017		$	30,225

The Company has no equipment under capital leases.

Depreciation is provided over the estimated useful lives of the respective assets using the straight-line method. The Company recorded depreciation expense of $2.6 million, $2.7 million and $4.0 million for the years ended March 31, 2010, 2011 and 2012, respectively. Depreciable lives by asset category are as follows:


Land improvements		10 – 15 years
Buildings		10 – 39 years
Leasehold improvements		Shorter of asset life or life of lease
Furniture, fixtures and office equipment		2 – 10 years
Plant equipment		3 – 10 years

No interest was capitalized for construction in progress during fiscal 2011 or fiscal 2012.

Patents and Licenses

Patents and licenses are amortized over their estimated useful life, ranging from 7 to 17 years, using the straight line method.

The Company capitalized $299,000, $157,000 and $224,000 of costs associated with obtaining patents and licenses in fiscal 2010, 2011 and 2012, respectively. Amortization expense recorded to cost of revenue for fiscal 2010, 2011 and 2012 was $113,000, $127,000 and $136,000, respectively. The costs and accumulated amortization for patents and licenses were $2,062,000 and $442,000 as of March 31, 2011; and $2,262,000 and $573,000 as of March 31, 2012. The average remaining useful life of the patents and licenses as of March 31, 2012 was approximately 12.0 years.

As of March 31, 2012, future amortization expense of the patents and licenses is estimated to be as follows (in thousands):


Fiscal 2013	$	139
Fiscal 2014		139
Fiscal 2015		138
Fiscal 2016		138
Fiscal 2017		138
Thereafter		997

	$	1,689

The Company’s management periodically reviews the carrying value of patents and licenses for impairment. No write-offs were recorded in fiscal 2010 or fiscal 2011 and $19,000 was recorded in fiscal 2012.

Long-Term Receivables

The Company records a long-term receivable for the non-current portion of its sales-type capital lease OTA contracts. The receivable is recorded at the net present value of the future cash flows from scheduled customer payments. The Company uses the implied cost of capital from each individual contract as the discount rate.

Also included in other long-term receivables are amounts due from a third party finance company to which the Company has sold, without recourse, the future cash flows from OTAs entered into with customers. Such receivables are recorded at the present value of the future cash flows discounted between 8.8% and 11%. As of March 31, 2012, the following amounts were due from the third party finance company in future periods (in thousands):


Fiscal 2013	$	955
Fiscal 2014		1,015
Fiscal 2015		958
Fiscal 2016		310
Fiscal 2017		9

Total gross long-term receivable		3,247
Less: amount representing interest		(521	)

Net long-term receivable	$	2,726

Long-Term Inventories

The Company records long-term inventory for the non-current portion of its wireless controls inventory. The inventories are stated at the lower of cost or market value with cost determined using the FIFO method.

Other Long-Term Assets

Other long-term assets include long-term security deposits, prepaid licensing costs and deferred financing costs. Other long-term assets include $55,000 and $87,000 of deferred financing costs as of March 31, 2011 and March 31, 2012, respectively. Deferred financing costs related to debt issuances are amortized to interest expense over the life of the related debt issue (2 to 10 years). For the years ended March 31, 2010, 2011 and 2012, the amortization was $6,000, $29,000 and $52,000, respectively.

Accrued Expenses

Accrued expenses include warranty accruals, accrued wages, accrued vacations, accrued insurance, accrued interest, sales tax payable and other miscellaneous accruals. No accrued expenses exceeded 5% of current liabilities as of March 31, 2011 and March 31, 2012.

The Company generally offers a limited warranty of one year on its products in addition to those standard warranties offered by major original equipment component manufacturers. The manufacturers’ warranties cover lamps and ballasts, which are significant components in the Company’s products.

Changes in the Company’s warranty accrual were as follows (in thousands):


	March 31,
	2011			2012
Beginning of year	$	60		$	59
Provision to cost of revenue		114			102
Charges		(115	)		(77	)

End of year	$	59		$	84

Incentive Compensation

The Company’s compensation committee approved an Executive Fiscal Year 2009 Annual Cash Incentive Program under its 2004 Stock and Incentive Awards Plan which became effective as of July 30, 2008. The plan provided for performance and discretionary bonus payments ranging from 28-125% of the base salaries of the Company’s named executive officers. The range of financial performance-based bonus guidelines under the approved plan began if the Company achieved a minimum of 1.125 times the prior fiscal year’s revenue and/or up to 2.00 times the prior fiscal year’s operating income, and correspondingly increased on a pro rata basis up to a maximum of 1.67 times those initial measures. The Company’s compensation committee chose to freeze target bonus programs for fiscal 2010 at their respective fiscal 2009 levels due to the economic environment the Company was operating in. Based upon the results for the year ended March 31, 2010, the Company did not accrue any expense related to this plan.

The Company’s compensation committee approved an Executive Fiscal Year 2011 Annual Cash Incentive Program under its 2004 Stock and Incentive Awards Plan which became effective as of July 21, 2010. The plan provided for performance and discretionary bonus payments ranging from 7-19% of the fiscal 2011 base salaries of the Company’s named executive officers. The range of fiscal 2011 financial performance-based bonus guidelines under the approved plan began if the Company achieved a minimum of 1.2 times the fiscal 2010 revenue and a minimum of $4.0 million operating income. Based upon the results for the year ended March 31, 2011, the Company did not accrue any expense related to this plan.

The Company’s compensation committee approved an Executive Fiscal Year 2012 Annual Cash Incentive Program under its 2004 Stock and Incentive Awards Plan which became effective as of May 21, 2011. The plan provided for performance based stock option awards ranging in fair value from 13-15% of the fiscal 2012 base salaries of the Company’s named executive officers. The range of fiscal 2012 financial performance-based bonus guidelines under the approved plan began if the Company achieved all of the following: a minimum of $115.0 million in revenue, a minimum of $4.9 million in net income and a minimum of $4.9 million in free cash flow. Free cash flow was defined as cash flow from operations less cash flow used for the purchase of property, plant and equipment. Additionally, if the Company’s performance was greater than 120% of the targets, a cash performance bonus payment was earned that would range from 12-14% of the fiscal 2012 base salaries. Based upon the results for the year ended March 31, 2012, the Company did not accrue any expense related to this plan.

Revenue Recognition

The Company offers a financing program called the Orion Throughput Agreement, or OTA, for a customer’s lease of the Company’s energy management systems. The OTA is structured as a sales-type lease upon successful installation of the system and customer acknowledgement that the system is operating as specified, revenue is recognized at the Company’s net investment in the lease which typically is the net present value of the future cash flows.

The Company offers a financing program called a Power Purchase Agreement, or PPA, for the Company’s renewable energy product offerings. A PPA is a supply side agreement for the generation of electricity and subsequent sale to the end user. Upon the customer’s acknowledgement that the system is operating as specified, product revenue is recognized on a monthly basis over the life of the PPA contract, typically in excess of 10 years.

For sales of solar photovoltaic systems, which are governed by customer contracts that require the Company to deliver functioning solar power systems and are generally completed within three to 15 months, the Company recognizes revenue from fixed price construction contracts using the percentage-of-completion method in accordance with ASC 605-35, Construction-Type and Production-Type Contracts. Under this method, revenue arising from fixed price construction contracts is recognized as work is performed based upon the percentage of incurred costs to estimated total forecasted costs. The Company has determined that the appropriate method of measuring progress on these sales is measured by the percentage of costs incurred to date of the total estimated costs for each contract as materials are installed. The percentage-of-completion method requires revenue recognition from the delivery of products to be deferred and the cost of such products to be capitalized as a deferred cost and current asset on the balance sheet. The Company performs periodic evaluations of the progress of the installation of the solar photovoltaic systems using actual costs incurred over total estimated costs to complete a project. Provisions for estimated losses on uncompleted contracts, if any, are recognized in the period in which the loss first becomes probable and reasonably estimable.

Revenue is recognized on the sales of our lighting and related energy efficiency systems and products when the following four criteria are met:

•

persuasive evidence of an arrangement exists;

•

delivery has occurred and title has passed to the customer;

•

the sales price is fixed and determinable and no further obligation exists; and

•

collectability is reasonably assured

These four criteria are met for the Company’s product-only revenue upon delivery of the product and title passing to the customer. At that time, the Company provides for estimated costs that may be incurred for product warranties and sales returns. Revenues are presented net of sales tax and other sales related taxes.

As discussed in “Recent Accounting Pronouncements”, the Company elected to adopt the revised guidance of ASC 605-25 related to multiple-element arrangements during the quarter ended December 31, 2010. This guidance was retrospectively applied to the beginning of the Company’s fiscal year. The adoption had no impact on revenue, income before taxes, net income or earnings per share.

For sales of the Company’s lighting and energy management technologies, consisting of multiple elements of revenue, such as a combination of product sales and services, the Company determines revenue by allocating the total contract revenue to each element based on their relative selling prices. In such circumstances, the Company uses a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (1) vendor-specific objective evidence (VSOE) of fair value, if available, (2) third-party evidence (TPE) of selling price if VSOE is not available, and (3) best estimate of the selling price if neither VSOE nor TPE is available (a description as to how the Company determined VSOE, TPE and estimated selling price is provided below).

The nature of the Company’s multiple element arrangements for the sale of its lighting and energy management technologies is similar to a construction project, with materials being delivered and contracting and project management activities occurring according to an installation schedule. The significant deliverables include the shipment of products and related transfer of title and the installation.

To determine the selling price in multiple-element arrangements, the Company established VSOE of the selling price for its HIF lighting and energy management system products using the price charged for a deliverable when sold separately. In addition, the Company records in service revenue the selling price for its installation and recycling services using management’s best estimate of selling price, as VSOE or TPE evidence does not exist. Service revenue is recognized when services are completed and customer acceptance has been received. Recycling services provided in connection with installation entail the disposal of the customer’s legacy lighting fixtures. The Company’s service revenues, other than for installation and recycling that are completed prior to delivery of the product, are included in product revenue using management’s best estimate of selling price, as VSOE or TPE evidence does not exist. These services include comprehensive site assessment, site field verification, utility incentive and government subsidy management, engineering design, and project management. For these services and for installation and recycling services, management’s best estimate of selling price is determined by considering several external and internal factors including, but not limited to, pricing practices, margin objectives, competition, geographies in which the Company offers its products and services and internal costs. The determination of estimated selling price is made through consultation with and approval by management, taking into account all of the preceding factors.

Deferred revenue relates to advance customer billings, investment tax grants received related to PPAs and a separate obligation to provide maintenance on OTAs and is classified as a liability on the Balance Sheet. The fair value of the maintenance is readily determinable based upon pricing from third-party vendors. Deferred revenue related to maintenance services is recognized when the services are delivered, which occurs in excess of a year after the original OTA contract is executed.

Deferred revenue was comprised of the following (in thousands):


	March 31,		March 31,
	2011		2012
Deferred revenue – current liability	$	8,427	$	2,614
Deferred revenue – long term liability		1,777		3,048

Total deferred revenue	$	10,204	$	5,662

Shipping and Handling Costs

The Company records costs incurred in connection with shipping and handling of products as cost of product revenue. Amounts billed to customers in connection with these costs are included in product revenue.

Advertising

Advertising costs of $482,000, $384,000 and $117,000 for fiscal 2010, 2011 and 2012, respectively, were charged to operations as incurred.

Research and Development

The Company expenses research and development costs as incurred.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the future tax consequences of temporary differences between financial reporting and income tax basis of assets and liabilities, measured using the enacted tax rates and laws expected to be in effect when the temporary differences reverse. Deferred income taxes also arise from the future tax benefits of operating loss and tax credit carryforwards. A valuation allowance is established when management determines that it is more likely than not that all or a portion of a deferred tax asset will not be realized.

ASC 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination. The Company has classified the amounts recorded for uncertain tax benefits in the balance sheet as other liabilities (non-current) to the extent that payment is not anticipated within one year. The Company recognizes penalties and interest related to uncertain tax liabilities in income tax expense. Penalties and interest were immaterial as of the date of adoption and are included in the unrecognized tax benefits.

Deferred tax benefits have not been recognized for income tax effects resulting from the exercise of non-qualified stock options. These benefits will be recognized in the period in which the benefits are realized as a reduction in taxes payable and an increase in additional paid-in capital. Realized tax benefits and (expense) from the exercise of stock options were $80,000, $(132,000) and $989,000 for the fiscal years 2010, 2011 and 2012, respectively.

Stock Option Plans

The Company’s share-based payments to employees are measured at fair value and are recognized in earnings, net of estimated forfeitures, on a straight-line basis over the requisite service period.

Cash flows from the exercise of stock options resulting from tax benefits in excess of recognized cumulative compensation costs (excess tax benefits) are classified as financing cash flows. For the years ended March 31, 2010, 2011 and 2012, $80,000, ($132,000) and $989,000, respectively, of such excess tax benefits were classified as financing cash flows.

The Company uses the Black-Scholes option-pricing model. Prior to fiscal 2011, the Company had determined volatility based on an analysis of a peer group of public companies due to a limited share price history. In fiscal 2011 and fiscal 2012, the Company calculated volatility based upon the historical market price of its common stock. The risk-free interest rate is the rate available as of the option date on zero-coupon U.S. Government issues with a remaining term equal to the expected term of the option. The expected term is based upon the vesting term of the Company’s options and expected exercise behavior. The Company has not paid dividends in the past and does not plan to pay any dividends in the foreseeable future. The Company estimates its forfeiture rate of unvested stock awards based on historical experience.

The fair value of each option grant in fiscal 2010, 2011 and 2012 was determined using the assumptions in the following table:


	Fiscal Year Ended March 31,
	2010	2011	2012
Weighted average expected term	6.6 years	5.7 years	5.7 years
Risk-free interest rate	2.68%	2.14%	1.46%
Expected volatility	60.0%	60.0 - 74.8%	70.0%
Expected forfeiture rate	3.0%	11.4%	15.1%

Net Income per Common Share

Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period and does not consider common stock equivalents.

Diluted net income per common share reflects the dilution that would occur if warrants and employee stock options were exercised. In the computation of diluted net income per common share, the Company uses the “treasury stock” method for outstanding options and warrants. In addition, in computing the dilutive effect of the convertible notes, the numerator is adjusted to add back the after-tax amount of interest recognized in the period. Diluted net loss per common share is the same as basic net loss per common share for the year ended March 31, 2010, because the effects of potentially dilutive securities are anti-dilutive. The effect of net income per common share is calculated based upon the following shares (in thousands except share amounts):


	Fiscal Year Ended March 31,
	2010			2011		2012
Numerator:
Net income (loss) (in thousands)	$	(3,473	)	$	341	$	483

Denominator:
Weighted-average common shares outstanding		21,844,150			22,678,411		22,953,037
Weighted-average effect of assumed conversion of stock options and warrants		—			519,652		433,488

Weighted-average common shares and common share equivalents outstanding		21,844,150			23,198,063		23,386,525

Net income (loss) per common share:
Basic	$	(0.16	)	$	0.02	$	0.02
Diluted	$	(0.16	)	$	0.01	$	0.02

The following table indicates the number of potentially dilutive securities as of the end of each period:


	March 31,
	2010		2011		2012
Common stock options		3,546,249		3,658,768		3,697,633
Common stock warrants		76,240		38,980		38,980

Total		3,622,489		3,697,748		3,736,613

Concentration of Credit Risk and Other Risks and Uncertainties

The Company’s cash is deposited with three financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant risk on these balances.

The Company currently depends on one supplier for a number of components necessary for its products, including ballasts and lamps. If the supply of these components were to be disrupted or terminated, or if this supplier were unable to supply the quantities of components required, the Company may have short-term difficulty in locating alternative suppliers at required volumes. Purchases from this supplier accounted for 26%, 22% and 14% of cost of revenue in fiscal 2010, 2011 and 2012, respectively.

In fiscal 2010, 2011 and 2012, there were no customers who individually accounted for greater than 10% of revenue.

As of March 31, 2011, one customer accounted for 17% of accounts receivable. As of March 31, 2012, one customer accounted for 11% and one customer accounted for 10% of accounts receivable.

Recent Accounting Pronouncements

Effective April 1, 2010, the Company adopted ASU 2009-13, Multiple-Deliverable Revenue Arrangements, which amends ASC Subtopic 650-25 Revenue Recognition—Multiple-Element Arrangements to eliminate the requirement that all undelivered elements have vendor-specific objective evidence (“VSOE”) or third-party evidence (“TPE”) before an entity can recognize the portion of an overall arrangement fee that is attributable to items that already have been delivered. In the absence of VSOE or TPE of the standalone selling price for one or more delivered or undelivered elements in a multiple-element arrangement, entities will be required to estimate the selling prices of those elements. The overall arrangement fee will be allocated to each element (both delivered and undelivered items) based on their relative selling prices, regardless of whether those selling prices are evidenced by VSOE or TPE or are based on the entity’s estimated selling price. Additionally, the new guidance will require entities to disclose more information about their multiple-element revenue arrangements. The adoption of this ASU did not result in a material change in either the units of accounting or a change in the pattern or timing of revenue recognition. Additionally, the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In July 2010, the FASB issued Accounting Standards Update 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (ASU 2010-20). ASU 2010-20 requires further disaggregated disclosures that improve financial statement users’ understanding of (1) the nature of an entity’s credit risk associated with its financing receivables and (2) the entity’s assessment of that risk in estimating its allowance for credit losses as well as changes in the allowance and the reasons for those changes. The new and amended disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The adoption of ASU 2010-20 did not have a significant impact on the Company’s consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04 Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Financial Reporting Standards (“IFRS”) (“ASU 2011-04”). ASU 2011-04 represents the converged guidance of the FASB and the IASB (the “Boards”) on fair value measurements. The collective efforts of the Boards and their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and IFRSs. The amendments in this ASU are required to be applied prospectively, and are effective for interim and annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a significant impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income,” (“ASU 2011-05”) which amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity. Instead, the Company must report comprehensive income in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after December 15, 2011 with early adoption permitted. However, in December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”), which deferred the guidance on whether to require entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. ASU 2011-12 reinstated the requirements for the presentation of reclassifications that were in place prior to the issuance of ASU 2011-05 and did not change the effective date for ASU 2011-05. For public entities, the amendments in ASU 2011-05 and ASU2011-12 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. The adoption of ASU 2011-05 and ASU 2011-12 did not have a significant impact on the Company’s consolidated statements as it only requires a change in the format of the current presentation.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet: Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11 requires entities to disclose information about offsetting and related arrangements of financial instruments and derivative instruments and will be applied retrospectively for all comparative periods presented. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact of ASU 2011-11.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Related Party Transactions

12 Months Ended

Mar. 31, 2012

RELATED PARTY TRANSACTIONS

NOTE C — RELATED PARTY TRANSACTIONS

During fiscal 2010, 2011 and 2012, the Company purchased goods and services from an entity in the amounts of $46,000, $48,000 and $46,000, respectively, for which a director of the Company serves as a member of the board of directors. The terms and conditions of such relationship are believed to be not materially more favorable to the Company or the entity than could be obtained from an independent third party.

During fiscal 2010 and 2011, the Company recorded revenue of $29,000 and $2,623,000 for products and services sold to an entity for which a former director of the Company was formerly the executive chairman. Included in the fiscal 2011 revenue was $2,586,000 in revenue from OTA contracts completed during the fiscal 2011 fourth quarter. As of March 31, 2011, current and long-term accounts receivable related to OTA contracts were $0.2 million and $1.1 million, respectively. During fiscal 2010 and 2011, the Company purchased goods and services from the same entity in the amounts of $30,000 and $0. The terms and conditions of such relationship are believed to be not materially more favorable to the Company or the entity than could be obtained from an independent third party. The related party relationship did not exist as of March 31, 2012.

During fiscal 2010 and 2011, the Company recorded revenue of $766,000 and $241,000 for products and services sold to various entities affiliated or associated with an entity for which a director of the Company previously served as a member of the board of directors. The Company is not able to identify the respective amount of revenues attributable to specifically identifiable entities within such group of affiliated or associated entities or the extent to which any such individual entities are related to the entity on whose board of directors the Company’s director served. The terms and conditions of such relationship are believed to be not materially more favorable to the Company or the entity than could be obtained from an independent third party. The related party relationship did not exist as of March 31, 2012.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Article 4

-Section 08

-Paragraph k

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Article 3A

-Section 04

-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 57

-Paragraph 1-4

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 850

-SubTopic 10

-Section 50

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

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-Name Accounting Standards Codification

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 850

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(k))

-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 850

-SubTopic 10

-Section 50

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Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 850

-SubTopic 10

-Section 50

-Paragraph 5

-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

+ Details

Long-Term Debt

12 Months Ended

Mar. 31, 2012

Long-Term Debt [Abstract]

LONG-TERM DEBT

NOTE D — LONG-TERM DEBT

Long-term debt as of March 31, 2011 and 2012 consisted of the following (in thousands):


	March 31,
	2011			2012
Term note	$	782		$	532
Customer equipment finance notes payable		1,793			6,568
First mortgage note payable		853			776
Debenture payable		807			765
Other long-term debt		1,127			854

Total long-term debt		5,362			9,495
Less current maturities		(1,137	)		(2,791	)

Long-term debt, less current maturities	$	4,225		$	6,704

Revolving Credit Agreement

On June 30, 2010, the Company entered into a new credit agreement (Credit Agreement) with JP Morgan Chase Bank, N.A. (JP Morgan), which was amended by a First Amendment on September 30, 2011. The Credit Agreement replaced the Company’s former credit agreement with a different bank.

The Credit Agreement provides for a revolving credit facility (Credit Facility) that matures on June 30, 2012. The Company is currently working on an amendment to the Credit Facility to extend the maturity date to June 30, 2013. Borrowings under the Credit Facility are limited to (i) $15.0 million or (ii) during periods in which the outstanding principal balance of outstanding loans under the Credit Facility is greater than $5.0 million, the lesser of (A) $15.0 million or (B) the sum of 75% of the outstanding principal balance of certain accounts receivable of the Company and 45% of certain inventory of the Company. The Credit Agreement contains certain financial covenants, including minimum unencumbered liquidity requirements and requirements that the Company maintain a total liabilities to tangible net worth ratio not to exceed 0.50 to 1.00 as of the last day of any fiscal quarter. The Credit Agreement also contains certain restrictions on the ability of the Company to make capital or lease expenditures over prescribed limits, incur additional indebtedness, consolidate or merge, guarantee obligations of third parties, make loans or advances, declare or pay any dividend or distribution on its stock, redeem or repurchase shares of its stock or pledge assets. The Company also may cause JP Morgan to issue letters of credit for the Company’s account in the aggregate principal amount of up to $2.0 million, with the dollar amount of each issued letter of credit counting against the overall limit on borrowings under the Credit Facility. As of March 31, 2012, the Company had outstanding letters of credit totaling $1.7 million, primarily for securing collateral requirements under equipment operating leases. The Company incurred $61,000 of deferred financing costs related to the Credit Agreement which will be amortized over the two-year term of the Credit Agreement. There were no borrowings by the Company under the Credit Agreement as of March 31, 2012. The Company was in compliance with all of its covenants under the Credit Agreement as of March 31, 2012.

The Credit Agreement is secured by a first lien security interest in the Company’s accounts receivable, inventory and general intangibles, and a second lien priority in the Company’s equipment and fixtures. All OTAs, PPAs, leases, supply agreements and/or similar agreements relating to solar photovoltaic and wind turbine systems or facilities, as well as all accounts receivable and assets of the Company related to the foregoing, are excluded from these liens.

The Credit Agreement provides that the Company has the option to select whether borrowings under the Credit Facility will bear interest at either (i) a daily borrowing LIBOR rate tied to a one-month maturity or (ii) a LIBOR rate tied to a maturity corresponding to an interest period selected by the Company plus, in the case of either (i) or (ii), a per annum rate spread of 2.00%, 2.50% or 3.00%, depending on the ratio of (A) earnings before interest, taxes, depreciation and amortization less income taxes pain in cash less 50% of depreciation expense to (B) the sum of interest expense paid in cash in respect of indebtedness for borrowed money plus scheduled principal payments made with respect to indebtedness for borrowed money, all as determined for the 12-month period ending as of the end of the applicable fiscal quarter.

The Company must pay a fee of 0.25% on the average daily unused amount of the Credit Facility and a fee of 2.00% on the daily average face amount of undrawn issued letters of credit. The fee on unused amounts is waived if the Company or its affiliates maintain funds on deposit with JP Morgan or its affiliates above a specified amount. The deposit threshold requirement was satisfied as of March 31, 2012.

Customer Equipment Finance Notes Payable

In September 2010, the Company entered into a note agreement with a financial institution that provided the Company with $2.4 million to fund completed customer contracts under the Company’s OTA finance program. In February 2011, the Company sold a portion of the OTA contracts collateralizing the note to a third party equipment finance company. Accordingly, the Company repaid $1.3 million of the outstanding note balance and recorded a prepayment penalty of $33,000. This note is included in the table above as customer equipment finance note payable. The note is collateralized by the OTA-related equipment and the expected future monthly payments under the supporting 17 individual OTA customer contracts. The note bears interest at 7% and matures in September 2015. The note agreement includes certain prepayment penalties and a covenant that the Company maintain at least $5 million in cash liquidity. The Company was in compliance with all covenants in the note agreement as of March 31, 2012.

In March 2011, the Company entered into a note agreement with a financial institution that provided the Company with $0.9 million to fund completed customer contracts under the Company’s OTA finance program. This note is included in the table above as customer equipment finance note payable. The note is collateralized by the OTA-related equipment and the expected future monthly payments under the supporting three individual OTA customer contracts. The note bears interest at 7% and requires monthly payments of $20,900 through April 2015. The note agreement includes certain prepayment penalties and a covenant that the Company maintain at least $5 million in cash liquidity. The Company was in compliance with all covenants in the note agreement as of March 31, 2012.

In June 2011, the Company entered into a note agreement with a financial institution that provided the Company with $2.8 million to fund completed customer contracts under the Company’s OTA finance program. The note is collateralized by the OTA-related equipment and the expected future monthly payments under the supporting 46 individual OTA contracts. The note bears interest at 7.85% and matures in March 2016 and is included in the customer equipment finance notes payable line in the table above. The note agreement includes a debt service covenant with respect to the supporting OTA contracts that the aggregate amount of all remaining scheduled payments due with respect to the individual OTA contracts be not less than 1.25 to 1.0 of the remaining principal and interest payments due under the loan. As of March 31, 2012 the Company was in compliance with the debt service covenant.

In September 2011, the Company entered into a credit agreement with JP Morgan Chase Bank, N.A. (JP Morgan) that provided the Company with $5.0 million immediately available to fund completed customer contracts under the Company’s OTA finance program and an additional $5.0 million upon the Company’s achievement of meeting a trailing 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) target of $8.0 million. As of March 31, 2012, the Company had not yet achieved the trailing 12-month EBITDA target. The Company has one year from the date of the commitment to borrow under the credit agreement. During fiscal 2012, the Company borrowed $3.2 million against the OTA credit note and repaid $0.3 million. The borrowing is collateralized by the OTA-related equipment and the expected future monthly payments under the supporting 39 individual OTA customer contracts. The current borrowing under the credit agreement bears interest at LIBOR plus 4% and matures in December 2016. The Company incurred $0.1 million of deferred financing costs related to the Credit Agreement which will be amortized over the repayment term of the Credit Agreement. The credit agreement includes certain financial covenants, including funded debt to EBITDA and debt service coverage ratios. The Company was in compliance with all covenants in the credit agreement as of March 31, 2012.

Term Note

The Company’s term note requires principal and interest payments of $25,000 per month payable through February 2014 at an interest rate of 6.9%. Amounts outstanding under the note are secured by a first security interest and first mortgage in certain long-term assets and a secondary interest in inventory and accounts receivable and a secondary general business security agreement on all assets. In addition, the agreement precludes the payment of dividends on our common stock. Amounts outstanding under the note are 75% guaranteed by the United States Department of Agriculture Rural Development Association.

First Mortgage Note Payable

The Company’s first mortgage note payable has an interest rate of prime plus 2.25% (effective rate of 5.50% at March 31, 2012), and requires monthly payments of principal and interest of $10,000 through September 2014. The mortgage is secured by a first mortgage on the Company’s manufacturing facility. The mortgage includes certain prepayment penalties and various restrictive covenants, with which the Company was in compliance as of March 31, 2012.

Debenture Payable

The Company’s debenture payable was issued by Certified Development Company at an effective interest rate of 6.18%. The balance is payable in monthly principal and interest payments of $8,000 through December 2024 and is guaranteed by United States Small Business Administration 504 program. The amount due was collateralized by a second mortgage on the manufacturing facility.

Other Long-Term Debt

In November 2007, the Company completed a Wisconsin Community Development Block Grant with the local city government to provide financing in the amount of $750,000 for the purpose of acquiring additional production equipment. The loan has an interest rate of 4.9% and is collateralized by the related equipment. The loan requires monthly payments of $11,000 through December 2014.

In September 2010, the Company entered into a note agreement with the Wisconsin Department of Commerce that provided the Company with $0.3 million to fund the Company’s rooftop solar project at its Manitowoc manufacturing facility. This note is included in the table above as other long-term debt. The note is collateralized by the related solar equipment. The note allows for two years without interest accruing or principal payments due. Beginning in July 2012, the note bears interest at 2% and requires monthly payments of $4,600. The note matures in June 2017. The note agreement requires the Company to maintain a certain number of jobs at its Manitowoc facilities during the note’s duration. The Company was in compliance with all covenants in the note agreement as of March 31, 2012.

In January 2011, the Company amended its November 2007 Wisconsin Community Development Block Grant with the local city government to provide the Company with $0.2 million to fund equipment at its Manitowoc facility. The loan is included in the table above as other long-term debt. The amendment to the loan agreement is collateralized by the related equipment. The loan bears interest at 2.1125% and requires monthly payment of $3,600 through December 2014. The amendment to the loan agreement requires the Company to create and maintain a certain number of jobs at its Manitowoc facilities during the note’s duration. The Company was in compliance with all covenants in the loan agreement as of March 31, 2012.

Other long-term debt consists of a promissory note from state government to provide working capital and equipment for the development of daylighting technologies. The note is secured by the related equipment. The loan bears interest at 2.0% and requires monthly payments of $3,400 through November 2015.

In fiscal 2010, $250,000 of debt was forgiven related to the creation of certain types and numbers of jobs within the lending locality.

Aggregate Maturities

As of March 31, 2012, aggregate maturities of long-term debt were as follows (in thousands):


Fiscal 2013	$	2,792
Fiscal 2014		2,599
Fiscal 2015		2,399
Fiscal 2016		926
Fiscal 2017		259
Thereafter		520

	$	9,495

Income Taxes

12 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

INCOME TAXES

NOTE E — INCOME TAXES

The total provision (benefit) for income taxes consists of the following for the fiscal years ending (in thousands):


	Fiscal Year Ended March 31,
	2010			2011			2012
Current	$	109		$	(48	)	$	520
Deferred		(1,112	)		(1,194	)		(150	)

	$	(1,003	)	$	(1,242	)	$	370


	2010			2011			2012
Federal	$	(1,348	)	$	(1,294	)	$	292
State		345			52			78

	$	(1,003	)	$	(1,242	)	$	370

A reconciliation of the statutory federal income tax rate and effective income tax rate is as follows:



	Fiscal Year Ended March 31,
	2010			2011			2012
Statutory federal tax rate		(34.0	)%		(34.0	)%		34.0	%
State taxes, net		2.6	%		1.2	%		9.2	%
Stock-based compensation expense		5.0	%		(68.0	)%		0.0	%
Federal tax credit		(3.5	)%		(26.5	)%		(11.6	)%
State tax credit		(0.4	)%		(3.2	)%		(5.9	)%
Change in valuation reserve		5.1	%		12.4	%		5.9	%
Permanent items		0.1	%		(19.7	)%		10.0	%
Change in tax contingency reserve		0.0	%		0.1	%		0.8	%
Other, net		2.7	%		(0.1	)%		0.9	%

Effective income tax rate		(22.4	)%		(137.8	)%		43.3	%

The net deferred tax assets and liabilities reported in the accompanying consolidated financial statements include the following components (in thousands):


	March 31,
	2011			2012
Inventory, accruals and reserves	$	1,230		$	1,176
Other		82			105
Deferred revenue		(263	)		268

Total net current deferred tax assets and liabilities		1,049			1,549
Federal and state operating loss carryforwards		1,416			1,404
Tax credit carryforwards		1,211			1,412
Non-qualified stock options		1,540			1,870
Deferred revenue		318			448
Fixed assets		(1,753	)		(2,097	)
Valuation allowance		(378	)		(428	)

Total net long-term deferred tax assets and liabilities	$	2,354		$	2,609

Total net deferred tax assets	$	3,403		$	4,158

The Company is eligible for tax benefits associated with the excess tax deduction available for exercises of non-qualified stock options over the fair value determined at the grant date. The amount of the benefit is based upon the ultimate deduction reflected in the applicable income tax return. Benefits of $0.1 million, $(0.1) million and $1.0 million were recorded in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, as a reduction in taxes payable and a credit to additional paid in capital based on the amount that was utilized in the current year.

During the fourth quarter of fiscal 2011, the Company converted almost all of its existing incentive stock options, or ISOs, to non-qualified stock options, or NQSOs. This conversion was applied retrospectively, allowing the Company to benefit $0.6 million of income tax expense related to non-deductible ISO stock compensation expense that was previously deferred for income tax purposes. The conversion reduced the effective tax rate for fiscal 2011 to a benefit rate of 137.8% from a pre-conversion income tax benefit rate of 69.8%.

As of March 31, 2012, the Company has federal net operating loss carryforwards of approximately $7.0 million, of which $3.2 million are associated with the exercise of non-qualified stock options that have not yet been recognized by the Company in its financial statements. The Company also has state net operating loss carryforwards of approximately $4.5 million, of which $2.1 million are associated with the exercise of non-qualified stock options. The benefit from the net operating losses created from these exercises will be recorded as a reduction in taxes payable and a credit to additional paid-in capital in the period in which the benefits are realized.

As of March 31, 2012, The Company also has federal tax credit carryforwards of approximately $1.0 million and state tax credits of $0.4 million. A valuation allowance has been set up for the state tax credits due to the state apportioned income and the potential expiration of the state tax credits due to the carry forward period. These federal and state net operating losses and credit carryforwards are available, subject to the discussion in the following paragraph, to offset future taxable income and, if not utilized, will begin to expire in varying amounts between 2014 – 2030.

Generally, a change of more than 50% in the ownership of the Company’s stock, by value, over a three year period constitutes an ownership change for federal income tax purposes. As a result, the Company’s ability to use its net operating loss carryforwards, attributable to the period prior to such ownership change, to offset taxable income can be subject to limitations in a particular year, which could potentially result in increased future tax liability for the Company. The Company does not believe an ownership change affects the use of the full amount of the net operating loss carryforwards. There was no limitation that occurred for fiscal 2011 or fiscal 2012.

The Company records its tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Where the Company believes that a tax position is supportable for income tax purposes, the item is included in their income tax returns. Where treatment of a position is uncertain, a liability is recorded based upon the expected most likely outcome taking into consideration the technical merits of the position based on specific tax regulations and facts of each matter. These liabilities may be affected by changing interpretations of laws, rulings by tax authorities, or the expiration of the statute of limitations.

As of December 31, 2011, an examination of the Company’s U.S. federal income tax returns for tax years 2009 to 2011 was complete. The resolution of this examination did not have a material effect on its business, financial condition, results of operations or liquidity.

State income tax returns are generally subject to examination for a period of 3 to 5 years after filing of the respective return. The state effect of any federal changes remains subject to examination by various states for a period of up to two years after formal notification to the states. The Company currently has no state income tax return positions in the process of examination, administrative appeals or litigation.

Uncertain tax positions

As of March 31, 2012, the balance of gross unrecognized tax benefits was approximately $0.4 million, all of which would reduce the Company’s effective tax rate if recognized. The Company does not expect any of these amounts to change in the next twelve months as none of the issues are currently under examination, the statutes of limitations do not expire within the period, and the Company is not aware of any pending litigation. Due to the existence of net operating loss and credit carryforwards, all years since 2002 are open to examination by tax authorities.

The Company has classified the amounts recorded for uncertain tax benefits in the balance sheet as other liabilities (non-current) to the extent that payment is not anticipated within one year. The Company recognizes penalties and interest related to uncertain tax liabilities in income tax expense. Penalties and interest are immaterial as of the date of adoption and are included in the unrecognized tax benefits.


	Fiscal Year Ended March 31,
	2010		2011		2012
Unrecognized tax benefits as of beginning of fiscal year	$	397	$	398	$	399
Decreases relating to settlements with tax authorities		—		—		—
Additions based on tax positions related to the current period positions		1		1		7

Unrecognized tax benefits as of end of fiscal year	$	398	$	399	$	406

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph h

-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 136, 172

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 43, 44, 45, 46, 47, 48, 49

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(h))

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-Topic 740

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Commitments and Contingencies

12 Months Ended

Mar. 31, 2012

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE F —COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases vehicles and equipment under operating leases expiring at various dates through 2021. Rent expense under operating leases was $1,385,000, $1,810,000 and $2,111,000 for fiscal 2010, 2011 and 2012, respectively. Total annual commitments under non-cancelable operating leases with terms in excess of one year at March 31, 2012 are as follows (in thousands):


Fiscal 2013	$	1,524
Fiscal 2014		924
Fiscal 2015		911
Fiscal 2016		888
Fiscal 2017		782
Thereafter		2,752

	$	7,781

Purchase Commitments

The Company enters into non-cancellable purchase commitments for certain inventory items in order to secure better pricing and ensure materials on hand and capital expenditures. As of March 31, 2012, the Company had entered into $13.9 million of purchase commitments related to fiscal 2013 for inventory purchases.

Retirement Savings Plan

The Company sponsors a tax deferred retirement savings plan that permits eligible employees to contribute varying percentages of their compensation up to the limit allowed by the Internal Revenue Service. This plan also provides for discretionary Company contributions. In fiscal 2010, 2011 and 2012, the Company made matching contributions of approximately $12,000, $7,000 and $15,000, respectively.

Litigation

From time to time, the Company is subject to various claims and legal proceedings arising out of the ordinary course of business. The Company is not currently subject to any material litigation.

In February and March 2008, three class action lawsuits were filed in the United States District Court for the Southern District of New York against the Company, several of its officers, all members of its then existing board of directors, and certain underwriters relating to the Company’s December 2007 initial public offering (IPO). In the fourth quarter of fiscal 2010, the Company reached a preliminary agreement to settle the class action lawsuits and on January 3, 2011, the court in the Southern District of New York issued an order granting preliminary approval of the settlement. After a fairness hearing on April 14, 2011, the court approved the settlement in a final judgment and order. No shareholder appeared at the hearing to object. Accordingly, the case has concluded. Of the final settlement amount of $3.25 million, the Company contributed $0.49 million and the its insurer contributed $2.76 million. The Company recorded the settlement charge in the fourth quarter of fiscal 2010.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Interpretation (FIN)

-Number 14

-Paragraph 3

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

-Number 5

-Paragraph 9, 10, 11, 12

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

-Topic 210

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-Paragraph 1

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-Topic 825

-SubTopic 20

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Shareholders' Equity

12 Months Ended

Mar. 31, 2012

Shareholders' Equity [Abstract]

SHAREHOLDERS' EQUITY

NOTE G —SHAREHOLDERS’ EQUITY

Conversion of Preferred Stock Upon Completion of Initial Public Offering

Upon completion of the Company’s IPO, all preferred shares were converted into common stock. Prior to the IPO, the Company had issued various classes of preferred stock. Series B and Series C preferred stock carried terms allowing for liquidation preference, voting rights, and conversion into common stock at a one-to-one ratio upon certain qualifying exit events.

Share Repurchase Program and Treasury Stock

In July 2008, the Company’s board of directors approved a share repurchase program authorizing the Company to repurchase in the aggregate up to a maximum of $20 million of the Company’s outstanding common stock. In December 2008, the Company’s board of directors supplemented the share repurchase program authorizing the Company to repurchase up to an additional $10 million of the Company’s outstanding common stock. Through January 31, 2010, the date the program was effectively terminated, the Company had repurchased 7,092,817 shares of common stock at a cost of $29.8 million under the program.

In October 2011, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase in aggregate up to a maximum of $1.0 million of the Company’s outstanding common stock. In November 2011, the Company’s Board of Directors approved an increase to the share repurchase program authorizing the Company to repurchase in aggregate up to a maximum of $2.5 million of the Company’s outstanding common stock. As of March 31, 2012, the Company had repurchased 278,300 shares of common stock at a cost of $740,000 under the program.

In fiscal 2009, the Company affected a net stock option exercise with an executive vice president. The executive surrendered 317,629 shares in lieu of a cash payment to cover the exercise price and taxes related to the stock option exercise. The shares surrendered were valued at $4.25, the closing market price of the Company’s stock on the date of exercise.

Shareholder Rights Plan

On January 7, 2009, the Company’s Board of Directors adopted a shareholder rights plan and declared a dividend distribution of one common share purchase right (a “Right”) for each outstanding share of the Company’s common stock. The issuance date for the distribution of the Rights was February 15, 2009 to shareholders of record on February 1, 2009. Each Right entitles the registered holder to purchase from the Company one share of the Company’s common stock at a price of $30.00 per share, subject to adjustment (the “Purchase Price”).

The Rights will not be exercisable (and will be transferable only with the Company’s common stock) until a “Distribution Date” occurs (or the Rights are earlier redeemed or expire). A Distribution Date generally will occur on the earlier of a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 20% or more of the Company’s outstanding common stock (a “Shares Acquisition Date”) or 10 business days after the commencement of, or the announcement of an intention to make, a tender offer or exchange offer that would result in any such person or group of persons acquiring such beneficial ownership.

If a person becomes an Acquiring Person, holders of Rights (except as otherwise provided in the shareholder rights plan) will have the right to receive that number of shares of the Company’s common stock having a market value of two times the then-current Purchase Price, and all Rights beneficially owned by an Acquiring Person, or by certain related parties or transferees, will be null and void. If, after a Shares Acquisition Date, the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provision will be made so that each holder of a Right (except as otherwise provided in the shareholder rights plan) will thereafter have the right to receive that number of shares of the acquiring company’s common stock which at the time of such transaction will have a market value of two times the then-current Purchase Price.

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company. At any time prior to a person becoming an Acquiring Person, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right. Unless they are extended or earlier redeemed or exchanged, the Rights will expire on January 7, 2019.

Employee Stock Purchase Plan

In August 2010, the Company’s board of directors approved a non-compensatory employee stock purchase plan, or ESPP. The ESPP authorizes 2,500,000 million shares to be issued from treasury or authorized shares to satisfy employee share purchases under the ESPP. All full-time employees of the Company are eligible to be granted a non-transferable purchase right each calendar quarter to purchase directly from the Company up to $20,000 of the Company’s common stock at a purchase price equal to 100% of the closing sale price of the Company’s common stock on the NYSE MKT exchange on the last trading day of each quarter. The ESPP allows for employee loans from the Company, except for Section 16 officers, limited to 20% of an individual’s annual income and no more than $250,000 outstanding at any one time. Interest on the loans is charged at the 10-year loan IRS rate and is payable at the end of each calendar year or upon loan maturity. The loans are secured by a pledge of any and all the Company’s shares purchased by the participant under the ESPP and the Company has full recourse against the employee, including offset against compensation payable. The Company had the following shares issued from treasury during fiscal 2011 and fiscal 2012:


As of March 31, 2011
	Shares Issued Under ESPP Plan		Closing Market Price		Shares Issued Under Loan Program		Dollar Value of Loans Issued		Repayment of Loans
Quarter Ended September 30, 2010		40,560	$	3.17		38,202	$	121,100	$	—
Quarter Ended December 31, 2010		12,274		3.34		10,898		36,400		844
Quarter Ended March 31, 2011		12,942		4.04		9,555		38,600		1,841

Total		65,776	$	3.37		58,655	$	196,100	$	2,685


As of March 31, 2012
	Shares Issued Under ESPP Plan		Closing Market Price		Shares Issued Under Loan Program		Dollar Value of Loans Issued		Repayment of Loans
Quarter Ended June 30, 2011		9,788	$	3.93		8,601	$	33,800	$	1,650
Quarter Ended September 30, 2011		16,753		2.65		11,265		29,850		11,101
Quarter Ended December 31, 2011		3,756		2.95		2,543		7,500		34,650
Quarter Ended March 31, 2012		6,737		2.38		5,084		12,100		8,790

Total		37,034	$	2.97		27,493	$	83,250	$	56,191

Loans issued to employees are reflected on the Company’s balance sheet as a contra-equity account.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(d),(e))

-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

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-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

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-Paragraph 4

-Subparagraph (SAB TOPIC 4.C)

-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

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-Name Staff Accounting Bulletin (SAB)

-Number Topic 4

-Section C

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-Name Accounting Standards Codification

-Topic 310

-SubTopic 10

-Section S99

-Paragraph 2

-Subparagraph (SAB TOPIC 4.E)

-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

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-Name Accounting Standards Codification

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-Paragraph 1

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-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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-Publisher FASB

-Name Accounting Standards Codification

-Glossary Preferred Stock

-URI http://asc.fasb.org/extlink&oid=6521494

Reference 14: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-Publisher AICPA

-Name Accounting Principles Board Opinion (APB)

-Number 12

-Paragraph 10

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Reference 16: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

-Number 210

-Section 04

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Reference 17: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

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Reference 18: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Research Bulletin (ARB)

-Number 43

-Chapter 1

-Section B

-Paragraph 7, 11A

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Reference 19: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 129

-Paragraph 2, 3, 4, 5, 6, 7, 8

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 20: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

-Number 210

-Section 08

-Article 4

Reference 21: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

-Number 5

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 22: http://www.xbrl.org/2003/role/presentationRef

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Reference 23: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 4

-Section E

+ Details

Stock Options and Warrants

12 Months Ended

Mar. 31, 2012

Stock Options and Warrants [Abstract]

STOCK OPTIONS AND WARRANTS

NOTE H — STOCK OPTIONS AND WARRANTS

The Company grants stock options under its 2003 Stock Option and 2004 Stock and Incentive Awards Plans (“the Plans”). Under the terms of the Plans, the Company has reserved 12,000,000 shares for issuance to key employees, consultants and directors. The Company’s board of directors approved an increase to the number of shares available under the 2004 Stock and Incentive Awards Plan of 1,500,000 shares, and such share increase was approved by the Company’s shareholders at the 2010 annual shareholders meeting and such shares are included above. The options generally vest and become exercisable ratably between one month and five years although longer vesting periods have been used in certain circumstances. Exercisability of the options granted to employees are contingent on the employees’ continued employment and non-vested options are subject to forfeiture if employment terminates for any reason. Options under the Plans have a maximum life of 10 years. In the past, the Company has granted both incentive stock options and non-qualified stock options, although in July 2008, the Company adopted a policy of thereafter only granting non-qualified stock options. Restricted stock awards have no vesting period and have been issued to certain non-employee directors in lieu of cash compensation pursuant to elections made under the Company’s non-employee director compensation program. The Plans also provide to certain employees accelerated vesting in the event of certain changes of control of the Company as well as under other special circumstances.

In fiscal 2011, the Company converted all of its existing ISO awards to NQSO awards. No consideration was given to the employees for their voluntary conversion of ISO awards.

The Company granted accelerated vesting stock options in May 2011 under its 2004 Stock and Incentive Awards Plan to provide an opportunity for its employees to earn long-term equity incentive awards based on the Company’s financial performance for fiscal 2012. An aggregate of 459,041 stock options were granted on the third business day following the Company’s public release of its fiscal 2011 results at an exercise price per share of $4.19, which was the closing sale price of the Company’s Common Stock on that date. The stock options only vested, however, if the optionee remained employed and the Company was successful in achieving at least 100% of the target levels for each of the Company’s three financial metric targets for fiscal 2012, and if the Company’s stock price equaled or exceeded $5.00 per share for at least 20 trading days during any 90-day period during the options’ ten-year term. As of March 31, 2012, the Company did not achieve 100% of all three of the financial metric targets and the options were subsequently cancelled.

In fiscal 2010, the Company granted 11,211 shares from the 2004 Stock and Incentive Awards Plan to certain non-employee directors who elected to receive stock awards in lieu of cash compensation. The shares were valued at the market price as of the grant date, ranging from $3.29 to $5.44 per share. In fiscal 2011, the Company granted 15,475 shares from the 2004 Stock and Incentive Awards Plan to certain non-employee directors who elected to receive stock awards in lieu of cash compensation. The shares were valued at the market price as of the grant date, ranging from $2.86 to $3.93 per share. In fiscal 2012, the Company granted 29,308 shares from the 2004 Stock and Incentive Awards Plan to certain non-employee directors who elected to receive stock awards in lieu of cash compensation. The shares were valued at the market price as of the grant date, ranging from $2.43 to $4.19 per share.

The following amounts of stock-based compensation were recorded (in thousands):


	Fiscal Year Ended
	2010		2011		2012
Cost of product revenue	$	222	$	187	$	189
General and administrative		539		560		548
Sales and marketing		691		523		501
Research and development		39		31		29

	$	1,491	$	1,301	$	1,267

The number of shares available for grant under the plans were as follows:


Available at March 31, 2009	1,070,954
Granted stock options	(888,018	)
Granted shares	(11,211	)
Forfeited	397,965

Available at March 31, 2010	569,690
Amendment to Plan	1,500,000
Granted stock options	(744,077	)
Granted shares	(15,475	)
Forfeited	267,538

Available at March 31, 2011	1,577,676
Granted stock options	(1,481,356	)
Granted shares	(29,308	)
Forfeited	1,339,078

Available at March 31, 2012	1, 406,090

The following table summarizes information with respect to outstanding stock options:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Fair Value of Options Granted		Aggregate Intrinsic Value
Outstanding at March 31, 2009		3,680,945		$	3.40	$	4.25
Granted		888,018		$	3.92
Exercised		(624,749	)	$	1.71
Forfeited		(397,965	)	$	4.89

Outstanding at March 31, 2010		3,546,249		$	3.66	$	2.23
Granted		744,077		$	3.57
Exercised		(364,020	)	$	1.30
Forfeited		(267,538	)	$	4.33

Outstanding at March 31, 2011		3,658,768		$	3.83	$	2.04
Granted		1,481,356		$	3.56
Exercised		(103,413	)	$	1.45
Forfeited		(1,339,078	)	$	4.18

Outstanding at March 31, 2012		3,697,633		$	3.76	$	1.95	$	176,041

Exercisable at March 31, 2012		1,887,384						$	154,351

The following table summarizes the range of exercise prices on outstanding stock options at March 31, 2012:


	March 31, 2012
	Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Vested		Weighted Average Exercise Price
$0.75		10,000		3.00		0.75		10,000		0.75
1.50		20,500		1.83		1.50		20,500		1.50
2.20 – 2.25		813,646		4.42		2.21		693,146		2.21
2.41 – 2.75		570,167		8.56		2.57		105,167		2.51
2.86 – 4.32		1,270,817		8.16		3.52		324,853		3.38
4.48 – 4.76		419,932		4.11		4.54		371,132		4.51
5.34 – 6.05		389,220		6.92		5.42		204,035		5.42
9.00 – 10.04		51,000		5.87		9.00		47,200		9.00
10.14 – 11.61		152,351		6.04		10.93		111,351		10.87

		3,697,633		6.64	$	3.76		1,887,384	$	3.89

The aggregate intrinsic value represents the total pre-tax intrinsic value, which is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s closing common stock price of $2.38 as of March 30, 2012.

Unrecognized compensation cost related to non-vested common stock-based compensation as of March 31, 2012 is as follows (in thousands):


Fiscal 2013	$	1,157
Fiscal 2014		942
Fiscal 2015		646
Fiscal 2016		443
Fiscal 2017		258
Thereafter		72

	$	3,518
Remaining weighted average expected term		6.6	years

The Company has issued warrants to placement agents in connection with various stock offerings and services rendered. The warrants grant the holder the option to purchase common stock at specified prices for a specified period of time. There were no warrants issued in fiscal 2010, 2011 or 2012.

Outstanding warrants are comprised of the following:


	Number of Shares			Weighted Average Exercise Price
Outstanding at March 31, 2009		488,504		$	2.31
Issued		—			—
Exercised		(399,364	)	$	2.30
Cancelled		(12,900	)	$	2.30

Outstanding at March 31, 2010		76,240		$	2.37
Issued		—			—
Exercised		(22,060	)	$	2.50
Cancelled		(15,200	)	$	2.50

Outstanding at March 31, 2011		38,980		$	2.25
Issued		—			—
Exercised		—			—
Cancelled		—			—

Outstanding at March 31, 2012		38,980		$	2.25

A summary of outstanding warrants as of March 31, 2012 follows:


Exercise Price	Number of Warrants		Expiration
$ 2.25		38,980		Fiscal 2015

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 123R

-Paragraph 64, 65, A240

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Statement of Position (SOP)

-Number 93-6

-Paragraph 53

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 14

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+ Details

Segment Data

12 Months Ended

Mar. 31, 2012

Segment Data [Abstract]

SEGMENT DATA

NOTE I — SEGMENT DATA

The descriptions of the Company’s segments and their summary financial information are summarized below.

Energy Management

The Energy Management division develops, manufactures, integrates and sells commercial high intensity fluorescent, or HIF, lighting systems and energy management systems.

Engineered Systems

The Engineered Systems division sells and integrates alternative renewable energy systems, such as solar and wind.

Corporate and Other

Corporate and Other is comprised of selling, general and administrative expenses not directly allocated to the Company’s segments and adjustments to reconcile to consolidated results, which primarily include intercompany eliminations.


	Revenues						Operating (Loss) Profit
	For the year ended March 31,						For the year ended March 31,
(dollars in thousands)	2010		2011		2012		2010			2011			2012
Segments:
Energy Management	$	67,663	$	77,861	$	72,097	$	2,421		$	6,460		$	4,974
Engineered Systems		410		4,176		28,465		(1,688	)		(1,507	)		569
Corporate and Other		—		—		—		(5,312	)		(5,007	)		(5,021	)

		68,073	$	82,037	$	100,562		(4,579	)	$	(54	)	$	522


	Depreciation						Capital Expenditures
	For the year ended March 31,						For the year ended March 31,
(dollars in thousands)	2010		2011		2012		2010			2011			2012
Segments:
Energy Management	$	1,214	$	997	$	1,448	$	1,325		$	699		$	1,179
Engineered Systems		31		175		287		2,682			2,373			34
Corporate and Other		1,308		1,539		2,246		4,293			1,882			3,114

		2,553	$	2,711	$	3,981		8,300		$	4,954		$	4,327


	Total Assets				Deferred Revenue
	For the year ended March 31,				For the year ended March 31,
(dollars in thousands)	2011		2012		2011		2012
Segments:
Energy Management	$	66,795	$	61,873	$	533	$	734
Engineered Systems		20,422		13,424		9,671		4,928
Corporate and Other		33,870		50,353		—		—

	$	121,087	$	125,650	$	10,204	$	5,662

The Company’s revenue and long-lived assets outside the United States are insignificant.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 131

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-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 15: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

-Section 50

-Paragraph 29

-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

+ Details

Quarterly Financial Data (Unaudited)

12 Months Ended

Mar. 31, 2012

Quarterly Financial Data [Abstract]

QUARTERLY FINANCIAL DATA (UNAUDITED)

NOTE K — QUARTERLY FINANCIAL DATA (UNAUDITED)

Summary quarterly results for the years ended March 31, 2011 and March 31, 2012 are as follows:


	Three Months Ended
	June 30,			Sept. 30,		Dec. 31,		Mar. 31,
	2011			2011		2011		2012			Total
	(in thousands, except per share amounts)
Total revenue	$	18,221		$	33,475	$	27,406	$	21,460		$	100,562
Gross profit		6,007			9,381		7,514		7,136			30,038
Net income (loss)		(792	)		1,358		74		(157	)		483
Basic net income per share		(0.03	)		0.06		0.00		(0.01	)		0.02
Shares used in basic per share calculation		22,921			22,990		22,996		22,904			22,953
Diluted net income per share		(0.03	)		0.06		0.00		(0.01	)		0.02
Shares used in diluted per share calculation		22,921			23,370		23,255		22,904			23,387


	Three Months Ended
	June 30,			Sept. 30,		Dec. 31,			Mar. 31,
	2010			2010		2010			2011		Total
	(in thousands, except per share amounts)
Total revenue	$	16,977		$	15,853	$	23,644		$	25,563	$	82,037
Gross profit		5,753			5,610		7,834			8,442		27,639
Net income (loss)		(536	)		540		(182	)		519		341
Basic net income per share		(0.02	)		0.02		(0.01	)		0.02		0.02
Shares used in basic per share calculation		22,523			22,639		22,726			22,827		22,678
Diluted net income per share		(0.02	)		0.02		(0.01	)		0.01		0.01
Shares used in diluted per share calculation		22,523			22,902		22,726			23,332		23,198

The four quarters for net earnings per share may not add to the total year because of differences in the weighted average number of shares outstanding during the quarters and the year.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

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