(11)	BENEFIT PLANS:

Retirement plan

The Company has a defined benefit retirement plan for which accumulated benefits were frozen and future service credits were curtailed as of March 1, 2004. Due to the closing of certain facilities in connection with the consolidation of the Company’s Subscription Fulfillment Services business and the associated work force reduction, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations thereunder, have given the Pension Benefit Guaranty Corporation (the “PBGC”) the right to require the Company to accelerate the funding of approximately $11,688,000 of accrued pension-related obligations to the Company’s defined benefit pension plan. In August 2012, the Company and the PBGC reached an agreement with respect to this funding obligation, and as a result, the Company made a $3,000,000 cash contribution to the pension plan on August 16, 2012. The agreement also provided that if, before August 15, 2013, the Company is unable to pay the remaining $8,688,000 liability or adequately secure it with collateral acceptable to the PBGC, the Company would be required to either (i) provide a letter of credit equal to 110% of the remaining liability or establish a cash escrow for 100% of the remaining liability, to be maintained for five years or until the remaining liability is discharged, if sooner or (ii) discharge the remaining liability in quarterly installments over a five year period and secure it with collateral acceptable to the PBGC. In the event the Company fails to meet the terms of the agreement, the PBGC could seek immediate payment of the amount due or attempt to force a termination of the pension plan. Although the Company is currently having discussions with the PBGC about a comprehensive restructuring of this $8,688,000 payment obligation, the Company is unable to offer any assurance that it will be able to discharge the pension plan funding obligation by August 15, 2013 or otherwise meet the PBGC’s requirements for securing or paying the undischarged amount, and the Company cannot offer any assurance that upon such inability it will be able to negotiate with the PBGC to obtain further relief. In addition, the Company may become subject to additional acceleration of its remaining accrued pension-related obligations to the pension plan if the Company closes certain additional facilities and further reduces its work force. Any such acceleration could negatively impact the Company’s limited financial resources and could have a material adverse impact on the Company’s financial condition.

Net periodic pension cost for 2013, 2012 and 2011 was comprised of the following components (in thousands):

	Year Ended April 30,
	2013		2012		2011

Interest cost on projected benefit obligation	$	1,454	$	1,681	$	1,706
Expected return on assets		(1,596)		(1,675)		(1,565)
Plan expenses		226		220		227
Recognized net actuarial loss		1,802		1,145		1,155
Total cost recognized in pretax income		1,886		1,371		1,523
Cost recognized in pretax other comprehensive income		(1,185)		5,094		96
Net periodic pension cost	$	701	$	6,465	$	1,619

The estimated net loss, transition obligation and prior service cost for the pension plan that will be amortized from accumulated other comprehensive income into net periodic pension cost over the next fiscal year are $1,662,000, $0 and $0, respectively. Assumptions used in determining net periodic pension cost and the benefit obligations were:

	Year Ended April 30,
	2013		2012		2011

Discount rate used to determine net periodic pension cost	3.97	%	5.05	%	5.44	%
Discount rate used to determine pension benefit obligation	3.47	%	3.97	%	5.05	%
Expected long-term rate of return on assets on assets	8.00	%	8.00	%	8.00	%

The following table sets forth changes in the pension plan’s benefit obligations and assets, and summarizes components of amounts recognized in the Company’s consolidated balance sheets (in thousands):

	April 30,
	2013		2012		2011
Change in benefit obligation:
Benefit obligation at beginning of year	$	37,899	$	34,550	$	32,568
Interest cost		1,454		1,681		1,706
Actuarial (gain) loss		1,536		3,992		2,861
Benefits paid		(2,307)		(2,324)		(2,585)
Benefit obligation at end of year	$	38,582	$	37,899	$	34,550

Change in plan assets:
Fair value of plan assets at beginning of year	$	20,222	$	21,931	$	20,493
Company contributions		4,572		1,407		1,075
Actual return on plan assets		2,523		(568)		3,168
Benefits paid		(2,307)		(2,324)		(2,585)
Plan expenses		(233)		(224)		(220)
Fair value of plan assets at end of year	$	24,777	$	20,222	$	21,931
Funded (underfunded) status:	$	(13,805)	$	(17,677)	$	(12,619)

Recognition of underfunded status:
Accrued pension cost	$	(13,805)	$	(17,677)	$	(12,619)

The funded status of the pension plan is equal to the net liability recognized in the consolidated balance sheet. The following table summarizes the amounts recorded in accumulated other comprehensive loss, which have not yet been recognized as a component of net periodic pension costs (in thousands):

	Year Ended April 30,
	2013		2012		2011
Pre-tax accumulated comprehensive loss	$	18,806	$	19,991	$	14,897

The following table summarizes the changes in accumulated other comprehensive loss related to the pension plan for the years ended April 30, 2013 and 2012 (in thousands):

	Pension Benefits
	Pre-tax		Net of Tax

Accumulated comprehensive loss, May 1, 2011	$	14,897	$	9,140
Net actuarial loss		6,239		3,868
Amortization of net loss		(1,145)		(710)
Accumulated comprehensive loss, April 30, 2012		19,991		12,298
Net actuarial loss		617		383
Amortization of net loss		(1,802)		(1,117)
Accumulated comprehensive loss, April 30, 2013	$	18,806	$	11,564

The Company recorded, net of tax, other comprehensive income of $734,000 in 2013, and other comprehensive losses of $3,158,000 in 2012 and $60,000 in 2011 to account for the net effect of changes to the unfunded pension liability.

The average asset allocation for the retirement plan by asset category was as follows:

	April 30,
	2013		2012
Equity securities	67	%	76	%
Fixed income securities	28		20
Other (principally cash and cash equivalents)	5		4
Total	100	%	100	%

The investment mix between equity securities and fixed income securities is based upon seeking to achieve a desired return by balancing more volatile equity securities and less volatile fixed income securities. Pension plan assets are invested in portfolios of diversified public-market equity securities and fixed income securities. The pension plan holds no securities of the Company. Investment allocations are made across a range of markets, industry sectors, capitalization sizes and, in the case of fixed income securities, maturities and credit quality. The Company has established long-term target allocations of approximately 78% for equity securities, 21% for fixed income securities and 1% for other.

The expected return on assets for the pension plan is based on management’s expectation of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the pension plan is invested, as well as current economic and market conditions. The Company is currently using an 8.0% assumed rate of return for purposes of the expected return rate on assets for the development of net periodic pension costs for the pension plan.

The Company funds the pension plan in compliance with IRS funding requirements. The Company’s contributions to the pension plan totaled $4,572,000 (including $3,000,000 contributed as part of the August 2012 agreement with the PBGC discussed above), $1,407,000 and $1,075,000 in 2013, 2012 and 2011. The Company expects to make required contributions of approximately $784,000 to the pension plan in fiscal year 2014, in accordance with minimum funding requirements as computed by the plan actuary.

The amount of future annual benefit payments is expected to be between $2,400,000 and $2,600,000 in fiscal years 2014 through 2018, and an aggregate of approximately $11,600,000 is expected to be paid in the fiscal five-year period 2019 through 2023.

The Company has adopted the disclosure requirements in ASC 715, which requires additional fair value disclosures consistent with those required by ASC 820. The following is a description of the valuation methodologies used for pension plan assets measured at fair value: Common stock - valued at the closing price reported on a listed stock exchange; Corporate bonds, debentures and government agency securities - valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flow; and U.S. Treasury – valued at the closing price reported in the active market in which the security is traded.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following tables set forth by level within the fair value hierarchy the pension plan’s assets at fair value as of April 30, 2013 and 2012 (in thousands):

2013:
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	1,251	$	1,251	$	-	$	-
Investments at fair value:
Equity securities		16,669		16,669		-		-
Corporate bonds and debentures		6,215		-		6,215		-
U.S. Treasury and government agency securities		642		640		2		-
Total assets at fair value	$	24,777	$	18,560	$	6,217	$	-

2012:
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	780	$	780	$	-	$	-
Investments at fair value:
Equity securities		15,376		15,376		-		-
Corporate bonds and debentures		1,773		-		1,773		-
U.S. Treasury and government agency securities		2,293		1,624		669		-
Total assets at fair value	$	20,222	$	17,780	$	2,442	$	-

Savings and salary deferral plans

The Company has a Savings and Salary Deferral Plan, commonly referred to as a 401(k) plan, in which participating employees contribute salary deductions. The Company also had a 401(k) plan for its Palm Coast employees. Effective November 15, 2012, the Company merged the Palm Coast plan with the Savings and Salary Deferral Plan resulting in one plan for the Company and its employees.

The Company may make discretionary matching contributions to the 401(k) plan, subject to the approval of the Company’s board of directors. Effective May 1, 2009, the Company suspended the matching contributions to the 401(k) plan.

Equity compensation plan

The Company adopted the 2006 Equity Compensation Plan in September 2006 that provides for the issuance of up to 400,000 shares of common stock of the Company pursuant to options, grants or other awards made under the plan. As of April 30, 2013, the Company had not issued any options, grants or other awards under the plan.