Stock-Based Compensation

9 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Stock-based compensation cost is measured at the grant date based on the fair value of the award. The Company uses the Black-Scholes model to value stock-based compensation for options and employee stock purchase rights under the ESPP, and the fair market value of the Company's common stock for RSUs. The MSUs were valued using the Monte Carlo pricing model, which uses the Company's stock price, the Index value, expected volatilities of the Company's stock price and the Index, correlation coefficients and risk free interest rates to determine the fair value. The Black-Scholes model determines the fair value of share-based payment awards based on assumptions including the Company’s stock price on the date of grant, volatility over the term of the awards, actual and projected employee stock option exercise behaviors and risk free interest rate.

The Company did not grant options or employee stock purchase rights during the three months ended December 31, 2014 and 2013. The fair values of the options and employee stock purchase rights granted during the nine months ended December 31, 2014 and 2013 are estimated as of the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Options				Employee Stock Purchase Rights
	Nine months ended December 31,				Nine months ended December 31,
	2014	2013			2014			2013
Expected life (years)	*	4.4			0.5			0.5
Risk-free interest rate	*	0.6		%	0.1		%	0.1		%
Volatility	*	49		%	57		%	57		%
Dividend yield	*	—		%	—		%	—		%
Weighted average fair value	*	$	2.95		$	2.57		$	3.67

* The Company did not grant options during the nine months ended December 31, 2014.

The weighted average grant-date fair value per share of the RSUs awarded was $5.82 and $8.20 during the three and nine months ended December 31, 2014, respectively, compared to $9.84 and $8.57 during the three and nine months ended December 31, 2013, respectively. The weighted average grant-date fair value per share was calculated based on the fair market value of the Company’s common stock on the respective grant dates.

During the fourth quarter of fiscal 2014, the Company revised its estimated forfeiture rate used in determining the amount of stock-based compensation from 6.7% to 5.8% as a result of a decreasing rate of forfeitures in recent periods, which the Company believes is indicative of the rate it will experience during the remaining vesting period of currently outstanding unvested grants.

The following table summarizes stock-based compensation expense related to stock options and RSUs (in thousands):

	Three Months Ended					Nine Months Ended
	December 31,					December 31,
	2014			2013		2014			2013
Stock-based compensation expense by type of grant:
Stock options	$	454		$	648	$	1,160		$	1,987
RSUs	4,428			5,231		13,148			11,454
	4,882			5,879		14,308			13,441
Stock-based compensation expensed from (capitalized to) inventory	(25		)	3		(5		)	(11		)
Total stock-based compensation expense	$	4,857		$	5,882	$	14,303		$	13,430

The following table summarizes stock-based compensation expense as it relates to the Company’s Condensed Consolidated Statement of Operations (in thousands):

	Three Months Ended					Nine Months Ended
	December 31,					December 31,
	2014			2013		2014			2013
Stock-based compensation expense by cost centers:
Cost of revenues	$	97		$	118	$	226		$	353
Research and development	2,992			1,545		9,039			4,867
Selling, general and administrative	1,793			4,216		5,043			8,221
	$	4,882		$	5,879	$	14,308		$	13,441
Stock-based compensation expensed from (capitalized to) inventory	(25		)	3		(5		)	(11		)
Total stock-based compensation expense	$	4,857		$	5,882	$	14,303		$	13,430

As of December 31, 2014, the amount of unrecognized stock-based compensation cost, net of estimated forfeitures, related to unvested stock options and unvested RSUs was $29.8 million which will be recognized over a weighted average period of 2.3 years.