STOCK-BASED COMPENSATION

3 Months Ended

May 31, 2013

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

NOTE 8 - STOCK-BASED COMPENSATION

Stock-based compensation expense is included in the following captions of the unaudited consolidated income statements (in thousands):

	Three Months Ended
	May 31,
	2013		2012
Cost of revenues	$	39	$	27
Research and development		110		98
Selling		71		63
General and administrative		411		670
	$	631	$	858

Changes in the Company's outstanding stock options during the three months ended May 31, 2013 were as follows (options in thousands):

			Weighted
	Number of		Average
	Options		Exercise Price
Outstanding at February 28, 2013	1,656		$	5.53
Granted	-			-
Exercised	(104	)		7.10
Forfeited or expired	-			-
Outstanding at May 31, 2013	1,552		$	5.42
Exercisable at May 31, 2013	1,298		$	5.66

During the three months ended May 31, 2013, upon the net share settlement exercise of 54,899 options held by four directors of the Company, the Company retained 33,222 shares to cover the option exercise price.

     Changes in the Company's unvested restricted stock shares and restricted stock units ("RSUs") during the three months ended May 31, 2013 were as follows (restricted shares and RSUs in thousands):

	Number of		Weighted
	Restricted		Average Grant
	Shares and		Date Fair
	RSUs		Value
Outstanding at February 28, 2013	1,338		$	4.40
Granted	22			9.61
Vested	(52	)		3.18
Forfeited	-			-
Outstanding at May 31, 2013	1,308		$	4.54

During the three months ended May 31, 2013, the Company retained 19,719 shares of the vested restricted stock and RSUs to satisfy the employee's minimum required statutory amount of withholding taxes.

As of May 31, 2013, there was $4.7 million of total unrecognized stock-based compensation cost related to nonvested stock options, restricted stock and RSUs that is expected to be recognized as an expense over a weighted-average remaining vesting period of 2.7 years.