Pensions And Other Postretirement Benefits

12 Months Ended

Jun. 30, 2012

Pensions And Other Postretirement Benefits [Abstract]

Pensions And Other Postretirement Benefits

9. Pensions and Other Postretirement Benefits

     We maintain a retirement savings plan (the "Plan"), available to U.S. employees, that qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code. The Company suspended employer matching as of August 18, 2009. We made discretionary matching contributions up to 50% of the first 5% of eligible employees' contributions for the first two months of fiscal year 2010 that totaled $68,000. Additionally, the Board of Directors approved a one-time profit sharing contribution of $245,000 to be distributed pro-rata based on salary to plan participants in fiscal year 2010. The one-time contribution was part of our second half bonus pool for fiscal year 2010.

     We also maintain a defined contribution plan (the "Stakeholder Plan") for our UK based employees. The Stakeholder Plan provides for discretionary matching contributions of between 4% and 7% of the employee's salary. For fiscal years 2012, 2011 and 2010, we made total contributions to the Stakeholder Plan of $63,000, $70,000 and $73,000, respectively.

     As of June 30, 2012, we maintained defined benefit pension plans covering certain current and former employees in Germany. The measurement date used to determine fiscal 2012 and 2011 benefit information for the plans was June 30, 2012 and 2011, respectively. Our German defined benefit plans have been closed to new employees since 1998 and no employees have been added to the plan since this time.

     A reconciliation of the changes in the plans' benefit obligations and fair value of plan assets over the two-year period ended June 30, 2012, and a statement of the funded status at June 30, 2012 for these years for our pension plans is as follows:

Obligations and Funded Status

		June 30,
		2012			2011
		(Dollars in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	4,768		$	4,090
Service cost		13			15
Interest cost		221			223
Actuarial (gain) loss		524			(70	)
Foreign currency exchange rate change		(641	)		733
Benefits paid		(233	)		(223	)
Benefit obligation at end of year	$	4,652		$	4,768
Change in plan assets:
Fair value of plan assets at beginning of year	$	2,587		$	2,338
Actual return on plan assets		30			9
Employer contributions		34			38
Benefits paid		(217	)		(207	)
Foreign currency exchange rate change		(337	)		409
Fair value of plan assets at end of year	$	2,097		$	2,587
Funded status at end of year	$	(2,555	)	$	(2,181	)

Amounts Recognized in the Consolidated Balance Sheets

		June 30,
		2012			2011
		(Dollars in thousands)
Pension liability - current liabilities	$	(14	)	$	(17	)
Pension liability - noncurrent liabilities		(2,541	)		(2,164	)
	$	(2,555	)	$	(2,181	)

Items not yet recognized as a component of net periodic pension cost (dollars in thousands):

		June 30,
		2012		2011
Net loss	$	583	$	-
Net transition cost		-		-
	$	583	$	-

Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets

				June 30,
		2012		2011
		(Dollars in thousands)
Projected benefit obligation	$	4,652	$	4,768
Accumulated benefit obligation		4,652		4,763
Fair value of plan assets		2,097		2,587

     The following tables provide the components of net periodic pension cost recognized in earnings for the fiscal years ended June 30, 2012, 2011 and 2010:

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income

		Year ended June 30,
		2012			2011			2010
		(Dollars in thousands)
Net Periodic Benefit Cost
Service cost	$	13		$	15		$	16
Interest cost		221			223			267
Expected return on plan assets		(93	)		(101	)		(111	)
Amortization of unrecognized net transition obligation (asset)		(1	)		(1	)		4
Net periodic benefit cost	$	140		$	136		$	176

     We estimate that $8,000 of the net loss for the defined benefit pension plans will be amortized from accumulated other comprehensive income into net period benefit cost over the next fiscal year.

Assumptions

The following table sets forth the assumptions used to determine benefit obligations:

	June 30,
	2012		2011
Discount rate	4.00	%	5.10	%
Expected return on plan assets	3.50	%	4.00	%
Compensation increase rate	0.00	%	1.00	%

The following table sets forth the assumptions used to determine net periodic benefit cost:

	Year Ended June 30,
	2012		2011		2010
Discount rate	5.10	%	5.00	%	6.01	%
Expected return on plan assets	4.00	%	4.00	%	4.30	%
Compensation increase rate	1.00	%	0.00	%	2.00	%

     On an annual basis, we adjust the discount rate used to determine the projected benefit obligation to approximate rates on high-quality, long-term obligations.

Plan Assets

     The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan's assets measured at fair value, as well as the percentage of total plan assets for each category at June 30, 2012:

									Percentage of
								Total	Plan Assets
		Level 1		Level 2		Level 3		Assets	2012
Asset Category:
Cash and cash equivalents	$	49	$	-	$	-	$	49	2.3	%
Equity securities		453		-		-		453	21.6	%
Debt securities		755		-		-		755	36.0	%
Cash surrender value insurance contracts		-		819		-		819	39.1	%
Other		21		-		-		21	1.0	%
Totals	$	1,278	$	819	$	-	$	2,097	100.0	%

     The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan's assets measured at fair value, as well as the percentage of total plan assets for each category at June 30, 2011:

									Percentage of
								Total	Plan Assets
		Level 1		Level 2		Level 3		Assets	2011
Asset Category:
Cash and cash equivalents	$	9	$	-	$	-	$	9	0.3	%
Equity securities		570		-		-		570	22.0	%
Debt securities		868		-		-		868	33.6	%
Cash surrender value insurance contracts		-		1,113		-		1,113	43.0	%
Other		27		-		-		27	1.0	%
Totals	$	1,474	$	1,113	$	-	$	2,587	100.0	%

     Pension assets utilizing Level 1 inputs include fair values of equity investments, debt securities and related dividends that were determined by closing prices for those securities traded on national stock exchanges. All cash equivalents are carried at cost, which approximates fair value. Level 2 assets include cash surrender life insurance contracts that are valued based on contractually stated settlement value. In estimating the expected return on plan assets, we consider past performance and future expectations for the fund. Plan assets are heavily weighted toward equity investments that yield consistent, dependable dividends.

     Our investment strategy with respect to pension assets is to invest the assets in accordance with applicable laws and regulations. The long-term primary objectives for our pension assets are to: (1) provide for a reasonable amount of long-term growth of capital, with prudent exposure to risk and protect the assets from erosion of purchasing power; (2) provide investment results that meet or exceed the plans' actuarially assumed long-term rate of return; and (3) match the duration of the liabilities and assets of the plans to reduce the potential risk of large employer contributions being necessary in the future.

Contributions

We expect to contribute $30,000 to our defined benefit pension plans in fiscal year 2013.

Estimated future benefit payments

     The benefit payments, which reflect expected future service, as appropriate, are expected to be paid (dollars in thousands) for each of the following years:

		Pension
		Benefits
2013	$	220
2014		242
2015		272
2016		297
2017		298
2018 - 2022		1,479