Pensions and Other Postretirement Benefits

12 Months Ended

Jun. 30, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Pensions and Other Postretirement Benefits

11. Pensions and Other Postretirement Benefits

Defined Contribution Plans

We maintain a retirement savings plan available to U.S. employees that qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code. From July 1, 2012 through August 20, 2013, the Company was matching 25% of the first 5% of the participants’ compensation. Effective August 21, 2013, the Company matches 50% of the first 5% of the participants’ compensation. For fiscal years 2016, 2015 and 2014, we made matching contributions of $449, $443 and $388, respectively.

We also maintain a defined contribution plan (the “Stakeholder Plan”) for our U.K. based employees. The Stakeholder Plan provides for discretionary matching contributions of between 4% and 7% of the employee’s salary. For fiscal years 2016, 2015 and 2014, we made total contributions to the Stakeholder Plan of $43, $58 and $70, respectively.

Defined Benefit Plans

As of June 30, 2016, we maintained defined benefit pension plans (the “Pension Plans”) covering former employees in Germany. The measurement date used to determine fiscal years’ 2016 and 2015 benefit information for the Pension Plans was June 30, 2016 and 2015, respectively. Our Pension Plans have been closed to new employees since 1998 and no existing employees are eligible to participate, as all eligible participants are no longer employed by us.

A reconciliation of the changes in the Pensions Plans’ benefit obligations and fair value of plan assets over the two-year period ended June 30, 2016, and a statement of the funded status at June 30, 2016 for these years for the Pension Plans is as follows:

Obligations and Funded Status

	June 30,
	2016		2015
Change in benefit obligation:
Benefit obligation at beginning of year	$	4,628	$	5,567
Interest cost		96		126
Actuarial loss		435		224
Foreign currency exchange rate change		4		(1,032)
Benefits paid		(244)		(257)
Benefit obligation at end of year	$	4,919	$	4,628
Change in plan assets:
Fair value of plan assets at beginning of year	$	1,432	$	1,984
Actual return on plan assets		(15)		30
Employer contributions		12		22
Benefits paid		(237)		(247)
Foreign currency exchange rate change		-		(357)
Fair value of plan assets at end of year	$	1,192	$	1,432
Funded status at end of year	$	(3,727)	$	(3,196)

Amounts Recognized in the Consolidated Balance Sheets

	June 30,
	2016		2015
Other accrued expenses (1)	$	(7)	$	(7)
Pension liability - long-term liabilities		(3,720)		(3,189)
Total pension liability	$	(3,727)	$	(3,196)
Accumulated other comprehensive loss	$	1,637	$	1,214

⁽¹⁾ Included in line item accounts payable and accrued expenses                

Items Not Yet Recognized as a Component of Net Periodic Pension Cost:

	June 30,
	2016		2015
Net loss	$	1,637	$	1,214
	$	1,637	$	1,214

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

	June 30,
	2016		2015
Projected benefit obligation	$	4,919	$	4,628
Accumulated benefit obligation	$	4,919	$	4,628
Fair value of plan assets	$	1,193	$	1,432

The following table provides the components of net periodic pension cost recognized in earnings for the fiscal years ended June 30, 2016, 2015 and 2014:

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

	Year Ended June 30,
	2016		2015		2014
Net Periodic Benefit Cost
Service cost	$	-	$	-	$	-
Interest cost		96		126		174
Expected return on plan assets		(22)		(45)		(61)
Recognized actuarial loss		50		40		19
Amortization of unrecognized net transition obligation (asset)		-		-		-
Net periodic benefit cost	$	124	$	121	$	132

We estimate that $77 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,
	2016			2015
Discount rate		1.07	%		2.13	%
Expected return on plan assets		2.50	%		2.50	%
Compensation increase rate		0.00	%		0.00	%

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

	Year Ended June 30,
	2016			2015			2014
Discount rate		2.13	%		2.65	%		3.43	%
Expected return on plan assets		2.50	%		3.50	%		3.00	%
Compensation increase rate		0.00	%		0.00	%		0.00	%

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, 2016:

	Level 1		Level 2		Level 3		Total Assets		Percentage of Plan Assets 2016
Asset Category:
Cash and cash equivalents	$	8	$	-	$	-	$	8		0.7	%
Equity securities		-		572		-		572		47.9	%
Debt securities		-		57		-		57		4.8	%
Cash surrender value insurance contracts		-		556		-		556		46.6	%
Totals	$	8	$	1,185	$	-	$	1,193		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, 2015:

	Level 1		Level 2		Level 3		Total Assets		Percentage of Plan Assets 2015
Asset Category:
Equity securities	$	-	$	612	$	-	$	612		42.8	%
Debt securities		-		231		-		231		16.1	%
Cash surrender value insurance contracts		-		589		-		589		41.1	%
Totals	$	-	$	1,432	$	-	$	1,432		100.0	%

Pension assets utilizing Level 1 inputs include fair values of equity investments and debt securities, and related dividends, which were determined by closing prices for those securities traded actively on national stock exchanges. All cash equivalents are carried at cost, which approximates fair value. Level 2 assets include fair values of equity investments and debt securities with limited trading activity and related dividends that were determined by closing prices for those securities traded on national stock exchanges and 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. Defined benefit 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 $13 to our defined benefit pension plans in fiscal year 2017.

Estimated Future Benefit Payments

Expected benefit payments, which reflect expected future service, during the next ten fiscal years ending June 30 are as follows:

	Pension
	Benefits
2017		241
2018		244
2019		243
2020		241
2021		240
2022 - 2026		1,176