Note 6 - Stock Compensation Expense

3 Months Ended

Dec. 31, 2012

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

6.         STOCK COMPENSATION EXPENSE

The Company maintains long-term incentive plans that authorize the Board of Directors or its Compensation Committee (the “Committee”) to grant key employees, officers and directors of the Company incentive or nonqualified stock options, stock appreciation rights, performance shares, restricted shares and performance units. The Committee determines the prices and terms at which awards may be granted along with the duration of the restriction periods and performance targets. All issuances are granted out of shares authorized, as the Company has no treasury stock.

Stock option awards

During fiscal 2012 the Company awarded performance-based based stock options with separate performance conditions in fiscal years 2012, 2013, and 2014, to named executive officers and other key employees. The Company will recognize compensation expense related to each separate service period during the respective period. As of December 31, 2012 the maximum number of performance-based options available to vest subject to certain operating performance targets is685,000 and subject to the performance measures in a given fiscal year.

The following table summarizes information for options currently outstanding and exercisable at December 31, 2012:

				Options Outstanding
Range of  Exercise Prices				Number		Wtd. Avg.  Remaining Life (years)		Wtd. Avg.  Exercise Price		Aggregate  Intrinsic Value
	$ 5.47	-	5.72		917,305		7	$	5.71	$	1,869,629
	8.02	-	8.60		105,175		5		8.32		-
	11.94	-	24.12		115,000		4		15.40		-
	31.07	-	36.73		75,000		3		33.33		-
	$ 5.47	-	36.73		1,212,480					$	1,869,629

				Options Exercisable
Range of Exercise Prices				Number		Wtd. Avg. Remaining Life (years)		Wtd. Avg. Exercise Price		Aggregate Intrinsic Value
	$5.47	-	5.72		262,305		7	$	5.69	$	539,979
	8.02	-	8.60		67,675		2		8.49		-
	11.94	-	24.12		115,000		4		15.40		-
	31.07	-	36.73		75,000		3		33.33		-
	$5.47	-	36.73		519,980					$	539,979

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

Assumptions	Fiscal 2012				Fiscal 2011			Fiscal 2010
Expected life of option (years)		3	-	5		5			3.8
Risk-free interest rate		0.4%	-	0.8%		2.4	%		0.4	%
Volatility of stock		72%	-	79%		73	%		77	%
Forfeiture rate		0%	-	16%		0	%		0	%

Volatility, expected term and dividend yield assumptions were based on the Company’s historical experience. The risk-free rate was based on a U.S. treasury note with a maturity similar to the option grant’s expected term.

Restricted stock awards

Under the Company’s equity incentive plans, employees and directors may be granted restricted stock awards with participation rights which are valued based upon the fair market value on the date of the grant. In accordance with ASC 718, the Company determined its practice of settling vested restricted shares in cash resulted in a modification in fiscal 2010 from equity to liability accounting for the remaining unvested restricted shares. The fair value of the modified liability award is measured each reporting date through settlement and any adjustments to increase or decrease the liability are recorded either as compensation cost or a charge to equity. During the first quarter of fiscal 2013, 15,000 shares of restricted stock vested.

The Company recorded into selling and general administrative expense for its corporate/other products segment the cost of employee services received in exchange for equity instruments based on the grant-date fair value of those instruments in accordance with the provisions of ASC 718, which was $0.2 million for the three months ended December 31, 2012, and $0.1 million for the three months ended December 31, 2011. There were no recognized tax benefits during the three months ended December 31, 2012 or 2011, as any benefit is offset by the Company's full valuation allowance on its net deferred tax asset. The number of options for performance-based shares is based on the probability of achieving expected targets.