Fair Value Measurements

12 Months Ended

Mar. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

13. Fair Value Measurements

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses a three-tier valuation hierarchy based upon observable and unobservable inputs:

• Level 1 — Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 — Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 — Valuation is based upon unobservable inputs that are significant to the fair value measurement.

The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The following table sets forth by level within the fair value hierarchy, the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2013 and 2012, according to the valuation techniques the Company used to determine their fair values.

	March 31, 2013								March 31, 2012
			Fair Value Measurements								Fair Value Measurements
			Using Inputs Considered as								Using Inputs Considered as
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets
Short-term investments
Mutual funds	$	411,000	$	411,000		-		-	$	342,000	$	342,000		-		-
Prepaid expenses and other current assets
Forward foreign currency exchange contracts		683,000		-	$	683,000		-		-		-		-		-
Liabilities
Other current liabilities
Deferred compensation		411,000		411,000		-		-		342,000		342,000		-		-
Forward foreign currency exchange contracts		-		-		-		-		121,000		-	$	121,000		-
Other liabilities
Warrant liability		2,014,000		-		-	$	2,014,000		-		-		-		-

The Company's short-term investments, which fund its deferred compensation liabilities, consist of investments in mutual funds. These investments are classified as Level 1 as the shares of these mutual funds trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis.

The forward foreign currency exchange contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers and classified as Level 2. During the fiscal years ended March 31, 2013 and 2012, a gain of $804,000 and a loss of $476,000, respectively, were recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts subsequent to entering into the contracts.

The Company estimates the fair value of the warrant liability using level 3 inputs and the Monte Carlo simulation model at each balance sheet date. This amount is recorded as a warrant liability which is included in other liabilities in the consolidated balance sheet at March 31, 2013. Any subsequent changes in the fair value of the warrant liability will be recorded in current period earnings as a general and administrative expense. During the year ended March 31, 2013, a loss of $389,000 was recorded in general and administrative expenses due to the change in the fair value of the warrant liability.

The assumptions used to determine the fair value of the Cerberus Warrant and the Supplier Warrant recorded as warrant liability were:

	March 31, 2013
	Cerberus Warrant		Supplier Warrant
Risk free interest rate	0.60	%	0.67	%
Expected life in years	4.15		4.50
Expected volatility	43.94	%	54.66	%
Dividend yield	-		-
Probability of future financing	0	%	0	%

The risk free interest rate used was based on U.S. treasury-note yields with terms commensurate with the remaining term of the warrants. The expected life is based on the remaining contractual term of the warrants and the expected volatility is based on the Company's daily historical volatility over a period commensurate with the remaining term of the warrants.

A summary of the change to the Company's warrant liability, as measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is presented below:

	Year Ended March 31,
	2013
Beginning balance	$	-
Newly issued		1,625,000
Total (gain) loss included in net loss		389,000
Warrants exercised		-
Net transfers in (out) of Level 3		-
Ending balance	$	2,014,000

As a result of the annual goodwill impairment analysis and intangible asset impairment analysis performed during the fourth quarter of fiscal 2013, the Company concluded that goodwill and intangible assets for its undercar product line segment were fully impaired and the Company recorded a pre-tax, non-cash goodwill impairment charge and intangible asset impairment charge of $68,356,000 and $16,330,000, respectively, as disclosed in the consolidated statements of operations.  After recording the impairment charge, the Company had no goodwill or intangible assets attributable to its undercar product line reporting unit remaining on its consolidated balance sheet at March 31, 2013.

			Fair Value Measurements Using Inputs Considered as
Description	Year Ended March 31, 2013		Level 1		Level 2		Level 3		Total Gains (Losses)
Goodwill	$	-		-		-	$	-	$	(68,356,000	)
Intangible assets		-		-		-		-		(16,330,000	)

During the fiscal years ended March 31, 2013 and 2012, the Company had no other significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these instruments. The carrying amounts of the revolving loans, term loans and other long-term liabilities approximate their fair value based on current rates for instruments with similar characteristics.