10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-7872

BREEZE-EASTERN CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	95-4062211
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)
35 Melanie Lane Whippany, New Jersey	07981
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (973) 602-1001

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of January 18, 2013, the total number of outstanding shares of common stock was 9,522,526.

INDEX

		Page No.
PART 1	Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)		3
	Condensed Consolidated Balance Sheets December 31, 2012 (Unaudited) and March 31, 2012		4
	Condensed Consolidated Statements of Operations for the Three and Nine Month Periods Ended December 31, 2012 and December 31, 2011 (Unaudited)		5
	Condensed Consolidated Statements of Cash Flows for the Nine Month Periods Ended December 31, 2012 and December 31, 2011 (Unaudited)		6
	Notes to Condensed Consolidated Financial Statements (Unaudited)		7 - 18
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19 - 27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		28
Item 4.	Controls and Procedures		29
PART II.	Other Information
Item 1.	Legal Proceedings		29
Item 1A.	Risk Factors		29
Item 6.	Exhibits		29
SIGNATURES			30
EXHIBITS

2

PART I. FINANCIAL INFORMATION

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The results reflected in the unaudited Condensed Consolidated Statements of Operations for the three and nine month periods ended December 31, 2012 are not necessarily indicative of the results to be expected for the entire fiscal year. The following unaudited Condensed Consolidated Financial Statements should be read in conjunction with the notes thereto, Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2 of Part I of this report, as well as the audited financial statements and related notes thereto contained in the Breeze-Eastern Corporation (the “Company”) Annual Report on Form 10-K filed for the fiscal year ended March 31, 2012, as filed with the Securities and Exchange Commission (“SEC”) on June 12, 2012.

When the Company refers to its fiscal year in this Quarterly Report on Form 10-Q, the Company is referring to the fiscal year ended on March 31^st of that year. Thus, the Company is currently operating in its fiscal year 2013, which commenced on April 1, 2012. Unless the context expressly indicates a contrary intention, all references to years in this filing are to the Company’s fiscal years. Figures in this Quarterly Report on Form 10-Q are in thousands, except for share amounts or where expressly noted.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

3

BREEZE-EASTERN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands of Dollars, Except Share Data)

ASSETS	(Unaudited) December 31,  2012			(Audited) March 31,  2012
CURRENT ASSETS:
Cash	$	9,833		$	12,683
Accounts receivable (net of allowance for doubtful accounts of $288 at December 31, 2012 and $283 at March 31, 2012)		10,004			19,403
Inventories		20,783			14,631
Prepaid expenses and other current assets		1,814			759
Deferred income taxes		6,339			8,861
Total current assets		48,773			56,337
PROPERTY:
Property and equipment		18,577			18,312
Less accumulated depreciation and amortization		11,725			10,692
Property – net		6,852			7,620
OTHER ASSETS:
Deferred income taxes, net		5,238			4,567
Goodwill		402			402
Real estate held for sale		3,800			3,800
Qualification units-net		1,591			1,775
Other		5,851			5,350
Total other assets		16,882			15,894
TOTAL ASSETS	$	72,507		$	79,851
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revolving credit facility	$	—		$	—
Current portion of long-term debt		—			2,464
Accounts payable – trade		5,497			5,779
Accrued compensation		3,292			2,967
Accrued income taxes		214			343
Other current liabilities		5,993			4,979
Total current liabilities		14,996			16,532
LONG-TERM DEBT, NET OF CURRENT PORTION		—			8,215
OTHER LONG-TERM LIABILITIES		15,807			16,952
COMMITMENTS AND CONTINGENCIES (Note 14)		—			—
TOTAL LIABILITIES		30,803			41,699
STOCKHOLDERS’ EQUITY
Preferred stock – authorized, 300,000 shares; none issued		—			—
Common stock – authorized, 100,000,000 shares of $.01 par value; issued, 9,966,204 at December 31, 2012 and 9,916,855 at March 31, 2012		99			99
Additional paid-in capital		96,790			96,019
Accumulated deficit		(48,140	)		(51,061	)
Accumulated other comprehensive loss		(74	)		(74	)
		48,675			44,983
Less treasury stock, at cost – 443,678 shares at December 31, 2012 and 426,704 shares at March 31, 2012		(6,971	)		(6,831	)
Total stockholders’ equity		41,704			38,152
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	72,507		$	79,851

See notes to condensed consolidated financial statements.

4

BREEZE-EASTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In Thousands of Dollars, Except Share and Per Share Data)

	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Net sales	$	20,170	$	19,599	$	58,004	$	55,727
Cost of sales		11,540		11,644		34,034		32,429
Gross profit		8,630		7,955		23,970		23,298
Selling, general, and administrative expenses		3,910		3,883		10,945		11,638
Engineering expense		1,733		2,127		7,713		6,475
Operating income		2,987		1,945		5,312		5,185
Interest expense		17		80		209		316
Other expense – net		22		39		68		89
Income before incomes taxes		2,948		1,826		5,035		4,780
Income tax provision		1,239		767		2,115		2,008
Net income	$	1,709	$	1,059	$	2,920	$	2,772
Earnings per common share:
Basic net income per share	$	0.18	$	0.11	$	0.31	$	0.29
Diluted net income per share		0.18		0.11		0.31		0.29
Weighted-average basic shares outstanding		9,518,000		9,489,000		9,503,000		9,468,000
Weighted-average diluted shares outstanding		9,592,000		9,598,000		9,563,000		9,597,000

See notes to condensed consolidated financial statements.

5

BREEZE-EASTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In Thousands of Dollars)

	Nine Months Ended
	December 31, 2012			December 31, 2011
Cash flows from operating activities:
Net income	$	2,920		$	2,772
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Write-off of engineering project development qualification units		111			—
Depreciation and amortization		1,113			1,135
Non-cash reserve accretion		299			317
Stock based compensation		609			535
Provision for losses on accounts receivable		13			16
Deferred taxes-net		1,851			1,924
Changes in assets and liabilities:
Decrease in accounts receivable and other receivables		9,386			2,700
Increase in inventories		(6,152	)		(5,832	)
(Increase) decrease in other assets		(1,563	)		496
(Decrease) increase in accounts payable		(282	)		634
Increase (decrease) in accrued compensation		306			(91	)
(Decrease) increase in accrued income taxes		(129	)		19
Decrease in other liabilities		(429	)		(346	)
Net cash provided by operating activities		8,053			4,279
Cash flows from investing activities:
Capital expenditures		(265	)		(627	)
Capitalized qualification units		—			(1,638	)
Net cash used in investing activities		(265	)		(2,265	)
Cash flows from financing activities:
Payments on long-term debt		(10,679	)		(821	)
Net borrowings (repayments) of other debt		—			—
Exercise of stock options		41			194
Net cash used in financing activities		(10,638	)		(627	)
(Decrease) increase in cash		(2,850	)		1,387
Cash at beginning of period		12,683			6,381
Cash at end of period	$	9,833		$	7,768
Supplemental information:
Interest payments	$	83		$	253
Income tax payments		460			171
Non-cash financing activity for stock option exercise		122			82

See notes to condensed consolidated financial statements.

6

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

NOTE 1. Financial Presentation

The unaudited, Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows are of Breeze-Eastern Corporation and its consolidated subsidiaries (collectively, the “Company”). These reports reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods reflected therein. Certain prior year amounts may have been reclassified to conform to the current period presentation.

NOTE 2. Earnings (Loss) Per Share

The computation of basic earnings per share is based on the weighted-average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the foregoing as well as the exercise of all dilutive stock options using the treasury stock method. The diluted earnings per share is computed using the same weighted-average number of shares as the basic earnings per share computation.

The components of the denominator for basic earnings per common share and diluted earnings per common share are reconciled as follows.

	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Basic Earnings per Common Share:
Weighted-average common shares outstanding for basic earnings per share calculation		9,518,000		9,489,000		9,503,000		9,468,000
Diluted Earnings per Common Share:
Weighted-average common shares outstanding		9,518,000		9,489,000		9,503,000		9,468,000
Stock options (a)		74,000		109,000		60,000		129,000
Weighted-average common shares outstanding for diluted earnings per share calculation		9,592,000		9,598,000		9,563,000		9,597,000

(a) During the three and nine month periods ended December 31, 2012, options to purchase 727,000 and 735,000 shares of common stock, respectively, and during the three and nine month periods ended December 31, 2011, options to purchase 376,000 and 264,000 shares of common stock, respectively, were not included in the computation of diluted earnings per share because the exercise prices of these options were greater than the average market price of the common share.

NOTE 3. Stock-Based Compensation

The Company follows guidance provided by Accounting Standards Codification (“ASC”) 718, “Accounting for Stock-Based Compensation”. Compensation cost is recognized for all awards granted and modified based on the grant date fair value of the awards. Net income for the three and nine month periods ended December 31, 2012, includes stock-based compensation expense of $84 net of tax, or $0.01 per diluted share, and $353 net of tax, or $0.04 per diluted share, respectively. Net income for the three and nine month periods ended December 31, 2011, includes stock-based compensation expense of $121 net of tax, or $0.01 per diluted share, and $311 net of tax, or $0.03 per diluted share, respectively. Stock based compensation expense is included in selling, general and administrative expenses. Additional compensation cost will be recognized as new restricted stock grants are awarded.

7

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

The Company maintains the 1999 Long-Term Incentive Plan (the “1999 Plan”), the 2004 Long-Term Incentive Plan (the “2004 Plan”), the 2006 Long-Term Incentive Plan (the “2006 Plan”), and the 2012 Incentive Compensation Plan (the “2012 Plan”).

Under the terms of the 2012 Plan, 750,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, certain employees, and other key individuals of the Company through October 2022. Under the terms of the 2006 Plan, 500,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, and certain employees of the Company through July 2016. Under the terms of the 2004 Plan, 200,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, and certain employees of the Company through September 2014. The 1999 Plan expired in July 2009, and no further grants or awards may be made under this plan. Under the 1999 Plan, unexercised options granted in fiscal years 2004, 2006, 2007 and 2008 remain outstanding.

Under each of the 1999, 2004, 2006, and 2012 Plans, option exercise prices equal the fair market value of the common shares at their respective grant dates. Prior to May 1999, options granted to officers and employees and all options granted to non-employee directors expired if not exercised on or before five years after the date of the grant. Beginning in May 1999, options granted to officers and employees expire no later than 10 years after the date of the grant. Options granted to directors, officers, and employees vest ratably over three years beginning one year after the date of the grant. In certain circumstances, including a change of control of the Company (as defined in the various Plans), option vesting may be accelerated.

The Company entered into an employment agreement with Brad Pedersen, President and Chief Executive Officer of the Company, effective May 22, 2012, and granted Mr. Pedersen a stock option to purchase 400,000 shares of common stock at an exercise price equal to the stock price of $8.10 on that date. This stock option was reported in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 22, 2012.

The Black-Scholes option-pricing model uses dividend yield, volatility, risk-free rate, expected term, and forfeiture assumptions to value stock options and was used to value 61,000 options granted in fiscal 2013 and all of the options granted in fiscal 2012. The Black-Scholes weighted-average value at each grant date per option granted in fiscal 2013 was $3.02 and $3.05 and was $2.75, $2.58, $2.72, $2.81, and $2.13 in fiscal 2012. Expected volatilities are based on historical volatility of the Company’s common stock and other factors, and the risk-free rate for periods within the option’s contractual life is based on the U.S. Treasury yield curve at the time of the grant. The Company uses historical data to estimate the expected option term and assumed no forfeitures because of the limited number of employees at the executive and senior management levels who receive stock options, past employment history, and current stock price projections. The Company used the following assumptions to estimate the fair value of option grants under the Black-Scholes method:

	2013 $3.02 value per option			2013 $3.05 value per option			2012 $2.75 value per option			2012 $2.58 value per option			2012 $2.72 value per option			2012 $2.81 value per option			2012 $2.13 value per option
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Volatility		35.5	%		34.0	%		25.6	%		25.8	%		25.8	%		25.4	%		25.3	%
Risk-free interest rate		1.2	%		1.2	%		1.5	%		1.6	%		1.6	%		1.9	%		1.9	%
Expected term of options (in years)		7.0			7.0			7.0			7.0			7.0			7.0			7.0

The remaining 350,000 options granted in fiscal 2013 had a weighted-average value per option of $1.86 at the grant date. This valuation used a Monte Carlo simulation because the option vesting was based on service and market conditions. Expected volatilities are based on the historical volatility of the Company’s common stock and other factors and the risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company uses the option contractual life for the expected option term and assumes a forfeiture rate using historical data for Company officers who receive stock options. The Company used the following assumptions to estimate the fair value of option grants under the Monte Carlo simulation:

	2013 $1.86 value per option
Dividend yield		0.0	%
Volatility		34.0	%
Risk-free interest rate		1.8	%
Expected term of options (in years)		10.0
Forfeiture adjustment		0.2	%
Suboptimal behavior factor		1.9

8

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

The following table summarizes stock option activity under all plans and other grants authorized by the Board of Directors.

	Number of Shares			Aggregate Intrinsic Value (in thousands)		Approximate Remaining Contractual Term (Years)		Weighted- Average Exercise Price
Outstanding at March 31, 2012		759,577		$	800		7	$	8.17
Granted		411,000			—		10		8.09
Exercised		(25,415	)		162		—		6.39
Canceled or expired		(32,001	)		—		—		8.55
Outstanding at December 31, 2012		1,113,161			740		7		8.17
Options exercisable at December 31, 2012		607,159			625		6		8.20
Unvested options expected to become exercisable after December 31, 2012		506,002			114		9		8.14
Shares available for future option grants at December 31, 2012 (a)		641,357

(a) May be decreased by restricted stock grants.

Cash received from stock option exercises during the first nine months of fiscal 2013 was approximately $41. In lieu of a cash payment for stock option exercises, the Company received 14,739 shares of common stock, which were retired into treasury, valued at the price of the common stock at the transaction date. The aggregate intrinsic value of options exercised during the first nine months of fiscal 2013 was approximately $35. The intrinsic value of stock options is the amount by which the market price of the stock on the date of exercise exceeded the market price of stock on the date of grant. There was no tax benefit generated to the Company from options granted prior to April 1, 2006 and exercised during fiscal 2013.

During the first nine months of fiscal 2013 and fiscal 2012, stock option compensation expense recorded in selling, general and administrative expenses was $468 and $237, respectively, before taxes of $196 and $99, respectively. As of December 31, 2012, there was $762 of unrecognized compensation cost related to stock options granted-but-not-yet-vested that are expected to become exercisable. This cost is expected to be recognized over a weighted-average period of approximately three years.

Except as otherwise authorized by the Board of Directors, it is the general policy of the Company that the stock underlying the option grants consists of authorized and unissued shares available for distribution under the applicable Plans. Under the 1999, 2004, 2006 and 2012 Plans, the Incentive and Compensation Committee of the Board of Directors (made up of independent directors) may at any time offer to repurchase a stock option that is exercisable and has not expired.

9

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

A summary of restricted stock award activity under all plans follows.

	Number of Shares			Weighted – Average Grant Date Fair Value
Non-vested at March 31, 2012		21,094		$	8.54
Granted		23,934			7.52
Vested		(20,903	)		8.56
Cancelled		—			—
Non-vested at December 31, 2012		24,125			7.51

Restricted stock awards are utilized both for director compensation and awards to officers and employees, and are distributed in a single grant of shares which are subject to forfeiture prior to vesting and have voting and dividend rights from the date of issuance. Other than the restricted stock granted in fiscal 2012 and the first nine months of fiscal 2013, outstanding restricted stock awards to officers and employees have forfeiture and transfer restrictions that lapse ratably over three years beginning one year after the date of the award. Restricted stock awards granted to officers and employees in fiscal 2012 contain forfeiture and transfer restrictions that lapse after six months.

Restricted stock awards granted to non-employee directors prior to fiscal 2012 contain forfeiture provisions that lapse after one year and transfer restrictions that lapse six months after the person ceases to be a director. In certain circumstances, including a change of control of the Company as defined in the various Plans, forfeiture lapses on restricted stock may be accelerated.

The fair value of restricted stock awards is based on the market price of the stock at the grant date and compensation cost is amortized to expense on a straight-line basis over the requisite service period as stated above. The Company expects no forfeitures during the vesting period with respect to unvested restricted stock awards granted. During the first nine months of fiscal 2013 and fiscal 2012, compensation expense related to restricted stock awards recorded in selling, general and administrative expenses was $141 and $299, respectively, before taxes of $59 and $125, respectively. As of December 31, 2012, there was approximately $181 of unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a period of less than one year.

NOTE 4. Inventories

Inventories are summarized as follows:

	December 31, 2012			March 31, 2012
Finished goods	$	494		$	512
Work in process		8,618			6,340
Purchased and manufactured parts		14,710			10,473
		23,822			17,325
Reserve for slow moving and obsolescence		(3,039	)		(2,694	)
Total	$	20,783		$	14,631

Inventory obsolescence is determined by identifying specific items based on the age of inventory and by establishing a general reserve based on annual purchases. Analyzing inventory by age showed little movement once items have aged five years, and historical trends showed that 1.1% of purchases would have the potential to eventually be scrapped. Accordingly, the Company uses these two factors in determining the amount of the reserve.

10

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

NOTE 5. Property, Equipment, and Related Depreciation

Property and equipment are recorded at cost, and equipment is depreciated on a straight-line basis over its estimated economic useful life. Leasehold improvements are depreciated using the shorter of the estimated economic useful life or the term of the lease. Depreciation expense for the three and nine month periods ended December 31, 2012 was $350 and $1,033, respectively, and for the three and nine month periods ended December 31, 2011 was $358 and $1,051, respectively.

The estimated useful lives for property are as follows:

Machinery and equipment	3 to 10 years
Furniture and fixtures	3 to 10 years
Computer hardware and software	3 to 5 years
Leasehold improvements	10 years

The Company classified as real estate held for sale on the condensed consolidated balance sheets a property owned in Glen Head, New York that is currently under sales contract. The sale of the property is expected to be concluded upon completion of municipal approvals and soil remediation pursuant to the remediation plan approved by the New York Department of Environmental Conservation. The net sale proceeds are expected to be $3,800. See Note 14 for a discussion of environmental matters related to this site.

NOTE 6. Product Warranty

Equipment has a one year warranty for which a reserve is established using historical averages and specific program contingencies when considered necessary. Changes in the carrying amount of accrued product warranty costs for the nine month period ended December 31, 2012 are summarized as follows:

Balance at March 31, 2012	$	318
Warranty costs incurred		(170	)
Change in estimates to pre-existing warranties		(9	)
Product warranty accrual		208
Balance at December 31, 2012	$	347

NOTE 7. Other Current Liabilities

Other current liabilities consists of the following:

	December 31, 2012		March 31, 2012
Engineering project reserves	$	1,881	$	1,637
Environmental reserves – Note 14		1,706		1,225
Accrued medical benefits cost		938		636
Accrued commissions		591		630
Other		877		851
Total	$	5,993	$	4,979

11

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

NOTE 8. Income Taxes

Income taxes for the nine month period ended December 31, 2012 was computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation by management.

At December 31, 2012, the Company has federal net operating loss carry forwards, or NOLs, of approximately $2,583, which are due to expire in fiscal 2030. These NOLs may be used to offset future taxable income through their respective expiration dates and thereby reduce or eliminate our federal income taxes otherwise payable. A valuation allowance of $265 was established in a prior year relating to other items, as it is management’s belief that it is more likely than not that a portion of this deferred asset is not realizable.

At December 31, 2012, the current deferred tax assets are $6,339, and non-current deferred tax assets are $5,238. If the Company does not generate adequate taxable earnings, some or all of our deferred tax assets may not be realized. Additionally, changes to the federal and state income tax laws also could impact our ability to use the NOLs. In such cases, the Company may need to revise the valuation allowance established related to deferred tax assets for federal and state purposes.

The Internal Revenue Code of 1986, as amended (the “Code”), imposes significant limitations on the utilization of NOLs in the event of an “ownership change” as defined under section 382 of the Code (the “Section 382 Limitation”). The Section 382 Limitation is an annual limitation on the amount of pre-ownership NOLs that a corporation may use to offset its post-ownership change income. The Section 382 Limitation is calculated by multiplying the value of a corporation’s stock immediately before an ownership change by the long-term tax-exempt rate (as published by the Internal Revenue Service). Generally, an ownership change occurs with respect to a corporation if the aggregate increase in the percentage of stock ownership by value of that corporation by one or more 5% shareholders (including specified groups of shareholders who, in the aggregate, own at least 5% of that corporation’s stock) exceeds 50 percentage points over a three-year testing period. The Company believes that it has not gone through an ownership change over the most recent three-year testing period that would cause the Company’s NOLs to be subject to the Section 382 Limitation. However, given the Company’s current ownership structure, the creation of one or more new 5% shareholders could result in the Company’s NOLs being subject to the Section 382 Limitation.

At December 31, 2012, the Company had no unrecognized tax benefits for uncertain tax positions.

NOTE 9. Long-Term Debt Payable to Banks

Long-term debt, including current maturities, consists of the following:

	December 31, 2012		March 31, 2012
Senior Credit Facility	$	—	$	10,679
Less current maturities		—		2,464
Total long-term debt, net of current maturities	$	—	$	8,215

Senior Credit Facility - The Company has a 60-month, $33,000 senior credit facility consisting of a $10,000 revolving line of credit (the “Revolver”) and, at the inception of the credit agreement in August 2008, a term loan totaling $23,000 (the “Senior Credit Facility”). The term loan had quarterly principal payments of $821 over the life of the loan and $6,571 due at maturity in August 2013. In June of 2012, the Company paid in full the term loan by pre-paying the total amount remaining of $10,679.

The Senior Credit Facility bears interest at either the “Base Rate” or the London Interbank Offered Rate (“LIBOR”) plus applicable margins based on the Company’s leverage ratio. The leverage ratio is equal to consolidated total debt divided by consolidated EBITDA (the sum of net income, depreciation, amortization, other non-cash charges and credits to net income, interest expense, and income tax expense minus charges related to debt refinancing) for the most recent four quarters and is calculated at each quarter end. The Base Rate is the higher of the Prime Rate or the Federal Funds Open Rate plus 0.50%. The applicable margins for the Base Rate based borrowings are between 0% and 0.75%. The applicable margins for LIBOR-based borrowings are between 1.25% and 2.25%. During the first nine months of fiscal 2013, the Senior Credit Facility had a blended interest rate of approximately 1.5%, for debt of $10,500 tied to LIBOR and for debt of $179 tied to the Prime Rate before the

12

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

term loan pre-payment of $10,679 discussed above. The Company also pays a commitment fee of 0.375% on the average daily unused portion of the Revolver. The Senior Credit Facility required the Company to enter into an interest rate swap through August 2011 (discussed below).

The Senior Credit Facility is secured by all of the Company’s assets and allows the Company to issue letters of credit against the total borrowing capacity of the facility. At December 31, 2012, there were no outstanding borrowings under the Revolver, $202 in outstanding (standby) letters of credit, and $9,798 in Revolver availability. The Senior Credit Facility contains certain financial covenants which require a minimum fixed charge coverage ratio that is not permitted to be less than 1.25 : 1.0 and a leverage ratio that is not permitted to be more than 2.5 : 1.0. The fixed charge coverage ratio is equal to consolidated EBITDA (as defined above) divided by fixed charges (the sum of cash interest expense, cash income taxes, dividends, cash environmental costs, scheduled principal installments on indebtedness adjusted for prepayments, capital expenditures, and payments under capitalized leases). The Company was permitted to exclude from fixed charges certain one-time capital expenditures of up to $5,500 related to the facility relocation in fiscal 2011. At December 31, 2012, the Company was in compliance with the covenant provisions of the Senior Credit Facility.

Interest Rate Swap - The Senior Credit Facility required the Company to enter into an interest rate swap for at least three years in an amount not less than 50% of the term loan for the first two years and 35% of the term loan for the third year. An interest rate swap, a type of derivative financial instrument, is used to minimize the effects of interest rate fluctuations on cash flows. The Company does not use derivatives for trading or speculative purposes. In September 2008, the Company entered into a three year interest rate swap to exchange floating rate for fixed rate interest payments on the term loan as required by the Company’s Senior Credit Facility. The swap’s net effect of the spread between the floating rate (30 day LIBOR) and the fixed rate (3.25%), was settled monthly, and was reflected as an adjustment to interest expense in the period incurred. The adjustment to record the swap at its fair value was included in accumulated other comprehensive loss, net of tax. The Company reduced its existing unrealized loss on the interest rate swap during the first three months of fiscal 2012. The interest rate swap expired in August 2011.

NOTE 10. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

• Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets;

• Level 2 - Inputs other than quoted prices in active markets for identical assets or liabilities that are observable whether directly or indirectly for substantially the full term of the asset or liability; and

• Level 3 - Unobservable inputs for the asset or liability, which include management’s own assumptions about what the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

The carrying amount reported in the Condensed Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses approximates fair value because of the short-term maturity of those instruments. The carrying amount for borrowings under the revolving portion of the Senior Credit Facility, if applicable, would approximate fair value because of the variable market interest rate charged to the Company for these borrowings.

NOTE 11. Employee Benefit Plans

The Company has a defined contribution plan covering all eligible employees. Contributions are based on certain percentages of an employee’s eligible compensation. Expenses related to this plan were $222 and $632, respectively, for the three and nine month periods ended December 31, 2012 and $215 and $620, respectively, for the three and nine month periods ended December 31, 2011.

The Company provides postretirement benefits to certain union employees. The Company funds these benefits on a pay-as-you-go basis. The measurement date is March 31.

13

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

In February 2002, the Company’s subsidiary, Seeger-Orbis GmbH & Co. OHG, now known as TransTechnology Germany GmbH (the “Selling Company”), sold its retaining ring business in Germany to Barnes Group Inc. (“Barnes”). German law prohibits the transfer of unfunded pension obligations which have vested for retired and former employees, so the legal responsibility for the pension plan that related to the business (the “Pension Plan”) remained with the Selling Company. At the time of the sale and subsequent to the sale, that pension liability was recorded based on the projected benefit obligation since future compensation levels will not affect the level of pension benefits. The relevant information for the Pension Plan is shown below under the caption Pension Plan. The measurement date is December 31. Barnes has entered into an agreement with the Company whereby Barnes is obligated to administer and discharge the pension obligation as well as indemnify and hold the Selling Company and the Company harmless from these pension obligations. Accordingly, the Company has recorded an asset equal to the benefit obligation for the Pension Plan of $3,178 and $3,207 as of December 31, 2012 and March 31, 2012, respectively. This asset is included in other long-term assets and it is restricted in use to satisfy the legal liability associated with the Pension Plan.

The net periodic pension cost is based on estimated values provided by independent actuaries. The following tables provide the components of the net periodic benefit cost.

	Postretirement Benefits
	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Interest cost	$	8	$	9	$	25	$	28
Amortization of net (gain) loss		1		4		5		11
Net periodic cost	$	9	$	13	$	30	$	39

	Pension Plan
	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Interest cost	$	36	$	40	$	105	$	125
Amortization of net (gain) loss		—		—		—		—
Net periodic cost	$	36	$	40	$	105	$	125

NOTE 12. Concentration of Credit Risks of Financial Instruments

The Company is subject to concentration of credit risk primarily with its cash and trade receivables. At times, the Company maintains its cash in bank deposit accounts in excess of the FDIC insured amount, which effective January 1, 2013 is $250,000. The Company grants credit to certain customers who meet pre-established credit requirements, and generally requires no collateral from its customers. Estimates of potential credit losses are provided for in the Company’s condensed consolidated financial statements and are within management’s expectations. As of December 31, 2012, the Company had no other significant concentrations of credit risk.

NOTE 13. New Accounting Standards

In October 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-04, Technical Corrections and Improvements. In November 2010, the FASB Chairman added a standing project to the FASB’s agenda to address feedback received from stakeholders on the Codification and to make other incremental improvements to U.S. GAAP. This perpetual project will facilitate Codification updates for technical corrections, clarifications, and improvements, and should eliminate the need for periodic agenda requests for narrow and incremental items. These amendments are referred to as Technical Corrections and Improvements. This ASU also includes amendments that identify

14

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

when the use of fair value should be linked to the definition of fair value in Topic 820, Fair Value Measurement, and contains conforming amendments to the Codification to reflect the measurement and disclosure requirements of Topic 820. These amendments are referred to as Conforming Amendments. In addition, this ASU deletes the second glossary definition of fair value that originated from AICPA Statement of Position 92-6, Accounting and Reporting by Health and Welfare Benefit Plans. The first definition originating from FASB Statement No. 123 (revised 2004), Share-Based Payment, and the third definition originating from FASB Statement No. 157, Fair Value Measurements, remain.

The Conforming Amendments to U.S. GAAP included in this ASU are generally non-substantive in nature. Many of the amendments conform wording to be consistent with the terminology in Topic 820 (e.g., revising market value and current market value to fair value, or mark-to-market to subsequently measure at fair value). The FASB does not anticipate that the amendments in this ASU will result in pervasive changes to current practice. However, certain amendments may result in a change to existing practice. For those amendments which the FASB deemed to be more substantive, transition guidance and a delayed effective date accompany them.

The amendments in this ASU that will not have transition guidance will be effective upon issuance. The amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. The adoption of this guidance is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

NOTE 14. Contingencies and Legacy Environmental Commitments

Environmental Matters

The Company is involved in environmental proceedings and potential proceedings relating to soil and groundwater contamination and other environmental matters at several former facilities that were never required for its current operations. These facilities were part of businesses disposed of by TransTechnology Corporation, the former parent Company. Environmental cleanup activities usually span several years, which make estimating liabilities a matter of judgment because of various factors, including changing remediation technologies, assessments of the extent of contamination, and continually evolving regulatory environmental standards. The Company considers these and other factors as well as studies and reports by external environmental consultants to estimate the amount and timing of any future costs that may be required for remediation actions. The Company follows Accounting Standards Codification (“ASC”) 450, “Contingencies”, in recording and disclosing environmental liabilities and records a liability for its best estimate of remediation costs. Because the Company believes it has a more-definitive best estimate of the environmental liability, the Company does not calculate a range in accordance with ASC 450.

At December 31, 2012 and March 31, 2012 the aggregate environmental liability was $12,896 and $13,535, respectively, included in other current liabilities and other long term liabilities on the balance sheet, before cost-sharing of approximately $1,472 and $1,500 at December 31, 2012 and March 31, 2012, respectfully, that is classified mostly as a non-current asset.

In the first nine months of fiscal 2013 and fiscal 2012, the Company spent $939 and $778, respectively, on environmental costs, and for the entire fiscal 2012, the Company spent $1,177. The Company has a detailed plan to manage its environmental exposure for each of its properties. Based on this plan, the Company anticipates spending $1,225 on environmental matters in fiscal 2013. These costs will be charged against the environmental liability reserve and will not impact income. The Company performs quarterly reviews of its environmental sites and the related liabilities.

The Company continues to participate in environmental assessments and remediation work at nine locations, including certain former facilities. Due to the nature of environmental remediation and monitoring work, such activities can extend for up to 30 years, depending upon the nature of the work, the substances involved, and the regulatory requirements associated with each site. The Company does not discount the recorded liabilities.

Although the Company takes great care in developing these risk assessments and future cost estimates, the actual amount of remediation costs may be different from those estimated as a result of a number of factors including: changes to federal and state environmental regulations or laws; changes in local construction costs and the availability of personnel and materials; unforeseen remediation requirements that are not apparent until the work actually commences; and actual remediation expenses

15

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

that differ from those estimated. The Company does not include any unasserted claims that it might have against others in determining its potential liability for such costs, and, except as noted with specific cost sharing arrangements, has no such arrangements, nor has it taken into consideration any future claims against insurance carriers that the Company may have in determining its environmental liabilities. In those situations where the Company is considered a de minimis participant in a remediation claim, the failure of the larger participants to meet their obligations could result in an increase in the Company’s liability at such a site.

There are a number of former operating facilities that the Company is monitoring or investigating for potential future remediation. In some cases, although a loss may be probable, it is not possible at this time to reasonably estimate the amount of any obligation for remediation activities because of uncertainties assessing the extent of the contamination or the applicable regulatory standard. The Company is also pursuing claims for contribution to site investigation and cleanup costs against other potentially responsible parties (PRPs), including the U.S. Government.

There are other properties that have a combined environmental liability of $3,937 at December 31, 2012. In addition, the Company had accrued $100 in estimated costs related to four environmental proceedings in which the Company had been named as a potentially responsible party. The Company deemed that its potential liabilities related to these matters are now resolved and does not anticipate any future costs.

Glen Head, New York

In the first quarter of fiscal 2003, the Company entered into a consent order for a former facility in Glen Head, New York, which is currently subject to a contract for sale, pursuant to which the Company developed a remediation plan for review and approval by the New York Department of Environmental Conservation (NYDEC). The Company was advised in fiscal 2010 that the NYDEC required additional offsite groundwater delineation studies. Based upon the characterization work performed to date and this latest request, the Company’s reserve is $3,299 for the Glen Head site at December 31, 2012. The amounts and timing of payments are subject to the approved remediation plan and additional discussions with NYDEC.

The property is classified as “held for sale” for $3,800 after allowing for certain costs. In July 2001, the Company entered into a sales contract for the Glen Head, New York property for $4,000. The property’s appraised value was $3,300 in July 2001 and was $4,200 in 2005, the date of the last appraisal. These appraisals did not reflect the Company’s estimated remediation costs.

Neither the consent order nor the remediation plan affect the buyer’s obligation to close under the sales contract. The contract does not include a price adjustment clause and, although there are conditions precedent to the buyer’s obligation to close, the contract does not allow for termination. Thus, the buyer cannot unilaterally terminate the contract without liability, a buy-out, or some other settlement negotiated with the Company. There is no set date for closing, and the Company must provide the buyer with a funded remediation plan and environmental insurance prior to the buyer’s obligation to close. The buyer indicated its intent to build residential housing on this former industrial site and has been engaged in the lengthy process of securing the necessary municipal approvals.

Saltzburg, Pennsylvania (“Federal Labs”)

The Company sold the business previously operated at the property owned in Saltzburg, Pennsylvania. The Company presented an environmental cleanup plan during the fourth quarter of fiscal 2000 for a portion of Federal Labs site pursuant to a consent order and agreement with the Pennsylvania Department of Environmental Protection (“PaDEP”) in fiscal 1999 (“1999 Consent Order”). PaDEP approved the plan during the third quarter of fiscal 2004, and the Company paid $200 for past costs, future oversight expenses, and in full settlement of claims made by PaDEP related to the environmental remediation of the site with an additional $200 paid subsequently.

The Company concluded a second consent order with PaDEP in the third quarter of fiscal 2001 for a second portion of the Federal Labs site (“2001 Consent Order”), and concluded a third Consent Order for the remainder of the Federal Labs site in the third quarter of fiscal 2003 (“2003 Consent Order”). The Company submitted an environmental cleanup plan for the portion of the Federal Labs site covered by the 2003 Consent Order during the second quarter of fiscal 2004.

16

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

The Company is administering a settlement, concluded in the first quarter of fiscal 2000, under which the U.S. Government pays 50% of the ongoing direct and indirect environmental costs for the Fed Labs site subject to the 1999 Consent Order. The U.S. Government cost-sharing receivable is classified primarily as other assets on the balance sheet. The Company also concluded an agreement in the first quarter of fiscal 2006, under which the U.S. Government paid an amount equal to 45% of the estimated environmental response costs for the Federal Labs site subject to the 2001 Consent Order. No future payments are due under this second agreement.

The Company is currently party to a tolling agreement with the Federal Government with the remainder of the Federal Labs site while negotiating a cost-sharing arrangement subject to the 2003 Consent Order. There can be no assurance the Company will be successful in these negotiations or any litigation seeking to enforce its rights to contribution or indemnification from the Federal Government. The Company’s environmental liability reserves are not reduced for any potential cost-sharing payments.

At December 31, 2012, the environmental liability reserve at Federal Labs was $5,660. The Company expects that remediation at this site, which is subject to the oversight of the Pennsylvania authorities, will not be completed for several years, and that monitoring costs, although expected to be incurred over twenty years, could extend for up to thirty years.

Litigation

The Company is also engaged in various other legal proceedings incidental to its business. It is the opinion of management that, after taking into consideration information furnished by its counsel, these matters will have no material effect on the Company’s financial position or the results of operations or cash flows in future periods.

NOTE 15. Segment, Geographic Location, and Customer Information

Our products and related services aggregate into one reportable segment - sophisticated mission equipment for specialty aerospace and defense applications. The nature of the production process (assemble, inspect, and test) is similar for all products, as are the customers and distribution methods.

Net sales of 10% or more of total revenues were derived from two and three customers for the three and nine month periods ended December 31, 2012 respectively, and four customers for the three and nine month periods ended December 31, 2011 are summarized as follows.

	Three Months Ended						Nine Months Ended
	December 31, 2012			December 31, 2011			December 31, 2012			December 31, 2011
Customer A		43	%		29	%		25	%		29	%
Customer B		18			20			21			23
Customer C			*		13			13			12
Customer D			*		15				*		12

* Represents less than 10% of net sales.

17

Notes To Unaudited Condensed Consolidated Financial Statements

($ In Thousands Except Share Amounts)

(Unaudited)

Net sales below show the geographic location of customers for the three and nine month periods ended December 31, 2012 and December 31, 2011:

	Three Months Ended				Nine Months Ended
Location	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
United States	$	14,730	$	11,659	$	37,792	$	36,000
England		1,230		880		3,798		3,773
Italy		966		2,038		4,594		3,483
Other European countries		1,117		766		3,037		2,155
Pacific and Far East		603		1,872		2,161		3,400
Other international		1,524		2,384		6,622		6,916
Total	$	20,170	$	19,599	$	58,004	$	55,727

NOTE 16. Subsequent Events

On January 14, 2013, the Company announced it had entered into an amendment to the Company’s shareholder rights plan (the “Rights Plan”) increasing the threshold by which the rights are triggered from 10% to 12.5%. The Rights Plan was adopted to ensure the fair treatment of all shareholders in connection with any take-over bid for the common stock of the Company. The Rights Plan seeks to provide shareholders with adequate time to properly assess a take-over bid without undue pressure. It also is intended to provide the Company’s Board of Directors with time to fully consider an unsolicited take-over bid and, if appropriate, to take requisite action to maximize shareholder value.

The amendment to the Rights Plan was unanimously approved by the Board of Directors. It was not adopted in response to any proposal to acquire control of the Company. The Board of Directors has deemed the amendment to be in the best interests of the Company because it enables stockholders to acquire up to 12.5% of the Company’s outstanding shares without meaningfully diminishing the protections of the Rights Plan. In the event that the Company’s risk of an adverse take-over bid increases in the future, the Company will assess whether further modifications to the Rights Plan are in the best interests of the Company.

Management has evaluated all events occurring through the date that the unaudited Condensed Consolidated Financial Statements have been issued, and has determined that all such events that are material to the unaudited Condensed Consolidated Financial Statements have been fully disclosed.

18

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unless otherwise indicated or the context otherwise requires, all references to the “Company,” the “registrant” “we,” “us” or “our” and similar terms in this report refer to Breeze-Eastern Corporation and its subsidiaries. All dollar amounts stated herein are in thousands except per share amounts. All references to years in this report refer to the fiscal year ended March 31 of the indicated year unless otherwise specified. This report reflects all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for fair presentation of the results of operations for the periods reflected. Certain prior fiscal year amounts may have been reclassified to conform to the current fiscal year presentation.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: changes in business conditions, changes in applicable laws, rules and regulations affecting us in locations in which we conduct business, interest rate trends, a decline or redirection of the United States (“U.S.”) defense budget, the failure of Congress to approve a budget or continuing resolution, the termination of any contracts with the U.S. Government, changes in our sales strategy and product development plans, changes in the marketplace, developments in environmental proceedings that we are involved in, continued services of our executive management team, competitive pricing pressures, security breaches, market acceptance of our products under development, delays in the development of products, changes in spending allocation or the termination, postponement, or failure to fund one or more significant contracts by the U.S. Government or other customers, determination by us to dispose of or acquire additional assets, events impacting the U.S. and world financial markets and economies; and such other factors that may be identified from time to time in our Securities and Exchange Commission (“SEC”) filings and other public announcements including those set forth under the caption “Risk Factors” in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended March 31, 2012.

All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Except as required by law, we assume no duty to update or revise our forward-looking statements.

OVERVIEW

We design, develop, manufacture, sell, and service sophisticated engineered mission equipment for specialty aerospace and defense applications. We have long been recognized as a leading global designer, manufacturer, service provider, and supplier of mission-critical rescue hoists. We also manufacture weapons-handling systems, cargo winches, cargo hook systems and tie-down equipment. Our products are designed to be efficient and reliable in extreme operating conditions and are used to complete rescue operations and military insertion/extraction operations, move and transport cargo, and load weapons onto aircraft and ground-based launching systems.

Our business is affected by global economic and geo-political conditions. In particular, as the U.S. military activity in Iraq and Afghanistan is reduced, reductions and redirection of United States defense spending could have a material impact on revenues and earnings in future periods. Similarly, if European governments significantly reduce their military and other government spending, that could have a material impact on revenues and earnings in future periods. However, we believe that the primary missions that drive procurement and the use of our equipment (search and rescue, special operations, and cargo delivery) will continue to get a relatively high funding priority.

As our original equipment manufacturer (“OEM”) customers’ development timetables have been extended, we have experienced corresponding product development schedule slippage and increased investment. In May 2012 a customer informed us that the customer would seek an alternative solution for a product we were developing. We continue to provide

19

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

other products and services to this customer. Other than this, we have not seen any program cancellations. Developing the Airbus A400M military transport aircraft has taken longer than was originally expected, but flight testing is now underway, and we expect revenues related to this project starting in calendar 2013. Our engineering expense is reported net of reimbursements from Airbus, and we anticipate gross engineering costs to continue at a high level.

CORE BUSINESS

Our core business is aerospace and defense products. We believe we are the world’s leading designer, manufacturer, service provider, and supplier of mission-critical rescue hoists and cargo hook systems. We also manufacture weapons handling systems, cargo winches, and tie-down equipment. These products are sold primarily to military and civilian agencies and aerospace contractors. Our emphasis is on the engineering, assembly, testing, service, and support of our products.

PRODUCTS AND SERVICES

Our products and related services aggregate into one reportable segment. The nature of the production process (assemble, inspect, and test), customers, and product distribution are similar for all products. We sell our products through internal marketing representatives and independent sales representatives and distributors.

Products

As a pioneer of helicopter rescue hoist technology, we continue to develop sophisticated helicopter hoist and winch systems, including systems for the current generation of Blackhawk, Seahawk, Osprey, Chinook, Ecureuil, Dolphin, Merlin/Cormorant, Super Stallion, Changhe Z-11, Agusta A109, Agusta A119 and AgustaWestland AW139 helicopters. We also design, market, sell and service a broad line of hydraulic and electric aircraft cargo winch systems with capacities from 900 pounds to over 7,000 pounds.

Our external cargo hook systems are original equipment on leading military medium and heavy lift helicopters. These hook systems range from smaller 1,000-pound capacity models up to the largest 36,000-pound capacity hooks employed on the Super Stallion helicopter. Our latest designs incorporate load sensing and display technology and automatic load release features. We also manufacture cargo and aircraft tie-downs which are included in this product line.

We make static-line retrieval and cargo winches for military cargo aircraft including the Boeing C-17, Alenia C-27J, and CASA CN-235, and CASA C-295. In addition, we have a contract with Airbus to develop and produce three products for the new cargo positioning and restraint system for the A400M cargo aircraft and expect to be the sole supplier of these products. We anticipate delivery beginning in the later part of the 2013 calendar year.

Once our products are qualified and approved for use with a particular aircraft model, sales of products and services generally continue over the life of the aircraft model, which is usually decades. It is expensive and difficult for a second supplier’s product to become qualified and approved on the same aircraft.

Our weapons handling systems include weapons handling equipment for land-based rocket launchers and munitions hoists for loading missiles and other loads using electric power or exchangeable battery packs. We supply this equipment for the United States, Japanese, and European Multiple-Launch Rocket Systems (MLRS) and the United States High Mobility Artillery Rocket System (HIMARS). We also provide actuators and specialty gearboxes for specialty weapons applications.

Services

We perform overhaul, repair, and maintenance services for all of our products. Most of these services are performed at our Whippany, New Jersey facility. We have also licensed third-party vendors around the world to perform these services.

In addition to performing research and development to design new products, improve existing products, and add new features to our product line, we also provide engineering services to adapt our products to customer specific needs and aircraft models on a fee-for-service basis.

We discuss segment information in Note 15 of our “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Item 1 of Part I of this report.

20

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

STRATEGY

Our primary strategy is to continue to expand our position as a market leader in the design, development, and service of sophisticated mission equipment for specialty aerospace and defense applications. We intend to maintain our position by continuing to focus on our principal customers and on geographic areas where we have developed our reputation as a premier provider of aircraft hoist and lift equipment, and by expanding both our customer base and product lines. We believe that continued spending on research and development to improve the quality of our product offerings and remaining on the leading edge of technological advances in our chosen markets is also crucial to our business. In this regard, we will continue to commit resources to product research and development.

CRITICAL ACCOUNTING POLICIES

Information regarding our critical accounting policies is provided in our Annual Report on Form 10-K for our fiscal year ended March 31, 2012, as filed with the SEC on June 12, 2012, under the caption “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” and our Notes to Consolidated Financial Statements included therein.

Results of Operations

Three Months Ended December 31, 2012 Compared with Three Months Ended December 31, 2011

	Three Months Ended						Increase/(Decrease)
	December 31, 2012			December 31, 2011			$			%
Products	$	15,494		$	14,010		$	1,484			10.6	%
Services		4,676			5,589			(913	)		(16.3	)
Net sales		20,170			19,599			571			2.9
Products		8,536			8,075			461			5.7
Services		3,004			3,569			(565	)		(15.8	)
Cost of sales		11,540			11,644			(104	)		(0.9	)
Gross profit		8,630			7,955			675			8.5
As a % of net sales		42.8	%		40.6	%		N/A			2.2	%Pt
Selling, general, and administrative expenses		3,910			3,883			27			0.7	%
Engineering expense		1,733			2,127			(394	)		(18.5	)
Operating income		2,987			1,945			1,042			53.6
Interest expense		17			80			(63	)		(78.8	)
Income tax provision		1,239			767			472			61.5
Effective tax rate		42.0	%		42.0	%		N/A			0.0	%Pt
Net income	$	1,709		$	1,059		$	650			61.4	%

Net Sales. Fiscal 2013 third quarter net sales of $20,170 were $571, or 2.9%, above net sales of $19,599 in the fiscal 2012 third quarter.

Fiscal 2013 third quarter products sales of $15,494 were $1,484, or 10.6%, above prior year due to greater new equipment hoist & winch and spare parts cargo hook volume to the U.S. military. Fiscal 2013 third quarter services sales of $4,676 were lower by $913, or 16.3%, compared with the prior year due to overhaul & repair for the US Military and engineering weapons handling.

21

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

The timing of U.S. Government awards, availability of U.S. Government funding, and product delivery schedules are among the factors that affect the period of recording revenues. Over the past several years, revenues in the second half of the fiscal year exceeded revenues in the first half of the fiscal year. We expect fiscal 2013 revenues will be consistent with this pattern.

Cost of Sales. Products cost of sales of $8,536 in the fiscal 2013 third quarter were $461, or 5.7%, above the same period in fiscal 2012 due to higher new production and spare parts volume. Cost of services provided of $3,004 in the fiscal 2013 third quarter was $565, or 15.8%, lower than the prior year due to reduced overhaul & repair and engineering volume. In the fiscal 2013 third quarter, manufacturing overhead was over-absorbed by $201, or 1.0% of sales. In the prior year, under-absorbed overhead was $109, or 0.6% of sales. The absorption split between products and services was approximately 40% and 60%, respectively.

Gross profit. Gross profit of $8,630 in the fiscal 2013 third quarter was $675, or 8.5%, above the same period in fiscal 2012. The increase is due to higher products sales volume. As a percent of sales, the gross profit margin was 42.8% for the fiscal 2013 third quarter compared with 40.6% for the prior year. Gross profit as a percent of sales increased due to higher spare parts volume and margins and to over-absorbed manufacturing overhead, partially offset by lower overhaul & repair margins.

Operating Expenses. Total operating expenses were $5,643, or 28.0% of net sales, in the third quarter of fiscal 2013 compared with $6,010 or 30.7% of net sales in the comparable prior-year period. Selling, general, and administrative (“SG&A”) expenses were $3,910 in the fiscal 2013 third quarter compared with $3,883 in the third quarter of fiscal 2012, essentially even. As a percent of sales, SG&A was 19.4% in the fiscal 2013 third quarter versus 19.8% in the comparable period last year.

Engineering expenses were $1,733 in the third quarter of fiscal 2013 compared with $2,127 in the third quarter of fiscal 2012. The decrease is due primarily to development programs that ended since last year, partly offset by not receiving any Airbus cost reimbursement. Reimbursements from Airbus reduced engineering expenses in last year’s fiscal third quarter by $1,050. The current dollar level of engineering expenses reflects continued new product development for awarded aerospace platforms, primarily the Airbus A400M and Sikorsky CH-53K, and we anticipate total gross engineering costs to continue at a high level through fiscal 2013 and into fiscal 2014.

Interest Expense. Interest expense was $17 during the third quarter of fiscal 2013 versus $80 in the third quarter of fiscal 2012. We pre-paid our $10,679 term loan in full during the fiscal 2013 first quarter which significantly reduced interest expense. Interest expense in the third quarter of fiscal 2013 primarily reflects unused revolver fees and capitalized debt acquisition cost amortization for the revolver debt availability.

Income tax provision. Income tax expense was $1,239 in the third quarter of fiscal 2013 versus $767 in the third quarter of fiscal 2012, reflecting higher pretax income in the current quarter. Income taxes for the three month periods ended December 31, 2012 and December 31, 2011 were computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation. Income taxes and income tax rates are discussed further in Note 8 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part I, Item 1 of this report.

Net Income. Net income was $1,709, or $0.18 per diluted share, in the fiscal 2013 third quarter compared with $1,059, or $0.11 per diluted share, in the same period in fiscal 2012. The increase is due to the higher gross profit resulting from sales growth and margin improvements plus lower SG&A and net engineering costs.

New Orders. New products and services orders received during the three months ended December 31, 2012 increased by 50.7% to $21,109 compared with $14,006 during the three months ended December 31, 2011. The increase was due primarily to new equipment for the U.S. Military, along with increases in overhaul & repair and spare parts.

Backlog. We measure backlog by the amount of products or services that customers committed by contract to purchase as of a given date. Backlog may vary substantially over time due to the size and timing of orders. Backlog of approximately $43,738 at December 31, 2012 is scheduled for shipment during the next twelve months. Although significant cancellations of purchase orders or substantial reductions of product quantities in existing contracts seldom occur, such cancellations or reductions could substantially and materially reduce backlog. Therefore, backlog information may not represent the actual amount of shipments or sales for any future period.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

Backlog at December 31, 2012 was $119,691 compared with $111,184 at March 31, 2012, and $118,639 at December 31, 2011. The backlog at December 31, 2012, March 31, 2012, and December 31, 2011 includes $71,238, $71,343, and $71,343, respectively, for the Airbus A400M military transport aircraft that was once scheduled to commence shipping in late calendar 2009 and continue through 2020. Airbus now indicates shipments are likely to commence in calendar 2013.

The book-to-bill ratio is computed by dividing the new orders received during a period by the sales for the same period. A book-to-bill ratio in excess of 1.0 is potentially indicative of continued overall growth in sales. The book to bill ratio was 1.0 for the fiscal 2013 third quarter and 0.7 for the fiscal 2012 third quarter.

Nine Months Ended December 31, 2012 Compared with Nine Months Ended December 31, 2011

	Nine Months Ended						Increase/(Decrease)
	December 31, 2012			December 31, 2011			$			%
Products	$	44,648		$	41,376		$	3,272			7.9	%
Services		13,356			14,351			(995	)		(6.9	)
Net sales		58,004			55,727			2,277			4.1
Products		25,663			23,106			2,557			11.1
Services		8,371			9,323			(952	)		(10.2	)
Cost of sales		34,034			32,429			1,605			4.9
Gross profit		23,970			23,298			672			2.9
As a % of net sales		41.3	%		41.8	%		N/A			(0.5	)%Pt
Selling, general, and administrative expenses		10,945			11,638			(693	)		(6.0	)%
Engineering expense		7,713			6,475			1,238			19.1
Operating income		5,312			5,185			127			2.4
Interest expense		209			316			(107	)		(33.9	)
Income tax provision		2,115			2,008			107			5.3
Effective tax rate		42.0	%		42.0	%		N/A			0.0	%Pt
Net income	$	2,920		$	2,772		$	148			5.3	%

Net Sales. Fiscal 2013 first nine months net sales of $58,004 increased by $2,277, or 4.1%, from net sales of $55,727 in the first nine months of fiscal 2012.

Product sales in the first nine months of fiscal 2013 were $44,648, an increase of $3,272, or 7.9%, from $41,376 in the corresponding prior year period. The increase is primarily due to increased new equipment volume to the U.S. military, partially offset by a slight decrease in spare parts volume, because the prior year included large U.S. Government spare parts re-stocking purchases.

Service sales in the first nine months of fiscal 2013 were $13,356, a decrease of $995, or 6.9%, from $14,351 in the corresponding prior year period. The decrease is primarily due to lower engineering weapons handling services, partly offset by higher overhaul & repair volume.

The timing of U.S. Government awards, availability of U.S. Government funding, and product delivery schedules are among the factors that affect the period of recording revenues. Fiscal 2012 was consistent with recent years with revenues in the second half of the fiscal year exceeding revenues in the first half of the fiscal year; we believe fiscal 2013 revenues will be consistent with this pattern.

23

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

Cost of Sales. Products cost of sales of $25,663 in the fiscal 2013 first nine months were 11.1% higher than the prior year primarily due to higher new equipment sales. Cost of services provided of $8,371 in the fiscal 2013 first nine months were $952 lower than the prior year due to lower engineering services.

Manufacturing overhead was under-absorbed by $56, or 0.1% of sales, in the first nine months of fiscal 2013. This under-absorption was approximately split between products at 63% and services at 37%. The prior year included over-absorbed overhead of $187, or 0.3% of sales. This over-absorption was approximately split between products at 40% and services at 60%.

Gross profit. Gross profit of $23,970 in the fiscal 2013 first nine months was $672, or 2.9% higher, from $23,298 in the corresponding prior year period. As a percent of sales, the gross profit margin was 41.3% for the fiscal 2013 first nine months compared with 41.8% for the corresponding prior year period. Gross profit as a percent of sales declined due to the unfavorable mix in new production sold to the U.S. Government and large OEMs in hoist & winch and weapons handling, partially offset by improved overhaul & repair and spare parts margins.

Operating Expenses. Total operating expenses were $18,658, or 32.2% of net sales, in the first nine months of fiscal 2013 compared with $18,113 or 32.5% of net sales in the comparable prior year period. Selling, general, and administrative (“SG&A”) expenses were $10,945 in the fiscal 2013 first nine months compared with $11,638 in the first nine months of fiscal 2012, a decrease of $693. The decrease is primarily due to business strategy development costs incurred during the first three months of fiscal 2012 that were not incurred during the first three months of fiscal 2013, lower medical costs and lower information technology costs from last year’s insourcing transition. These decreases were partly offset by CEO transition costs in fiscal 2013. As a percent of sales, SG&A was 18.9% in the fiscal 2013 first nine months versus 20.9% in the comparable period last year.

Engineering expenses were $7,713 in the first nine months of fiscal 2013 compared with $6,475 in the first nine months of fiscal 2012. The increase is due to not receiving any Airbus cost reimbursement, partly offset by lower spending on development programs that ended since last year. Reimbursements from Airbus reduced engineering expenses in last fiscal year’s first nine months by $2,366. The dollar level of engineering expenses reflects continued new product development for awarded aerospace platforms, primarily the Airbus A400M and Sikorsky CH-53K, and we anticipate total gross engineering costs to continue at a high level through fiscal 2013 and into fiscal 2014.

Interest Expense. Interest expense was $209 in the fiscal 2013 first nine months versus $316 in the corresponding period in fiscal 2012. We pre-paid our $10,679 term loan in full during the fiscal 2013 first quarter which resulted in expensing $95 of deferred debt acquisition costs in the fiscal 2013 first quarter.

Income tax provision. Income tax expense was $2,115 in the first nine months of fiscal 2013 versus $2,008 in the first nine months of fiscal 2012. The increase is due to higher pre-tax income due primarily to higher gross profit and lower SG&A expenses partly offset by higher net engineering costs. Income taxes for the nine month periods ended December 31, 2012 and December 31, 2011 were computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation. Income taxes and income tax rates are discussed further in Note 8 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part I, Item 1 of this report.

Net Income. Net income was $2,920, or $0.31 per diluted share, in the fiscal 2013 first nine months compared with $2,772, or $0.29 per diluted share, in the same period in fiscal 2012. The increase in net income resulted primarily from the higher gross profit and lower SG&A expenses partly offset by higher net engineering costs.

New Orders. New products and services orders received during the nine months ended December 31, 2012 increased 53.9% to $66,511 compared with $43,215 during the nine months ended December 31, 2011. The increase was due primarily to new equipment from booking Multi-Year VIII from Sikorsky and U.S. Military orders plus increases in overhaul & repair, spare parts, and engineering.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

Backlog. The book to bill ratio for the first nine months of fiscal 2013 was 1.1 compared with 0.8 for the first nine months of fiscal 2012. Cancellations of purchase orders or reductions of product quantities in existing contracts, although seldom occurring, could substantially and materially reduce our backlog. Therefore, the backlog may not represent the actual amount of shipments or sales for any future period.

Liquidity and Capital Resources

Our principal sources of liquidity are cash on hand, cash generated from operations, and our Senior Credit Facility. At times, we maintain our cash in bank deposit accounts in excess of the FDIC insured amount, which effective January 31, 2013 is $250,000.

Our liquidity requirements depend on a number of factors, many of which are beyond our control, including the timing of production under contracts with the U.S. Government. Our working capital needs fluctuate between periods as a result of changes in program status and the timing of payments by program. Additionally, because sales are generally made on the basis of individual purchase orders, liquidity requirements vary based on the timing and volume of orders. Based on cash on hand, future cash expected to be generated from operations, and the Senior Credit Facility, we expect to have sufficient cash to meet liquidity requirements for the next twelve months. The Senior Credit Facility is discussed in Note 9 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Item I, Part 1, of this report.

The Senior Credit Facility expires in August, 2013, and we are currently evaluating debt financing and capital structure options including a new senior credit facility.

In fiscal 2011 and fiscal 2012 we accelerated term-loan payments by making a total of five quarterly term-loan pre-payments totaling $4,107. During the first quarter of fiscal 2013 due to our strong cash position and to gain additional flexibility on our fixed-charge debt covenant, we pre-paid our entire term loan balance of $10,679, of which $6,571 would become due when the term loan expired in August, 2013. We believe we have adequate cash flow and revolver debt availability to meet our operating needs.

We are involved in environmental proceedings and potential proceedings relating to soil and groundwater contamination and other environmental matters at several of our former parent company’s facilities that were never required for our current operations. In fiscal 2013, we anticipate spending approximately $1,225 on environmental characterization and remediation costs. These costs will be charged against our environmental liability reserve and will not impact income.

Working Capital

Net working capital at December 31, 2012 was $33,777, a decrease of $6,028, versus $39,805 at March 31, 2012. The ratio of current assets to current liabilities was 3.3:1.0 at December 31, 2012 compared with 3.4:1.0 at the beginning of fiscal 2013. During the first quarter of fiscal 2013, we pre-paid the term loan balance of $10,679 remaining under our Senior Credit Facility, of which $8,215 was classified as long-term debt as of March 31, 2012, using the cash on hand at the end of fiscal 2012. Other significant working capital changes were decreases in accounts receivable of $9,399, cash of $2,850, and deferred income taxes from NOL utilization of $2,601. Inventory increased by $6,152 to prepare for shipments scheduled in the fourth quarter of fiscal 2013 and to improve customer service with better overhaul & repair turnaround time and product delivery.

Accounts receivable days outstanding decreased to 48.0 days at December 31, 2012, from 61.2 days at December 31, 2011. Inventory turns increased slightly to 2.1 at December 31, 2012 versus 2.0 turns at December 31, 2011.

Capital Expenditures

Capital expenditures for the nine months ended December 31, 2012 and 2011 were $265 and $627, respectively. Spending for the first nine months of both fiscal 2013 and fiscal 2012 was for production test equipment and information technology capital. Capitalized qualification units for the nine months ended December 31, 2011 was $1,638. We did not capitalize any qualification units for the nine-month period ended December 31, 2012.

25

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

Senior Credit Facility

The Senior Credit Facility is discussed in Note 9 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part I, Item 1 of this report.

Interest Rate Swap

The Interest Rate Swap is discussed in Note 9 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part I, Item 1 of this report.

Tax Benefits from Net Operating Losses

The Tax Benefits from Net Operating Losses is discussed in Note 8 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part I, Item 1 of this report.

Contractual Obligations

The following table summarizes our contractual obligations in future fiscal years.

	Payments Due By Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Operating leases	$	6,738	$	1,061	$	1,976	$	1,853	$	1,848
Purchase obligations (a)		—		—		—		—		—
Total	$	6,738	$	1,061	$	1,976	$	1,853	$	1,848

(a) Our supplier purchase orders contain provisions allowing vendors to recover certain costs in the event of “cancellation for convenience” by us. We believe that we do not have ongoing purchase obligations with respect to our suppliers that are material in amount or that would result, individually or collectively, in a material loss exposure to us if cancelled for convenience. Furthermore, purchase obligations for capital assets and services historically have not been material in amount.

Inflation

Neither inflation nor deflation has had, and we do not expect it to have, a material impact upon operating results. We cannot be certain that our business will not be affected by inflation or deflation in the future.

Contingencies and Legacy Environmental Commitments

Environmental matters - At December 31, 2012 and March 31, 2012 the aggregate environmental liability was $12,896 and $13,535, respectively. The liability is classified in other current liabilities and other long-term liabilities on the balance sheet. Separately, environmental cost-sharing with third parties of approximately $1,472 and $1,500 at December 31, 2012 and March 31, 2012, respectfully, is classified mostly as a non-current asset.

In the first nine months of fiscal 2013 and fiscal 2012, we spent $939 and $778, respectively, on environmental costs, and for the entire fiscal 2012, we spent $1,177. We have a detailed plan to manage our environmental exposure on each of our properties. Based on this plan, we anticipate spending $1,225 on environmental matters in fiscal 2013. These costs will be charged against the environmental liability reserve and will not impact income. We perform quarterly reviews of our environmental sites and the related liabilities.

Environmental matters are discussed in Note 14 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part 1, Item 1 of this report.

Litigation - Litigation is discussed in Note 14 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part 1, Item 1 of this report.

26

Management’s Discussion and Analysis of Financial Condition and Results of Operations

($ In Thousands Except Share Amounts)

Recently Issued Accounting Standards

The recent accounting pronouncements are discussed in Note 13 of the “Notes to Unaudited Condensed Consolidated Financial Statements” contained in Part 1, Item 1 of this report.

Off-Balance Sheet Arrangements

As of December 31, 2012, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or variable interest entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

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($ In Thousands Except Share data)

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, primarily changes in interest rates associated with our Senior Credit Facility. The Senior Credit Facility required us to enter into an interest rate swap for at least three years in an amount not less than 50% of the term loan for the first two years and 35% of the term loan for the third year. An interest rate swap, a type of derivative financial instrument, is used to minimize the effects of interest rate fluctuations on cash flows. We do not use derivatives for trading or speculative purposes. In September 2008, we entered into a three-year interest rate swap to exchange floating rate for fixed rate interest payments on the term loan as required by our Senior Credit Facility. The swap’s net effect of the spread between the floating rate (30 day LIBOR) and the fixed rate (3.25%), was settled monthly, and was reflected as an adjustment to interest expense in the period incurred. The adjustment to record the swap at its fair value was included in accumulated other comprehensive loss, net of tax. The Company reduced its existing unrealized loss on the interest rate swap during fiscal 2012. The interest rate swap expired in August 2011.

At December 31, 2012, we had no borrowings under our Senior Credit Facility.

At times, the Company maintains its cash in bank deposit accounts in excess of the FDIC insured amount, which effective January 31, 2013 is $250,000.

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Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) as of the end of the period covered by this report pursuant to Exchange Act Rule 13a-15(b). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2012, our disclosure controls and procedures were effective to ensure (i) that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, in order to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) during the first nine months of fiscal 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are engaged in various other legal proceedings incidental to the Company’s business. Management believes that, after taking into consideration information furnished by its counsel, these matters will not have a material effect on the financial position, results of operations, or cash flows in future periods.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, the reader should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2012 as filed with the SEC on June 12, 2012 and incorporated herein by reference, which factors could materially affect our business, financial condition, financial results or future performance.

Item 6. EXHIBITS

10.1	Form of Indemnification Agreement between the Company and current and future board of directors and officers.
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BREEZE-EASTERN CORPORATION
		(Registrant)
Dated: January 31, 2013	By:	/s/ Mark D. Mishler
		Mark D. Mishler, Senior Vice President,
		Chief Financial Officer, Treasurer, and Secretary *

* On behalf of the Registrant and as Principal Financial and Accounting Officer.

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EX-10.1

EXHIBIT 10.1

FORM OF INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of             , 2012 between Breeze-Eastern Corporation, Inc., a Delaware corporation (the “Company”), and             (“Indemnitee”).

RECITALS

WHEREAS, the Board has determined it is reasonable and prudent for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, directors and executive officers to the fullest extent permitted by applicable law in consideration of their service to the Company; and

WHEREAS, this Agreement is intended to clarify Indemnitee’s entitlement to the maximum indemnity afforded directors under the Delaware General Corporation Law (the “DGCL”) and is a supplement to and in furtherance of the provisions calling for indemnification of directors contained in the bylaws or certificate of incorporation of the Company (collectively, the “Charter Documents”) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve, and to continue his service, as a director or executive officer after the date hereof, the parties hereto, intending to be legally bound, agree as follows.

1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time, and the Charter Documents, as may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section l (a) if, by reason of his or her Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to be made, a party to or participant (as a witness or otherwise) in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee, or on his or her behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his or her Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant (as a

witness or otherwise) in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf if, by reason of his or her Corporate Status, Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful under Delaware law.

3. Contribution.

(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee without any injunctive or other equitable relief being imposed against Indemnitee.

(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations that applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution that may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness, or is made (or asked to) respond to discovery requests, in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

5. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.

6. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless and only to the extent such failure actually and materially prejudices the interests of the Company.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board of Directors of the Company: (i) by a majority vote of the Disinterested Directors (as defined in Section 13 below), even though less than a quorum; (ii) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum; (iii) by Independent Counsel (as defined in Section 13 below) in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee, if (A) there are no Disinterested Directors or if the Disinterested Directors so direct, or (B) a Change of Control (as hereinafter defined) shall have occurred and Indemnitee so requests; or (iv) if so directed by the Board of Directors, by the stockholders of the Company.

(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c). The Independent Counsel shall be selected by the Board of Directors, but shall only be an Independent Counsel to which Indemnitee does not properly object in accordance with the subsequent provisions of this Section 6(c); provided, however, that if a Change of Control shall have occurred, Indemnitee shall select such Independent Counsel,

but only an Independent Counsel to which the Board of Directors does not properly object in accordance with the subsequent provisions of this Section 6(c). Within ten (10) days after such written notice of selection shall have been given, the non-selecting party shall deliver to the selecting party, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection that shall have been made to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.

(d) For purposes of this Section 6, “Change of Control” means a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the corporation is then subject to such reporting requirement; provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities without the prior approval of at least a majority of the members of the Board of Directors in office immediately prior to such acquisition; or (ii) the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter.

(e) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the

Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(f) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as defined in Section 13 below), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(f) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(g) If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board of Directors or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

(h) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board of Directors or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to

indemnification under this Agreement. Any Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(i) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(j) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

7. Remedies of Indemnitee.

(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The Company shall not oppose Indemnitee’s right to seek any such adjudication.

(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).

(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of Indemnitee’s rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on Indemnitee’s behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by Indemnitee in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee that are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter Documents, any agreement, a vote of stockholders, a resolution of directors or otherwise, of the Company. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Charter Documents and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy

given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other Enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(d) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other Enterprise.

9. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act, or similar provisions of state statutory law or common law; or

(c) except with respect to a Proceeding relating to enforcement of, or to indemnity under, this Agreement, the Charter Documents, the DGCL or any insurance policy relating to Indemnitee’s Corporate Status, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board of Directors of the Company authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided that this prohibition shall not apply to a counterclaim, cross-claim or third party claim brought in any Proceeding.

10. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of the Company or another Enterprise) and for a period of ten (10) years thereafter, and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of Indemnitee’s Corporate Status, whether or not Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement and regardless of any subsequent amendment to the Charter Documents, the DGCL or any other agreement relating to indemnification of Indemnitee. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

11. Security. To the extent requested by Indemnitee and approved by the Board of Directors of the Company, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

12. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

13. Definitions. For purposes of this Agreement:

(a) “Corporate Status” describes the status of a person who is or was a director of the Company in his or her official capacity (i) as a director of the Company or (ii) as agent or fiduciary of the Company or as a director, officer, employee, agent or fiduciary of any other Enterprise that such person is or was serving at the express written request of the Company, in each of the foregoing cases, related to such status as a director (but not as an officer or employee) of the Company.

(b) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(c) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

(d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director of the Company, by reason of any action taken by Indemnitee or of any inaction on Indemnitee’s part while acting as a director of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

14. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director of the Company and that Indemnitee is entitled to enforce the provisions hereof as a direct beneficiary thereof. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws and to ensure that indemnification rights provided by the Secondary Indemnitors are secondary to the primary obligation of the Company to indemnify Indemnitee as provided in this Agreement. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

15. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation that it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay actually materially prejudices the Company.

17. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

(a) to Indemnitee at the address set forth below Indemnitee signature hereto; or

(b) to the Company at:

Breeze-Eastern Corporation

35 Melanie Lane

Whippany, New Jersey

Attention: Corporate Secretary

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

20. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

[The next page is the signature page.]

IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

COMPANY:	BREEZE-EASTERN CORPORATION
	By:
	Name:
	Title:
INDEMNITEE:
	[                ]
	Address:	[                ]
		[                ]
		[                ]
	With a copy to:	[                ]
		[                ]
		[                ]

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Brad Pedersen certify that:

1. I have reviewed this quarterly report on Form 10-Q of Breeze-Eastern Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 31, 2013	/s/ Brad Pedersen
	Brad Pedersen
	President & Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Mark D. Mishler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Breeze-Eastern Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 31, 2013	/s/ Mark D. Mishler
	Mark D. Mishler, Senior Vice President,
	Chief Financial Officer, Treasurer, and Secretary

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Breeze-Eastern Corporation (the “Company”) on Form 10-Q for the quarterly period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	January 31, 2013	/s/ Brad Pedersen
		Brad Pedersen
		President & Chief Executive Officer
Date:	January 31, 2013	/s/ Mark D. Mishler
		Mark D. Mishler, Senior Vice President,
		Chief Financial Officer, Treasurer, and Secretary

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Inventories - Additional Information (Detail)	9 Months Ended
	Dec. 31, 2012
Inventories [Line Items]
Age inventory showed little movement	5 years
Percentage of purchases scrapped	1.10%

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Segment, Geographic Location, and Customer Information - Summary of Total Revenues Derived from Customers (Parenthetical) (Detail)	9 Months Ended
	Dec. 31, 2012
Revenue, Major Customer [Line Items]
Net sales	10.00%

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Employee Benefit Plans - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Mar. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan expenses	$ 222	$ 215	$ 632	$ 620
Benefit obligation for the Pension Plan	$ 3,178		$ 3,178		$ 3,207

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Segment, Geographic Location, and Customer Information - Net Sales by Geographic Location (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales by geographic location	$ 20,170	$ 19,599	$ 58,004	$ 55,727
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales by geographic location	14,730	11,659	37,792	36,000
England [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales by geographic location	1,230	880	3,798	3,773
Italy [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales by geographic location	966	2,038	4,594	3,483
Other European countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales by geographic location	1,117	766	3,037	2,155
Pacific and Far East [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales by geographic location	603	1,872	2,161	3,400
Other international [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales by geographic location	$ 1,524	$ 2,384	$ 6,622	$ 6,916

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Long-Term Debt Payable to Banks - Long-Term Debt Including Current Maturities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Debt Disclosure [Line Items]
Senior Credit Facility		$ 10,679
Less current maturities		2,464
Total long-term debt, net of current maturities		$ 8,215

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Earnings (Loss) Per Share - Components of Denominator for Basic Earnings Per Common Share and Diluted Earnings Per Common Share (Parenthetical) (Detail)	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Options excluded from the computation of diluted earnings per share	727,000	376,000	735,000	264,000

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Inventories (Tables)

9 Months Ended

Dec. 31, 2012

Inventories

Inventories are summarized as follows:

	December 31, 2012			March 31, 2012
Finished goods	$	494		$	512
Work in process		8,618			6,340
Purchased and manufactured parts		14,710			10,473
		23,822			17,325
Reserve for slow moving and obsolescence		(3,039	)		(2,694	)
Total	$	20,783		$	14,631

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Concentration of Credit Risks of Financial Instruments - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Financial Instruments [Line Items]
Cash in bank deposit accounts in excess of the FDIC insured amount	$ 250,000

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Product Warranty - Additional Information (Detail)	9 Months Ended
	Dec. 31, 2012
Warranties [Line Items]
Warranty for the equipment	1 year

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Stock-Based Compensation - Restricted Stock Award Activity under All Plans (Detail) (USD $)	9 Months Ended
	Dec. 31, 2012
Non-vested at March 31, 2012	21,094
Number of Shares, Granted	23,934
Number of Shares, Vested	(20,903)
Number of Shares, Cancelled
Number of Shares, Non-vested at December 31, 2012	24,125
Weighted-Average Grant Date Fair Value, Non-vested at March 31, 2012	$ 8.54
Weighted-Average Grand Date Fair Value, Granted	$ 7.52
Weighted-Average Grand Date Fair Value, Vested	$ 8.56
Weighted-Average Grand Date Fair Value, Cancelled
Weighted-Average Grant Date Fair Value, Non-vested at December 31, 2012	$ 7.51

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Segment, Geographic Location, and Customer Information - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Segment	Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of reportable segments			1
Net sales	10.00%	10.00%	10.00%	10.00%

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Long-Term Debt Payable to Banks - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2012
Line of Credit Facility [Line Items]
Senior credit facility	$ 33,000
Senior credit facility period	60 months
Quarterly principal payments	821
Maturity payment	6,571
Term-loan prepayments	10,679
Senior Credit Facility blended interest rate	1.50%
Debt tied to LIBOR	10,500
Debt tied to Prime Rate	179
Unused borrowing commitment fee	0.375%
Senior Credit Facility Base Rate calculation	Higher of the Prime Rate or the Federal Funds Open Rate plus 0.50%
Senior Credit Facility margin	0.50%
Outstanding letters of credit	202
Revolver availability	9,798
Fixed charge coverage ratio, Minimum	Not less than 1.25 1.0
Fixed charge leverage ratio, Maximum	Not more than 2.5 1.0
One-time capital expenditures	5,500
Amount required to enter into an interest rate swap	not less than 50% of the term loan for the first two years and 35% of the term loan for the third year
Percentage of term loan to be entered into an interest rate swap during first two years	50.00%
Percentage of term loan to be entered into an interest rate swap during third year	35.00%
Fixed rate on interest rate swap	3.25%
Floating rate period	30 day LIBOR
Years required to enter into an interest rate swap	3 years
Revolver [Member]
Line of Credit Facility [Line Items]
Senior credit facility	10,000
Senior Credit Facility [Member]
Line of Credit Facility [Line Items]
Senior credit facility	$ 23,000
Minimum [Member]
Line of Credit Facility [Line Items]
Applicable margins for Base Rate based borrowings	0.00%
Applicable margins for LIBOR-based borrowings	1.25%
Maximum [Member]
Line of Credit Facility [Line Items]
Applicable margins for Base Rate based borrowings	0.75%
Applicable margins for LIBOR-based borrowings	2.25%

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Inventories

9 Months Ended

Dec. 31, 2012

Inventories

NOTE 4. Inventories

Inventories are summarized as follows:

	December 31, 2012			March 31, 2012
Finished goods	$	494		$	512
Work in process		8,618			6,340
Purchased and manufactured parts		14,710			10,473
		23,822			17,325
Reserve for slow moving and obsolescence		(3,039	)		(2,694	)
Total	$	20,783		$	14,631

Inventory obsolescence is determined by identifying specific items based on the age of inventory and by establishing a general reserve based on annual purchases. Analyzing inventory by age showed little movement once items have aged five years, and historical trends showed that 1.1% of purchases would have the potential to eventually be scrapped. Accordingly, the Company uses these two factors in determining the amount of the reserve.

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Product Warranty - Changes in Carrying Amount of Accrued Product Warranty Costs (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2012
Warranties [Line Items]
Balance at March 31, 2012	$ 318
Warranty costs incurred	(170)
Change in estimates to pre-existing warranties	(9)
Product warranty accrual	208
Balance at December 31, 2012	$ 347

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Long-Term Debt Payable to Banks (Tables)

9 Months Ended

Dec. 31, 2012

Long-Term Debt Including Current Maturities

Long-term debt, including current maturities, consists of the following:

	December 31, 2012		March 31, 2012
Senior Credit Facility	$	—	$	10,679
Less current maturities		—		2,464
Total long-term debt, net of current maturities	$	—	$	8,215

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Other Current Liabilities (Tables)

9 Months Ended

Dec. 31, 2012

Other Current Liabilities

Other current liabilities consists of the following:

	December 31, 2012		March 31, 2012
Engineering project reserves	$	1,881	$	1,637
Environmental reserves – Note 14		1,706		1,225
Accrued medical benefits cost		938		636
Accrued commissions		591		630
Other		877		851
Total	$	5,993	$	4,979

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Subsequent Events - Additional Information (Detail) (Rights Plan [Member])	Dec. 31, 2012
Minimum [Member]
Subsequent Event [Line Items]
Acquisition of company's outstanding shares	10.00%
Maximum [Member]
Subsequent Event [Line Items]
Acquisition of company's outstanding shares	12.50%

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Other Current Liabilities - Other Current Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Schedule Of Other Current Liabilities [Line Items]
Engineering project reserves	$ 1,881	$ 1,637
Environmental reserves	1,706	1,225
Accrued medical benefits cost	938	636
Accrued commissions	591	630
Other	877	851
Total	$ 5,993	$ 4,979

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Employee Benefit Plans (Tables)

9 Months Ended

Dec. 31, 2012

Components of Net Periodic Benefit Cost

The following tables provide the components of the net periodic benefit cost.

	Postretirement Benefits
	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Interest cost	$	8	$	9	$	25	$	28
Amortization of net (gain) loss		1		4		5		11
Net periodic cost	$	9	$	13	$	30	$	39

	Pension Plan
	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Interest cost	$	36	$	40	$	105	$	125
Amortization of net (gain) loss		—		—		—		—
Net periodic cost	$	36	$	40	$	105	$	125

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Segment, Geographic Location, and Customer Information (Tables)

9 Months Ended

Dec. 31, 2012

Summary of Total Revenues Derived from Customers

Net sales of 10% or more of total revenues were derived from two and three customers for the three and nine month periods ended December 31, 2012 respectively, and four customers for the three and nine month periods ended December 31, 2011 are summarized as follows.

	Three Months Ended						Nine Months Ended
	December 31, 2012			December 31, 2011			December 31, 2012			December 31, 2011
Customer A		43	%		29	%		25	%		29	%
Customer B		18			20			21			23
Customer C			*		13			13			12
Customer D			*		15				*		12

* Represents less than 10% of net sales.

Net Sales by Geographic Location

Net sales below show the geographic location of customers for the three and nine month periods ended December 31, 2012 and December 31, 2011:

	Three Months Ended				Nine Months Ended
Location	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
United States	$	14,730	$	11,659	$	37,792	$	36,000
England		1,230		880		3,798		3,773
Italy		966		2,038		4,594		3,483
Other European countries		1,117		766		3,037		2,155
Pacific and Far East		603		1,872		2,161		3,400
Other international		1,524		2,384		6,622		6,916
Total	$	20,170	$	19,599	$	58,004	$	55,727

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Stock-Based Compensation

9 Months Ended

Dec. 31, 2012

Stock-Based Compensation

NOTE 3. Stock-Based Compensation

The Company follows guidance provided by Accounting Standards Codification (“ASC”) 718, “Accounting for Stock-Based Compensation”. Compensation cost is recognized for all awards granted and modified based on the grant date fair value of the awards. Net income for the three and nine month periods ended December 31, 2012, includes stock-based compensation expense of $84 net of tax, or $0.01 per diluted share, and $353 net of tax, or $0.04 per diluted share, respectively. Net income for the three and nine month periods ended December 31, 2011, includes stock-based compensation expense of $121 net of tax, or $0.01 per diluted share, and $311 net of tax, or $0.03 per diluted share, respectively. Stock based compensation expense is included in selling, general and administrative expenses. Additional compensation cost will be recognized as new restricted stock grants are awarded.

The Company maintains the 1999 Long-Term Incentive Plan (the “1999 Plan”), the 2004 Long-Term Incentive Plan (the “2004 Plan”), the 2006 Long-Term Incentive Plan (the “2006 Plan”), and the 2012 Incentive Compensation Plan (the “2012 Plan”).

Under the terms of the 2012 Plan, 750,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, certain employees, and other key individuals of the Company through October 2022. Under the terms of the 2006 Plan, 500,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, and certain employees of the Company through July 2016. Under the terms of the 2004 Plan, 200,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, and certain employees of the Company through September 2014. The 1999 Plan expired in July 2009, and no further grants or awards may be made under this plan. Under the 1999 Plan, unexercised options granted in fiscal years 2004, 2006, 2007 and 2008 remain outstanding.

Under each of the 1999, 2004, 2006, and 2012 Plans, option exercise prices equal the fair market value of the common shares at their respective grant dates. Prior to May 1999, options granted to officers and employees and all options granted to non-employee directors expired if not exercised on or before five years after the date of the grant. Beginning in May 1999, options granted to officers and employees expire no later than 10 years after the date of the grant. Options granted to directors, officers, and employees vest ratably over three years beginning one year after the date of the grant. In certain circumstances, including a change of control of the Company (as defined in the various Plans), option vesting may be accelerated.

The Company entered into an employment agreement with Brad Pedersen, President and Chief Executive Officer of the Company, effective May 22, 2012, and granted Mr. Pedersen a stock option to purchase 400,000 shares of common stock at an exercise price equal to the stock price of $8.10 on that date. This stock option was reported in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 22, 2012.

The Black-Scholes option-pricing model uses dividend yield, volatility, risk-free rate, expected term, and forfeiture assumptions to value stock options and was used to value 61,000 options granted in fiscal 2013 and all of the options granted in fiscal 2012. The Black-Scholes weighted-average value at each grant date per option granted in fiscal 2013 was $3.02 and $3.05 and was $2.75, $2.58, $2.72, $2.81, and $2.13 in fiscal 2012. Expected volatilities are based on historical volatility of the Company’s common stock and other factors, and the risk-free rate for periods within the option’s contractual life is based on the U.S. Treasury yield curve at the time of the grant. The Company uses historical data to estimate the expected option term and assumed no forfeitures because of the limited number of employees at the executive and senior management levels who receive stock options, past employment history, and current stock price projections. The Company used the following assumptions to estimate the fair value of option grants under the Black-Scholes method:

	2013 $3.02 value per option			2013 $3.05 value per option			2012 $2.75 value per option			2012 $2.58 value per option			2012 $2.72 value per option			2012 $2.81 value per option			2012 $2.13 value per option
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Volatility		35.5	%		34.0	%		25.6	%		25.8	%		25.8	%		25.4	%		25.3	%
Risk-free interest rate		1.2	%		1.2	%		1.5	%		1.6	%		1.6	%		1.9	%		1.9	%
Expected term of options (in years)		7.0			7.0			7.0			7.0			7.0			7.0			7.0

The remaining 350,000 options granted in fiscal 2013 had a weighted-average value per option of $1.86 at the grant date. This valuation used a Monte Carlo simulation because the option vesting was based on service and market conditions. Expected volatilities are based on the historical volatility of the Company’s common stock and other factors and the risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company uses the option contractual life for the expected option term and assumes a forfeiture rate using historical data for Company officers who receive stock options. The Company used the following assumptions to estimate the fair value of option grants under the Monte Carlo simulation:

	2013 $1.86 value per option
Dividend yield		0.0	%
Volatility		34.0	%
Risk-free interest rate		1.8	%
Expected term of options (in years)		10.0
Forfeiture adjustment		0.2	%
Suboptimal behavior factor		1.9

The following table summarizes stock option activity under all plans and other grants authorized by the Board of Directors.

	Number of Shares			Aggregate Intrinsic Value (in thousands)		Approximate Remaining Contractual Term (Years)		Weighted- Average Exercise Price
Outstanding at March 31, 2012		759,577		$	800		7	$	8.17
Granted		411,000			—		10		8.09
Exercised		(25,415	)		162		—		6.39
Canceled or expired		(32,001	)		—		—		8.55
Outstanding at December 31, 2012		1,113,161			740		7		8.17
Options exercisable at December 31, 2012		607,159			625		6		8.20
Unvested options expected to become exercisable after December 31, 2012		506,002			114		9		8.14
Shares available for future option grants at December 31, 2012 (a)		641,357

(a) May be decreased by restricted stock grants.

Cash received from stock option exercises during the first nine months of fiscal 2013 was approximately $41. In lieu of a cash payment for stock option exercises, the Company received 14,739 shares of common stock, which were retired into treasury, valued at the price of the common stock at the transaction date. The aggregate intrinsic value of options exercised during the first nine months of fiscal 2013 was approximately $35. The intrinsic value of stock options is the amount by which the market price of the stock on the date of exercise exceeded the market price of stock on the date of grant. There was no tax benefit generated to the Company from options granted prior to April 1, 2006 and exercised during fiscal 2013.

During the first nine months of fiscal 2013 and fiscal 2012, stock option compensation expense recorded in selling, general and administrative expenses was $468 and $237, respectively, before taxes of $196 and $99, respectively. As of December 31, 2012, there was $762 of unrecognized compensation cost related to stock options granted-but-not-yet-vested that are expected to become exercisable. This cost is expected to be recognized over a weighted-average period of approximately three years.

Except as otherwise authorized by the Board of Directors, it is the general policy of the Company that the stock underlying the option grants consists of authorized and unissued shares available for distribution under the applicable Plans. Under the 1999, 2004, 2006 and 2012 Plans, the Incentive and Compensation Committee of the Board of Directors (made up of independent directors) may at any time offer to repurchase a stock option that is exercisable and has not expired.

A summary of restricted stock award activity under all plans follows.

	Number of Shares			Weighted – Average Grant Date Fair Value
Non-vested at March 31, 2012		21,094		$	8.54
Granted		23,934			7.52
Vested		(20,903	)		8.56
Cancelled		—			—
Non-vested at December 31, 2012		24,125			7.51

Restricted stock awards are utilized both for director compensation and awards to officers and employees, and are distributed in a single grant of shares which are subject to forfeiture prior to vesting and have voting and dividend rights from the date of issuance. Other than the restricted stock granted in fiscal 2012 and the first nine months of fiscal 2013, outstanding restricted stock awards to officers and employees have forfeiture and transfer restrictions that lapse ratably over three years beginning one year after the date of the award. Restricted stock awards granted to officers and employees in fiscal 2012 contain forfeiture and transfer restrictions that lapse after six months.

Restricted stock awards granted to non-employee directors prior to fiscal 2012 contain forfeiture provisions that lapse after one year and transfer restrictions that lapse six months after the person ceases to be a director. In certain circumstances, including a change of control of the Company as defined in the various Plans, forfeiture lapses on restricted stock may be accelerated.

The fair value of restricted stock awards is based on the market price of the stock at the grant date and compensation cost is amortized to expense on a straight-line basis over the requisite service period as stated above. The Company expects no forfeitures during the vesting period with respect to unvested restricted stock awards granted. During the first nine months of fiscal 2013 and fiscal 2012, compensation expense related to restricted stock awards recorded in selling, general and administrative expenses was $141 and $299, respectively, before taxes of $59 and $125, respectively. As of December 31, 2012, there was approximately $181 of unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a period of less than one year.

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Earnings (Loss) Per Share - Components of Denominator for Basic Earnings Per Common Share and Diluted Earnings Per Common Share (Detail)	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Weighted-average common shares outstanding for basic earnings per share calculation	9,518,000	9,489,000	9,503,000	9,468,000
Weighted-average common shares outstanding	9,518,000	9,489,000	9,503,000	9,468,000
Stock options	74,000	109,000	60,000	129,000
Weighted-average common shares outstanding for diluted earnings per share calculation	9,592,000	9,598,000	9,563,000	9,597,000

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Property, Equipment, and Related Depreciation - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 350	$ 358	$ 1,033	$ 1,051
Expected net sale proceeds			$ 3,800

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Segment, Geographic Location, and Customer Information - Summary of Total Revenues Derived from Customers (Detail)	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Revenue, Major Customer [Line Items]
Net sales	10.00%	10.00%	10.00%	10.00%
Customer A [Member]
Revenue, Major Customer [Line Items]
Net sales	43.00%	29.00%	25.00%	29.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Net sales	18.00%	20.00%	21.00%	23.00%
Customer C [Member]
Revenue, Major Customer [Line Items]
Net sales		13.00%	13.00%	12.00%
Customer D [Member]
Revenue, Major Customer [Line Items]
Net sales		15.00%		12.00%

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
CURRENT ASSETS:
Cash	$ 9,833	$ 12,683
Accounts receivable (net of allowance for doubtful accounts of $288 at December 31, 2012 and $283 at March 31, 2012)	10,004	19,403
Inventories	20,783	14,631
Prepaid expenses and other current assets	1,814	759
Deferred income taxes	6,339	8,861
Total current assets	48,773	56,337
PROPERTY:
Property and equipment	18,577	18,312
Less accumulated depreciation and amortization	11,725	10,692
Property - net	6,852	7,620
OTHER ASSETS:
Deferred income taxes, net	5,238	4,567
Goodwill	402	402
Real estate held for sale	3,800	3,800
Qualification units-net	1,591	1,775
Other	5,851	5,350
Total other assets	16,882	15,894
TOTAL ASSETS	72,507	79,851
CURRENT LIABILITIES:
Revolving credit facility
Current portion of long-term debt		2,464
Accounts payable - trade	5,497	5,779
Accrued compensation	3,292	2,967
Accrued income taxes	214	343
Other current liabilities	5,993	4,979
Total current liabilities	14,996	16,532
LONG-TERM DEBT, NET OF CURRENT PORTION		8,215
OTHER LONG-TERM LIABILITIES	15,807	16,952
COMMITMENTS AND CONTINGENCIES (Note 14)
TOTAL LIABILITIES	30,803	41,699
STOCKHOLDERS' EQUITY
Preferred stock - authorized, 300,000 shares; none issued
Common stock - authorized, 100,000,000 shares of $.01 par value; issued, 9,966,204 at December 31, 2012 and 9,916,855 at March 31, 2012	99	99
Additional paid-in capital	96,790	96,019
Accumulated deficit	(48,140)	(51,061)
Accumulated other comprehensive loss	(74)	(74)
Stockholders' equity before treasury stock	48,675	44,983
Less treasury stock, at cost - 443,678 shares at December 31, 2012 and 426,704 shares at March 31, 2012	(6,971)	(6,831)
Total stockholders' equity	41,704	38,152
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$ 72,507	$ 79,851

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Income Taxes - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2012 Shareholder	Mar. 31, 2012
Income Tax Disclosure [Line Items]
Federal net operating loss carry forwards	$ 2,583
Effective income tax rate expiration in fiscal year	2030
Valuation allowance	265
Current deferred tax assets	6,339	8,861
Non-current deferred tax assets	5,238	4,567
Minimum number of shareholders	1
Type of shareholders	5.00%
Minimum percentage owned by shareholders	5.00%
Increase in the percentage of stock ownership by value	50.00%
Period for change in stock ownership	3 years
Unrecognized tax benefits	$ 0

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Financial Presentation

9 Months Ended

Dec. 31, 2012

Financial Presentation

NOTE 1. Financial Presentation

The unaudited, Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows are of Breeze-Eastern Corporation and its consolidated subsidiaries (collectively, the “Company”). These reports reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods reflected therein. Certain prior year amounts may have been reclassified to conform to the current period presentation.

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Stock-Based Compensation - Assumptions to Estimate Fair Value of Option Grants (Detail)	9 Months Ended
	Dec. 31, 2012 Black Scholes Based Option Pricing Model [Member] 2013 $3.02 value per option [Member]	Dec. 31, 2012 Black Scholes Based Option Pricing Model [Member] 2013 $3.05 value per option [Member]	Dec. 31, 2012 Black Scholes Based Option Pricing Model [Member] 2012 $2.75 value per option [Member]	Dec. 31, 2012 Black Scholes Based Option Pricing Model [Member] 2012 $2.58 value per option [Member]	Dec. 31, 2012 Black Scholes Based Option Pricing Model [Member] 2012 $2.72 value per option [Member]	Dec. 31, 2012 Black Scholes Based Option Pricing Model [Member] 2012 $2.81 value per option [Member]	Dec. 31, 2012 Black Scholes Based Option Pricing Model [Member] 2012 $2.13 value per option [Member]	Dec. 30, 2012 Monte Carlo Simulation [Member] 2013 $1.86 value per option [Member] OptionPlan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Volatility	35.50%	34.00%	25.60%	25.80%	25.80%	25.40%	25.30%	34.00%
Risk-free interest rate	1.20%	1.20%	1.50%	1.60%	1.60%	1.90%	1.90%	1.80%
Expected term of options (in years)	7 years	7 years	7 years	7 years	7 years	7 years	7 years	10 years
Forfeiture adjustment								0.20%
Suboptimal behavior factor								1.9

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New Accounting Standards (Policies)

9 Months Ended

Dec. 31, 2012

Technical Corrections and Improvements

In October 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-04, Technical Corrections and Improvements. In November 2010, the FASB Chairman added a standing project to the FASB’s agenda to address feedback received from stakeholders on the Codification and to make other incremental improvements to U.S. GAAP. This perpetual project will facilitate Codification updates for technical corrections, clarifications, and improvements, and should eliminate the need for periodic agenda requests for narrow and incremental items. These amendments are referred to as Technical Corrections and Improvements. This ASU also includes amendments that identify when the use of fair value should be linked to the definition of fair value in Topic 820, Fair Value Measurement, and contains conforming amendments to the Codification to reflect the measurement and disclosure requirements of Topic 820. These amendments are referred to as Conforming Amendments. In addition, this ASU deletes the second glossary definition of fair value that originated from AICPA Statement of Position 92-6, Accounting and Reporting by Health and Welfare Benefit Plans. The first definition originating from FASB Statement No. 123 (revised 2004), Share-Based Payment, and the third definition originating from FASB Statement No. 157, Fair Value Measurements, remain.

The Conforming Amendments to U.S. GAAP included in this ASU are generally non-substantive in nature. Many of the amendments conform wording to be consistent with the terminology in Topic 820 (e.g., revising market value and current market value to fair value, or mark-to-market to subsequently measure at fair value). The FASB does not anticipate that the amendments in this ASU will result in pervasive changes to current practice. However, certain amendments may result in a change to existing practice. For those amendments which the FASB deemed to be more substantive, transition guidance and a delayed effective date accompany them.

The amendments in this ASU that will not have transition guidance will be effective upon issuance. The amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. The adoption of this guidance is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

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Stock-Based Compensation - Stock Option Activity under All Plans and Other Grants (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Jun. 30, 2012	Dec. 31, 2012
Schedule Of Stock Option Activity [Line Items]
Number of Shares, Outstanding at March 31, 2012	759,577	759,577
Number of Shares, Granted		411,000
Number of Shares, Exercised		(25,415)
Number of Shares, Canceled or expired		(32,001)
Number of Shares, Outstanding at December 31, 2012		1,113,161
Number of Shares, Options exercisable at December 31, 2012		607,159
Number of Shares, Unvested options expected to become exercisable after December 31, 2012		506,002
Number of Shares, Shares available for future option grants at December 31, 2012		641,357
Aggregate Intrinsic Value, Outstanding at March 31, 2012	$ 800	$ 800
Aggregate Intrinsic Value, Granted
Aggregate Intrinsic Value, Exercised		162
Aggregate Intrinsic Value, Canceled or expired
Aggregate Intrinsic Value, Outstanding at December 31, 2012		740
Aggregate Intrinsic Value, Options exercisable at December 31, 2012		625
Aggregate Intrinsic Value, Unvested options expected to become exercisable after December 31, 2012		$ 114
Approximate Remaining Contractual Term, Outstanding at March 31, 2012		7 years
Approximate Remaining Contractual Term, Granted		10 years
Approximate Remaining Contractual Term, Exercised
Approximate Remaining Contractual Term, Canceled or expired
Approximate Remaining Contractual Term, Outstanding at December 31, 2012		7 years
Approximate Remaining Contractual Term, Options exercisable at December 31, 2012		6 years
Approximate Remaining Contractual Term, Unvested options expected to become exercisable after December 31, 2012		9 years
Weighted-Average Exercise Price, Outstanding at March 31, 2012	$ 8.17	$ 8.17
Weighted-Average Exercise Price, Granted	$ 1.86	$ 8.09
Weighted-Average Exercise Price, Exercised		$ 6.39
Weighted-Average Exercise Price, Canceled or expired		$ 8.55
Weighted-Average Exercise Price, Outstanding at December 31, 2012		$ 8.17
Weighted-Average Exercise Price, Options exercisable at December 31, 2012		$ 8.20
Weighted-Average Exercise Price, Unvested options expected to become exercisable after December 31, 2012		$ 8.14

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Stock-Based Compensation (Tables)

9 Months Ended

Dec. 31, 2012

Stock Option Activity under All Plans and Other Grants

The following table summarizes stock option activity under all plans and other grants authorized by the Board of Directors.

	Number of Shares			Aggregate Intrinsic Value (in thousands)		Approximate Remaining Contractual Term (Years)		Weighted- Average Exercise Price
Outstanding at March 31, 2012		759,577		$	800		7	$	8.17
Granted		411,000			—		10		8.09
Exercised		(25,415	)		162		—		6.39
Canceled or expired		(32,001	)		—		—		8.55
Outstanding at December 31, 2012		1,113,161			740		7		8.17
Options exercisable at December 31, 2012		607,159			625		6		8.20
Unvested options expected to become exercisable after December 31, 2012		506,002			114		9		8.14
Shares available for future option grants at December 31, 2012 (a)		641,357

(a) May be decreased by restricted stock grants.

Restricted Stock Award Activity under All Plans

A summary of restricted stock award activity under all plans follows.

	Number of Shares			Weighted – Average Grant Date Fair Value
Non-vested at March 31, 2012		21,094		$	8.54
Granted		23,934			7.52
Vested		(20,903	)		8.56
Cancelled		—			—
Non-vested at December 31, 2012		24,125			7.51

Black Scholes Based Option Pricing Model [Member]

Assumptions to Estimate Fair Value of Option Grants

	2013 $3.02 value per option			2013 $3.05 value per option			2012 $2.75 value per option			2012 $2.58 value per option			2012 $2.72 value per option			2012 $2.81 value per option			2012 $2.13 value per option
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Volatility		35.5	%		34.0	%		25.6	%		25.8	%		25.8	%		25.4	%		25.3	%
Risk-free interest rate		1.2	%		1.2	%		1.5	%		1.6	%		1.6	%		1.9	%		1.9	%
Expected term of options (in years)		7.0			7.0			7.0			7.0			7.0			7.0			7.0

Monte Carlo Simulation [Member]

Assumptions to Estimate Fair Value of Option Grants

Company used the following assumptions to estimate the fair value of option grants under the Monte Carlo simulation:

	2013 $1.86 value per option
Dividend yield		0.0	%
Volatility		34.0	%
Risk-free interest rate		1.8	%
Expected term of options (in years)		10.0
Forfeiture adjustment		0.2	%
Suboptimal behavior factor		1.9

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Earnings (Loss) Per Share

9 Months Ended

Dec. 31, 2012

Earnings (Loss) Per Share

NOTE 2. Earnings (Loss) Per Share

The computation of basic earnings per share is based on the weighted-average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the foregoing as well as the exercise of all dilutive stock options using the treasury stock method. The diluted earnings per share is computed using the same weighted-average number of shares as the basic earnings per share computation.

The components of the denominator for basic earnings per common share and diluted earnings per common share are reconciled as follows.

	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Basic Earnings per Common Share:
Weighted-average common shares outstanding for basic earnings per share calculation		9,518,000		9,489,000		9,503,000		9,468,000
Diluted Earnings per Common Share:
Weighted-average common shares outstanding		9,518,000		9,489,000		9,503,000		9,468,000
Stock options (a)		74,000		109,000		60,000		129,000
Weighted-average common shares outstanding for diluted earnings per share calculation		9,592,000		9,598,000		9,563,000		9,597,000

(a) During the three and nine month periods ended December 31, 2012, options to purchase 727,000 and 735,000 shares of common stock, respectively, and during the three and nine month periods ended December 31, 2011, options to purchase 376,000 and 264,000 shares of common stock, respectively, were not included in the computation of diluted earnings per share because the exercise prices of these options were greater than the average market price of the common share.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Accounts receivable, net of allowance for doubtful accounts	$ 288	$ 283
Preferred stock, shares authorized	300,000	300,000
Preferred stock, shares issued	0	0
Common stock, shares authorized	100,000,000	100,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	9,966,204	9,916,855
Treasury stock, at cost	443,678	426,704

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Concentration of Credit Risks of Financial Instruments

9 Months Ended

Dec. 31, 2012

Concentration of Credit Risks of Financial Instruments

NOTE 12. Concentration of Credit Risks of Financial Instruments

The Company is subject to concentration of credit risk primarily with its cash and trade receivables. At times, the Company maintains its cash in bank deposit accounts in excess of the FDIC insured amount, which effective January 1, 2013 is $250,000. The Company grants credit to certain customers who meet pre-established credit requirements, and generally requires no collateral from its customers. Estimates of potential credit losses are provided for in the Company’s condensed consolidated financial statements and are within management’s expectations. As of December 31, 2012, the Company had no other significant concentrations of credit risk.

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Document and Entity Information	9 Months Ended
	Dec. 31, 2012	Jan. 18, 2013
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	BZC
Entity Registrant Name	BREEZE-EASTERN CORP
Entity Central Index Key	0000099359
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		9,522,526

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New Accounting Standards

9 Months Ended

Dec. 31, 2012

New Accounting Standards

NOTE 13. New Accounting Standards

In October 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-04, Technical Corrections and Improvements. In November 2010, the FASB Chairman added a standing project to the FASB’s agenda to address feedback received from stakeholders on the Codification and to make other incremental improvements to U.S. GAAP. This perpetual project will facilitate Codification updates for technical corrections, clarifications, and improvements, and should eliminate the need for periodic agenda requests for narrow and incremental items. These amendments are referred to as Technical Corrections and Improvements. This ASU also includes amendments that identify when the use of fair value should be linked to the definition of fair value in Topic 820, Fair Value Measurement, and contains conforming amendments to the Codification to reflect the measurement and disclosure requirements of Topic 820. These amendments are referred to as Conforming Amendments. In addition, this ASU deletes the second glossary definition of fair value that originated from AICPA Statement of Position 92-6, Accounting and Reporting by Health and Welfare Benefit Plans. The first definition originating from FASB Statement No. 123 (revised 2004), Share-Based Payment, and the third definition originating from FASB Statement No. 157, Fair Value Measurements, remain.

The Conforming Amendments to U.S. GAAP included in this ASU are generally non-substantive in nature. Many of the amendments conform wording to be consistent with the terminology in Topic 820 (e.g., revising market value and current market value to fair value, or mark-to-market to subsequently measure at fair value). The FASB does not anticipate that the amendments in this ASU will result in pervasive changes to current practice. However, certain amendments may result in a change to existing practice. For those amendments which the FASB deemed to be more substantive, transition guidance and a delayed effective date accompany them.

The amendments in this ASU that will not have transition guidance will be effective upon issuance. The amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. The adoption of this guidance is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Net sales	$ 20,170	$ 19,599	$ 58,004	$ 55,727
Cost of sales	11,540	11,644	34,034	32,429
Gross profit	8,630	7,955	23,970	23,298
Selling, general, and administrative expenses	3,910	3,883	10,945	11,638
Engineering expense	1,733	2,127	7,713	6,475
Operating income	2,987	1,945	5,312	5,185
Interest expense	17	80	209	316
Other expense - net	22	39	68	89
Income before incomes taxes	2,948	1,826	5,035	4,780
Income tax provision	1,239	767	2,115	2,008
Net income	$ 1,709	$ 1,059	$ 2,920	$ 2,772
Earnings per common share:
Basic net income per share	$ 0.18	$ 0.11	$ 0.31	$ 0.29
Diluted net income per share	$ 0.18	$ 0.11	$ 0.31	$ 0.29
Weighted-average basic shares outstanding	9,518,000	9,489,000	9,503,000	9,468,000
Weighted-average diluted shares outstanding	9,592,000	9,598,000	9,563,000	9,597,000

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Other Current Liabilities

9 Months Ended

Dec. 31, 2012

Other Current Liabilities

NOTE 7. Other Current Liabilities

Other current liabilities consists of the following:

	December 31, 2012		March 31, 2012
Engineering project reserves	$	1,881	$	1,637
Environmental reserves – Note 14		1,706		1,225
Accrued medical benefits cost		938		636
Accrued commissions		591		630
Other		877		851
Total	$	5,993	$	4,979

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Product Warranty

9 Months Ended

Dec. 31, 2012

Product Warranty

NOTE 6. Product Warranty

Equipment has a one year warranty for which a reserve is established using historical averages and specific program contingencies when considered necessary. Changes in the carrying amount of accrued product warranty costs for the nine month period ended December 31, 2012 are summarized as follows:

Balance at March 31, 2012	$	318
Warranty costs incurred		(170	)
Change in estimates to pre-existing warranties		(9	)
Product warranty accrual		208
Balance at December 31, 2012	$	347

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Earnings (Loss) Per Share (Tables)

9 Months Ended

Dec. 31, 2012

Components of Denominator for Basic Earnings Per Common Share and Diluted Earnings Per Common Share

The components of the denominator for basic earnings per common share and diluted earnings per common share are reconciled as follows.

	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Basic Earnings per Common Share:
Weighted-average common shares outstanding for basic earnings per share calculation		9,518,000		9,489,000		9,503,000		9,468,000
Diluted Earnings per Common Share:
Weighted-average common shares outstanding		9,518,000		9,489,000		9,503,000		9,468,000
Stock options (a)		74,000		109,000		60,000		129,000
Weighted-average common shares outstanding for diluted earnings per share calculation		9,592,000		9,598,000		9,563,000		9,597,000

(a) During the three and nine month periods ended December 31, 2012, options to purchase 727,000 and 735,000 shares of common stock, respectively, and during the three and nine month periods ended December 31, 2011, options to purchase 376,000 and 264,000 shares of common stock, respectively, were not included in the computation of diluted earnings per share because the exercise prices of these options were greater than the average market price of the common share.

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Contingencies and Legacy Environmental Commitments

9 Months Ended

Dec. 31, 2012

Contingencies and Legacy Environmental Commitments

NOTE 14. Contingencies and Legacy Environmental Commitments

Environmental Matters

The Company is involved in environmental proceedings and potential proceedings relating to soil and groundwater contamination and other environmental matters at several former facilities that were never required for its current operations. These facilities were part of businesses disposed of by TransTechnology Corporation, the former parent Company. Environmental cleanup activities usually span several years, which make estimating liabilities a matter of judgment because of various factors, including changing remediation technologies, assessments of the extent of contamination, and continually evolving regulatory environmental standards. The Company considers these and other factors as well as studies and reports by external environmental consultants to estimate the amount and timing of any future costs that may be required for remediation actions. The Company follows Accounting Standards Codification (“ASC”) 450, “Contingencies”, in recording and disclosing environmental liabilities and records a liability for its best estimate of remediation costs. Because the Company believes it has a more-definitive best estimate of the environmental liability, the Company does not calculate a range in accordance with ASC 450.

At December 31, 2012 and March 31, 2012 the aggregate environmental liability was $12,896 and $13,535, respectively, included in other current liabilities and other long term liabilities on the balance sheet, before cost-sharing of approximately $1,472 and $1,500 at December 31, 2012 and March 31, 2012, respectfully, that is classified mostly as a non-current asset.

In the first nine months of fiscal 2013 and fiscal 2012, the Company spent $939 and $778, respectively, on environmental costs, and for the entire fiscal 2012, the Company spent $1,177. The Company has a detailed plan to manage its environmental exposure for each of its properties. Based on this plan, the Company anticipates spending $1,225 on environmental matters in fiscal 2013. These costs will be charged against the environmental liability reserve and will not impact income. The Company performs quarterly reviews of its environmental sites and the related liabilities.

The Company continues to participate in environmental assessments and remediation work at nine locations, including certain former facilities. Due to the nature of environmental remediation and monitoring work, such activities can extend for up to 30 years, depending upon the nature of the work, the substances involved, and the regulatory requirements associated with each site. The Company does not discount the recorded liabilities.

Although the Company takes great care in developing these risk assessments and future cost estimates, the actual amount of remediation costs may be different from those estimated as a result of a number of factors including: changes to federal and state environmental regulations or laws; changes in local construction costs and the availability of personnel and materials; unforeseen remediation requirements that are not apparent until the work actually commences; and actual remediation expenses that differ from those estimated. The Company does not include any unasserted claims that it might have against others in determining its potential liability for such costs, and, except as noted with specific cost sharing arrangements, has no such arrangements, nor has it taken into consideration any future claims against insurance carriers that the Company may have in determining its environmental liabilities. In those situations where the Company is considered a de minimis participant in a remediation claim, the failure of the larger participants to meet their obligations could result in an increase in the Company’s liability at such a site.

There are a number of former operating facilities that the Company is monitoring or investigating for potential future remediation. In some cases, although a loss may be probable, it is not possible at this time to reasonably estimate the amount of any obligation for remediation activities because of uncertainties assessing the extent of the contamination or the applicable regulatory standard. The Company is also pursuing claims for contribution to site investigation and cleanup costs against other potentially responsible parties (PRPs), including the U.S. Government.

There are other properties that have a combined environmental liability of $3,937 at December 31, 2012. In addition, the Company had accrued $100 in estimated costs related to four environmental proceedings in which the Company had been named as a potentially responsible party. The Company deemed that its potential liabilities related to these matters are now resolved and does not anticipate any future costs.

Glen Head, New York

In the first quarter of fiscal 2003, the Company entered into a consent order for a former facility in Glen Head, New York, which is currently subject to a contract for sale, pursuant to which the Company developed a remediation plan for review and approval by the New York Department of Environmental Conservation (NYDEC). The Company was advised in fiscal 2010 that the NYDEC required additional offsite groundwater delineation studies. Based upon the characterization work performed to date and this latest request, the Company’s reserve is $3,299 for the Glen Head site at December 31, 2012. The amounts and timing of payments are subject to the approved remediation plan and additional discussions with NYDEC.

The property is classified as “held for sale” for $3,800 after allowing for certain costs. In July 2001, the Company entered into a sales contract for the Glen Head, New York property for $4,000. The property’s appraised value was $3,300 in July 2001 and was $4,200 in 2005, the date of the last appraisal. These appraisals did not reflect the Company’s estimated remediation costs.

Neither the consent order nor the remediation plan affect the buyer’s obligation to close under the sales contract. The contract does not include a price adjustment clause and, although there are conditions precedent to the buyer’s obligation to close, the contract does not allow for termination. Thus, the buyer cannot unilaterally terminate the contract without liability, a buy-out, or some other settlement negotiated with the Company. There is no set date for closing, and the Company must provide the buyer with a funded remediation plan and environmental insurance prior to the buyer’s obligation to close. The buyer indicated its intent to build residential housing on this former industrial site and has been engaged in the lengthy process of securing the necessary municipal approvals.

Saltzburg, Pennsylvania (“Federal Labs”)

The Company sold the business previously operated at the property owned in Saltzburg, Pennsylvania. The Company presented an environmental cleanup plan during the fourth quarter of fiscal 2000 for a portion of Federal Labs site pursuant to a consent order and agreement with the Pennsylvania Department of Environmental Protection (“PaDEP”) in fiscal 1999 (“1999 Consent Order”). PaDEP approved the plan during the third quarter of fiscal 2004, and the Company paid $200 for past costs, future oversight expenses, and in full settlement of claims made by PaDEP related to the environmental remediation of the site with an additional $200 paid subsequently.

The Company concluded a second consent order with PaDEP in the third quarter of fiscal 2001 for a second portion of the Federal Labs site (“2001 Consent Order”), and concluded a third Consent Order for the remainder of the Federal Labs site in the third quarter of fiscal 2003 (“2003 Consent Order”). The Company submitted an environmental cleanup plan for the portion of the Federal Labs site covered by the 2003 Consent Order during the second quarter of fiscal 2004.

The Company is administering a settlement, concluded in the first quarter of fiscal 2000, under which the U.S. Government pays 50% of the ongoing direct and indirect environmental costs for the Fed Labs site subject to the 1999 Consent Order. The U.S. Government cost-sharing receivable is classified primarily as other assets on the balance sheet. The Company also concluded an agreement in the first quarter of fiscal 2006, under which the U.S. Government paid an amount equal to 45% of the estimated environmental response costs for the Federal Labs site subject to the 2001 Consent Order. No future payments are due under this second agreement.

The Company is currently party to a tolling agreement with the Federal Government with the remainder of the Federal Labs site while negotiating a cost-sharing arrangement subject to the 2003 Consent Order. There can be no assurance the Company will be successful in these negotiations or any litigation seeking to enforce its rights to contribution or indemnification from the Federal Government. The Company’s environmental liability reserves are not reduced for any potential cost-sharing payments.

At December 31, 2012, the environmental liability reserve at Federal Labs was $5,660. The Company expects that remediation at this site, which is subject to the oversight of the Pennsylvania authorities, will not be completed for several years, and that monitoring costs, although expected to be incurred over twenty years, could extend for up to thirty years.

Litigation

The Company is also engaged in various other legal proceedings incidental to its business. It is the opinion of management that, after taking into consideration information furnished by its counsel, these matters will have no material effect on the Company’s financial position or the results of operations or cash flows in future periods.

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Fair Value Measurements

9 Months Ended

Dec. 31, 2012

Fair Value Measurements

NOTE 10. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

• Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets;

• Level 2 - Inputs other than quoted prices in active markets for identical assets or liabilities that are observable whether directly or indirectly for substantially the full term of the asset or liability; and

• Level 3 - Unobservable inputs for the asset or liability, which include management’s own assumptions about what the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

The carrying amount reported in the Condensed Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses approximates fair value because of the short-term maturity of those instruments. The carrying amount for borrowings under the revolving portion of the Senior Credit Facility, if applicable, would approximate fair value because of the variable market interest rate charged to the Company for these borrowings.

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Income Taxes

9 Months Ended

Dec. 31, 2012

Income Taxes

NOTE 8. Income Taxes

Income taxes for the nine month period ended December 31, 2012 was computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation by management.

At December 31, 2012, the Company has federal net operating loss carry forwards, or NOLs, of approximately $2,583, which are due to expire in fiscal 2030. These NOLs may be used to offset future taxable income through their respective expiration dates and thereby reduce or eliminate our federal income taxes otherwise payable. A valuation allowance of $265 was established in a prior year relating to other items, as it is management’s belief that it is more likely than not that a portion of this deferred asset is not realizable.

At December 31, 2012, the current deferred tax assets are $6,339, and non-current deferred tax assets are $5,238. If the Company does not generate adequate taxable earnings, some or all of our deferred tax assets may not be realized. Additionally, changes to the federal and state income tax laws also could impact our ability to use the NOLs. In such cases, the Company may need to revise the valuation allowance established related to deferred tax assets for federal and state purposes.

The Internal Revenue Code of 1986, as amended (the “Code”), imposes significant limitations on the utilization of NOLs in the event of an “ownership change” as defined under section 382 of the Code (the “Section 382 Limitation”). The Section 382 Limitation is an annual limitation on the amount of pre-ownership NOLs that a corporation may use to offset its post-ownership change income. The Section 382 Limitation is calculated by multiplying the value of a corporation’s stock immediately before an ownership change by the long-term tax-exempt rate (as published by the Internal Revenue Service). Generally, an ownership change occurs with respect to a corporation if the aggregate increase in the percentage of stock ownership by value of that corporation by one or more 5% shareholders (including specified groups of shareholders who, in the aggregate, own at least 5% of that corporation’s stock) exceeds 50 percentage points over a three-year testing period. The Company believes that it has not gone through an ownership change over the most recent three-year testing period that would cause the Company’s NOLs to be subject to the Section 382 Limitation. However, given the Company’s current ownership structure, the creation of one or more new 5% shareholders could result in the Company’s NOLs being subject to the Section 382 Limitation.

At December 31, 2012, the Company had no unrecognized tax benefits for uncertain tax positions.

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Long-Term Debt Payable to Banks

9 Months Ended

Dec. 31, 2012

Long-Term Debt Payable to Banks

NOTE 9. Long-Term Debt Payable to Banks

Long-term debt, including current maturities, consists of the following:

	December 31, 2012		March 31, 2012
Senior Credit Facility	$	—	$	10,679
Less current maturities		—		2,464
Total long-term debt, net of current maturities	$	—	$	8,215

Senior Credit Facility - The Company has a 60-month, $33,000 senior credit facility consisting of a $10,000 revolving line of credit (the “Revolver”) and, at the inception of the credit agreement in August 2008, a term loan totaling $23,000 (the “Senior Credit Facility”). The term loan had quarterly principal payments of $821 over the life of the loan and $6,571 due at maturity in August 2013. In June of 2012, the Company paid in full the term loan by pre-paying the total amount remaining of $10,679.

The Senior Credit Facility bears interest at either the “Base Rate” or the London Interbank Offered Rate (“LIBOR”) plus applicable margins based on the Company’s leverage ratio. The leverage ratio is equal to consolidated total debt divided by consolidated EBITDA (the sum of net income, depreciation, amortization, other non-cash charges and credits to net income, interest expense, and income tax expense minus charges related to debt refinancing) for the most recent four quarters and is calculated at each quarter end. The Base Rate is the higher of the Prime Rate or the Federal Funds Open Rate plus 0.50%. The applicable margins for the Base Rate based borrowings are between 0% and 0.75%. The applicable margins for LIBOR-based borrowings are between 1.25% and 2.25%. During the first nine months of fiscal 2013, the Senior Credit Facility had a blended interest rate of approximately 1.5%, for debt of $10,500 tied to LIBOR and for debt of $179 tied to the Prime Rate before the term loan pre-payment of $10,679 discussed above. The Company also pays a commitment fee of 0.375% on the average daily unused portion of the Revolver. The Senior Credit Facility required the Company to enter into an interest rate swap through August 2011 (discussed below).

The Senior Credit Facility is secured by all of the Company’s assets and allows the Company to issue letters of credit against the total borrowing capacity of the facility. At December 31, 2012, there were no outstanding borrowings under the Revolver, $202 in outstanding (standby) letters of credit, and $9,798 in Revolver availability. The Senior Credit Facility contains certain financial covenants which require a minimum fixed charge coverage ratio that is not permitted to be less than 1.25 : 1.0 and a leverage ratio that is not permitted to be more than 2.5 : 1.0. The fixed charge coverage ratio is equal to consolidated EBITDA (as defined above) divided by fixed charges (the sum of cash interest expense, cash income taxes, dividends, cash environmental costs, scheduled principal installments on indebtedness adjusted for prepayments, capital expenditures, and payments under capitalized leases). The Company was permitted to exclude from fixed charges certain one-time capital expenditures of up to $5,500 related to the facility relocation in fiscal 2011. At December 31, 2012, the Company was in compliance with the covenant provisions of the Senior Credit Facility.

Interest Rate Swap - The Senior Credit Facility required the Company to enter into an interest rate swap for at least three years in an amount not less than 50% of the term loan for the first two years and 35% of the term loan for the third year. An interest rate swap, a type of derivative financial instrument, is used to minimize the effects of interest rate fluctuations on cash flows. The Company does not use derivatives for trading or speculative purposes. In September 2008, the Company entered into a three year interest rate swap to exchange floating rate for fixed rate interest payments on the term loan as required by the Company’s Senior Credit Facility. The swap’s net effect of the spread between the floating rate (30 day LIBOR) and the fixed rate (3.25%), was settled monthly, and was reflected as an adjustment to interest expense in the period incurred. The adjustment to record the swap at its fair value was included in accumulated other comprehensive loss, net of tax. The Company reduced its existing unrealized loss on the interest rate swap during the first three months of fiscal 2012. The interest rate swap expired in August 2011.

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Employee Benefit Plans

9 Months Ended

Dec. 31, 2012

Employee Benefit Plans

NOTE 11. Employee Benefit Plans

The Company has a defined contribution plan covering all eligible employees. Contributions are based on certain percentages of an employee’s eligible compensation. Expenses related to this plan were $222 and $632, respectively, for the three and nine month periods ended December 31, 2012 and $215 and $620, respectively, for the three and nine month periods ended December 31, 2011.

The Company provides postretirement benefits to certain union employees. The Company funds these benefits on a pay-as-you-go basis. The measurement date is March 31.

In February 2002, the Company’s subsidiary, Seeger-Orbis GmbH & Co. OHG, now known as TransTechnology Germany GmbH (the “Selling Company”), sold its retaining ring business in Germany to Barnes Group Inc. (“Barnes”). German law prohibits the transfer of unfunded pension obligations which have vested for retired and former employees, so the legal responsibility for the pension plan that related to the business (the “Pension Plan”) remained with the Selling Company. At the time of the sale and subsequent to the sale, that pension liability was recorded based on the projected benefit obligation since future compensation levels will not affect the level of pension benefits. The relevant information for the Pension Plan is shown below under the caption Pension Plan. The measurement date is December 31. Barnes has entered into an agreement with the Company whereby Barnes is obligated to administer and discharge the pension obligation as well as indemnify and hold the Selling Company and the Company harmless from these pension obligations. Accordingly, the Company has recorded an asset equal to the benefit obligation for the Pension Plan of $3,178 and $3,207 as of December 31, 2012 and March 31, 2012, respectively. This asset is included in other long-term assets and it is restricted in use to satisfy the legal liability associated with the Pension Plan.

The net periodic pension cost is based on estimated values provided by independent actuaries. The following tables provide the components of the net periodic benefit cost.

	Postretirement Benefits
	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Interest cost	$	8	$	9	$	25	$	28
Amortization of net (gain) loss		1		4		5		11
Net periodic cost	$	9	$	13	$	30	$	39

	Pension Plan
	Three Months Ended				Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
Interest cost	$	36	$	40	$	105	$	125
Amortization of net (gain) loss		—		—		—		—
Net periodic cost	$	36	$	40	$	105	$	125

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended		3 Months Ended			9 Months Ended				12 Months Ended	9 Months Ended
	May 31, 2012	Apr. 30, 1999	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Restricted stock [Member]	Dec. 31, 2011 Restricted stock [Member]	Mar. 31, 2012 Restricted stock [Member]	Dec. 31, 2012 Stock Options [Member]	Dec. 31, 2011 Stock Options [Member]	Dec. 31, 2012 2013 $3.02 value per option [Member]	Dec. 31, 2012 2013 $1.86 value per option [Member]	Dec. 31, 2012 2012 $2.75 value per option [Member]	Dec. 31, 2012 2012 $2.58 value per option [Member]	Dec. 31, 2012 2012 $2.72 value per option [Member]	Dec. 31, 2012 2012 $2.81 value per option [Member]	Dec. 31, 2012 2012 $2.13 value per option [Member]	Dec. 31, 2012 2012 Plan [Member]	Dec. 31, 2012 2006 Plan [Member]	Dec. 31, 2012 2004 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense, net of tax			$ 84		$ 121	$ 353	$ 311
Stock-based compensation expense, net of tax, per diluted share			$ 0.01		$ 0.01	$ 0.04	$ 0.03
Shares of common stock granted			641,357			641,357														750,000	500,000	200,000
Expiration period	10 years	5 years						9 months		3 years
Options granted						400,000
Weighted average grant date fair value				$ 1.86		$ 8.09
Options valued by Black Scholes pricing model						61,000
Weighted-average value per option granted													$ 3.02	$ 3.05	$ 2.75	$ 2.58	$ 2.72	$ 2.81	$ 2.13
Options valued by Monte Carlo simulation model				350,000
Cash received from stock option exercises						41
Common stock received in lieu of cash payment for stock option exercises						14,739
Aggregate intrinsic value of options exercised						162
Stock option compensation expense								141	299		468	237
Taxes related to stock option compensation expense								59	125		196	99
Unrecognized compensation cost related to stock options granted-but-not-yet-vested that are expected to become exercisable			762			762
Weighted-average period cost is to be recognized								1 year			3 years
Forfeiture provisions lapse period for non-employee directors						1 year
Transfer restrictions lapse period for non-employee directors						6 months
Unrecognized compensation cost related to non-vested restricted stock awards			$ 181			$ 181

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Contingencies and Legacy Environmental Commitments - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended		1 Months Ended			3 Months Ended				9 Months Ended
	Dec. 31, 2012 Location	Dec. 31, 2011	Mar. 31, 2012	Mar. 31, 2013 Forecast [Member]	Jul. 31, 2001 Glen Head, New York [Member]	Dec. 31, 2012 Glen Head, New York [Member]	Dec. 31, 2005 Glen Head, New York [Member]	Jun. 30, 2005 Federal Labs [Member]	Dec. 31, 2003 Federal Labs [Member]	Jun. 30, 1999 Federal Labs [Member]	Dec. 31, 2012 Federal Labs [Member]	Dec. 31, 2012 Federal Labs [Member] Minimum [Member]	Dec. 31, 2012 Federal Labs [Member] Maximum [Member]	Dec. 31, 2012 Other properties [Member]	Dec. 31, 2012 Four environmental proceedings [Member]
Site Contingency [Line Items]
Aggregate environmental liability	$ 12,896		$ 13,535			$ 3,299					$ 5,660			$ 3,937	$ 100
Cost-sharing related to environmental liabilities	1,472		1,500
Environmental costs	939	778	1,177						200
Environmental costs, one year				1,225
Number of locations for participating in environmental assessments and remediation work	9
Time frame for environmental liabilities	30 years											20 years	30 years
Property "held for sale"						3,800
Sale of environmental remediation property					4,000
Appraised value of property					3,300		4,200
Additional environmental remediation expense									$ 200
Percentage of environmental costs paid by Federal Government								45.00%		50.00%

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Subsequent Events

9 Months Ended

Dec. 31, 2012

Subsequent Events

NOTE 16. Subsequent Events

On January 14, 2013, the Company announced it had entered into an amendment to the Company’s shareholder rights plan (the “Rights Plan”) increasing the threshold by which the rights are triggered from 10% to 12.5%. The Rights Plan was adopted to ensure the fair treatment of all shareholders in connection with any take-over bid for the common stock of the Company. The Rights Plan seeks to provide shareholders with adequate time to properly assess a take-over bid without undue pressure. It also is intended to provide the Company’s Board of Directors with time to fully consider an unsolicited take-over bid and, if appropriate, to take requisite action to maximize shareholder value.

The amendment to the Rights Plan was unanimously approved by the Board of Directors. It was not adopted in response to any proposal to acquire control of the Company. The Board of Directors has deemed the amendment to be in the best interests of the Company because it enables stockholders to acquire up to 12.5% of the Company’s outstanding shares without meaningfully diminishing the protections of the Rights Plan. In the event that the Company’s risk of an adverse take-over bid increases in the future, the Company will assess whether further modifications to the Rights Plan are in the best interests of the Company.

Management has evaluated all events occurring through the date that the unaudited Condensed Consolidated Financial Statements have been issued, and has determined that all such events that are material to the unaudited Condensed Consolidated Financial Statements have been fully disclosed.

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Property, Equipment, and Related Depreciation (Tables)

9 Months Ended

Dec. 31, 2012

Estimated Useful Lives for Property

The estimated useful lives for property are as follows:

Machinery and equipment	3 to 10 years
Furniture and fixtures	3 to 10 years
Computer hardware and software	3 to 5 years
Leasehold improvements	10 years

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Employee Benefit Plans - Components of Net Periodic Benefit Cost (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 8	$ 9	$ 25	$ 28
Amortization of net (gain) loss	1	4	5	11
Net periodic cost	9	13	30	39
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	36	40	105	125
Amortization of net (gain) loss
Net periodic cost	$ 36	$ 40	$ 105	$ 125

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Property, Equipment, and Related Depreciation - Estimated Useful Lives for Property (Detail)	9 Months Ended
	Dec. 31, 2012
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Useful lives of property	10 years
Minimum [Member] | Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Useful lives of property	3 years
Minimum [Member] | Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Useful lives of property	3 years
Minimum [Member] | Computer hardware and software [Member]
Property, Plant and Equipment [Line Items]
Useful lives of property	3 years
Maximum [Member] | Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Useful lives of property	10 years
Maximum [Member] | Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Useful lives of property	10 years
Maximum [Member] | Computer hardware and software [Member]
Property, Plant and Equipment [Line Items]
Useful lives of property	5 years

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 2,920	$ 2,772
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Write-off of engineering project development qualification units	111
Depreciation and amortization	1,113	1,135
Non-cash reserve accretion	299	317
Stock based compensation	609	535
Provision for losses on accounts receivable	13	16
Deferred taxes-net	1,851	1,924
Changes in assets and liabilities:
Decrease in accounts receivable and other receivables	9,386	2,700
Increase in inventories	(6,152)	(5,832)
(Increase) decrease in other assets	(1,563)	496
(Decrease) increase in accounts payable	(282)	634
Increase (decrease) in accrued compensation	306	(91)
(Decrease) increase in accrued income taxes	(129)	19
Decrease in other liabilities	(429)	(346)
Net cash provided by operating activities	8,053	4,279
Cash flows from investing activities:
Capital expenditures	(265)	(627)
Capitalized qualification units		(1,638)
Net cash used in investing activities	(265)	(2,265)
Cash flows from financing activities:
Payments on long-term debt	(10,679)	(821)
Net borrowings (repayments) of other debt
Exercise of stock options	41	194
Net cash used in financing activities	(10,638)	(627)
(Decrease) increase in cash	(2,850)	1,387
Cash at beginning of period	12,683	6,381
Cash at end of period	9,833	7,768
Supplemental information:
Interest payments	83	253
Income tax payments	460	171
Non-cash financing activity for stock option exercise	$ 122	$ 82

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Property, Equipment, and Related Depreciation

9 Months Ended

Dec. 31, 2012

Property, Equipment, and Related Depreciation

NOTE 5. Property, Equipment, and Related Depreciation

Property and equipment are recorded at cost, and equipment is depreciated on a straight-line basis over its estimated economic useful life. Leasehold improvements are depreciated using the shorter of the estimated economic useful life or the term of the lease. Depreciation expense for the three and nine month periods ended December 31, 2012 was $350 and $1,033, respectively, and for the three and nine month periods ended December 31, 2011 was $358 and $1,051, respectively.

The estimated useful lives for property are as follows:

Machinery and equipment	3 to 10 years
Furniture and fixtures	3 to 10 years
Computer hardware and software	3 to 5 years
Leasehold improvements	10 years

The Company classified as real estate held for sale on the condensed consolidated balance sheets a property owned in Glen Head, New York that is currently under sales contract. The sale of the property is expected to be concluded upon completion of municipal approvals and soil remediation pursuant to the remediation plan approved by the New York Department of Environmental Conservation. The net sale proceeds are expected to be $3,800. See Note 14 for a discussion of environmental matters related to this site.

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Product Warranty (Tables)

9 Months Ended

Dec. 31, 2012

Changes in Carrying Amount of Accrued Product Warranty Costs

Changes in the carrying amount of accrued product warranty costs for the nine month period ended December 31, 2012 are summarized as follows:

Balance at March 31, 2012	$	318
Warranty costs incurred		(170	)
Change in estimates to pre-existing warranties		(9	)
Product warranty accrual		208
Balance at December 31, 2012	$	347

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Inventories - Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Inventories Net [Line Items]
Finished goods	$ 494	$ 512
Work in process	8,618	6,340
Purchased and manufactured parts	14,710	10,473
Inventories, gross	23,822	17,325
Reserve for slow moving and obsolescence	(3,039)	(2,694)
Total	$ 20,783	$ 14,631

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Segment, Geographic Location, and Customer Information

9 Months Ended

Dec. 31, 2012

Segment, Geographic Location, and Customer Information

NOTE 15. Segment, Geographic Location, and Customer Information

Our products and related services aggregate into one reportable segment - sophisticated mission equipment for specialty aerospace and defense applications. The nature of the production process (assemble, inspect, and test) is similar for all products, as are the customers and distribution methods.

Net sales of 10% or more of total revenues were derived from two and three customers for the three and nine month periods ended December 31, 2012 respectively, and four customers for the three and nine month periods ended December 31, 2011 are summarized as follows.

	Three Months Ended						Nine Months Ended
	December 31, 2012			December 31, 2011			December 31, 2012			December 31, 2011
Customer A		43	%		29	%		25	%		29	%
Customer B		18			20			21			23
Customer C			*		13			13			12
Customer D			*		15				*		12

* Represents less than 10% of net sales.

Net sales below show the geographic location of customers for the three and nine month periods ended December 31, 2012 and December 31, 2011:

	Three Months Ended				Nine Months Ended
Location	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
United States	$	14,730	$	11,659	$	37,792	$	36,000
England		1,230		880		3,798		3,773
Italy		966		2,038		4,594		3,483
Other European countries		1,117		766		3,037		2,155
Pacific and Far East		603		1,872		2,161		3,400
Other international		1,524		2,384		6,622		6,916
Total	$	20,170	$	19,599	$	58,004	$	55,727