10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended September 30, 2014

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 October 27, 2014, the total number of outstanding shares of common stock was 9,816,058.

INDEX

		Page No.
PART 1	Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and March 31, 2014	4
	Condensed Consolidated Statements of Operations for the Three and Six Month Periods Ended September 30, 2014 and September 30, 2013 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Six Month Periods Ended September 30, 2014 and September 30, 2013 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6 - 16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17 - 24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25
Item 4.	Controls and Procedures	25
PART II.	Other Information
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	26
Item 6.	Exhibits	26
SIGNATURES		27
EXHIBITS

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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 six month periods ended September 30, 2014 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 consolidated financial statements and related notes thereto contained in the Company’s Annual Report on Form 10-K filed on June 5, 2014 with the Securities and Exchange Commission (“SEC”) for the fiscal year ended March 31, 2014. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to these rules.

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. Presently the Company is operating in its fiscal year 2015, which commenced on April 1, 2014 and will end on March 31, 2015. 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]

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BREEZE-EASTERN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands of Dollars, Except Share Data)

ASSETS	(Unaudited) September 30, 2014			(Audited) March 31, 2014
CURRENT ASSETS:
Cash	$	12,876		$	6,021
Accounts receivable (net of allowance for doubtful accounts of $240 at September 30, 2014 and $323 at March 31, 2014)		14,785			24,191
Inventories – net		22,586			18,909
Prepaid expenses and other current assets		1,445			1,868
Deferred income taxes		4,739			4,608
Total current assets		56,431			55,597
PROPERTY:
Property and equipment		19,941			19,767
Less accumulated depreciation and amortization		14,167			13,435
Property – net		5,774			6,332
OTHER ASSETS:
Deferred income taxes – net		3,755			4,197
Goodwill		402			402
Real estate held for sale		3,800			3,800
Qualification units and pre-qualification assets – net		4,019			4,385
Other		5,135			5,080
Total other assets		17,111			17,864
TOTAL ASSETS	$	79,316		$	79,793
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revolving credit facility	$	—		$	—
Current portion of long-term debt		—			—
Accounts payable – trade		7,077			7,442
Accrued compensation		1,951			2,875
Accrued income taxes		303			358
Other current liabilities		5,259			5,214
Total current liabilities		14,590			15,889
LONG-TERM DEBT, NET OF CURRENT PORTION		—			—
OTHER LONG-TERM LIABILITIES		12,518			13,420
COMMITMENTS AND CONTINGENCIES (Note 14)		—			—
TOTAL LIABILITIES		27,108			29,309
STOCKHOLDERS’ EQUITY
Preferred stock – authorized, 300,000 shares; none issued		—			—
Common stock – authorized, 100,000,000 shares of $.01 par value; issued, 10,265,707  shares at September 30, 2014 and 10,148,944 shares at March 31, 2014		102			101
Additional paid-in capital		99,998			98,707
Accumulated deficit		(40,866	)		(41,344	)
Accumulated other comprehensive income		3			3
		59,237			57,467
Less treasury stock, at cost – 449,649 shares at September 30, 2014 and 445,067 shares at March 31, 2014		(7,029	)		(6,983	)
Total stockholders’ equity		52,208			50,484
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	79,316		$	79,793

See notes to condensed consolidated financial statements.

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BREEZE-EASTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

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

	Three Months Ended					Six Months Ended
	September 30, 2014		September 30, 2013			September 30, 2014		September 30, 2013
Net sales	$	17,671	$	15,464		$	35,590	$	35,032
Cost of sales		10,686		10,051			23,039		22,814
Gross profit		6,985		5,413			12,551		12,218
Selling, general, and administrative expenses		3,707		3,808			7,668		6,541
Engineering expense		2,221		1,910			4,046		3,729
Operating income (loss)		1,057		(305	)		837		1,948
Interest expense		8		15			16		33
Other expense – net		33		30			62		51
Income (loss) before incomes taxes		1,016		(350	)		759		1,864
Income tax provision (benefit)		376		(133	)		281		708
Net income (loss)	$	640	$	(217	)	$	478	$	1,156
Earnings (loss) per common share:
Basic net income (loss) per share	$	0.07	$	(0.02	)	$	0.05	$	0.12
Diluted net income (loss) per share		0.06		(0.02	)		0.05		0.12
Weighted-average basic shares outstanding		9,766,000		9,644,000			9,741,000		9,608,000
Weighted-average diluted shares outstanding		9,962,000		9,644,000			9,937,000		9,705,000

See notes to condensed consolidated financial statements.

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BREEZE-EASTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In Thousands of Dollars)

	Six Months Ended
	September 30, 2014			September 30, 2013
Cash flows from operating activities:
Net income	$	478		$	1,156
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Write-off of engineering project development qualification units		67			—
Shipped qualification assets		2			743
Depreciation and amortization		1,078			749
Non-cash reserve accretion		149			174
Stock based compensation		599			350
Provision for losses on accounts receivable		9			9
Deferred taxes-net		311			561
Changes in assets and liabilities:
(Increase) decrease in accounts receivable and other receivables		9,397			3,318
(Increase) decrease in inventories		(3,677	)		(6,958	)
(Increase) decrease in other assets		363			(365	)
Increase (decrease) in accounts payable		(365	)		1,425
Increase (decrease) in accrued compensation		(939	)		(1,335	)
Increase (decrease) in accrued income taxes		(55	)		(741	)
Increase (decrease) in other liabilities		(1,006	)		(1,660	)
Net cash provided by (used in) operating activities		6,411			(2,574	)
Cash flows from investing activities:
Capital expenditures		(174	)		(447	)
Capitalized qualification units and pre-qualification assets		(44	)		(744	)
Net cash used in investing activities		(218	)		(1,191	)
Cash flows from financing activities:
Payments on long-term debt		—			—
Net borrowings (repayments) of other debt		—			—
Payment of debt issue costs		—			(33	)
Exercise of stock options		662			607
Net cash provided by financing activities		662			574
Increase (decrease) in cash		6,855			(3,191	)
Cash at beginning of period		6,021			6,688
Cash at end of period	$	12,876		$	3,497
Supplemental information:
Interest payments	$	13		$	26
Income tax payments		24			980

See notes to condensed consolidated financial statements.

NOTE  1.     Financial Presentation

The unaudited, Condensed Consolidated Balance Sheets, 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 financial statements 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 (loss) 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

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treasury stock method. The diluted loss per share is computed using the same weighted-average number of shares as the basic earnings (loss) per share computation.

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

	Three Months Ended				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Basic earnings (loss) per Common Share:
Weighted-average common shares outstanding for basic earnings (loss) per share calculation		9,766,000		9,644,000		9,741,000		9,608,000
Diluted earnings (loss) per Common Share:
Weighted-average common shares outstanding		9,766,000		9,644,000		9,741,000		9,608,000
Stock options (a)		196,000		—		196,000		97,000
Weighted-average common shares outstanding for diluted earnings (loss) per share calculation		9,962,000		9,644,000		9,937,000		9,705,000

(a) During the three and six month periods ended September 30, 2014, options to purchase 207,500 shares of common stock and during the six month period ended September 30, 2013, options to purchase  271,000 shares of common stock were excluded from the computation of diluted earnings (loss) per share because the exercise process of these options were greater than the average market price of the common share and the effect of their conversion would be antidilutive. During the three month period ended September 30, 2013 all stock options are excluded due to the Company’s net loss.

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 six month periods ended September 30, 2014, includes stock-based compensation expense of $179 net of tax, or $0.02 per diluted share, and $377 net of tax, or $0.04 per diluted share, respectively. Net income (loss) for the three and six month periods ended September 30, 2013, includes stock- based compensation expense of $108 net of tax, or $0.01 per diluted share, and $217 net of tax, or $0.02 per diluted share, respectively. Stock based compensation expense is included in selling, general and administrative expenses. Additional compensation cost will be recognized as new stock-based 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” and together with the 1999 Plan, the 2004 Plan and the 2006 Plan collectively, the “Plans”).

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. The 2004 Plan expired in September 2014, and the 1999 Plan expired in July 2009, and no further grants or awards may be made under these plans. Under the 2004 Plan, no unexercised options remain outstanding, and under the 1999 Plan, unexercised options granted in fiscal year 2006 remain outstanding.

Under each of the Plans, option exercise prices equal the fair market value of the common shares at their respective grant dates. Options granted to officers and employees expire no later than 10 years after the date of the grant. In most circumstances prior to fiscal year 2014, options granted to directors, officers, and employees generally 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.

Pursuant to the terms of an employment agreement, effective June 16, 2014, between the Company and Serge Dupuis, Chief Financial Officer and Treasurer of the Company, the Company granted to Mr. Dupuis an option to purchase 200,000 shares, which option has a weighted average grant date fair value equal to $12.78.  This option was reported in the Company’s Current Report on Form 8-K filed on June 17, 2014.

As noted above, in connection with the hiring of Serge Dupuis as the Company’s Chief Financial Officer and Treasurer, the terms of the Company’s employment offer to Mr. Dupuis include a commitment to award him an option to purchase 200,000 shares of common stock

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of the Company (the “Dupuis Option”).  At the time of the issuance of the award, the Company and Mr. Dupuis entered into an option grant agreement indicating that the option would be subject to, and the option shares would be allocated from, the Company’s 2012 Incentive Compensation Plan (the “2012 Plan”). On July 3, 2014, the Company determined that the allocation of that number of option shares from the 2012 Plan would be in excess of the 2012 Plan’s per person, per year share limit, and, therefore, 50,000 of the option shares would need to be allocated from the Company’s 2006 Incentive Compensation Plan or the Company would need to modify the grant to be an “inducement grant” in order for the Company to fulfill its obligations to Mr. Dupuis.  As a result, on July 7, 2014 the Company and Mr. Dupuis agreed to modify the terms of his award such that the number of shares allocated from the 2012 Plan in respect of the Dupuis Option is 150,000 and the remaining 50,000 shares would be allocated from and subject to the Company’s 2006 Incentive Compensation Plan.

On August 18, 2014, in connection with the hiring of Bradley Repp, Vice President of Product Development, the Company granted to Mr. Repp an option to purchase 200,000 shares of our common stock, which option has a weighted average grant date fair value equal to $10.40. This award to Mr. Repp was made outside of the Company’s stockholder approved equity incentive plans and was approved by the Incentive and Compensation Committee of the Company’s Board of Directors, as an inducement material to Mr. Repp entering into employment with the Company pursuant to Section 711(a) of the NYSE MKT Company Guide. This option was reported in the Company’s Current Report on Form 8-K filed on August 18, 2014.

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 50,000 of the total 400,000 options granted in fiscal 2015 and 19,000 of the total 158,000 options granted in fiscal 2014. The Black-Scholes weighted-average value at each grant date per option granted in fiscal 2015 was $4.61 and $3.85, and in fiscal 2014 was $3.03 and $3.01. 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:

	Dividend yield			Volatility		Risk-free interest rate		Expected term of options (in years)	Forfeiture adjustment
2015 $4.61 value per option		0.0	%	30.0	%	2.1	%	7.0	0.0	%
2015 $3.85 value per option		0.0	%	30.9	%	2.2	%	7.0	0.0	%
2014 $3.03 value per option		0.0	%	31.2	%	1.3	%	7.0	0.0	%
2014 $3.01 value per option		0.0	%	31.2	%	1.3	%	7.0	0.0	%

The remaining 350,000 options granted in fiscal 2015 had a weighted-average value per option of $3.05 and $2.49. The remaining 139,000 options granted in fiscal 2014 had a weighted-average value per option of $1.90 and $1.71 at the grant date. These valuations 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 usesthe 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:

	2015 $3.05 value per option		2015 $2.49 value per option		2014 $1.90 value per option		2014 $1.71 value per option
Dividend yield	0.0	%	0.0	%	0.0	%	0.0	%
Volatility	32.3	%	33.7	%	34.9	%	34.9	%
Risk-free interest rate	2.6	%	2.5	%	1.9	%	1.9	%
Expected term of options (in years)	10.0		10.0		10.0		10.0
Forfeiture adjustment	1.4	%	1.2	%	1.1	%	1.8	%
Suboptimal behavior factor	1.6		1.6		1.7		1.7

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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		Approximate Remaining Contractual Term (Years)		Weighted- Average Exercise Price
Outstanding at March 31, 2014	851,165		$	1,516		8	$	8.15
Granted	400,000			—		10		11.59
Exercised	(88,833	)		339		—		7.46
Canceled or expired	(10,332	)		—		—		8.59
Outstanding at September 30, 2014	1,152,000			1,651		9		9.18
Options exercisable at September 30, 2014	527,000			1,076		8		8.64
Unvested options expected to become exercisable after September 30, 2014	625,000			633		9		9.79
Shares available for future option grants at September 30, 2014 (a)	285,376

(a) May be decreased by restricted stock grants.

Cash received from stock option exercises during the first six months of fiscal 2015 was approximately $662. The aggregate intrinsic value of options exercised during the first six months of fiscal 2015 was approximately $339. 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 2015.

During the first six months of fiscal 2015 and fiscal 2014, stock option compensation expense recorded in selling, general and administrative expenses was $487 and $248, respectively, before taxes of $180 and $94, respectively. As of September 30, 2014, there was $1,156 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 two 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 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, 2014		29,807		$	8.93
Granted		27,930			10.07
Vested		(22,924	)		9.11
Cancelled		(3,495	)		9.04
Non-vested at September 30, 2014		31,318			9.81

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 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 contained 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 six months of fiscal 2015 and fiscal 2014, compensation expense related to restricted stock awards recorded in selling, general and administrative expenses was $112 and $102, respectively,

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before taxes of $41 and $39, respectively. As of September 30, 2014, there was approximately $291 of unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a period of approximately two years.

NOTE  4.    Inventories

Inventories are summarized as follows:

	September 30, 2014			March 31, 2014
Finished goods	$	841		$	2,751
Work in process		7,899			5,932
Purchased and manufactured parts		16,683			13,155
		25,423			21,838
Reserve for slow moving and obsolescence		(2,837	)		(2,929	)
Total	$	22,586		$	18,909

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 eventually be scrapped. Accordingly, the Company uses these two factors in determining the amount of the reserve.

NOTE  5.      Property, Equipment, and Related Depreciation and Amortization

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 amortized using the shorter of the estimated economic useful life or the term of the lease. Depreciation and amortization expense for the three month and six month periods ended September 30, 2014 was $383 and $733, respectively, and for the three and six month periods ended September 30, 2013 was $339 and $670, respectively.

Average 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 currently under sales contract owned in Glen Head, New York. 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

All 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 six month period ended September 30, 2014 are summarized as follows:

Balance at March 31, 2014	$	284
Warranty costs incurred		(80	)
Change in estimates to pre-existing warranties		—
Product warranty accrual		153
Balance at September 30, 2014	$	357

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NOTE  7.     Other Current Liabilities

Other current liabilities consist of the following:

	September 30, 2014		March 31, 2014
Engineering project reserves	$	1,490	$	1,530
Environmental reserves – Note 14		1,836		1,673
Accrued medical benefits cost		768		621
Accrued commissions		440		618
Other		725		772
Total	$	5,259	$	5,214

NOTE  8.      Income Taxes

Income taxes for the six month period ended September 30, 2014 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 September 30, 2014, the Company has available an Alternative Minimum Tax Credit of approximately $130 and is available to reduce future federal taxes. A valuation allowance of $265 exists 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 September 30, 2014, the Company had no unrecognized tax benefits for uncertain tax positions and the Company does not expect the liability for uncertain tax positions to increase during the fiscal year.

NOTE  9.      Long-Term Debt Payable to Banks

Revolving Credit Facility – The Company has a five-year Revolving Credit Facility (the “Revolving Credit Facility” or “Facility”),which provides the Company with a $20,000 unsecured revolving line of credit with an accordion feature that may increase the amount to 2.5 times EBITDA (as defined in the Facility) to a maximum of $35,000. The term of the Facility is through August 26, 2018.

The Company has the option, subject to bank approval, during the five-year term of the Revolving Credit Facility, to convert the Facility to a secured credit facility which increases the borrowing limit to 3.5 times EBITDA (as defined in the Facility) up to a maximum of $35,000. As of September 30, 2014, the Company has not exercised this option.

Amounts outstanding under the Revolving Credit Facility generally accrue interest at a floating rate, adjusted monthly. The floating rate is the then-current London Interbank Offered Rate (“LIBOR”) monthly floating rate plus an applicable margin based on the Company’s ratio of funded debt to EBITDA. The Company also must pay a quarterly unused commitment fee of 0.125%. Amounts outstanding under the Revolving Credit Facility are generally due and payable on the expiration date of the Facility (August 26, 2018), and the Company can elect to prepay some or all of the outstanding balance from time to time without penalty. Up to $8,000 of the available funds can be used to support the issuance of letters of credit. During the first six months of fiscal 2015, the Revolving Credit Facility had a blended interest rate of approximately 0.125%, which represents a commitment fee on the average daily unused portion of the Facility.  

The Revolving Credit Facility includes customary representations and warranties and requires the Company to comply with customary covenants, including, among other things, the following financial covenants: maintain at least a specified minimum level of tangible net worth; maintain a ratio of funded debt to EBITDA not exceeding a specified amount; and maintain a ratio of EBIT (as defined in the Facility) to cash interest expense not below a specified amount.

The Revolving Credit Facility does not restrict the Company’s ability to pay cash dividends on shares of its common stock, subject to maintaining $5,000 available under the Facility after the dividend payment and complying with the financial covenants included in the Facility. In addition, the Revolving Credit Facility does not restrict the Company’s ability to acquire or purchase other businesses or their assets provided that the businesses or assets are in a line of business which is substantially similar to the Company’s current business.

As of September 30, 2014, there were no outstanding borrowings under the Facility, $202 in outstanding (standby) letters of credit, and $19,798 in unsecured revolving line of credit availability. As of September 30, 2014, the Company was in compliance with the covenant provisions of the Facility.

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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.

For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company develops unobservable inputs based on the best information and analysis available. The source of this information may include internal Company functional experts and external sources. The analysis includes internal valuation input and judgments and the significance of any unobservable inputs and data.

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 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 $208 and $411, respectively, for the three and six month periods ended September 30, 2014 and $244 and $526, respectively, for the three and six month periods ended September 30, 2013.

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 $3,209 and $3,479 as of September 30, 2014 and March 31, 2014, 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.

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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				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Interest cost	$	5	$	8	$	11	$	15
Amortization of net (gain) loss		—		7		—		15
Net periodic cost	$	5	$	15	$	11	$	30

	Pension Plan
	Three Months Ended				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Interest cost	$	28	$	28	$	57	$	56
Amortization of net (gain) loss		3		—		5		—
Net periodic cost	$	31	$	28	$	62	$	56

NOTE  12.      Concentration of Credit Risk

The Company is subject to concentration of credit risk primarily with its cash and accounts receivable. At times, the Company maintains its cash in bank deposit accounts in excess of the FDIC insured amount which is $250. 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 September 30, 2014, the Company had no other significant concentrations of credit risk.

NOTE  13. New Accounting Standards

In June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606. ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer.Step 2: Identify the performance obligations in the contract.Step 3: Determine the transaction price.Step 4: Allocate the transaction price to the performance obligations in the contract.Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. An entity should apply the amendments in this ASU using one of the following two methods:1. Retrospectively to each prior reporting period 2. Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. The Company is currently considering the impact that the adoption of this guidance will have 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 many 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

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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 ASC 450 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 September 30, 2014 and March 31, 2014, the aggregate environmental liability was $9,677 and $10,323, respectively, included in other current liabilities and other long term liabilities on the condensed consolidated balance sheets, before cost-sharing of approximately $1,344 and $1,918 at September 30, 2014 and March 31, 2014, respectfully, that is included in other current assets and other long term assets, net of fees to be paid to a third party relating to this arrangement.  The Company’s environmental liability reserves are not reduced for any potential cost-sharing reimbursements.

In the first six months of fiscal 2015 and the first six months fiscal 2014, the Company spent $383 and $602, respectively, on environmental costs, and for the entire fiscal 2014 the Company spent $1,487. These costs are charged against the environmental liability reserve and do not impact net income (loss). 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 seven locations, including certain former facilities. Due to the nature of environmental remediation and monitoring work, such activities can extend for up to thirty 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 but not limited to the following: 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.

In addition, and as disclosed below, 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.

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 $3,158 for the Glen Head site at September 30, 2014. 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.  

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

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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.

In the second quarter of fiscal 2014, the Company and the PaDEP executed a first amendment to the 2003 Consent Order for additional remediation work within the site covered by the 2003 Consent Order. The Company submitted an environmental cleanup plan for this additional remediation work during the second quarter of fiscal 2014.

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 Federal Labs site subject to the 1999 Consent Order. The U.S. Government cost-sharing receivable is classified primarily as other assets on the condensed consolidated balance sheets.  

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. In May 2014, the Pennsylvania Department of Environmental Protection (“PADEP”) approved the final remedial action report for the site subject to the 2001 Consent Order and as a result of this approval the Company believes that no further on-site work is required.  The remaining technical fees from the Company’s technical advisors are not expected to exceed $10.  Accordingly, the Company reduced the environmental reserve by $412 in June 2014.

In March 2014, the Company reached an agreement in principle with the U.S. Government with respect to environmental response costs for the Fed Labs site subject to the 2003 Consent Order. Under this agreement, the U.S. Government will pay an amount equal to approximately 26% of the environmental response costs incurred prior to December 31, 2012 and 33.5% of the ongoing environmental response costs incurred thereafter.  

At September 30, 2014, the environmental liability reserve at Federal Labs was $4,344. 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.

There are other properties that have a combined environmental liability of $2,175 at September 30, 2014.

The environmental activity is summarized as follows:

Balance at March 31, 2014	$	10,323
Environmental costs incurred		(383	)
Interest accretion		149
Reduction of environmental reserve-Part of Federal Labs site subject to the 2001 Consent Order		(412	)
Balance at September 30, 2014	$	9,677

Litigation

Certain other claims, suits, and complaints arising in the ordinary course of business have been filed or are pending against us. We believe, after consultation with legal counsel handling these specific matters, all such matters are reserved for or adequately covered by insurance or, if not so covered, are without merit or are of such kind, or involve such amounts, as would not be expected to have a material effect on our financial position or results of operations if determined adversely against us.

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.

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Net sales of 10% or more of total revenues derived from customers for the three and six month periods ended September 30, 2014 and 2013 are summarized as follows.

	Three Months Ended						Six Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Customer A		17	%		21	%		12	%		28	%
Customer B		17			18			18			18
Customer C		14			23			11			18
Customer D		11			*			20			*
Customer E		*			10			*			*

* Represents less than 10% of net sales.

As of September 30, 2014, 22%, 20% and 16% of net accounts receivable were derived from three major customers, respectively. As of September 30, 2013, 33%, 21% and 10% of net accounts receivable were derived from three major customers, respectively.

Net sales below show the geographic location of customers for the three and six month periods ended September 30, 2014 and September 30, 2013:

	Three Months Ended				Six Months Ended
Location	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
United States	$	10,278	$	9,796	$	18,829	$	22,189
Germany		2,013		—		6,400		326
Italy		1,613		2,206		2,282		4,859
England		475		1,665		1,104		1,989
Other European countries		1,401		450		2,776		1,016
Pacific and Far East		837		556		2,639		1,147
Other international		1,054		791		1,560		3,506
Total	$	17,671	$	15,464	$	35,590	$	35,032

NOTE  16.Subsequent Events

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

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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 in this report to the “Company,” the “registrant” “we,” “us” or “our” and similar terms 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 “Item 1A. Risk Factors” contained in the Company’s Annual Report on Form 10-K filed with the SEC on June 5, 2014 for the fiscal year ended March 31, 2014, and under and Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this report.

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. 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. United States defense spending reductions and redirections could have a material impact on our revenues and earnings in future periods. Similarly, European government military and spending reductions could have a material impact on revenues and earnings in future periods. However, we believe that the primary military 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.

We have experienced product development schedule delays and increased investment due to OEM customer extended development timetables and due to our own product development progress. The Airbus A400M military transport aircraft development has taken longer than originally anticipated, but we commenced shipping in the third quarter of fiscal 2014 and we expect to complete engineering qualification in the next several months.

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

($ In Thousands Except Share Amounts)

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, cargo winches, tie-down equipment and weapons handling systems. 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 Sikorsky H-60 Blackhawk and Naval Hawk, CH-53K King Stallion, Bell-Boeing V-22 Osprey, Boeing CH-47 Chinook, Eurocopter Ecureuil, Dolphin, EH-101 Merlin/Cormorant, Changhe Z-11, Agusta Westland A-W109, AW119 and 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 Sikorsky CH-53 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, CASA CN-235, CASA C-295, and Airbus A400M.

Once our products are qualified and approved for use with a particular aircraft model, sales of products and services generally continue for the life of the aircraft model, which can be for 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 also provide actuators and specialty gear boxes 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 service centers 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.

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.

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

($ In Thousands Except Share Amounts)

CRITICAL ACCOUNTING POLICIES

For information regarding our critical accounting policies, please refer to the discussion provided in our Annual Report on Form 10-K for our fiscal year ended March 31, 2014, as filed with the SEC on June 5, 2014, 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 September 30, 2014 Compared with Three Months Ended September 30, 2013

	Three Months Ended						Increase/(Decrease)
	September 30, 2014			September 30, 2013			$			%
Products	$	13,234		$	9,872		$	3,362			34.1	%
Services		4,437			5,592			(1,155	)		(20.7	)
Net sales		17,671			15,464			2,207			14.3
Products		8,373			6,222			2,151			34.6
Services		2,313			3,829			(1,516	)		(39.6	)
Cost of sales		10,686			10,051			635			6.3
Gross profit		6,985			5,413			1,572			29.0
As a % of net sales		39.5	%		35.0	%		N/A			4.5	%Pt
Selling, general, and administrative expenses		3,707			3,808			(101	)		(2.7	)%
Engineering expense		2,221			1,910			311			16.3
Total operating expenses		5,928			5,718			210			3.7
Operating income (loss)		1,057			(305	)		1,362			446.6
Interest expense		8			15			(7	)		(46.7	)
Income tax provision (benefit)		376			(133	)		509			382.7
Effective tax rate		37.0	%		38.0	%		N/A			(1.0	)%Pt
Net income (loss)	$	640		$	(217	)	$	857			394.9	%

Net Sales. Fiscal 2015 second quarter net sales of $17,671 were $2,207, or 14.3%, higher than net sales of $15,464 in the fiscal 2014 second quarter. Fiscal 2015 second quarter products sales of $13,234 were $3,362, or 34.1%, higher than prior year primarily due to higher new equipment hoist & winch volume to the U.S. Government and Airbus and higher spare parts hoist & winch volume to the US and Foreign Governments.

Fiscal 2015 second quarter services sales of $4,437 were lower by $1,155, or 20.7%, compared with the prior year primarily due to lower Overhaul & Repair volume and lower engineering billing.

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 2015 revenues will be consistent with this historical pattern.

Cost of Sales. Products cost of sales of $8,373 in the fiscal 2015 second quarter were $2,151, or 34.6%, higher than the same period in fiscal 2014 primarily due to increased new production volume. Cost of services provided of $2,313 in the fiscal 2015 second quarter was $1,516, or 39.6%, lower than the prior year due primarily to lower engineering volume and lower overhaul and repair volume.  

Gross profit. Gross profit of $6,985 in the fiscal 2015 second quarter was $1,572, or 29.0%, higher than the same period in fiscal 2014. The increase is primarily due to increased new equipment and spare parts volume and also to higher profitability for spare parts. The new equipment volume was favorable due to higher volume to the U.S. and foreign governments. As a percent of sales, the gross profit margin was 39.5% for the fiscal 2015 second quarter compared with 35.0% for the prior year. Gross profit as a percent of sales increased primarily due to spare parts sales volume and profitability.

19

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

($ In Thousands Except Share Amounts)

Operating Expenses. Total operating expenses were $5,928, or 33.5% of net sales, in the second quarter of fiscal 2015 compared with $5,718 or 37.0% of net sales in the comparable prior year period. Selling, general, and administrative (“SG&A”) expenses of $3,707 in the fiscal 2015 second quarter were lower than the $3,808 in the second quarter of fiscal 2014. As a percent of sales, SG&A was 21.0% in the fiscal 2015 second quarter versus 24.6% in the comparable period last year. The decrease as a percent of sales is due primarily to the higher sales in this fiscal year.

Engineering expenses were $2,221 in the second quarter of fiscal 2015 compared with $1,910 in the second quarter of fiscal 2014. The increase results from one-time costs associated with an internal reorganization.

Interest Expense. Interest expense was $8 during the second quarter of fiscal 2015 versus $15 in the second quarter of fiscal 2014.  The decrease is due to lower interest rates on the unused portion of our Revolving Credit Facility.

Income tax provision (benefit). Income tax provision was $376 in the second quarter of fiscal 2015, compared with an income tax benefit of $133 in the second quarter of fiscal 2014. Income taxes for the three month periods ended September 30, 2014 and September 30, 2013 were computed using the effective tax rates of 37.0% and 38.0%, respectively, 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 (loss). Net income was $640, or a $0.06 per diluted share, in the second quarter of fiscal 2015, compared with net loss of $217, or a negative $0.02 per diluted share, in the fiscal 2014 second quarter. The increase is due to the higher gross profit resulting from higher sales and higher margins, partly offset by higher engineering costs.

New Orders. New products and services orders received during the three months ended September 30, 2014 increased by 11.0% to $24,178 compared with $21,816 during the three months ended September 30, 2013. The increase was due primarily to higher orders from the U.S. Government.

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 $52,983 at September 30, 2014 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.

Backlog at September 30, 2014 was $126,532, compared with $119,464 at March 31, 2014, and $117,858 at September 30, 2013. These figures include $69,372, $70,853, and $70,816, respectively, for the Airbus A400M military transport aircraft.

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 1.4 for the fiscal 2015 and fiscal 2014 second quarters.

20

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

($ In Thousands Except Share Amounts)

Six Months Ended September 30, 2014 Compared with Six Months Ended September 30, 2013

	Six Months Ended						Increase/(Decrease)
	September 30, 2014			September 30, 2013			$			%
Products	$	26,942		$	23,428		$	3,514			15.0	%
Services		8,648			11,604			(2,956	)		(25.5	)
Net sales		35,590			35,032			558			1.6
Products		18,065			14,833			3,232			21.8
Services		4,974			7,981			(3,007	)		(37.7	)
Cost of sales		23,039			22,814			225			1.0
Gross profit		12,551			12,218			333			2.7
As a % of net sales		35.3	%		34.9	%		N/A			0.4	%Pt
Selling, general, and administrative expenses		7,668			6,541			1,127			17.2	%
Engineering expense		4,046			3,729			317			8.5
Total operating expenses		11,714			10,270			1,444			14.1
Operating income		837			1,948			(1,111	)		(57.0	)
Interest expense		16			33			(17	)		(51.5	)
Income tax provision		281			708			(427	)		(60.3	)
Effective tax rate		37.0	%		38.0	%		N/A			(1.0	)%Pt
Net income	$	478		$	1,156		$	(678	)		(58.7	)%

Net Sales. Fiscal 2015 first six months net sales of $35,590 increased by $558, or 1.6%, from net sales of $35,032 in the first six months of fiscal 2014.

Product sales in the first six months of fiscal 2015 were $26,942, an increase of $3,514, or 15.0%, from $23,428 in the corresponding prior year period. The increase is primarily due to higher new equipment winch volume to Airbus, offset by lower spare parts volume to international customers.

Service sales in the first six months of fiscal 2015 were $8,648, a decrease of $2,956, or 25.5%, from $11,604 in the corresponding prior year period due to lower overhaul & repair volume to the U.S. Government and international OEM’s and lower engineering billing.

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 2014 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 2015 revenues will be consistent with this historical pattern.

Cost of Sales. Products cost of sales of $18,065 in the fiscal 2015 first six months were 21.8% higher than the corresponding prior-year period primarily due to the increased new equipment volume. Cost of services provided of $4,974 in the fiscal 2015 first six months were $3,007 lower than the corresponding prior-year period due to lower overhaul & repair volume and lower engineering billing.

Gross profit. Gross profit of $12,551 in the fiscal 2015 first six months was $333, or 2.7% higher than the same period in fiscal 2014. Gross profit dollars improved primarily from the higher sales volume of new equipment to Airbus, significant reduction in engineering losses offset by lower volume of spares and overhaul & repair.  As a percent of sales, the gross profit margin was 35.3% for the fiscal 2015 first six months compared with 34.9% for the prior year. Gross profit as a percent of sales improved primarily due to billable engineering.

21

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

($ In Thousands Except Share Amounts)

Operating Expenses. Total operating expenses were $11,714, or 32.9% of net sales, in the first six months of fiscal 2015 compared with $10,270, or 29.3% of net sales, in the comparable prior-year period. Selling, general, and administrative (“SG&A”) expenses were $7,668 in the fiscal 2015 first six months compared with $6,541 in the first six months of fiscal 2014, an increase of $1,127 primarily explained by the significant reduction of the environmental liability experienced in the fiscal 2014 first quarter of $1,207 recorded for the previously-owned property in Wyoming, Illinois. A reduction of $412 in environmental liability was also recorded in the fiscal 2015 first quarter following the approval of the final remedial action plan for the Fed Labs Saltsburg, Pennsylvania site subject to the 2001 Consent Order. Higher SG&A costs were also incurred during the first six months of fiscal 2015 as a result of the CFO transition costs of $593. Excluding the benefit from the environmental reserve reduction, SG&A increased by $332 due to CFO transition costs. As a percent of sales, SG&A was 21.5% (22.7% excluding the reserve reversal benefit) in the fiscal 2015 first six months versus 18.7% in the comparable period last year (22.1% excluding the reserve reversal benefit).

Engineering expenses were $4,046 in the first six months of fiscal 2015 compared with $3,729 in the first six months of fiscal 2014. The increase is primarily due to one-time costs associated with an internal reorganization.

Interest Expense. Interest expense was $16 in the fiscal 2015 first six months versus $33 in fiscal 2014, and represents amortization of debt origination costs and the unused commitment fee on our Revolving Credit Facility. Rates for the unused commitment fee were lower in the first six months of fiscal 2015 compared with the first six months of fiscal 2014 accounting for the decrease in interest expense.

Income tax provision. Income tax expense was $281 in the first six months of fiscal 2015 versus $708 in the first six months of fiscal 2014. The decrease is due to lower pre-tax income due primarily to higher SG&A and engineering expenses. Income taxes for the six month periods ended September 30, 2014 and September 30, 2013 were computed using the effective tax rates of 37.0% and 38.0%, respectively, 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 $478, or $0.05 per diluted share, in the fiscal 2015 first six months compared with $1,156, or $0.12 per diluted share, in the same period in fiscal 2014.  The decrease is due to higher SG&A resulting from lower environmental reserve reversal benefit ($795), CFO transition costs ($593) and one-time costs associated with an internal reorganization ($288).Excluding the non-recurring benefits of the environmental reserve reduction recorded during the first quarter of both fiscal years, net income for the first six months of fiscal 2015 would have been $0.2 million or $0.02 per diluted share versus net income of $0.4 million, or $0.04 per diluted share for the first six months of fiscal 2014.

New Orders. New products and services orders received during the six months ended September 30, 2014 increased 12.9% to $42,658 compared with $37,788 during the six months ended September 30, 2013. The increase was due primarily to higher orders from the U.S. Government.

Backlog

The book to bill ratio for the first six months of fiscal 2015 was 1.2 compared with 1.1 for the first six months of fiscal 2014. 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 Revolving Credit Facility.

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 Revolving Credit Facility, we expect to have sufficient cash to meet liquidity requirements for the next twelve months. The Revolving 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.

Our cash was $12,876 on September 30, 2014, compared with $6,021 on March 31, 2014, an increase of $6,855. The increase in our cash is primarily the net result of positive cash flows provided by operating activities of $6,411.

22

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

($ In Thousands Except Share Amounts)

Cash flows provided by operating activities during the first six months of fiscal 2015 was $6,411 and is the result of a decrease in accounts receivable of $9,397 as cash from high fiscal 2014 fourth quarter sales was collected. This was partially offset by an increase in inventory of $3,677, a decrease in accounts payable of $365 and a decrease in accrued compensation of $939 due to the payment of incentives.

Cash flows used in investing activities in the first six months of fiscal 2015 was $218, and was used for capital expenditures of $174 mainly for production test and barcoding equipment, and information technology equipment. Spending for capitalized qualification units was $44 as we are nearing the completion of this testing.

Cash flows provided by financing activities during the first six months of fiscal 2015 was $662, and reflects cash received from the exercise of stock options.

Net working capital at September 30, 2014 was $41,841, an increase of $2,133, versus $39,708 at March 31, 2014.  The ratio of current assets to current liabilities was 3.9:1.0 at September 30, 2014 compared with 3.5:1.0 at the beginning of fiscal 2015.

Accounts receivable days outstanding were 62 days at September 30, 2014 and 59 days at September 30, 2013. The increase in days is due to customer sales mix and related payment terms. Inventory turnover was 2.4 turns at September 30, 2014 versus 1.8 turns at September 30, 2013. These accounts receivables and inventory measures are predicated on the prior twelve month historical data for sales and cost of sales.

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 September 30, 2014 and March 31, 2014, the aggregate environmental liability was $9,677 and $10,323, respectively. The liability is classified in other current liabilities and other long-term liabilities on the condensed consolidated balance sheets. Separately, environmental cost-sharing with third parties of approximately $1,344 and $1,918 at September 30, 2014 and March 31, 2014, respectfully, is included in other current assets and other long term assets, net of fees to be paid to a third party relating to this arrangement. The Company’s environmental liability reserves are not reduced for any potential cost-sharing reimbursements.

In the first six months of fiscal 2015 and fiscal 2014, we spent $383 and $602, respectively, on environmental costs, and for the entire fiscal 2014, we spent $1,487. We have a detailed plan by property to manage our environmental exposure. Based on this plan, we anticipate spending approximately $1,614 on environmental matters in fiscal 2015. 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.

In May 2014, the PADEP approved the final remedial action report for the Fed Labs Saltsburg, Pennsylvania site subject to the 2001 Consent Order and as a result of this approval we believe that no further on-site work is required.  The remaining technical fees from our technical advisors are not expected to exceed $10. Accordingly, we reduced the environmental reserve by $412 in the first quarter of fiscal 2015, as reflected in SG&A expense.

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.

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.

23

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

($ In Thousands Except Share Amounts)

OFF-BALANCE SHEET ARRANGEMENTS

As of September 30, 2014, 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.

24

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. At September 30, 2014, we had no borrowings under our Senior Credit Facility.

At times we maintain our cash in bank deposit accounts in excess of the FDIC insured amount which is $250.

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 15d-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 September 30, 2014, 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 15d-15(f)) during the second quarter of fiscal 2015 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.

We are subject to federal and state requirements for protection of the environment, including those for discharge of hazardous materials and remediation of contaminated sites. As a result, we are a party to or have our former property subject to various lawsuits or proceedings involving environmental protection matters. Due in part to their complexity and pervasiveness, such requirements have resulted in us being involved with related legal proceedings, claims, and remediation obligations. The extent of our financial exposure cannot in all cases be reasonably estimated at this time. For information regarding these matters, including current estimates of the amounts that we believe are required for remediation or clean-up to the extent estimable, see Note 14 in the “Notes to Unaudited Condensed Consolidated Financial Statements” contained elsewhere in this report.

Item 1A.    RISK FACTORS

In addition to the other information set forth in this report, the user/reader should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, as filed with the SEC on June 5, 2014, and incorporated herein by reference, which factors could materially affect our business, financial condition, financial results or future performance.

Item 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

Item 3.    DEFAULTS UPON SENIOR SECURITIES.

None.

Item 4.    MINE SAFETY DISCLOSURES.

None.

25

Item 5.    OTHER INFORMATION.

None.

Item 6.    EXHIBITS

10.1	Amendment to Employment Letter by and between Breeze-Eastern Corporation and James D. Cashel dated October 10, 2014 (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K, filed with the SEC on October 14, 2014).
10.2	Amendment to Stock Option Agreement by and between Breeze-Eastern Corporation and Serge Dupuis executed and effective July 7, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2014).
10.3	Options to purchase Common Stock of the Company, issued to Bradley Alan Repp on August 18, 2014.
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.

* We have attached the following documents formatted in XBRL (Extensible Business Reporting Language) as Exhibit 101 to this report: (i) the Condensed Consolidated Statements of Operations for the three month and six month periods ended September 30, 2014 and September 30, 2013, respectively; (ii) the Condensed Consolidated Balance Sheets at September 30, 2014, and March 31, 2014; and (iii) the Condensed Consolidated Statements of Cash Flows for the six month periods ended September 30, 2014, and September 30, 2013, respectively.

26

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: October 29, 2014	By:	/s/ Serge Dupuis
		Serge Dupuis
		Chief Financial Officer and Treasurer *

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

27

EX-10

Exhibit 10.3

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

NON-QUALIFIED OPTION TO PURCHASE COMMON STOCK

OF

BREEZE-EASTERN CORPORATION

Void after August 18, 2024

This certifies that, for value received, BRADLEY ALAN REPP (“Holder”) is entitled, subject to the terms set forth below, to purchase from BREEZE-EASTERN CORPORATION, a Delaware corporation (the “Company”), shares of the common stock, $.01 par value per share, of the Company (“Common Stock”), as constituted on August 18, 2014 (the “Option Issue Date”), with the Notice of Exercise attached hereto duly executed, and simultaneous payment therefor in lawful money of the United States or as otherwise provided in Section 3 hereof, at the Exercise Price then in effect. The number, character and Exercise Price of the shares of Common Stock issuable upon exercise hereof are subject to adjustment as provided herein. This Option is granted to Holder outside of the Company’s stockholder approved equity incentive plans (including the 2012 Incentive Compensation Plan (the “2012 Plan”), as an inducement award to Section 711(a) of the NYSE MKT Company Guide. This Option is a Non-Qualified Stock Option (i.e., not an Incentive Stock Option as defined in Section 422 of the Internal Revenue Code of 1986, as amended).

1. Term of Option. This Option shall be exercisable, in whole or in part, on the date hereof and ending at 5:00 p.m. EST on August 18, 2024 (the “Option Termination Date”) and shall be void thereafter.

2. Number of Shares, Exercise Price, and Vesting.

2.1 Number of Shares. The number of shares of Common Stock which may be purchased pursuant to this Option shall be two hundred thousand (200,000) shares (the “Shares”), subject, however, to the vesting provisions included in Section 2.3 below and to adjustment pursuant to Section 11 hereof.

2.2 Exercise Price. The Exercise Price at which this Option, or portion thereof, may be exercised shall be $10.40 per Share, subject, however, to adjustment pursuant to Section 11 hereof.

2.3 Vesting. The Option shall vest as follows:

(i) options to purchase twenty five thousand (25,000) Shares will vest immediately on the Option Issue Date;

(ii) options to purchase twenty five thousand (25,000) Shares will vest when the average closing price of the Common Stock after the Option Issue Date and for the preceding thirty (30) days (the “Trailing Price”) exceeds an amount equal to or greater than the Exercise Price plus one dollar ($1.00);

(iii) at any time after the first anniversary of the Option Issue Date, (A) options to purchase twenty five thousand (25,000) Shares will vest when the Trailing Price exceeds an amount equal to or greater than the Exercise Price plus two dollars ($2.00); and (B) options to purchase twenty five thousand (25,000) Shares will vest when the Trailing Price exceeds an amount equal to or greater than the Exercise Price plus three dollars ($3.00);

(iv) at any time after the second anniversary of the Option Issue Date, (A) options to purchase twenty five thousand (25,000) Shares will vest when the Trailing Price exceeds an amount equal to or greater than the Exercise Price plus four dollars ($4.00); and (B) options to purchase twenty five thousand (25,000) Shares will vest when the Trailing Price exceeds an amount equal to or greater than the Exercise Price plus five dollars ($5.00); and

(v) at any time after the third anniversary of the Option Issue Date, (A) options to purchase twenty five thousand (25,000) Shares will vest when the Trailing Price exceeds an amount equal to or greater than the Exercise Price plus six dollars ($6.00); and (B) options to purchase twenty five thousand (25,000) Shares will vest when the Trailing Price exceeds an amount equal to or greater than the Exercise Price plus seven dollars ($7.00).

3. Exercise of Option.

3.1 Payment of Exercise Price. Subject to the terms hereof, the purchase rights represented by this Option are exercisable by the Holder in whole or in part, at any time, or from time to time, by the surrender of this Option and the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company) accompanied by payment of the Exercise Price in full (i) in accordance with the terms of Section 4.g of the 2012 Plan, or (ii) in the discretion of the Company, by reducing the number of shares of the Company’s Common Stock otherwise issuable under this Option to Holder upon the exercise of the Option by a number of shares of Common Stock having a Fair Market Value equal to such aggregated exercise price (“Net Exercise”); provided, however, that such method of payment is then permitted under applicable law. While this Option may use certain provisions from the 2012 Plan where explicitly stated herein as a matter of convenience, as stated above, this Option is not granted pursuant to the 2012 Plan and is not subject to the 2012 Plan (other than those terms explicitly incorporated by reference into this Option).

3.2 Fair Market Value. If previously owned shares of Common Stock are tendered as payment of the Exercise Price or payment is made by Net Exercise, the value of such shares shall be the “Fair Market Value” of such shares on the trading date immediately preceding the date of exercise. For the purpose of this Agreement, the “Fair Market Value” shall be:

(a) If the Common Stock is admitted to trading on a United States securities exchange, the Fair Market Value on any date shall be the closing price reported for the Common Stock on such exchange or system for such date or, if no sales were reported for such date, for the last day preceding such date for which a sale was reported;

(b) If the Common Stock is traded in the over-the-counter market and not on any national securities exchange, the Fair Market Value shall be the arithmetic mean of the last bid and ask prices per share (or if last bid and ask is not reported, the closing price per share), as reported by the National Quotation Bureau, Inc. or an equivalent generally accepted reporting service, or if not so reported, the arithmetic mean of the closing bid and asked prices for a share as furnished to the Company by any member of the Financial Industry Regulatory Authority, selected by the Company for that purpose; or

(c) If the Fair Market Value of the Common Stock cannot be determined on the basis previously set forth in this definition on the date that the Fair Market Value is to be determined, the Board of Directors of the Company shall in good faith and in its sole discretion determine the Fair Market Value of the Common Stock on such date.

If the tender of previously owned shares would result in an issuance of a whole number of Shares and a fractional Share of Common Stock, the value of such fractional share shall be paid to the Company in cash or by check by the Holder.

3.3 Termination of Employment or Service; Death.

(a) If Holder’s employment or services are terminated by the Company for any reason other than for Cause (“for Cause” is defined in Section 10 of the 2012 Plan), this Option may be exercised only within three (3) months after the termination of employment or cessation of service and prior to the Option Termination Date.

(b) If Holder’s employment or services are terminated by the Company for Cause (as defined below), then this Option shall forthwith terminate.

(c) If Holder shall die while employed by or providing services to the Company and prior to the Option Termination Date, this Option may be exercised only within three (3) months after Holder’s death, prior to the Option Termination Date, and only by the Holder’s personal representative or persons entitled thereto under the Holder’s will or the laws of descent and distribution.

(d) This Option may not be exercised for more Shares (subject to adjustment as provided in Section 11 hereof) after the termination of the Holder’s employment, cessation of services to the Company, or death, as the case may be, than the Holder was entitled to purchase thereunder at the time of the termination of the Holder’s employment, the cessation of services to the Company, or death.

For the avoidance of doubt, any portion of this Option which is unvested as of the date of the termination of the Holder’s employment, cessation of services to the Company, or death shall remain unvested and never vest.

3.4 Exercise Date; Delivery of Certificates. This Option shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and Holder shall be treated for all purposes as the holder of record of such Shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the Holder a certificate or certificates for the number of Shares issuable upon such exercise. In the event that this Option is exercised in part, the Company at its expense will execute and deliver a new Option of like tenor exercisable for the number of shares for which this Option may then be exercised.

4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Option. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

5. Replacement of Option. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Option, the Company at its expense shall execute and deliver, in lieu of this Option, a new Option of like tenor and amount.

6. Rights of Stockholder. Except as otherwise contemplated herein, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Option shall have been exercised as provided herein.

7. Transfer of Option.

7.1. Non-Transferability. This Option shall not be assigned, transferred, pledged or hypothecated in any way, nor subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution. Any attempted assignment, transfer, pledge, hypothecation or other disposition of this Option contrary to the provisions hereof, and the levy of an execution, attachment, or similar process upon the Option, shall be null and void and without effect.

7.2. Compliance with Securities Laws; Restrictions on Transfers. In addition to restrictions on transfer of this Option and Shares set forth in Section 7.1 above.

(a) The Holder of this Option, by acceptance hereof, acknowledges that this Option and the Shares to be issued upon exercise hereof are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment (unless such shares are subject to resale pursuant to an effective prospectus), and that the Holder will not offer, sell or otherwise dispose of any Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of applicable federal and state securities laws. Upon exercise of this Option, the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Shares of Common Stock so purchased are being acquired solely for the Holder’s own account and not as a nominee for any other party, for investment (unless such shares are subject to resale pursuant to an effective prospectus), and not with a view toward distribution or resale.

(b) Neither this Option nor any share of Common Stock issued upon exercise of this Option may be offered for sale or sold, or otherwise transferred or sold in any transaction which would constitute a sale thereof within the meaning of the 1933 Act, unless (i) such security has been registered for sale under the 1933 Act and registered or qualified under applicable state securities laws relating to the offer and sale of securities; or (ii) exemptions from the registration requirements of the 1933 Act and the registration or qualification requirements of all such state securities laws are available and the Company shall have received an opinion of counsel that the proposed sale or other disposition of such securities may be effected without registration under the 1933 Act and would not result in any violation of any applicable state securities laws relating to the registration or qualification of securities for sale, such counsel and such opinion to be satisfactory to the Company. The Holder of this Option, by acceptance hereof, acknowledges that the Company has no obligation to file a registration statement with the Securities and Exchange Commission or any state securities commission to register the issuance of the Shares upon exercise hereof or the sale or transfer of the Shares after issuance.

(c) All Shares issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (in addition to any legend required by state securities laws).

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION THEREFROM.

(d) Holder recognizes that investing in the Option and the Shares involves a high degree of risk, and Holder is in a financial position to hold the Option and the Shares indefinitely and is able to bear the economic risk and withstand a complete loss of his investment in the Option and the Shares. The Holder is a sophisticated investor and is capable of evaluating the merits and risks of investing in the Company.

The Holder has had an opportunity to discuss the Company’s business, management and financial affairs with the Company’s management, has been given full and complete access to information concerning the Company, and has utilized such access to his satisfaction for the purpose of obtaining information or verifying information and has had the opportunity to inspect the Company’s operation. Holder has had the opportunity to ask questions of, and receive answers from the management of the Company (and any person acting on his behalf) concerning the Option and the Shares and the agreements and transactions contemplated hereby, and to obtain any additional information as Holder may have requested in making his investment decision.

(e) Holder acknowledges and represents: (i) that the Company has made available to him the Company’s latest Annual Report on Form 10-K, all Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC during the current fiscal year, and the Company’s most recent Proxy Statement and Annual Report to Stockholders, and that he has been afforded the opportunity to review and is familiar with the business prospects and finances of the Company and has based his decision to invest solely on such review and the information contained therein and has not been furnished with any other literature, prospectus or other information; (ii) Holder is acquiring the Options and Shares for investment purposes only and not with a view toward distribution; (iii) he understands that no federal or state agency has approved or disapproved the Option or Shares or made any finding or determination as to the fairness of the Option and Common Stock for investment; and (iv) that the Company has made no representations, warranties, or assurances as to (A) the future trading value of the Common Stock, (B) whether there will be a public market for the resale of the Common Stock or (C) the filing of a registration statement with the Securities and Exchange Commission or any state securities commission to register the issuance of the Shares upon exercise hereof or the sale or transfer of the Shares after issuance.

8. Reservation and Issuance of Stock; Payment of Taxes.

(a) The Company covenants that during the term that this Option is exercisable, the Company will reserve from its authorized and unissued Common Stock or Common Stock held in treasury a sufficient number of shares to provide for the issuance of the Shares upon the exercise of this Option, and from time to time will take all steps necessary to amend its Articles of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon the exercise of the Option.

(b) The Company further covenants that all shares of Common Stock issuable upon the due exercise of this Option will be free and clear from all taxes or liens, charges and security interests created by the Company with respect to the issuance thereof, however, the Company shall not be obligated or liable for the payment of any taxes, liens or charges of Holder, or any other party contemplated by Section 7, incurred in connection with the issuance of this Option or the Common Stock upon the due exercise of this Option. The Company agrees that its issuance of this Option shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the shares of Common Stock upon the exercise of this Option. The Common Stock issuable upon the due exercise of this Option, will, upon issuance in accordance with the terms hereof, be duly authorized, validly issued, fully paid and non-assessable.

(c) There may be a regular income tax liability upon the exercise of the Option. Upon exercise of the Option, the Company shall have the right to require the Holder to remit to the Company an amount sufficient to satisfy federal, state and local tax withholding requirements prior to the delivery of any certificate for Shares of Common Stock purchased pursuant to the Option, if in the opinion of counsel to the Company such withholding is required under applicable tax laws.

(d) If Holder is obligated to pay the Company an amount required to be withheld under applicable tax withholding requirements, the Holder may pay such amount in cash or, if not so paid by the Holder, the Company may make a withholding in accordance with Section 9 of the 2012 Plan.

9. Notices.

(a) Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall issue a certificate signed by its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and number of shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Option.

(b) All notices, advices and communications under this Option shall be deemed to have been given, (i) in the case of personal delivery, on the date of such delivery and (ii) in the case of mailing, on the third business day following the date of such mailing, addressed as follows:

If to the Company:

Breeze-Eastern Corporation

35 Melanie Lane

Whippany, NJ 07981

Attn: Corporate Secretary

and to the Holder:

at the address set forth in the records of the Company.

Either of the Company or the Holder may from time to time change the address to which notices to it are to be mailed hereunder by notice in accordance with the provisions of this Paragraph 9.

(c) This Option does not confer upon or give to the Holder any right to continued employment by the Company and does not in any way affect the right of the Company to terminate the Holder’s employment at any time.

(d) Notwithstanding anything to the contrary herein, this Option and any Shares of Common Stock transferred upon exercise thereof shall be subject to the Company’s ability to recoup or recover the Option, such Shares or other consideration previously granted under this Option, pursuant to (i) any compensation recovery or recoupment policy (i.e., clawback policy) to be adopted by the Company from time to time in the future (regardless of whether adopted pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise), or (ii) any other applicable law, regulation or stock exchange rule, including without limitation, Section 304 of the Sarbanes-Oxley Act of 2002.

10. Amendments.

(a) The Company may amend, modify or terminate this Option, including but not limited to, substituting therefor another Option of the same or a different type and changing the date of exercise or realization, provided that the Holder’s consent to such action shall be required unless the Company determines that the action, taking into account any related action, would not materially and adversely affect the Holder.

(b) No waivers of, or exceptions to, any term, condition or provision of this Option, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

11. Adjustments. The number of Shares of Common Stock purchasable hereunder and the Exercise Price is subject to adjustment from time to time upon the occurrence of certain events, as follows:

11.1. Split, Subdivision, Combination of Shares, Reclassification or Recapitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, applicable to securities as to which purchase rights under this Option exist or any distribution to holders of the securities as to which purchase rights under this Option exist other than an ordinary cash dividend, the Exercise Price and the number and kind of securities issuable upon exercise of this Option may be proportionately adjusted by the Board in its sole discretion. Any adjustment under this Section 11.1 shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend. If this Section 11.1 applies and Section 11.3 also applies to any event, Section 11.3 shall be applicable to such event, and this Section 11.1 shall not be applicable.

11.2 Liquidation or Dissolution. In the event the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, the terms of Section 8.g of the 2012 Plan shall apply.

11.3 Change of Control Events.

(1) A “Change of Control” shall be defined as set forth in Section 8.f.F of the 2012 Plan.

(2) Effect on Option. Upon the occurrence of a Change of Control, the terms of Section 8.f and 8.i of the 2012 Plan shall apply. Without limiting the foregoing (and the rights of the Board thereunder), upon the occurrence of a Change of Control all of the time frames set forth in Section 2.3 of this Option shall immediately accelerate, such that the Option would remain subject only to satisfaction of the Trailing Price thresholds set forth in Section 2.3 of this Option for vesting purposes.

12. Severability. Whenever possible, each provision of this Option shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Option is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Option in such jurisdiction or affect the validity, legality or enforceability of any provision in any other jurisdiction, but this Option shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

13. Governing Law. The corporate law of the State of Delaware shall govern all issues and questions concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, interpretation and enforceability of this Option and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

14. Jurisdiction. The Holder and the Company agree to submit to personal jurisdiction and to waive any objection as to venue in the federal or state courts of the State of Delaware. Service of process on the Company or the Holder in any action arising out of or relating to this Option shall be effective if mailed to such party at the address listed in Section 9 hereof.

15. Arbitration. If a dispute arises as to interpretation of this Option, it shall be decided finally by a single arbitrator in an arbitration proceeding conforming to the Rules of the American Arbitration Association applicable to commercial arbitration. The arbitrator shall be appointed by agreement of the parties, or, if they cannot agree, then the arbitrator shall be appointed by the American Arbitration Association. The arbitration shall take place in New York, New York. The decision of the arbitrator shall be conclusively binding upon the parties and final, and such decision shall be enforceable as a judgment in any court of competent jurisdiction. Each party shall pay the fees and expenses of its counsel and its witnesses. The parties shall share equally the fees and expenses of the arbitrator.

16. Corporate Power; Authorization; Enforceable Obligations; Administration. The execution, delivery and performance by the Company of this Option: (i) are within the Company’s corporate power; (ii) have been duly authorized by all necessary or proper corporate action; (iii) are not in contravention of the Company’s articles of incorporation or bylaws; (iv) will not violate in any material respect, any law or regulation, including any and all Federal and state securities laws, or any order or decree of any court or governmental instrumentality; and (v) will not, in any material respect, conflict with or result in the breach or termination of, or constitute a default under any agreement or other material instrument to which the Company is a party or by which the Company is bound. This Option shall be administered and interpreted by the Incentive and Compensation Committee of the Company’s Board of Directors, and any actions that may be taken by the Board hereunder may be taken by the Compensation Committee in lieu thereof.

17. Successors and Assigns. This Option shall inure to the benefit of and be binding on the respective successors, assigns and legal representatives of the Holder and the Company.

* * * * *

IN WITNESS WHEREOF, the Company has caused this Option to be executed as of the 18th day of August, 2014.

BREEZE-EASTERN CORPORATION
By:	/s/ Brad Pedersen
Name:	Brad Pedersen
Title:	Chief Executive Officer and President

AGREED AND ACCEPTED:
BRADLEY ALAN REPP
Signature	/s/ Bradley Alan Repp

NOTICE OF EXERCISE

To:	Corporate Secretary
	Breeze-Eastern Corporation

(1) The undersigned hereby elects to purchase shares of Common Stock of Breeze-Eastern Corporation, pursuant to the terms of the attached Option, and tenders herewith payment of the purchase price for such shares in full in the following manner (please check one of the following choices – all choices other than cash are subject to approval by the Company):

In Cash

Cashless exercise through a broker;

Delivery of previously owned shares; or

Net Exercise

(2) The undersigned understands that he or she may suffer adverse tax consequences as a result of the purchase (i.e., exercise of the Option) or disposition of the Shares. The undersigned represents that he or she has consulted with any tax consultants he or she deems advisable in connection with the purchase or disposition of the Shares and that the undersigned is not relying on the Company for any tax advice.

(3) In exercising this Option, the undersigned hereby confirms and acknowledges that the shares of Common Stock to be issued upon conversion thereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, and for investment (unless such shares are subject to resale pursuant to an effective prospectus), and that the undersigned will not offer, sell or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.

(4) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned.

(Date) (Signature)

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 13a-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 accounting principles generally accepted in the United States of America;

(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: October 29, 2014	/s/ Brad Pedersen
	Brad Pedersen
	President & Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Serge Dupuis, 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 13a-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 accounting principles generally accepted in the United States of America;

(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: October 29, 2014	/s/ Serge Dupuis
	Serge Dupuis,
	Chief Financial Officer and Treasurer

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 September 30, 2014, 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: October 29, 2014	/s/ Brad Pedersen
	Brad Pedersen
	President & Chief Executive Officer

Date: October 29, 2014	/s/  Serge Dupuis
	Serge Dupuis
	Chief Financial Officer & Treasurer

XML

Inventories - Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Inventory Disclosure [Abstract]
Finished goods	$ 841	$ 2,751
Work in process	7,899	5,932
Purchased and manufactured parts	16,683	13,155
Inventories, gross	25,423	21,838
Reserve for slow moving and obsolescence	(2,837)	(2,929)
Total	$ 22,586	$ 18,909

XML

Segment, Geographic Location and Customer Information - Net Sales of 10% or More of Total Revenues Derived from Customers (Detail) (Net Sales)	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Entity Wide Revenue Major Customer [Line Items]
Percentage of net sales made to customers	10.00%	10.00%	10.00%	10.00%
Customer A
Entity Wide Revenue Major Customer [Line Items]
Percentage of net sales made to customers	17.00%	21.00%	12.00%	28.00%
Customer B
Entity Wide Revenue Major Customer [Line Items]
Percentage of net sales made to customers	17.00%	18.00%	18.00%	18.00%
Customer C
Entity Wide Revenue Major Customer [Line Items]
Percentage of net sales made to customers	14.00%	23.00%	11.00%	18.00%
Customer D
Entity Wide Revenue Major Customer [Line Items]
Percentage of net sales made to customers	11.00%		20.00%
Customer E
Entity Wide Revenue Major Customer [Line Items]
Percentage of net sales made to customers		10.00%

XML

Employee Benefit Plans - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014
Compensation And Retirement Disclosure [Abstract]
Defined contribution plan expenses	$ 208	$ 244	$ 411	$ 526
Benefit obligation for the Pension Plan	$ 3,209		$ 3,209		$ 3,479

XML

Segment, Geographic Location and Customer Information - Net Sales of 10% or More of Total Revenues Derived from Customers (Parenthetical) (Detail) (Net Sales)	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net Sales
Entity Wide Revenue Major Customer [Line Items]
Percentage of net sales made to customers	10.00%	10.00%	10.00%	10.00%

XML

Income Taxes - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014
Income Tax Disclosure [Abstract]
Alternative Minimum Tax Credit	$ 130
Valuation allowance	265
Unrecognized Tax Benefits	$ 0

XML

Earnings (Loss) Per Share - Components of Denominator for Basic Earnings (Loss) Per Common Share and Diluted Earnings (Loss) Per Common Share (Detail) (Parenthetical)	3 Months Ended	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Options excluded from the computation of diluted earnings (loss) per share	207,500	207,500	271,000

XML

Inventories (Tables)

6 Months Ended

Sep. 30, 2014

Inventory Disclosure [Abstract]

Inventories

Inventories are summarized as follows:

	September 30, 2014			March 31, 2014
Finished goods	$	841		$	2,751
Work in process		7,899			5,932
Purchased and manufactured parts		16,683			13,155
		25,423			21,838
Reserve for slow moving and obsolescence		(2,837	)		(2,929	)
Total	$	22,586		$	18,909

XML

Concentration of Credit Risk - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014
Risks And Uncertainties [Abstract]
Cash in bank deposit accounts in excess of the FDIC insured amount	$ 250

XML

Property, Equipment, and Related Depreciation and Amortization - Average Estimated Useful Lives for Property (Detail)	6 Months Ended
	Sep. 30, 2014
Machinery and equipment | Minimum
Property Plant And Equipment [Line Items]
Average estimated useful lives of property	3 years
Machinery and equipment | Maximum
Property Plant And Equipment [Line Items]
Average estimated useful lives of property	10 years
Furniture and Fixtures | Minimum
Property Plant And Equipment [Line Items]
Average estimated useful lives of property	3 years
Furniture and Fixtures | Maximum
Property Plant And Equipment [Line Items]
Average estimated useful lives of property	10 years
Computer Hardware And Software | Minimum
Property Plant And Equipment [Line Items]
Average estimated useful lives of property	3 years
Computer Hardware And Software | Maximum
Property Plant And Equipment [Line Items]
Average estimated useful lives of property	5 years
Leasehold improvements
Property Plant And Equipment [Line Items]
Average estimated useful lives of property	10 years

XML

Stock-Based Compensation - Stock Option Activity under All Plans and Other Grants (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended	12 Months Ended
	Sep. 30, 2014	Mar. 31, 2014
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Shares, Outstanding, Beginning Balance	851,165
Number of Shares, Granted	400,000	158,000
Number of Shares, Exercised	(88,833)
Number of Shares, Canceled or expired	(10,332)
Number of Shares, Outstanding, Ending Balance	1,152,000	851,165
Number of Shares, Options exercisable at September 30, 2014	527,000
Number of Shares, Unvested options expected to become exercisable after September 30, 2014	625,000
Number of Shares, Shares available for future option grants at September 30, 2014	285,376
Aggregate Intrinsic Value, Outstanding, Beginning Balance	$ 1,516
Aggregate Intrinsic Value, Exercised	339
Aggregate Intrinsic Value, Outstanding, Ending Balance	1,651	1,516
Aggregate Intrinsic Value, Options exercisable at September 30, 2014	1,076
Aggregate Intrinsic Value, Unvested options expected to become exercisable after September 30, 2014	$ 633
Approximate Remaining Contractual Term, Outstanding	9 years	8 years
Approximate Remaining Contractual Term, Granted	10 years
Approximate Remaining Contractual Term, Options exercisable at September 30, 2014	8 years
Approximate Remaining Contractual Term, Unvested options expected to become exercisable after September 30, 2014	9 years
Weighted-Average Exercise Price Outstanding, Beginning Balance	$ 8.15
Weighted-Average Exercise Price, Granted	$ 11.59
Weighted-Average Exercise Price, Exercised	$ 7.46
Weighted-Average Exercise Price, Canceled or expired	$ 8.59
Weighted-Average Exercise Price, Outstanding, Ending Balance	$ 9.18	$ 8.15
Weighted-Average Exercise Price, Options exercisable at September 30, 2014	$ 8.64
Weighted-Average Exercise Price, Unvested options expected to become exercisable after September 30, 2014	$ 9.79

XML

Contingencies and Legacy Environmental Commitments - Schedule of Environmental Activity (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014
Environmental Remediation Obligations [Abstract]
Environmental activity, Beginning balance	$ 10,323
Environmental costs incurred	(383)	(602)	(1,487)
Interest accretion	149	174
Reduction of environmental reserve-Part of Federal Labs site subject to the 2001 Consent Order	(412)
Environmental activity, Ending balance	$ 9,677		$ 10,323

XML

Long-Term Debt Payable to Banks - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified			6 Months Ended		6 Months Ended
	Sep. 30, 2014	Mar. 31, 2014	Sep. 30, 2014 Revolving Credit Facility	Sep. 30, 2014 Revolving Credit Facility Maximum	Sep. 30, 2014 Revolving Credit Facility Unsecured Debt
Line Of Credit Facility [Line Items]
Senior credit facility period					5 years
Senior credit facility					$ 20,000
Line of credit, maximum borrowing capacity					35,000
Borrowing capacity ratio, maximum					May increase the amount to 2.5 times EBITDA
Option to convert Revolving Credit Facility, description					The Company has the option, subject to bank approval, during the five-year term of the Revolving Credit Facility, to convert the Facility to a secured credit facility which increases the borrowing limit to 3.5 times EBITDA (as defined in the Facility) up to a maximum of $35,000. As of September 30, 2014, the Company has not exercised this option.
Unused borrowing commitment fee			0.125%
Revolving credit facility expiration date			Aug. 26, 2018
Revolving credit facility	0	0	0	8,000
Line of Credit Facility, Commitment Fee Percentage			0.125%
Minimum borrowing capacity after dividend payment			5,000
Outstanding letters of credit			202
Line of credit, remaining borrowing capacity					$ 19,798

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Inventories

6 Months Ended

Sep. 30, 2014

Inventory Disclosure [Abstract]

Inventories

NOTE  4.    Inventories

Inventories are summarized as follows:

	September 30, 2014			March 31, 2014
Finished goods	$	841		$	2,751
Work in process		7,899			5,932
Purchased and manufactured parts		16,683			13,155
		25,423			21,838
Reserve for slow moving and obsolescence		(2,837	)		(2,929	)
Total	$	22,586		$	18,909

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 eventually be scrapped. Accordingly, the Company uses these two factors in determining the amount of the reserve.

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Product Warranty - Additional Information (Detail)	6 Months Ended
	Sep. 30, 2014
Product Warranty Disclosures [Line Items]
Warranty for the equipment	1 year
Airbus A400M Military Aircraft
Product Warranty Disclosures [Line Items]
Warranty for the equipment	3 years

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Employee Benefit Plans (Tables)

6 Months Ended

Sep. 30, 2014

Compensation And Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost

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

	Postretirement Benefits
	Three Months Ended				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Interest cost	$	5	$	8	$	11	$	15
Amortization of net (gain) loss		—		7		—		15
Net periodic cost	$	5	$	15	$	11	$	30

	Pension Plan
	Three Months Ended				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Interest cost	$	28	$	28	$	57	$	56
Amortization of net (gain) loss		3		—		5		—
Net periodic cost	$	31	$	28	$	62	$	56

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Other Current Liabilities (Tables)

6 Months Ended

Sep. 30, 2014

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

Other current liabilities consist of the following:

	September 30, 2014		March 31, 2014
Engineering project reserves	$	1,490	$	1,530
Environmental reserves – Note 14		1,836		1,673
Accrued medical benefits cost		768		621
Accrued commissions		440		618
Other		725		772
Total	$	5,259	$	5,214

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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		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	$ 17,671	$ 15,464	$ 35,590	$ 35,032
United States
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	10,278	9,796	18,829	22,189
Germany
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	2,013		6,400	326
Italy
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	1,613	2,206	2,282	4,859
England
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	475	1,665	1,104	1,989
Other European Countries
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	1,401	450	2,776	1,016
Pacific And Far East
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	837	556	2,639	1,147
Other international
Revenues From External Customers And Long Lived Assets [Line Items]
Net sales by geographic location	$ 1,054	$ 791	$ 1,560	$ 3,506

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Product Warranty - Changes in Carrying Amount of Accrued Product Warranty Costs (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2014
Product Warranties Disclosures [Abstract]
Balance at March 31, 2014	$ 284
Warranty costs incurred	(80)
Change in estimates to pre-existing warranties	0
Product warranty accrual	153
Balance at September 30, 2014	$ 357

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Contingencies and Legacy Environmental Commitments (Tables)

6 Months Ended

Sep. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

Schedule of Environmental Activity

The environmental activity is summarized as follows:

Balance at March 31, 2014	$	10,323
Environmental costs incurred		(383	)
Interest accretion		149
Reduction of environmental reserve-Part of Federal Labs site subject to the 2001 Consent Order		(412	)
Balance at September 30, 2014	$	9,677

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Segment, Geographic Location and Customer Information (Tables)

6 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Net Sales of 10% or More of Total Revenues Derived from Customers

Net sales of 10% or more of total revenues derived from customers for the three and six month periods ended September 30, 2014 and 2013 are summarized as follows.

	Three Months Ended						Six Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Customer A		17	%		21	%		12	%		28	%
Customer B		17			18			18			18
Customer C		14			23			11			18
Customer D		11			*			20			*
Customer E		*			10			*			*

Net Sales by Geographic Location

Net sales below show the geographic location of customers for the three and six month periods ended September 30, 2014 and September 30, 2013:

	Three Months Ended				Six Months Ended
Location	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
United States	$	10,278	$	9,796	$	18,829	$	22,189
Germany		2,013		—		6,400		326
Italy		1,613		2,206		2,282		4,859
England		475		1,665		1,104		1,989
Other European countries		1,401		450		2,776		1,016
Pacific and Far East		837		556		2,639		1,147
Other international		1,054		791		1,560		3,506
Total	$	17,671	$	15,464	$	35,590	$	35,032

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Stock-Based Compensation

6 Months Ended

Sep. 30, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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 six month periods ended September 30, 2014, includes stock-based compensation expense of $179 net of tax, or $0.02 per diluted share, and $377 net of tax, or $0.04 per diluted share, respectively. Net income (loss) for the three and six month periods ended September 30, 2013, includes stock- based compensation expense of $108 net of tax, or $0.01 per diluted share, and $217 net of tax, or $0.02 per diluted share, respectively. Stock based compensation expense is included in selling, general and administrative expenses. Additional compensation cost will be recognized as new stock-based 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” and together with the 1999 Plan, the 2004 Plan and the 2006 Plan collectively, the “Plans”).

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. The 2004 Plan expired in September 2014, and the 1999 Plan expired in July 2009, and no further grants or awards may be made under these plans. Under the 2004 Plan, no unexercised options remain outstanding, and under the 1999 Plan, unexercised options granted in fiscal year 2006 remain outstanding.

Under each of the Plans, option exercise prices equal the fair market value of the common shares at their respective grant dates. Options granted to officers and employees expire no later than 10 years after the date of the grant. In most circumstances prior to fiscal year 2014, options granted to directors, officers, and employees generally 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.

Pursuant to the terms of an employment agreement, effective June 16, 2014, between the Company and Serge Dupuis, Chief Financial Officer and Treasurer of the Company, the Company granted to Mr. Dupuis an option to purchase 200,000 shares, which option has a weighted average grant date fair value equal to $12.78.  This option was reported in the Company’s Current Report on Form 8-K filed on June 17, 2014.

As noted above, in connection with the hiring of Serge Dupuis as the Company’s Chief Financial Officer and Treasurer, the terms of the Company’s employment offer to Mr. Dupuis include a commitment to award him an option to purchase 200,000 shares of common stock of the Company (the “Dupuis Option”).  At the time of the issuance of the award, the Company and Mr. Dupuis entered into an option grant agreement indicating that the option would be subject to, and the option shares would be allocated from, the Company’s 2012 Incentive Compensation Plan (the “2012 Plan”). On July 3, 2014, the Company determined that the allocation of that number of option shares from the 2012 Plan would be in excess of the 2012 Plan’s per person, per year share limit, and, therefore, 50,000 of the option shares would need to be allocated from the Company’s 2006 Incentive Compensation Plan or the Company would need to modify the grant to be an “inducement grant” in order for the Company to fulfill its obligations to Mr. Dupuis.  As a result, on July 7, 2014 the Company and Mr. Dupuis agreed to modify the terms of his award such that the number of shares allocated from the 2012 Plan in respect of the Dupuis Option is 150,000 and the remaining 50,000 shares would be allocated from and subject to the Company’s 2006 Incentive Compensation Plan.

On August 18, 2014, in connection with the hiring of Bradley Repp, Vice President of Product Development, the Company granted to Mr. Repp an option to purchase 200,000 shares of our common stock, which option has a weighted average grant date fair value equal to $10.40. This award to Mr. Repp was made outside of the Company’s stockholder approved equity incentive plans and was approved by the Incentive and Compensation Committee of the Company’s Board of Directors, as an inducement material to Mr. Repp entering into employment with the Company pursuant to Section 711(a) of the NYSE MKT Company Guide. This option was reported in the Company’s Current Report on Form 8-K filed on August 18, 2014.

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 50,000 of the total 400,000 options granted in fiscal 2015 and 19,000 of the total 158,000 options granted in fiscal 2014. The Black-Scholes weighted-average value at each grant date per option granted in fiscal 2015 was $4.61 and $3.85, and in fiscal 2014 was $3.03 and $3.01. 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:

	Dividend yield			Volatility		Risk-free interest rate		Expected term of options (in years)	Forfeiture adjustment
2015 $4.61 value per option		0.0	%	30.0	%	2.1	%	7.0	0.0	%
2015 $3.85 value per option		0.0	%	30.9	%	2.2	%	7.0	0.0	%
2014 $3.03 value per option		0.0	%	31.2	%	1.3	%	7.0	0.0	%
2014 $3.01 value per option		0.0	%	31.2	%	1.3	%	7.0	0.0	%

The remaining 350,000 options granted in fiscal 2015 had a weighted-average value per option of $3.05 and $2.49. The remaining 139,000 options granted in fiscal 2014 had a weighted-average value per option of $1.90 and $1.71 at the grant date. These valuations 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 usesthe 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:

	2015 $3.05 value per option		2015 $2.49 value per option		2014 $1.90 value per option		2014 $1.71 value per option
Dividend yield	0.0	%	0.0	%	0.0	%	0.0	%
Volatility	32.3	%	33.7	%	34.9	%	34.9	%
Risk-free interest rate	2.6	%	2.5	%	1.9	%	1.9	%
Expected term of options (in years)	10.0		10.0		10.0		10.0
Forfeiture adjustment	1.4	%	1.2	%	1.1	%	1.8	%
Suboptimal behavior factor	1.6		1.6		1.7		1.7

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		Approximate Remaining Contractual Term (Years)		Weighted- Average Exercise Price
Outstanding at March 31, 2014	851,165		$	1,516		8	$	8.15
Granted	400,000			—		10		11.59
Exercised	(88,833	)		339		—		7.46
Canceled or expired	(10,332	)		—		—		8.59
Outstanding at September 30, 2014	1,152,000			1,651		9		9.18
Options exercisable at September 30, 2014	527,000			1,076		8		8.64
Unvested options expected to become exercisable after September 30, 2014	625,000			633		9		9.79
Shares available for future option grants at September 30, 2014 (a)	285,376

(a) May be decreased by restricted stock grants.

Cash received from stock option exercises during the first six months of fiscal 2015 was approximately $662. The aggregate intrinsic value of options exercised during the first six months of fiscal 2015 was approximately $339. 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 2015.

During the first six months of fiscal 2015 and fiscal 2014, stock option compensation expense recorded in selling, general and administrative expenses was $487 and $248, respectively, before taxes of $180 and $94, respectively. As of September 30, 2014, there was $1,156 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 two 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 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, 2014		29,807		$	8.93
Granted		27,930			10.07
Vested		(22,924	)		9.11
Cancelled		(3,495	)		9.04
Non-vested at September 30, 2014		31,318			9.81

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 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 contained 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 six months of fiscal 2015 and fiscal 2014, compensation expense related to restricted stock awards recorded in selling, general and administrative expenses was $112 and $102, respectively, before taxes of $41 and $39, respectively. As of September 30, 2014, there was approximately $291 of unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a period of approximately two years.

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Earnings (Loss) Per Share - Components of Denominator for Basic Earnings (Loss) Per Common Share and Diluted Earnings (Loss) Per Common Share (Detail)	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Basic earnings (loss) per Common Share:
Weighted-average common shares outstanding for basic earnings (loss) per share calculation	9,766,000	9,644,000	9,741,000	9,608,000
Diluted earnings (loss) per Common Share:
Weighted-average basic shares outstanding	9,766,000	9,644,000	9,741,000	9,608,000
Stock options	196,000		196,000	97,000
Weighted-average common shares outstanding for diluted earnings (loss) per share calculation	9,962,000	9,644,000	9,937,000	9,705,000

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Inventories - Additional Information (Detail)	6 Months Ended
	Sep. 30, 2014
Inventory Disclosure [Abstract]
Age inventory showed little movement	5 years
Percentage of purchases scrapped	1.10%

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Segment, Geographic Location and Customer Information - Additional Information (Detail)	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Revenues From External Customers And Long Lived Assets [Line Items]
Number of reportable segments	1
Customers accounted for more than ten percent of accounts receivables	3	3
Net Accounts Receivable | Customer 1
Revenues From External Customers And Long Lived Assets [Line Items]
Percentage of accounts receivable from major customers	22.00%	33.00%
Net Accounts Receivable | Customer 2
Revenues From External Customers And Long Lived Assets [Line Items]
Percentage of accounts receivable from major customers	20.00%	21.00%
Net Accounts Receivable | Customer 3
Revenues From External Customers And Long Lived Assets [Line Items]
Percentage of accounts receivable from major customers	16.00%	10.00%

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
CURRENT ASSETS:
Cash	$ 12,876	$ 6,021
Accounts receivable (net of allowance for doubtful accounts of $240 at September 30, 2014 and $323 at March 31, 2014)	14,785	24,191
Inventories – net	22,586	18,909
Prepaid expenses and other current assets	1,445	1,868
Deferred income taxes	4,739	4,608
Total current assets	56,431	55,597
PROPERTY:
Property and equipment	19,941	19,767
Less accumulated depreciation and amortization	14,167	13,435
Property – net	5,774	6,332
OTHER ASSETS:
Deferred income taxes – net	3,755	4,197
Goodwill	402	402
Real estate held for sale	3,800	3,800
Qualification units and pre-qualification assets – net	4,019	4,385
Other	5,135	5,080
Total other assets	17,111	17,864
TOTAL ASSETS	79,316	79,793
CURRENT LIABILITIES:
Revolving credit facility	0	0
Current portion of long-term debt	0	0
Accounts payable – trade	7,077	7,442
Accrued compensation	1,951	2,875
Accrued income taxes	303	358
Other current liabilities	5,259	5,214
Total current liabilities	14,590	15,889
LONG-TERM DEBT, NET OF CURRENT PORTION	0	0
OTHER LONG-TERM LIABILITIES	12,518	13,420
COMMITMENTS AND CONTINGENCIES (Note 14)
TOTAL LIABILITIES	27,108	29,309
STOCKHOLDERS’ EQUITY
Preferred stock – authorized, 300,000 shares; none issued
Common stock – authorized, 100,000,000 shares of $.01 par value; issued, 10,265,707 shares at September 30, 2014 and 10,148,944 shares at March 31, 2014	102	101
Additional paid-in capital	99,998	98,707
Accumulated deficit	(40,866)	(41,344)
Accumulated other comprehensive income	3	3
Stockholders' equity before treasury stock	59,237	57,467
Less treasury stock, at cost – 449,649 shares at September 30, 2014 and 445,067 shares at March 31, 2014	(7,029)	(6,983)
Total stockholders’ equity	52,208	50,484
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$ 79,316	$ 79,793

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Other Current Liabilities - Other Current Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Other Liabilities Disclosure [Abstract]
Engineering project reserves	$ 1,490	$ 1,530
Environmental reserves	1,836	1,673
Accrued medical benefits cost	768	621
Accrued commissions	440	618
Other	725	772
Total	$ 5,259	$ 5,214

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Financial Presentation

6 Months Ended

Sep. 30, 2014

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Financial Presentation

NOTE  1.     Financial Presentation

The unaudited, Condensed Consolidated Balance Sheets, 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 financial statements 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)	6 Months Ended
	Sep. 30, 2014
2015 $4.61 Value Per Option | Black Scholes Based Option Pricing Model
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	30.00%
Risk-free interest rate	2.10%
Expected term of options (in years)	7 years
Forfeiture adjustment	0.00%
2015 $3.85 Value Per Option | Black Scholes Based Option Pricing Model
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	30.90%
Risk-free interest rate	2.20%
Expected term of options (in years)	7 years
Forfeiture adjustment	0.00%
2014 $3.03 Value Per Option | Black Scholes Based Option Pricing Model
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	31.20%
Risk-free interest rate	1.30%
Expected term of options (in years)	7 years
Forfeiture adjustment	0.00%
2014 $3.01 Value Per Option | Black Scholes Based Option Pricing Model
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	31.20%
Risk-free interest rate	1.30%
Expected term of options (in years)	7 years
Forfeiture adjustment	0.00%
2015 $3.05 Value Per Option | Monte Carlo Simulation
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	32.30%
Risk-free interest rate	2.60%
Expected term of options (in years)	10 years
Forfeiture adjustment	1.40%
Suboptimal behavior factor	1.6
2015 $2.14 Value Per Option | Monte Carlo Simulation
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	33.70%
Risk-free interest rate	2.50%
Expected term of options (in years)	10 years
Forfeiture adjustment	1.20%
Suboptimal behavior factor	1.6
2014 $1.90 Value Per Option | Monte Carlo Simulation
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	34.90%
Risk-free interest rate	1.90%
Expected term of options (in years)	10 years
Forfeiture adjustment	1.10%
Suboptimal behavior factor	1.7
2014 $1.71 Value Per Option | Monte Carlo Simulation
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%
Volatility	34.90%
Risk-free interest rate	1.90%
Expected term of options (in years)	10 years
Forfeiture adjustment	1.80%
Suboptimal behavior factor	1.7

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New Accounting Standards (Policies)

6 Months Ended

Sep. 30, 2014

Accounting Changes And Error Corrections [Abstract]

New Accounting Standards

In June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606. ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer.Step 2: Identify the performance obligations in the contract.Step 3: Determine the transaction price.Step 4: Allocate the transaction price to the performance obligations in the contract.Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. An entity should apply the amendments in this ASU using one of the following two methods:1. Retrospectively to each prior reporting period 2. Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. The Company is currently considering the impact that the adoption of this guidance will have on the Company’s financial position, results of operations, or cash flows.

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Stock-Based Compensation - Assumptions to Estimate Fair Value of Option Grants (Parenthetical) (Detail) (USD $)	6 Months Ended	12 Months Ended
	Sep. 30, 2014	Mar. 31, 2014
Black Scholes Based Option Pricing Model | 2015 $4.61 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 4.61
Black Scholes Based Option Pricing Model | 2015 $3.85 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 3.85
Black Scholes Based Option Pricing Model | 2014 $3.03 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 3.03	$ 3.03
Black Scholes Based Option Pricing Model | 2014 $3.01 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 3.01	$ 3.01
Monte Carlo Simulation | 2015 $3.05 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 3.05
Monte Carlo Simulation | 2015 $2.14 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 2.49
Monte Carlo Simulation | 2014 $1.90 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 1.90	$ 1.90
Monte Carlo Simulation | 2014 $1.71 Value Per Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average value per option granted	$ 1.71	$ 1.71

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Stock-Based Compensation (Tables)

6 Months Ended

Sep. 30, 2014

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

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		Approximate Remaining Contractual Term (Years)		Weighted- Average Exercise Price
Outstanding at March 31, 2014	851,165		$	1,516		8	$	8.15
Granted	400,000			—		10		11.59
Exercised	(88,833	)		339		—		7.46
Canceled or expired	(10,332	)		—		—		8.59
Outstanding at September 30, 2014	1,152,000			1,651		9		9.18
Options exercisable at September 30, 2014	527,000			1,076		8		8.64
Unvested options expected to become exercisable after September 30, 2014	625,000			633		9		9.79
Shares available for future option grants at September 30, 2014 (a)	285,376

(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, 2014		29,807		$	8.93
Granted		27,930			10.07
Vested		(22,924	)		9.11
Cancelled		(3,495	)		9.04
Non-vested at September 30, 2014		31,318			9.81

Black Scholes Based Option Pricing Model

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Assumptions to Estimate Fair Value of Option Grants

The Company used the following assumptions to estimate the fair value of option grants under the Black-Scholes method:

	Dividend yield			Volatility		Risk-free interest rate		Expected term of options (in years)	Forfeiture adjustment
2015 $4.61 value per option		0.0	%	30.0	%	2.1	%	7.0	0.0	%
2015 $3.85 value per option		0.0	%	30.9	%	2.2	%	7.0	0.0	%
2014 $3.03 value per option		0.0	%	31.2	%	1.3	%	7.0	0.0	%
2014 $3.01 value per option		0.0	%	31.2	%	1.3	%	7.0	0.0	%

Monte Carlo Simulation

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Assumptions to Estimate Fair Value of Option Grants

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

	2015 $3.05 value per option		2015 $2.49 value per option		2014 $1.90 value per option		2014 $1.71 value per option
Dividend yield	0.0	%	0.0	%	0.0	%	0.0	%
Volatility	32.3	%	33.7	%	34.9	%	34.9	%
Risk-free interest rate	2.6	%	2.5	%	1.9	%	1.9	%
Expected term of options (in years)	10.0		10.0		10.0		10.0
Forfeiture adjustment	1.4	%	1.2	%	1.1	%	1.8	%
Suboptimal behavior factor	1.6		1.6		1.7		1.7

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Earnings (Loss) Per Share

6 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

NOTE  2.     Earnings (Loss) Per Share

The computation of basic earnings (loss) 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 loss per share is computed using the same weighted-average number of shares as the basic earnings (loss) per share computation.

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

	Three Months Ended				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Basic earnings (loss) per Common Share:
Weighted-average common shares outstanding for basic earnings (loss) per share calculation		9,766,000		9,644,000		9,741,000		9,608,000
Diluted earnings (loss) per Common Share:
Weighted-average common shares outstanding		9,766,000		9,644,000		9,741,000		9,608,000
Stock options (a)		196,000		—		196,000		97,000
Weighted-average common shares outstanding for diluted earnings (loss) per share calculation		9,962,000		9,644,000		9,937,000		9,705,000

(a) During the three and six month periods ended September 30, 2014, options to purchase 207,500 shares of common stock and during the six month period ended September 30, 2013, options to purchase  271,000 shares of common stock were excluded from the computation of diluted earnings (loss) per share because the exercise process of these options were greater than the average market price of the common share and the effect of their conversion would be antidilutive. During the three month period ended September 30, 2013 all stock options are excluded due to the Company’s net loss.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts	$ 240	$ 323
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	10,265,707	10,148,944
Treasury Stock, shares	449,649	445,067

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Concentration of Credit Risk

6 Months Ended

Sep. 30, 2014

Risks And Uncertainties [Abstract]

Concentration of Credit Risk

NOTE  12.      Concentration of Credit Risk

The Company is subject to concentration of credit risk primarily with its cash and accounts receivable. At times, the Company maintains its cash in bank deposit accounts in excess of the FDIC insured amount which is $250. 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 September 30, 2014, the Company had no other significant concentrations of credit risk.

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Document and Entity Information	6 Months Ended
	Sep. 30, 2014	Oct. 27, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
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		9,816,058

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New Accounting Standards

6 Months Ended

Sep. 30, 2014

Accounting Changes And Error Corrections [Abstract]

New Accounting Standards

NOTE  13. New Accounting Standards

In June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606. ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer.Step 2: Identify the performance obligations in the contract.Step 3: Determine the transaction price.Step 4: Allocate the transaction price to the performance obligations in the contract.Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. An entity should apply the amendments in this ASU using one of the following two methods:1. Retrospectively to each prior reporting period 2. Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. The Company is currently considering the impact that the adoption of this guidance will have 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		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
Net sales	$ 17,671	$ 15,464	$ 35,590	$ 35,032
Cost of sales	10,686	10,051	23,039	22,814
Gross profit	6,985	5,413	12,551	12,218
Selling, general, and administrative expenses	3,707	3,808	7,668	6,541
Engineering expense	2,221	1,910	4,046	3,729
Operating income (loss)	1,057	(305)	837	1,948
Interest expense	8	15	16	33
Other expense – net	33	30	62	51
Income (loss) before incomes taxes	1,016	(350)	759	1,864
Income tax provision (benefit)	376	(133)	281	708
Net income (loss)	$ 640	$ (217)	$ 478	$ 1,156
Earnings (loss) per common share:
Basic net income (loss) per share	$ 0.07	$ (0.02)	$ 0.05	$ 0.12
Diluted net income (loss) per share	$ 0.06	$ (0.02)	$ 0.05	$ 0.12
Weighted-average basic shares outstanding	9,766,000	9,644,000	9,741,000	9,608,000
Weighted-average diluted shares outstanding	9,962,000	9,644,000	9,937,000	9,705,000

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Other Current Liabilities

6 Months Ended

Sep. 30, 2014

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

NOTE  7.     Other Current Liabilities

Other current liabilities consist of the following:

	September 30, 2014		March 31, 2014
Engineering project reserves	$	1,490	$	1,530
Environmental reserves – Note 14		1,836		1,673
Accrued medical benefits cost		768		621
Accrued commissions		440		618
Other		725		772
Total	$	5,259	$	5,214

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Product Warranty

6 Months Ended

Sep. 30, 2014

Product Warranties Disclosures [Abstract]

Product Warranty

NOTE  6.      Product Warranty

All 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 six month period ended September 30, 2014 are summarized as follows:

Balance at March 31, 2014	$	284
Warranty costs incurred		(80	)
Change in estimates to pre-existing warranties		—
Product warranty accrual		153
Balance at September 30, 2014	$	357

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Earnings (Loss) Per Share (Tables)

6 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Components of Denominator for Basic Earnings (Loss) Per Common Share and Diluted Earnings (Loss) Per Common Share

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

	Three Months Ended				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Basic earnings (loss) per Common Share:
Weighted-average common shares outstanding for basic earnings (loss) per share calculation		9,766,000		9,644,000		9,741,000		9,608,000
Diluted earnings (loss) per Common Share:
Weighted-average common shares outstanding		9,766,000		9,644,000		9,741,000		9,608,000
Stock options (a)		196,000		—		196,000		97,000
Weighted-average common shares outstanding for diluted earnings (loss) per share calculation		9,962,000		9,644,000		9,937,000		9,705,000

(a) During the three and six month periods ended September 30, 2014, options to purchase 207,500 shares of common stock and during the six month period ended September 30, 2013, options to purchase  271,000 shares of common stock were excluded from the computation of diluted earnings (loss) per share because the exercise process of these options were greater than the average market price of the common share and the effect of their conversion would be antidilutive. During the three month period ended September 30, 2013 all stock options are excluded due to the Company’s net loss.

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Contingencies and Legacy Environmental Commitments

6 Months Ended

Sep. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

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 many 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 ASC 450 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 September 30, 2014 and March 31, 2014, the aggregate environmental liability was $9,677 and $10,323, respectively, included in other current liabilities and other long term liabilities on the condensed consolidated balance sheets, before cost-sharing of approximately $1,344 and $1,918 at September 30, 2014 and March 31, 2014, respectfully, that is included in other current assets and other long term assets, net of fees to be paid to a third party relating to this arrangement.  The Company’s environmental liability reserves are not reduced for any potential cost-sharing reimbursements.

In the first six months of fiscal 2015 and the first six months fiscal 2014, the Company spent $383 and $602, respectively, on environmental costs, and for the entire fiscal 2014 the Company spent $1,487. These costs are charged against the environmental liability reserve and do not impact net income (loss). 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 seven locations, including certain former facilities. Due to the nature of environmental remediation and monitoring work, such activities can extend for up to thirty 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 but not limited to the following: 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.

In addition, and as disclosed below, 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.

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 $3,158 for the Glen Head site at September 30, 2014. 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.  

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.

In the second quarter of fiscal 2014, the Company and the PaDEP executed a first amendment to the 2003 Consent Order for additional remediation work within the site covered by the 2003 Consent Order. The Company submitted an environmental cleanup plan for this additional remediation work during the second quarter of fiscal 2014.

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 Federal Labs site subject to the 1999 Consent Order. The U.S. Government cost-sharing receivable is classified primarily as other assets on the condensed consolidated balance sheets.  

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. In May 2014, the Pennsylvania Department of Environmental Protection (“PADEP”) approved the final remedial action report for the site subject to the 2001 Consent Order and as a result of this approval the Company believes that no further on-site work is required.  The remaining technical fees from the Company’s technical advisors are not expected to exceed $10.  Accordingly, the Company reduced the environmental reserve by $412 in June 2014.

In March 2014, the Company reached an agreement in principle with the U.S. Government with respect to environmental response costs for the Fed Labs site subject to the 2003 Consent Order. Under this agreement, the U.S. Government will pay an amount equal to approximately 26% of the environmental response costs incurred prior to December 31, 2012 and 33.5% of the ongoing environmental response costs incurred thereafter.  

At September 30, 2014, the environmental liability reserve at Federal Labs was $4,344. 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.

There are other properties that have a combined environmental liability of $2,175 at September 30, 2014.

The environmental activity is summarized as follows:

Balance at March 31, 2014	$	10,323
Environmental costs incurred		(383	)
Interest accretion		149
Reduction of environmental reserve-Part of Federal Labs site subject to the 2001 Consent Order		(412	)
Balance at September 30, 2014	$	9,677

Litigation

Certain other claims, suits, and complaints arising in the ordinary course of business have been filed or are pending against us. We believe, after consultation with legal counsel handling these specific matters, all such matters are reserved for or adequately covered by insurance or, if not so covered, are without merit or are of such kind, or involve such amounts, as would not be expected to have a material effect on our financial position or results of operations if determined adversely against us.

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Fair Value Measurements

6 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

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.

For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company develops unobservable inputs based on the best information and analysis available. The source of this information may include internal Company functional experts and external sources. The analysis includes internal valuation input and judgments and the significance of any unobservable inputs and data.

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 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

6 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

NOTE  8.      Income Taxes

Income taxes for the six month period ended September 30, 2014 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 September 30, 2014, the Company has available an Alternative Minimum Tax Credit of approximately $130 and is available to reduce future federal taxes. A valuation allowance of $265 exists 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 September 30, 2014, the Company had no unrecognized tax benefits for uncertain tax positions and the Company does not expect the liability for uncertain tax positions to increase during the fiscal year.

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Long-Term Debt Payable to Banks

6 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Long-Term Debt Payable to Banks

NOTE  9.      Long-Term Debt Payable to Banks

Revolving Credit Facility – The Company has a five-year Revolving Credit Facility (the “Revolving Credit Facility” or “Facility”),which provides the Company with a $20,000 unsecured revolving line of credit with an accordion feature that may increase the amount to 2.5 times EBITDA (as defined in the Facility) to a maximum of $35,000. The term of the Facility is through August 26, 2018.

The Company has the option, subject to bank approval, during the five-year term of the Revolving Credit Facility, to convert the Facility to a secured credit facility which increases the borrowing limit to 3.5 times EBITDA (as defined in the Facility) up to a maximum of $35,000. As of September 30, 2014, the Company has not exercised this option.

Amounts outstanding under the Revolving Credit Facility generally accrue interest at a floating rate, adjusted monthly. The floating rate is the then-current London Interbank Offered Rate (“LIBOR”) monthly floating rate plus an applicable margin based on the Company’s ratio of funded debt to EBITDA. The Company also must pay a quarterly unused commitment fee of 0.125%. Amounts outstanding under the Revolving Credit Facility are generally due and payable on the expiration date of the Facility (August 26, 2018), and the Company can elect to prepay some or all of the outstanding balance from time to time without penalty. Up to $8,000 of the available funds can be used to support the issuance of letters of credit. During the first six months of fiscal 2015, the Revolving Credit Facility had a blended interest rate of approximately 0.125%, which represents a commitment fee on the average daily unused portion of the Facility.  

The Revolving Credit Facility includes customary representations and warranties and requires the Company to comply with customary covenants, including, among other things, the following financial covenants: maintain at least a specified minimum level of tangible net worth; maintain a ratio of funded debt to EBITDA not exceeding a specified amount; and maintain a ratio of EBIT (as defined in the Facility) to cash interest expense not below a specified amount.

The Revolving Credit Facility does not restrict the Company’s ability to pay cash dividends on shares of its common stock, subject to maintaining $5,000 available under the Facility after the dividend payment and complying with the financial covenants included in the Facility. In addition, the Revolving Credit Facility does not restrict the Company’s ability to acquire or purchase other businesses or their assets provided that the businesses or assets are in a line of business which is substantially similar to the Company’s current business.

As of September 30, 2014, there were no outstanding borrowings under the Facility, $202 in outstanding (standby) letters of credit, and $19,798 in unsecured revolving line of credit availability. As of September 30, 2014, the Company was in compliance with the covenant provisions of the Facility.

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Employee Benefit Plans

6 Months Ended

Sep. 30, 2014

Compensation And Retirement Disclosure [Abstract]

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 $208 and $411, respectively, for the three and six month periods ended September 30, 2014 and $244 and $526, respectively, for the three and six month periods ended September 30, 2013.

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 $3,209 and $3,479 as of September 30, 2014 and March 31, 2014, 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				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Interest cost	$	5	$	8	$	11	$	15
Amortization of net (gain) loss		—		7		—		15
Net periodic cost	$	5	$	15	$	11	$	30

	Pension Plan
	Three Months Ended				Six Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Interest cost	$	28	$	28	$	57	$	56
Amortization of net (gain) loss		3		—		5		—
Net periodic cost	$	31	$	28	$	62	$	56

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended					12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended			6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	0 Months Ended		6 Months Ended		0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014	Mar. 31, 2015 Scenario, Forecast	Sep. 30, 2014 Employee Stock Option	Sep. 30, 2013 Employee Stock Option	Sep. 30, 2014 Restricted Stock	Sep. 30, 2013 Restricted Stock	Sep. 30, 2014 Black Scholes Based Option Pricing Model 2015 $4.61 Value Per Option	Mar. 31, 2015 Black Scholes Based Option Pricing Model 2015 $4.61 Value Per Option Scenario, Forecast	Sep. 30, 2014 Black Scholes Based Option Pricing Model 2015 $3.85 Value Per Option	Mar. 31, 2015 Black Scholes Based Option Pricing Model 2015 $3.85 Value Per Option Scenario, Forecast	Sep. 30, 2014 Black Scholes Based Option Pricing Model 2014 $3.03 Value Per Option	Mar. 31, 2014 Black Scholes Based Option Pricing Model 2014 $3.03 Value Per Option	Sep. 30, 2014 Black Scholes Based Option Pricing Model 2014 $3.01 Value Per Option	Mar. 31, 2014 Black Scholes Based Option Pricing Model 2014 $3.01 Value Per Option	Mar. 31, 2014 Monte Carlo Simulation	Mar. 31, 2015 Monte Carlo Simulation Scenario, Forecast	Sep. 30, 2014 Monte Carlo Simulation 2015 $3.05 Value Per Option	Mar. 31, 2015 Monte Carlo Simulation 2015 $3.05 Value Per Option Scenario, Forecast	Sep. 30, 2014 Monte Carlo Simulation 2015 $2.14 Value Per Option	Mar. 31, 2015 Monte Carlo Simulation 2015 $2.14 Value Per Option Scenario, Forecast	Sep. 30, 2014 Monte Carlo Simulation 2014 $1.90 Value Per Option	Mar. 31, 2014 Monte Carlo Simulation 2014 $1.90 Value Per Option	Sep. 30, 2014 Monte Carlo Simulation 2014 $1.71 Value Per Option	Mar. 31, 2014 Monte Carlo Simulation 2014 $1.71 Value Per Option	Jun. 16, 2014 Chief Financial Officer	Aug. 18, 2014 Vice President	Sep. 30, 2014 Maximum	Sep. 30, 2014 2012 Plan	Jul. 07, 2014 2012 Plan Chief Financial Officer	Sep. 30, 2014 2006 Plan	Jul. 07, 2014 2006 Plan Chief Financial Officer	Sep. 30, 2014 2004 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense, net of tax	$ 179	$ 108	$ 377	$ 217
Stock-based compensation expense, net of tax, per diluted share	$ 0.02	$ 0.01	$ 0.04	$ 0.02
Shares of common stock granted	285,376		285,376																													750,000		500,000
Shares of common stock granted, expiration date																																Oct. 31, 2022		Jul. 31, 2016		Sep. 30, 2014
Expiration period																															10 years
Options vesting period, beginning one year after the date of the grant			3 years
Number of Shares, Granted			400,000		158,000	400,000													139,000	350,000									200,000	200,000			150,000		50,000
Weighted-average value per option granted											$ 4.61	$ 4.61	$ 3.85	$ 3.85	$ 3.03	$ 3.03	$ 3.01	$ 3.01			$ 3.05	$ 3.05	$ 2.49	$ 2.49	$ 1.90	$ 1.90	$ 1.71	$ 1.71	$ 12.78	$ 10.40
Options valued by Black Scholes pricing model					19,000	50,000
Exercise of stock options			662	607
Aggregate intrinsic value of options exercised			339
Stock option compensation expense							487	248	112	102
Taxes related to stock option compensation expense							180	94	41	39
Unrecognized compensation cost related to stock options granted-but-not-yet-vested that are expected to become exercisable	1,156		1,156
Weighted-average period cost is to be recognized			2 years				2 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	$ 291		$ 291

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Contingencies and Legacy Environmental Commitments - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended	1 Months Ended		1 Months Ended	3 Months Ended			6 Months Ended
	Sep. 30, 2014 Location	Sep. 30, 2013	Mar. 31, 2014	Jul. 31, 2001 Glen Head, New York	Sep. 30, 2014 Glen Head, New York	Mar. 31, 2014 Federal Labs	Jun. 30, 2005 Federal Labs	Dec. 31, 2003 Federal Labs	Jun. 30, 1999 Federal Labs	Sep. 30, 2014 Federal Labs	Sep. 30, 2014 Federal Labs Minimum	Sep. 30, 2014 Federal Labs Maximum	Sep. 30, 2014 Other Properties
Site Contingency [Line Items]
Aggregate environmental liability	$ 9,677		$ 10,323		$ 3,158					$ 4,344			$ 2,175
Cost-sharing related to environmental liabilities	1,344		1,918
Environmental costs	383	602	1,487					200
Number of locations for participating in environmental assessments and remediation work	7
Time frame for environmental liabilities	30 years										20 years	30 years
Real estate held for sale	3,800		3,800		3,800
Sale of environmental remediation property				4,000
Additional environmental remediation expense								200
Percentage of environmental costs paid by Federal Government							45.00%		50.00%
Maximum technical and oversight fees										10
Decrease in environmental reserve	$ 412									$ 412
Percentage of environmental costs payable						26.00%
Percentage of environmental costs payable thereafter						33.50%

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Subsequent Events

6 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

NOTE  16.Subsequent Events

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

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Property, Equipment, and Related Depreciation and Amortization (Tables)

6 Months Ended

Sep. 30, 2014

Property Plant And Equipment [Abstract]

Average Estimated Useful Lives for Property

Average 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		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 5	$ 8	$ 11	$ 15
Amortization of net (gain) loss		7		15
Net periodic cost	5	15	11	30
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Interest cost	28	28	57	56
Amortization of net (gain) loss	3		5
Net periodic cost	$ 31	$ 28	$ 62	$ 56

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Property, Equipment, and Related Depreciation and Amortization - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Property Plant And Equipment [Abstract]
Depreciation and amortization expense	$ 383	$ 339	$ 733	$ 670
Expected net sale proceeds			$ 3,800

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income	$ 478	$ 1,156
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Write-off of engineering project development qualification units	67
Shipped qualification assets	2	743
Depreciation and amortization	1,078	749
Non-cash reserve accretion	149	174
Stock based compensation	599	350
Provision for losses on accounts receivable	9	9
Deferred taxes-net	311	561
Changes in assets and liabilities:
(Increase) decrease in accounts receivable and other receivables	9,397	3,318
(Increase) decrease in inventories	(3,677)	(6,958)
(Increase) decrease in other assets	363	(365)
Increase (decrease) in accounts payable	(365)	1,425
Increase (decrease) in accrued compensation	(939)	(1,335)
Increase (decrease) in accrued income taxes	(55)	(741)
Increase (decrease) in other liabilities	(1,006)	(1,660)
Net cash provided by (used in) operating activities	6,411	(2,574)
Cash flows from investing activities:
Capital expenditures	(174)	(447)
Capitalized qualification units and pre-qualification assets	(44)	(744)
Net cash used in investing activities	(218)	(1,191)
Cash flows from financing activities:
Payments on long-term debt	0	0
Net borrowings (repayments) of other debt	0	0
Payment of debt issue costs		(33)
Exercise of stock options	662	607
Net cash provided by financing activities	662	574
Increase (decrease) in cash	6,855	(3,191)
Cash at beginning of period	6,021	6,688
Cash at end of period	12,876	3,497
Supplemental information:
Interest payments	13	26
Income tax payments	$ 24	$ 980

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Property, Equipment, and Related Depreciation and Amortization

6 Months Ended

Sep. 30, 2014

Property Plant And Equipment [Abstract]

Property, Equipment, and Related Depreciation and Amortization

NOTE  5.      Property, Equipment, and Related Depreciation and Amortization

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 amortized using the shorter of the estimated economic useful life or the term of the lease. Depreciation and amortization expense for the three month and six month periods ended September 30, 2014 was $383 and $733, respectively, and for the three and six month periods ended September 30, 2013 was $339 and $670, respectively.

Average 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 currently under sales contract owned in Glen Head, New York. 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)

6 Months Ended

Sep. 30, 2014

Product Warranties Disclosures [Abstract]

Changes in Carrying Amount of Accrued Product Warranty Costs

Changes in the carrying amount of accrued product warranty costs for the six month period ended September 30, 2014 are summarized as follows:

Balance at March 31, 2014	$	284
Warranty costs incurred		(80	)
Change in estimates to pre-existing warranties		—
Product warranty accrual		153
Balance at September 30, 2014	$	357

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Stock-Based Compensation - Restricted Stock Award Activity under All Plans (Detail) (USD $)	6 Months Ended
	Sep. 30, 2014
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Shares Non-vested, Beginning Balance	29,807
Number of Shares, Granted	27,930
Number of Shares, Vested	(22,924)
Number of Shares, Cancelled	(3,495)
Number of Shares Non-vested, Ending Balance	31,318
Weighted-Average Grant Date Fair Value Non-vested, Beginning Balance	$ 8.93
Weighted-Average Grand Date Fair Value, Granted	$ 10.07
Weighted-Average Grand Date Fair Value, Vested	$ 9.11
Weighted-Average Grand Date Fair Value, Cancelled	$ 9.04
Weighted-Average Grant Date Fair Value Non-vested, Ending Balance	$ 9.81

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Segment, Geographic Location and Customer Information

6 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

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 derived from customers for the three and six month periods ended September 30, 2014 and 2013 are summarized as follows.

	Three Months Ended						Six Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Customer A		17	%		21	%		12	%		28	%
Customer B		17			18			18			18
Customer C		14			23			11			18
Customer D		11			*			20			*
Customer E		*			10			*			*

* Represents less than 10% of net sales.

As of September 30, 2014, 22%, 20% and 16% of net accounts receivable were derived from three major customers, respectively. As of September 30, 2013, 33%, 21% and 10% of net accounts receivable were derived from three major customers, respectively.

Net sales below show the geographic location of customers for the three and six month periods ended September 30, 2014 and September 30, 2013:

	Three Months Ended				Six Months Ended
Location	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
United States	$	10,278	$	9,796	$	18,829	$	22,189
Germany		2,013		—		6,400		326
Italy		1,613		2,206		2,282		4,859
England		475		1,665		1,104		1,989
Other European countries		1,401		450		2,776		1,016
Pacific and Far East		837		556		2,639		1,147
Other international		1,054		791		1,560		3,506
Total	$	17,671	$	15,464	$	35,590	$	35,032