NOTE 12 – INCOME TAXES:

The Company files federal and state income tax returns in several domestic and international jurisdictions. In most tax jurisdictions, returns are subject to examination by the relevant tax authorities for a number of years after the returns have been filed. The Company is subject to examination in federal and state tax jurisdictions for tax year 2013 and tax years 2009 through 2013, respectively. The Company is subject to examination in the People’s Republic of China for tax years 2011 through 2013. During the third quarter of fiscal year 2014, the U. S. Internal Revenue Service (“IRS”) examination of tax years 2011 and 2012 was completed. Based upon the results of the IRS examination, the Company reduced its liability for unrecognized tax benefits by $134. The liability for unrecognized tax benefits was $0 and $134 at December 31, 2013 and at March 31, 2013, respectively.

It is the Company’s policy to recognize any interest related to uncertain tax positions in interest expense and any penalties related to uncertain tax positions in selling, general and administrative expense. During the three and nine months ended December 31, 2013, the Company reversed provisions made in previous periods for interest related to its uncertain tax positions of $15 and $11, respectively, based upon the results of the IRS examination of tax years 2011 and 2012. During the three months ended December 31, 2012, the Company recorded $2 for interest related to its uncertain tax positions. During the nine months ended December 31, 2012, the Company reversed provisions that had been made in previous periods for interest related to its uncertain tax positions of $387 due to lower interest assessments by the IRS than expected. Including this reversal, the Company recorded $(323) for interest related to its uncertain tax positions during the nine months ended December 31, 2012. No penalties related to uncertain tax positions were recorded in the three-month or nine-month periods ended December 31, 2013 or 2012.

In September 2013, the IRS issued final regulations affecting costs to acquire, produce, or improve tangible property and re-proposed regulations affecting dispositions of tangible property. The final regulations are effective for taxable years beginning on or after January 1, 2014. The Company has evaluated the final regulations and does not expect the adoption of the regulations to have a material impact on its consolidated financial statements.