Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Fair Value Measurements

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Note 12 - Fair Value Measurements
 3 Months Ended
Sep. 30, 2012
Fair Value Disclosures [Text Block]
(12)  Fair Value Measurements

We determine fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value is calculated based on assumptions that market participants use in pricing the asset or liability, and not on assumptions specific to the Company. In addition, the fair value of liabilities includes consideration of non-performance risk including our own credit risk. Each fair value measurement is reported in one of three levels, determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The following section describes the valuation methodologies we use to measure different financial assets and liabilities at fair value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis at September 30, 2012 and June 30, 2012 (in thousands):

September 30, 2012
                       
   
Level 1
   
Level 2
   
Level 3
   
Balance
 
Cash equivalents
  $ 89,335     $ -     $ -     $ 89,335  
Available-for-sale securities
    -       10,670       -       10,670  
Total
  $ 89,335     $ 10,670     $ -     $ 100,005  

June 30, 2012
                       
   
Level 1
   
Level 2
   
Level 3
   
Balance
 
Cash equivalents
  $ 95,137     $ -     $ -     $ 95,137  
Available-for-sale securities
    -       9,005       -       9,005  
Total
  $ 95,137     $ 9,005     $ -     $ 104,142  

Cash equivalents consist of money market accounts and mutual funds in U.S. government and agency fixed income securities. We use quoted prices in active markets for identical assets or liabilities to determine fair value. There were no transfers between level 1 and level 2 during fiscal 2013 or fiscal 2012. At both September 30, 2012 and June 30, 2012, $15.4 million of the cash equivalents were restricted, and classified as a long-term asset.

At September 30, 2012, available-for-sale securities consist of $9.2 million in U.S. municipal bonds and $1.5 million of corporate bonds, and at June 30, 2012, available-for-sale securities consisted of $7.5 million in U.S. municipal bonds and $1.5 million of corporate bonds, all with maturities of less than two years. The bonds are rated A/A2 or better by S&P/Moodys respectively. As of September 30, 2012 and June 30, 2012, there were no material gross unrealized gains or losses on available-for-sale securities.

As of September 30, 2012 and June 30, 2012, the contractual maturities of our available-for-sale investments were as follows:

September 30, 2012
 
   
Cost
   
Estimated Fair Value
 
Due in one year or less
  $ 8,576     $ 8,474  
Due after one year through five years
  $ 2,197     $ 2,196  

June 30, 2012
 
   
Cost
   
Estimated Fair Value
 
Due in one year or less
  $ 6,999     $ 6,862  
Due after one year through five years
  $ 2,130     $ 2,143  

No investments have been in a continuous loss position for more than one year, and no other-than-temporary impairments were recognized. Also see Note 4, "Restricted Cash and Investments" and Note 5, "Marketable Securities".

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

We measure certain assets at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. During the three month periods ended September 30, 2012 and  2011, we did not record any impairments on those assets required to be measured at fair value on a non-recurring basis.