Annual report pursuant to Section 13 and 15(d)

Commitments And Contingencies

Commitments And Contingencies
12 Months Ended
Mar. 31, 2012
Commitments And Contingencies [Abstract]  
Commitments And Contingencies

Note 5. Commitments and Contingencies:


The Company leases a 185,000 square foot corporate facility in Aurora, Illinois, to house product distribution, engineering, sales, marketing, manufacturing and administration pursuant to a lease that originated in 1997 and runs through September 2017. The rental payments are currently $2.0 million a year and increase 2% every other year. In accordance with FASB Technical Bulletin 88-1, Issues Related to Accounting of Leases, as codified in ASC topic 840, Leases ("ASC 840") the Company recorded a long-term deferred lease liability of $665,000 and $761,000 presented in other long-term liabilities and a short-term deferred lease liability of $94,000 and $74,000 presented in Accrued expenses on the Consolidated Balance Sheets as of March 31, 2012 and 2011, respectively, to account for the straight-line impact on the rental payments. As part of the Noran Tel relocation, the Company exercised the early termination option of the lease of the Regina facility which it will lease until August 2012. The leases require the Company to pay utilities, insurance and real estate taxes on the facilities. Total rent expense was $2.2 million, $2.0 million and $2.1 million for fiscal years 2012, 2011 and 2010, respectively. In fiscal year 2012, rent expense was offset by $0.4 million of sublease income.

Future obligations and commitments as of March 31, 2012 consisted of the following:


     Payments due by fiscal year  
(in thousands)    2013      2014      2015      2016      2017      Thereafter      Total  

Purchase obligations

   $ 5,232       $ —         $ —         $ —         $ —         $ —         $ 5,232   

Future minimum lease payments for operating leases

     2,168         2,028         2,048         2,069         2,089         1,045         11,447   






















Future obligations and commitments

   $ 7,400       $ 2,028       $ 2,048       $ 2,069       $ 2,089       $ 1,045       $ 16,679   























The Company and its subsidiaries are involved in various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that are incorporated in the Company's products, which are being handled and defended in the ordinary course of business. These matters are in various stages of investigation and litigation, and are being vigorously defended. Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company's operating results or cash flows in a particular period. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and it records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable. The Company has not recorded any contingent liability attributable to existing litigation.

Wi-LAN Inc. v. Westell Technologies, Inc. et al.

In October 2007, Wi-LAN Inc. ("Wi-LAN"), a patent-holding company existing under the laws of Canada, filed two complaints against the Company, amongst other defendants, in the U.S. District Court for the Eastern District of Texas, Marshall Division. In the complaint, Wi-LAN alleged that certain of the Company's products infringe U.S. patent numbers 5,282,222 and RE37,802. Wi-LAN sought monetary damages and other relief. In February 2011, the Company settled the lawsuit with the plaintiff. The settlement agreement was not material to the Company and concludes the lawsuit.


Contingency Reserves

As a result of a vendor dispute in the ConferencePlus segment, a $700,000 loss contingency reserve was recorded in cost of services in the fourth quarter of fiscal year 2010. The Company applies ASC 450 in assessing the need for a reserve and concluded that this loss was both probable and estimable. A settlement agreement was reached with the vendor and the Company paid the entire $700,000 as part of the settlement in the first quarter of fiscal year 2011.

In addition, as of March 31, 2012, the Company has a contingent liability accrual of $810,000 related to certain intellectual property and indemnification claims, of which $410,000 relates to discontinued operations. This accrual is classified as Accrued expenses on the Consolidated Balance Sheet as of March 31, 2012.