Cover
Cover - shares | 9 Months Ended | |
Apr. 30, 2024 | Jun. 12, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 0-7928 | |
Entity Registrant Name | COMTECH TELECOMMUNICATIONS CORP /DE/ | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 11-2139466 | |
Entity Address, Address Line One | 305 N 54th Street | |
Entity Address, City or Town | Chandler | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 333-2200 | |
City Area Code | (480) | |
Local Phone Number | 333-2200 | |
Title of 12(b) Security | Common Stock, par value $0.10 per share | |
Trading Symbol | CMTL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,493,147 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2024 | |
Entity Central Index Key | 0000023197 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Apr. 30, 2024 | Jul. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 27,192,000 | $ 18,961,000 |
Accounts receivable, net | 199,646,000 | 163,159,000 |
Inventories, net | 96,120,000 | 105,845,000 |
Prepaid expenses and other current assets | 21,428,000 | 17,521,000 |
Total current assets | 344,386,000 | 305,486,000 |
Property, plant and equipment, net | 50,653,000 | 53,029,000 |
Operating lease right-of-use assets, net | 33,791,000 | 44,410,000 |
Goodwill | 333,105,000 | 347,692,000 |
Intangibles with finite lives, net | 210,041,000 | 225,907,000 |
Deferred financing costs, net | 1,722,000 | 2,349,000 |
Other assets, net | 17,301,000 | 17,364,000 |
Total assets | 990,999,000 | 996,237,000 |
Current liabilities: | ||
Accounts payable | 54,520,000 | 64,241,000 |
Accrued expenses and other current liabilities | 64,869,000 | 66,990,000 |
Current portion of long-term debt | 3,712,000 | 4,375,000 |
Operating lease liabilities, current | 8,014,000 | 8,645,000 |
Contract liabilities | 61,014,000 | 66,351,000 |
Interest payable | 1,256,000 | 1,368,000 |
Total current liabilities | 193,385,000 | 211,970,000 |
Non-current portion of long-term debt | 157,709,000 | 160,029,000 |
Operating lease liabilities, non-current | 31,250,000 | 41,763,000 |
Income taxes payable, non-current | 2,294,000 | 2,208,000 |
Deferred tax liability, net | 8,231,000 | 9,494,000 |
Long-term contract liabilities | 19,795,000 | 18,419,000 |
Other liabilities | 1,662,000 | 1,844,000 |
Total liabilities | 414,326,000 | 445,727,000 |
Commitments and contingencies (See Note 19) | ||
Convertible preferred stock, par value $0.10 per share; authorized and issued 166,121 shares at April 30, 2024 (includes accrued dividends of $1,267,000) and authorized 125,000 shares; issued 100,000 at July 31, 2023 (includes accrued dividends of $604,000) | 170,254,000 | 112,211,000 |
Equity, Attributable to Parent [Abstract] | ||
Preferred stock, par value $0.10 per share; authorized and unissued 1,833,879 and 1,875,000 shares at April 30, 2024 and July 31, 2023, respectively | 0 | 0 |
Common stock, par value $0.10 per share; authorized 100,000,000 shares; issued 43,526,372 and 43,096,271 shares at April 30, 2024 and July 31, 2023, respectively | 4,353,000 | 4,310,000 |
Additional paid-in capital | 639,730,000 | 636,925,000 |
Retained earnings | 204,185,000 | 238,913,000 |
Stockholders' equity before treasury stock | 848,268,000 | 880,148,000 |
Treasury stock, at cost (15,033,317 shares at April 30, 2024 and July 31, 2023) | (441,849,000) | (441,849,000) |
Total stockholders’ equity | 406,419,000 | 438,299,000 |
Total liabilities, convertible preferred stock and stockholders’ equity | $ 990,999,000 | $ 996,237,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Apr. 30, 2024 | Jul. 31, 2023 |
Equity, Attributable to Parent [Abstract] | ||
Convertible preferred stock, par value per share (in dollars per share) | $ 0.10 | $ 0.10 |
Convertible preferred stock, shares authorized (in shares) | 166,121 | 125,000 |
Convertible preferred stock, par value (in shares) | 166,121 | 100,000 |
Convertible preferred stock, accrued dividends | $ 1,267,000 | $ 604,000 |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 1,833,879 | 1,875,000 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 43,526,372 | 43,096,271 |
Treasury stock, shares (in shares) | 15,033,317 | 15,033,317 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | |
Income Statement [Abstract] | ||||
Net sales | $ 128,076,000 | $ 136,316,000 | $ 414,212,000 | $ 401,180,000 |
Cost of sales | 89,122,000 | 93,170,000 | 284,178,000 | 265,307,000 |
Gross profit | 38,954,000 | 43,146,000 | 130,034,000 | 135,873,000 |
Expenses: | ||||
Selling, general and administrative | 28,697,000 | 31,397,000 | 91,699,000 | 89,649,000 |
Research and development | 5,746,000 | 11,676,000 | 20,401,000 | 36,868,000 |
Amortization of intangibles | 5,289,000 | 5,349,000 | 15,866,000 | 16,047,000 |
Loss (gain) on business divestiture, net | 200,000 | 0 | (2,013,000) | 0 |
CEO transition costs | 2,492,000 | 0 | 2,492,000 | 9,090,000 |
Total operating expenses | 42,424,000 | 48,422,000 | 128,445,000 | 151,654,000 |
Operating (loss) income | (3,470,000) | (5,276,000) | 1,589,000 | (15,781,000) |
Other expenses (income): | ||||
Interest expense | 5,146,000 | 4,386,000 | 15,343,000 | 10,412,000 |
Interest (income) and other | 409,000 | 728,000 | 1,246,000 | 928,000 |
Change in fair value of warrants | (6,439,000) | 0 | (6,439,000) | 0 |
Loss before (benefit from) provision for income taxes | (2,586,000) | (10,390,000) | (8,561,000) | (27,121,000) |
(Benefit from) provision for income taxes | (5,381,000) | (2,932,000) | 639,000 | (3,762,000) |
Net income (loss) | 2,795,000 | (7,458,000) | (9,200,000) | (23,359,000) |
Establishment of initial convertible preferred stock purchase option liability | 0 | 0 | (13,640,000) | 0 |
Convertible preferred stock issuance costs | 76,000 | 0 | 4,349,000 | 0 |
Dividend on convertible preferred stock | (3,759,000) | (1,766,000) | (7,643,000) | (5,213,000) |
Net loss attributable to common stockholders | $ (1,040,000) | $ (9,224,000) | $ (34,832,000) | $ (28,572,000) |
Net loss per common share (See Note 6): | ||||
Basic (in dollars per share) | $ (0.04) | $ (0.33) | $ (1.21) | $ (1.02) |
Diluted (in dollars per share) | $ (0.04) | $ (0.33) | $ (1.21) | $ (1.02) |
Weighted average number of common shares outstanding - basic (in shares) | 28,854,000 | 28,071,000 | 28,753,000 | 27,950,000 |
Weighted average number of common and common equivalent shares outstanding - diluted (in shares) | 28,854,000 | 28,071,000 | 28,753,000 | 27,950,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock |
Beginning Balance (in shares) at Jul. 31, 2022 | 100,000 | ||||
Beginning Balance at Jul. 31, 2022 | $ 105,204,000 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Convertible preferred stock issuance costs | 0 | ||||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | $ (5,213,000) | ||||
Ending Balance (in shares) at Apr. 30, 2023 | 100,000 | ||||
Ending Balance at Apr. 30, 2023 | $ 110,417,000 | ||||
Beginning balance (in shares) at Jul. 31, 2022 | 42,672,827 | ||||
Beginning balance (in shares) at Jul. 31, 2022 | 15,033,317 | ||||
Beginning balance at Jul. 31, 2022 | 466,585,000 | $ 4,267,000 | $ 625,484,000 | $ 278,683,000 | $ (441,849,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-classified stock award compensation | 6,298,000 | 6,298,000 | |||
CEO transition costs related to equity-classified stock-based awards | 3,764,000 | 3,764,000 | |||
Issuance of employee stock purchase plan shares (in shares) | 41,606 | ||||
Issuance of employee stock purchase plan shares | 334,000 | $ 4,000 | 330,000 | ||
Issuance of restricted stock (in shares) | 93,091 | ||||
Issuance of restricted stock, net of forfeiture | 0 | $ 9,000 | (9,000) | ||
Net settlement of stock-based awards (in shares) | 114,741 | ||||
Net settlement of stock-based awards | (1,664,000) | $ 12,000 | (1,676,000) | ||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | (5,213,000) | (5,213,000) | |||
Cash dividends declared, net | (5,549,000) | (5,549,000) | |||
Accrual of dividend equivalents, net of reversal | (342,000) | (342,000) | |||
Net loss | (23,359,000) | (23,359,000) | |||
Ending balance (in shares) at Apr. 30, 2023 | 42,922,265 | ||||
Ending balance (in shares) at Apr. 30, 2023 | 15,033,317 | ||||
Ending balance at Apr. 30, 2023 | $ 440,854,000 | $ 4,292,000 | 634,191,000 | 244,220,000 | $ (441,849,000) |
Beginning Balance (in shares) at Jan. 31, 2023 | 100,000 | ||||
Beginning Balance at Jan. 31, 2023 | $ 108,651,000 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Convertible preferred stock issuance costs | 0 | ||||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | $ (1,766,000) | ||||
Ending Balance (in shares) at Apr. 30, 2023 | 100,000 | ||||
Ending Balance at Apr. 30, 2023 | $ 110,417,000 | ||||
Beginning balance (in shares) at Jan. 31, 2023 | 42,900,871 | ||||
Beginning balance (in shares) at Jan. 31, 2023 | 15,033,317 | ||||
Beginning balance at Jan. 31, 2023 | 446,096,000 | $ 4,290,000 | 630,233,000 | 253,422,000 | $ (441,849,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-classified stock award compensation | 4,126,000 | 4,126,000 | |||
Issuance of employee stock purchase plan shares (in shares) | 12,146 | ||||
Issuance of employee stock purchase plan shares | 127,000 | $ 1,000 | 126,000 | ||
Net settlement of stock-based awards (in shares) | 9,248 | ||||
Net settlement of stock-based awards | (293,000) | $ 1,000 | (294,000) | ||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | (1,766,000) | (1,766,000) | |||
Reversal of dividend equivalents | (22,000) | (22,000) | |||
Net loss | (7,458,000) | (7,458,000) | |||
Ending balance (in shares) at Apr. 30, 2023 | 42,922,265 | ||||
Ending balance (in shares) at Apr. 30, 2023 | 15,033,317 | ||||
Ending balance at Apr. 30, 2023 | $ 440,854,000 | $ 4,292,000 | 634,191,000 | 244,220,000 | $ (441,849,000) |
Beginning Balance (in shares) at Jul. 31, 2023 | 100,000 | ||||
Beginning Balance at Jul. 31, 2023 | $ 112,211,000 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Extinguishment of convertible preferred stock (in shares) | (100,000) | ||||
Extinguishment of convertible preferred stock | $ (115,721,000) | ||||
Issuance of convertible preferred stock | 166,121 | ||||
Issuance of convertible preferred stock | $ 166,121,000 | ||||
Convertible preferred stock issuance costs | (4,349,000) | ||||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | $ 11,992,000 | ||||
Ending Balance (in shares) at Apr. 30, 2024 | 166,121 | ||||
Ending Balance at Apr. 30, 2024 | $ 170,254,000 | ||||
Beginning balance (in shares) at Jul. 31, 2023 | 43,096,271 | 43,096,271 | |||
Beginning balance (in shares) at Jul. 31, 2023 | 15,033,317 | 15,033,317 | |||
Beginning balance at Jul. 31, 2023 | $ 438,299,000 | $ 4,310,000 | 636,925,000 | 238,913,000 | $ (441,849,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-classified stock award compensation | 5,238,000 | 5,238,000 | |||
Issuance of employee stock purchase plan shares (in shares) | 38,554 | ||||
Issuance of employee stock purchase plan shares | 219,000 | $ 4,000 | 215,000 | ||
Issuance of restricted stock (in shares) | (2,686) | ||||
Issuance of restricted stock, net of forfeiture | 0 | $ 0 | 0 | ||
Net settlement of stock-based awards (in shares) | 394,233 | ||||
Net settlement of stock-based awards | (2,609,000) | $ 39,000 | (2,648,000) | ||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | (11,992,000) | (11,992,000) | |||
Reversal of dividend equivalents | 104,000 | 104,000 | |||
Net loss | $ (9,200,000) | (9,200,000) | |||
Ending balance (in shares) at Apr. 30, 2024 | 43,526,372 | 43,526,372 | |||
Ending balance (in shares) at Apr. 30, 2024 | 15,033,317 | 15,033,317 | |||
Ending balance at Apr. 30, 2024 | $ 406,419,000 | $ 4,353,000 | 639,730,000 | 204,185,000 | $ (441,849,000) |
Beginning Balance (in shares) at Jan. 31, 2024 | 166,121 | ||||
Beginning Balance at Jan. 31, 2024 | $ 166,495,000 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Convertible preferred stock issuance costs | (76,000) | ||||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | $ (3,835,000) | ||||
Ending Balance (in shares) at Apr. 30, 2024 | 166,121 | ||||
Ending Balance at Apr. 30, 2024 | $ 170,254,000 | ||||
Beginning balance (in shares) at Jan. 31, 2024 | 43,506,289 | ||||
Beginning balance (in shares) at Jan. 31, 2024 | 15,033,317 | ||||
Beginning balance at Jan. 31, 2024 | 406,959,000 | $ 4,351,000 | 639,300,000 | 205,157,000 | $ (441,849,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-classified stock award compensation | 404,000 | 404,000 | |||
Issuance of employee stock purchase plan shares (in shares) | 14,437 | ||||
Issuance of employee stock purchase plan shares | 43,000 | $ 2,000 | 41,000 | ||
Net settlement of stock-based awards (in shares) | 5,646 | ||||
Net settlement of stock-based awards | (15,000) | $ 0 | (15,000) | ||
Extinguishment of convertible preferred stock | (13,640,000) | (13,640,000) | |||
Adjustment to reflect redemption value of convertible preferred stock (including accrued dividends) | (3,835,000) | (3,835,000) | |||
Reversal of dividend equivalents | 68,000 | 68,000 | |||
Net loss | $ 2,795,000 | 2,795,000 | |||
Ending balance (in shares) at Apr. 30, 2024 | 43,526,372 | 43,526,372 | |||
Ending balance (in shares) at Apr. 30, 2024 | 15,033,317 | 15,033,317 | |||
Ending balance at Apr. 30, 2024 | $ 406,419,000 | $ 4,353,000 | $ 639,730,000 | $ 204,185,000 | $ (441,849,000) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Parenthetical) | 9 Months Ended |
Apr. 30, 2023 $ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Cash dividends declared (in dollars per share) | $ 0.20 |
Accrual of dividend equivalents (in dollars per share) | $ 0.20 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Cash flows from operating activities: | ||||||
Net loss | $ 2,795,000 | $ (7,458,000) | $ (9,200,000) | $ (23,359,000) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization of property, plant and equipment | 3,121,000 | 2,981,000 | 9,073,000 | 8,746,000 | ||
Amortization of intangible assets with finite lives | 5,289,000 | 5,349,000 | 15,866,000 | 16,047,000 | ||
Amortization of stock-based compensation | 404,000 | 4,126,000 | 5,238,000 | 6,298,000 | ||
Amortization of cost to fulfill assets | 240,000 | 240,000 | 720,000 | 720,000 | ||
CEO transition costs related to equity-classified stock-based awards | 0 | 0 | 0 | 3,764,000 | ||
Amortization of deferred financing costs | 2,694,000 | 1,257,000 | ||||
Change in fair value of warrants | (6,439,000) | 0 | (6,439,000) | 0 | ||
Loss (gain) on business divestiture, net | 200,000 | 0 | (2,013,000) | 0 | ||
Changes in other liabilities | (3,100,000) | (3,100,000) | ||||
Loss on disposal of property, plant and equipment | 17,000 | 48,000 | ||||
Provision for allowance for doubtful accounts | 1,134,000 | 586,000 | ||||
Provision for excess and obsolete inventory | 2,243,000 | 2,753,000 | ||||
Deferred income tax benefit | (1,013,000) | (4,926,000) | ||||
Changes in assets and liabilities, net of effects of divestiture: | ||||||
Accounts receivable | (42,068,000) | (21,070,000) | ||||
Inventories | (10,189,000) | (14,383,000) | ||||
Prepaid expenses and other current assets | 1,596,000 | 1,826,000 | ||||
Other assets | 1,159,000 | (3,547,000) | ||||
Accounts payable | (7,316,000) | 18,199,000 | ||||
Accrued expenses and other current liabilities | 2,117,000 | (797,000) | ||||
Contract liabilities | (3,305,000) | 8,621,000 | ||||
Other liabilities, non-current | 41,000 | 142,000 | ||||
Interest payable | (112,000) | 1,037,000 | ||||
Income taxes payable | (2,141,000) | 961,000 | ||||
Net cash used in operating activities | (44,998,000) | (177,000) | $ (4,433,000) | $ 1,997,000 | ||
Cash flows from investing activities: | ||||||
Proceeds from divestiture | 33,225,000 | 0 | ||||
Purchases of property, plant and equipment | (2,667,000) | (4,955,000) | (8,904,000) | (14,873,000) | ||
Net cash provided by (used in) investing activities | 24,321,000 | (14,873,000) | ||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of convertible preferred stock | 43,200,000 | 0 | ||||
Net borrowings of long-term debt under Revolving Loan Facility | 17,554,000 | 31,000,000 | ||||
Repayment of debt under Term Loan | (20,613,000) | (1,250,000) | ||||
Remittance of employees’ statutory tax withholding for stock awards | (3,810,000) | (2,766,000) | ||||
Payment of deferred financing costs | (3,180,000) | (3,791,000) | ||||
Cash dividends paid on common stock | (267,000) | (8,658,000) | ||||
Proceeds from issuance of employee stock purchase plan shares | 219,000 | 370,000 | ||||
Repayment of principal amounts under finance lease liabilities | 0 | (4,000) | ||||
Net cash provided by financing activities | 28,908,000 | 14,800,000 | ||||
Net increase (decrease) in cash and cash equivalents | 8,231,000 | (250,000) | ||||
Cash and cash equivalents at beginning of period | 18,961,000 | 21,654,000 | 21,654,000 | |||
Cash and cash equivalents at end of period | $ 27,192,000 | $ 21,404,000 | 27,192,000 | 21,404,000 | $ 18,961,000 | $ 21,654,000 |
Cash paid during the period for: | ||||||
Interest | 12,743,000 | 8,070,000 | ||||
Income taxes, net | 3,794,000 | 123,000 | ||||
Non-cash investing and financing activities: | ||||||
Accrued additions to property, plant and equipment | 1,630,000 | 1,421,000 | ||||
Adjustment to reflect redemption value of convertible preferred stock | 11,992,000 | 5,213,000 | ||||
Unpaid convertible preferred stock issuance costs | 154,000 | 0 | ||||
Accrued deferred financing costs | 1,479,000 | 17,000 | ||||
Accrued remittance of employees' statutory tax withholdings | 4,000 | 0 | ||||
Cash dividends declared on common stock but unpaid, including (reversal) accrual of dividend equivalents | (104,000) | 342,000 | ||||
Accrued shelf registration costs | 20,000 | 0 | ||||
Reclassification of finance lease right-of-use assets to property, plant and equipment | 0 | 274,000 | ||||
Issuance of restricted stock | 0 | 9,000 | ||||
Convertible Preferred Stock | ||||||
Cash flows from financing activities: | ||||||
Payment of issuance costs | (4,195,000) | 0 | ||||
Shelf Registration | ||||||
Cash flows from financing activities: | ||||||
Payment of issuance costs | $ 0 | $ (101,000) |
General
General | 9 Months Ended |
Apr. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The accompanying Condensed Consolidated Financial Statements of Comtech Telecommunications Corp. and its subsidiaries ("Comtech," "we," "us," or "our") as of and for the three and nine months ended April 30, 2024 and 2023 are unaudited. In the opinion of management, the information furnished reflects all material adjustments (which include normal recurring adjustments) necessary for a fair presentation of the results for the unaudited interim periods. Our results of operations for such periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. The preparation of our Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements , and the reported amounts of net sales and expenses during the reported period. Actual results may differ from those estimates. Our Condensed Consolidated Financial Statements should be read in conjunction with our audited consolidated financial statements, filed with the Securities and Exchange Commission ("SEC"), for the fiscal year ended July 31, 2023 and the notes thereto contained in our Annual Report on Form 10-K, and all of our other filings with the SEC. Liquidity and Going Concern The accompanying unaudited Condensed Consolidated Financial Statements have been prepared assuming we will continue as a going concern. The going concern basis of presentation assumes that we will continue in operation one year after the date these unaudited Condensed Consolidated Financial Statements are issued and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Pursuant to the requirements of ASC Topic 205-40, " Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern ," we are required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern. This evaluation does not take into consideration the potential mitigating effect of our plans that have not been fully implemented or are not within our control as of the date the unaudited Condensed Consolidated Financial Statements are issued. When substantial doubt exists, we evaluate whether the mitigating effect of our plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of our plans, however, is only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the unaudited Condensed Consolidated Financial Statements are issued, and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited Condensed Consolidated Financial Statements are issued. As of the date these financial statements were issued (the "issuance date"), we evaluated whether the following conditions or events, considered in the aggregate, raise substantial doubt about the Company's ability to continue as a going concern over the next twelve months beyond the issuance date. Over the past three fiscal years, we incurred operating losses of $14,660,000, $33,752,000, and $68,298,000 in fiscal 2023, 2022 and 2021, respectively. More recently, we recognized an operating loss of $3,470,000 in the three months ended April 30, 2024 and operating income of $1,589,000 in the nine months ended April 30, 2024. In addition, over the past three fiscal years, net cash used in operating activities was $4,433,000 and $40,638,000 in fiscal 2023 and 2021, respectively, and net cash provided by operating activities was $1,997,000 in fiscal 2022. More recently, net cash used in operating activities was $44,998,000 in the nine months ended April 30, 2024. As of April 30, 2024, we were in compliance with all restrictive and financial covenants under our Prior Credit Facility (see Note (10) – “ Credit Facility ” for defined terms). As of April 30, 2024, our Secured Leverage Ratio was 2.89x TTM Adjusted EBITDA compared to the maximum allowable Secured Leverage Ratio of 3.50x TTM Adjusted EBITDA. Our Interest Expense Coverage Ratio as of April 30, 2024 was 3.36x TTM Adjusted EBITDA compared to the Minimum Interest Expense Coverage Ratio of 3.25x TTM Adjusted EBITDA. Our Minimum Liquidity as of April 30, 2024 was $26,800,000 compared to the Minimum Liquidity requirement of $25,000,000. As discussed in Note (10) – “Credit Facility,” on June 17, 2024, we entered into a $222,000,000 credit facility with a new syndicate of lenders (the “New Credit Facility”), which replaces our Prior Credit Facility and which is expected to fund on or around June 18, 2024. The New Credit Facility matures on July 31, 2028, consists of a committed $162,000,000 term loan (“Term Loan”) and $60,000,000 revolver loan facility (“Revolver”) and is expected to have outstanding borrowings at close of $187,000,000, reflecting $25,000,000 drawn on the Revolver. The New Credit Facility, among other things, requires compliance with new restrictive and financial covenants. Considering the New Credit Facility entered into subsequent to quarter end and our forecasted results over the next twelve months beyond the issuance date, we anticipate in the future that we will be in compliance with all restrictive and financial covenants under our New Credit Facility. As of the issuance date and closing of the New Credit Facility, our available sources of liquidity will approximate $63,000,000, consisting of qualified cash and cash equivalents of approximately $28,000,000 and $35,000,000 of excess availability under the Revolver, both as defined in the New Credit Facility. Our ability to meet our current obligations as they come due may be impacted by our ability to remain compliant with the financial covenants under our New Credit Facility or to obtain waivers or amendments that impact the related financial covenants. If we are unable to satisfy certain covenants and not able to obtain waivers or amendments, such event would constitute an Event of Default and could cause an immediate acceleration and repayment of all outstanding principal, interest and fees due under our New Credit Facility. If there is an Event of Default, there can be no assurances that we will be able to continue as a going concern, which could force us to delay, reduce or discontinue certain aspects of our business strategy. Additionally, our ability to meet future anticipated liquidity needs will largely depend on our ability to generate positive cash inflows from operations and/or secure other sources of outside capital. As it relates to sources of outside capital, we can raise up to $50,000,000 through the issuance of common shares without the consent of the holders of Convertible Preferred Stock. Based on our current business plans, including projected capital expenditures, we believe our current level of cash and cash equivalents, excess availability under our Revolver and liquidity expected to be generated from future cash flows will be sufficient to fund our operations over the next twelve months beyond the issuance date. However, such a determination is dependent on several factors including, but not limited to, general business conditions and our ability to reduce investments in working capital (such as unbilled receivables). If we are unable to maintain our current level of cash and cash equivalents, excess availability under our Revolver or generate sufficient liquidity from future cash flows, our business, financial condition and results of operations could be materially and adversely affected. Our ability to generate cash in the future or have sufficient access to credit from financial institutions and/or financing from public and/or private debt and equity markets on acceptable terms, or at all, (i) is subject to (a) general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control and (b) under certain circumstances, a majority vote consent right of the holders of the Convertible P ref erred Stock (as discussed further in Note (17) – " Convertible Preferred Stock "), and (ii) could (x) dilute the ownership interest of our stockholders, (y) include terms that adversely affect the rights of our common stockholders, or (z) restrict our ability to take specific actions such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. Also, our transition to sustained profitability is dependent upon the successful completion of our ongoing One Comtech transformation and integration of individual businesses into two segments and related restructuring activities to optimize our cost structure and reduce investments in working capital and/or capital expenditures. As a result of the foregoing, although we have successfully refinanced our Prior Credit Facility and significantly enhanced our liquidity position as of the issuance date, we continue to believe that substantial doubt exists regarding our ability to continue as a going concern. This determination considers: (i) the proximity of the refinancing to the issuance date not allowing us adequate time to evaluate our financial performance subsequent to such refinancing, and (ii) those conditions and events as of the issuance date described above that could negatively impact our forecasted results and liquidity, which in turn could result in our inability to comply with the financial covenants contained in our New Credit Facility. Now having completed the refinancing of our Prior Credit Facility as of the issuance date, our other plans to address our ability to continue as a going concern include, among other things: • implementing certain cost savings and restructuring activities to reduce cash used in operations, as discussed further in Note (20) – “Cost Reduction;” • pursuing initiatives to reduce investments in working capital, namely accounts receivable and inventory; • improving process disciplines to attain and maintain profitable operations by entering into more favorable sales or service contracts; • reevaluating our business plans to identify opportunities to further reduce capital expenditures; • seeking opportunities to improve liquidity through any combination of debt and/or equity financing (including possibly restructuring our existi ng Convertible Preferred S tock); and • seeking other strategic transactions and/or measures including, but not limited to, the potential sale or divestiture of assets. While we believe the implementation of some or all of the elements of our plans over the next twelve months beyond the issuance date will be successful, these plans are not all solely within management’s control and, as such, we can provide no assurance our plans are probable of being effectively implemented as of the issuance date. Therefore, those potential adverse c onditions and events described above raise substantial doubt about our ability to continue as a going concern as of the issuance date. We prepared these unaudited condensed consolidated financial statements on a going concern basis, assuming our financial resources will be sufficient to meet our capital needs over the next twelve months and did not include any adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation for the next twelve months. CEO Transition Related On August 9, 2022, our Board of Directors appointed Ken Peterman as our Chairman of the Board, President and Chief Executive Officer ("CEO"). Transition costs related to our former President and CEO, Michael D. Porcelain, pursuant to his separation agreement with the Company, were $7,424,000, of which $3,764,000 related to the acceleration of unamortized stock based compensation, with the remaining $3,660,000 related to his severance payments and benefits upon termination of employment. The cash portion of the transition costs of $3,660,000 was paid to Mr. Porcelain in October 2022. Also, in connection with Mr. Peterman entering into an employment agreement with the Company, effective as of August 9, 2022, we incurred a $1,000,000 expense related to a cash sign-on bonus, which was paid to Mr. Peterman in January 2023. CEO transition costs related to Mr. Porcelain and Mr. Peterman were expensed in our Unallocated segment during the first quarter of fiscal 2023. |
Disposition
Disposition | 9 Months Ended |
Apr. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposition | Business Divestiture On November 7, 2023, we completed the divestiture of our solid-state RF microwave high power amplifiers and control components product line, which was included in our Satellite and Space Communications segment, pursuant to a stock sale agreement entered into on October 11, 2023 (the "PST Divestiture"). The sales price for this divestiture was $35,459,000 in cash (including adjustments for closing date net working capital and cash on hand), plus contingent consideration of up to $5,000,000 based on the achievement of a revenue target or the receipt of an anticipated contract award as specified in the stock sale agreement. As of April 30, 2024, we received net cash proceeds of $33,277,000, which includes $800,000 of the $1,000,000 previously held in escrow and is net of $2,182,000 of transaction costs. For the three and nine months ended April 30, 2024, we recognized a reduction to the estimated pre-tax gain of $200,000 (to reflect the final settlement of the closing date net working capital) and an estimated pre-tax gain of $2,013,000, respectively, which is presented as " Loss (g ain) on business divestiture, net " in our Condensed Consolidated Statements of Operations . The estimated pre-tax loss (gain) reflects the recognition of a $3,300,000 receivable for the estimated fair value of the contingent consideration. The receivable for the estimated fair value of the contingent consideration is presented within “ Prepaid expenses and other current assets ” on the Condensed Consolidated Balance Sheet as of April 30, 2024. We will subsequently measure the contingent consideration receivable as a gain contingency in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 450, " Contingencies, " and subsequent changes in the carrying value of the contingent consideration receivable will be recorded as an adjustment to “ Loss (g ain) on business divestiture, net. ” The carrying amount of the major classes of assets and liabilities related to the PST Divestiture ("PST Disposal Group") as of November 7, 2023 are as follows: Cash and cash equivalents $ (71,000) Accounts receivable, net 4,168,000 Inventories, net 17,822,000 Prepaid expenses and other current assets 201,000 Property, plant and equipment, net 2,790,000 Operating lease right-of-use assets, net 5,379,000 Goodwill 14,587,000 Other assets, net 35,000 Total assets of disposal group held for sale $ 44,911,000 Accounts payable $ 3,081,000 Accrued expenses and other current liabilities 1,622,000 Operating lease liabilities, current 545,000 Contract liabilities 656,000 Operating lease liabilities, non-current 4,894,000 Deferred tax liability, net (451,000) Total liabilities of disposal group held for sale $ 10,347,000 |
Adoption of Accounting Standard
Adoption of Accounting Standards and Updates | 9 Months Ended |
Apr. 30, 2024 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Adoption of Accounting Standards and Updates | Adoption of Accounting Standards and Updates We are required to prepare our Condensed Consolidated Financial Statements in accordance with the FASB ASC, which is the source for all authoritative U.S. generally accepted accounting principles, which are commonly referred to as "GAAP." The FASB ASC is subject to updates by the FASB, which are known as Accounting Standards Updates ("ASUs"). During the nine months ended April 30, 2024, the following FASB ASUs have been issued and incorporated into the FASB ASC and have not yet been adopted by us as of April 30, 2024: • FASB ASU No. 2023-07, which requires the disclosure of significant segment expenses, by reportable segment, regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss. The disclosure of other segment items by reportable segment are also required and would constitute the difference between segment revenues less these significant segment expenses and reported segment profit or loss. On an annual basis, the update requires an entity to disclose the CODM's title and position, as well as describe how the CODM uses the reported measures. Additionally, all existing annual disclosures about segment profit or loss must be provided on an interim basis in addition to the disclosure of significant segment expenses and other segment items. This ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year beginning on August 1, 2024) and for interim periods within fiscal years beginning after December 15, 2024 (our interim period beginning on August 1, 2025), with early adoption permitted. • FASB ASU No. 2023-09 enhances and establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Most notably under the new requirements is greater disaggregation of information in the effective tax rate reconciliation, including the inclusion of both percentages and amounts, specific categories, and additional information for reconciling items meeting a quantitative threshold defined by the guidance. Additionally, disclosures of income taxes paid and income tax expense must be disaggregated by federal, state and foreign taxes, with income taxes paid further disaggregated for individual jurisdictions that represent 5 percent or more of total income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (our fiscal year beginning on August 1, 2025), with early adoption permitted. We are evaluating the impact of this ASU on our Condensed Consolidated Financial Statements and disclosures. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Apr. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition In accordance with FASB ASC 606, " Revenue from Contracts with Customers " ("ASC 606"), we record revenue in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, we follow a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue using one of the following two methods: • Over time - We recognize revenue using the over time method when there is a continuous transfer of control to the customer over the contractual period of performance. This generally occurs when we enter into a long-term contract relating to the design, development or manufacture of complex equipment or technology platforms to a buyer’s specification (or to provide services related to the performance of such contracts) for which we have determined there is no alternative use, as defined in ASC 606. Continuous transfer of control is typically supported by contract clauses which allow our customers to unilaterally terminate a contract for convenience, pay for costs incurred plus a reasonable profit and take control of work-in-process. Revenue recognized over time is generally based on the extent of progress toward completion of the related performance obligations. The selection of the method to measure progress requires judgment and is based on the nature of the products or services provided. In certain instances, typically for firm fixed-price contracts, we use the cost-to-cost measure because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion, including warranty costs. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill generally include direct labor, materials, subcontractor costs, other direct costs and an allocation of indirect costs. When these contracts are modified, the additional goods or services are generally not distinct from those already provided. As a result, these modifications form part of an existing contract and we must update the transaction price and our measure of progress for the single performance obligation and recognize a cumulative catch-up to revenue and gross profits. For over time contracts using a cost-to-cost measure of progress, we have an estimate at completion ("EAC") process in which management reviews the progress and execution of our performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Since certain contracts extend over a long period of time, the impact of revisions in revenue and/or cost estimates during the progress of work may impact current period earnings through a cumulative adjustment. Additionally, if the EAC process indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract revenue and cost estimates for significant contracts are generally reviewed and reassessed at least quarterly. The cost-to-cost method is principally used to account for contracts in our Satellite and Space Communications segment and, to a lesser extent, certain location-based and messaging infrastructure contracts in our public safety and location technologies product line within our Terrestrial and Wireless Networks segment. For service-based contracts in our Terrestrial and Wireless Networks segment, we also recognize revenue over time. These services are typically recognized as a series of services performed over the contract term using the straight-line method, or based on our customers’ actual usage of the networks and platforms which we provide. • Point in time - When a performance obligation is not satisfied over time, we must record revenue using the point in time accounting method which generally results in revenue being recognized upon shipment or delivery of a promised good or service to a customer. This generally occurs when we enter into short-term contracts or purchase orders where items are provided to customers with relatively quick turn-around times. Modifications to such contracts and/or purchase orders, which typically provide for additional quantities or services, are accounted for as a new contract because the pricing for these additional quantities or services are based on standalone selling prices. Point in time accounting is principally applied to contracts in our satellite ground station technologies product line (which includes satellite modems and traveling wave tube amplifiers). The contracts related to these product lines do not meet the requirements for over time revenue recognition because our customers cannot utilize the equipment for its intended purpose during any phase of our manufacturing process; customers do not simultaneously receive and/or consume the benefits provided by our performance; customers do not control the asset (i.e., prior to delivery, customers cannot direct the use of the asset, sell or exchange the equipment, etc.); and, although many of our contracts have termination for convenience clauses and/or an enforceable right to payment for performance completed to date, our performance creates an asset with an alternative use through the point of delivery. In determining that our equipment has alternative use, we considered the underlying manufacturing process for our products. In the early phases of manufacturing, raw materials and work in process (including subassemblies) consist of common parts that are highly fungible among many different types of products and customer applications. Finished products are either configured to our standard configuration or based on our customers’ specifications. Finished products, whether built to our standard specification or to a customers’ specification, can be sold to a variety of customers and across many different end use applications with minimal rework, if needed, and without incurring a significant economic loss. When identifying a contract with our customer, we consider when it has approval and commitment from both parties, if the rights of the parties are identified, if the payment terms are identified, if it has commercial substance and if collectability is probable. When identifying performance obligations, we consider whether there are multiple promises and how to account for them. In our contracts, multiple promises are separated if they are distinct, both individually and in the context of the contract. If multiple promises in a contract are highly interrelated or comprise a series of distinct services performed over time, they are combined into a single performance obligation. In some cases, we may also provide the customer with an additional service-type warranty, which we recognize as a separate performance obligation. Service-type warranties do not represent a significant portion of our consolidated net sales. When service-type warranties represent a separate performance obligation, the revenue is deferred and recognized ratably over the extended warranty period. Our contracts, from time-to-time, may also include options for additional goods and services. To date, these options have not represented material rights to the customer as the pricing for them reflects standalone selling prices. As a result, we do not consider options we offer to be performance obligations for which we must allocate a portion of the transaction price. In many cases, we provide assurance-type warranty coverage for some of our products for a period of at least one year from the date of delivery. When identifying the transaction price, we typically utilize the contract's stated price as a starting point. The transaction price in certain arrangements may include estimated amounts of variable consideration, including award fees, incentive fees or other provisions that can either increase or decrease the transaction price. We estimate variable consideration as the amount to which we expect to be entitled, and we include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the estimation uncertainty is resolved. The estimation of this variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (e.g., historical, current and forecasted) that is reasonably available to us. When allocating the contract’s transaction price, we consider each distinct performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We determine standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions, including geographic or regional specific factors, competitive positioning, internal costs, profit objectives and internally approved pricing guidelines related to the performance obligations. Most of our contracts with customers are denominated in U.S. dollars and typically are either firm fixed-price or cost reimbursable type contracts (including fixed-fee, incentive-fee and time-and-material type contracts). In almost all of our contracts with customers, we are the principal in the arrangement and report revenue on a gross basis. Transaction prices for contracts with U.S. domestic and international customers are usually based on specific negotiations with each customer and in the case of the U.S. government, sometimes based on estimated or actual costs of providing the goods or services in accordance with applicable regulations. Sales by geography and customer type, as a percentage of consolidated net sales, are as follows: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 United States U.S. government 34.4 % 29.1 % 33.8 % 30.3 % Domestic 48.1 % 43.8 % 43.5 % 45.7 % Total United States 82.5 % 72.9 % 77.3 % 76.0 % International 17.5 % 27.1 % 22.7 % 24.0 % Total 100.0 % 100.0 % 100.0 % 100.0 % Sales to U.S. government customers include sales to the U.S. Department of Defense ("DoD"), intelligence and civilian agencies, as well as sales directly to or through prime contractors. Domestic sales include sales to commercial customers, as well as to U.S. state and local governments. For the three and nine months ended April 30, 2024 and three months ended April 30, 2023, except for the U.S. government, there were no customers that represented 10.0% or more of consolidated net sales. For the nine months ended April 30, 2023, included in domestic sales are sales to Verizon Communications Inc. ("Verizon"), which accounted for 11.2% of consolidated net sales. Except for the U.S., no individual country (including sales to U.S. domestic companies for inclusion in products that are sold to a foreign country) represented 10.0% or more of consolidated net sales for the three and nine months ended April 30, 2024 and 2023. The following tables summarize our disaggregation of revenue consistent with information reviewed by our CODM for the three and nine months ended April 30, 2024 and 2023. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors which impact our business: Three months ended April 30, 2024 Nine months ended April 30, 2024 Satellite and Space Communications Terrestrial and Wireless Networks Total Satellite and Space Communications Terrestrial and Wireless Networks Total Geographical region U.S. government $ 43,546,000 593,000 $ 44,139,000 $ 138,253,000 1,762,000 $ 140,015,000 Domestic 11,569,000 49,998,000 61,567,000 36,325,000 144,018,000 180,343,000 Total United States 55,115,000 50,591,000 105,706,000 174,578,000 145,780,000 320,358,000 International 16,330,000 6,040,000 22,370,000 77,858,000 15,996,000 93,854,000 Total $ 71,445,000 56,631,000 $ 128,076,000 $ 252,436,000 161,776,000 $ 414,212,000 Contract type Firm fixed-price $ 60,691,000 56,631,000 $ 117,322,000 $ 217,524,000 161,776,000 $ 379,300,000 Cost reimbursable 10,754,000 — 10,754,000 34,912,000 — 34,912,000 Total $ 71,445,000 56,631,000 $ 128,076,000 $ 252,436,000 161,776,000 $ 414,212,000 Transfer of control Point in time $ 25,257,000 129,000 $ 25,386,000 $ 103,569,000 1,461,000 $ 105,030,000 Over time 46,188,000 56,502,000 102,690,000 148,867,000 160,315,000 309,182,000 Total $ 71,445,000 56,631,000 $ 128,076,000 $ 252,436,000 161,776,000 $ 414,212,000 Three months ended April 30, 2023 Nine months ended April 30, 2023 Satellite and Space Communications Terrestrial and Wireless Networks Total Satellite and Space Communications Terrestrial and Wireless Networks Total Geographical region and customer type U.S. government $ 38,779,000 855,000 $ 39,634,000 $ 118,739,000 2,841,000 $ 121,580,000 Domestic 12,146,000 47,555,000 59,701,000 41,819,000 141,542,000 183,361,000 Total United States 50,925,000 48,410,000 99,335,000 160,558,000 144,383,000 304,941,000 International 31,324,000 5,657,000 36,981,000 82,971,000 13,268,000 96,239,000 Total $ 82,249,000 54,067,000 $ 136,316,000 $ 243,529,000 157,651,000 $ 401,180,000 Contract type Firm fixed-price $ 68,010,000 54,067,000 $ 122,077,000 $ 210,343,000 157,651,000 $ 367,994,000 Cost reimbursable 14,239,000 — 14,239,000 33,186,000 — 33,186,000 Total $ 82,249,000 54,067,000 $ 136,316,000 $ 243,529,000 157,651,000 $ 401,180,000 Transfer of control Point in time $ 30,870,000 268,000 $ 31,138,000 $ 152,157,000 1,994,000 $ 154,151,000 Over time 51,379,000 53,799,000 105,178,000 91,372,000 155,657,000 247,029,000 Total $ 82,249,000 54,067,000 $ 136,316,000 $ 243,529,000 157,651,000 $ 401,180,000 The timing of revenue recognition, billings and collections results in receivables, unbilled receivables and contract liabilities on our Condensed Consolidated Balance Sheet . Under typical payment terms for our contracts accounted for over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly) or upon achievement of contractual milestones. For certain contracts with provisions that are intended to protect customers in the event we do not satisfy our performance obligations, billings occur subsequent to revenue recognition, resulting in unbilled receivables. Under ASC 606, unbilled receivables constitute contract assets. There were no material impairment losses recognized on contract assets during the three and nine months ended April 30, 2024 and 2023, respectively. On large long-term contracts, and for contracts with international customers that do not do business with us regularly, payment terms typically require advanced payments and deposits. Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability. These contract liabilities are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract. Under the typical payment terms for our contracts accounted for at a point in time, costs are accumulated in inventory until the time of billing, which generally coincides with revenue recognition. Of the current contract liability balance of $66,351,000 at July 31, 2023 and $64,601,000 at July 31, 2022, $39,877,000 and $43,125,000 was recognized as revenue during the nine months ended April 30, 2024 and 2023, respectively. We recognize the incremental costs to obtain or fulfill a contract as an expense when incurred if the amortization period of the asset is one year or less; otherwise, such costs are capitalized and amortized over the estimated life of the contract. During the nine months ended April 30, 2024 and 2023, incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material. Commissions payable to our internal sales and marketing employees or contractors that are incremental to the acquisition of long-term customer contracts are capitalized and amortized consistent with the pattern of revenue recognition through cost of sales on our Condensed Consolidated Statements of Operations . Commissions payable that are not incremental to the acquisition of long-term contracts are expensed as incurred in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations . Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the end of a fiscal period. Remaining performance obligations, which we refer to as backlog, exclude unexercised contract options and potential orders under indefinite delivery / indefinite quantity ("IDIQ") contracts. As of April 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $653,414,000 (which represents the amount of our consolidated funded backlog). We estimate that a substantial portion of our remaining performance obligations at April 30, 2024 will be completed and recognized as revenue during the next twenty-four month period, with the rest thereafter. During the nine months ended April 30, 2024, revenue recognized from performance obligations satisfied, or partially satisfied, in previous periods (for example due to changes in the transaction price) was not material. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 9 Months Ended |
Apr. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Using the fair value hierarchy described in FASB ASC 820 " Fair Value Measurements and Disclosures," we valued our cash and cash equivalents using Level 1 inputs that were based on quoted market prices. We believe that the carrying amounts of our other current financial assets (such as accounts receivable) and other current liabilities (including accounts payable, accrued expenses and the current portion of long-term debt) approximate their fair values due to their short-term maturities. The fair value of the non-current portion of our long-term debt approximates its carrying amount due to its variable interest rate and pricing grid dependent upon our leverage ratio as of such date. See Note (10) - " Credit Facility" for more information. As further discussed in Note (17) - " Convertible Preferred Stock," we used Level 3 inputs to value warrants contingently issuable under the terms of our Convertible Preferred Stock. Level 3 inputs are unobservable inputs developed using the best available information under the circumstances. Level 3 inputs are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect our assumptions related to how market participants would use similar inputs to price the asset or liability. As of April 30, 2024, we determined the fair value of Convertible Preferred Stock warrants using the Monte Carlo simulation model with the following assumptions: expected life of six months; risk free rate of 4.7%; expected volatility of 55.0%; and dividend yield of 0%. As of April 30, 2024 and July 31, 2023, other than the cash and cash equivalents and warrants discussed above, we had no other significant assets or liabilities included in our Condensed Consolidated Balance Sheets recorded at fair value, as such term is defined by FASB ASC 820. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Apr. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Our basic earnings per share ("EPS") is computed based on the weighted average number of common shares (including vested but unissued share units, performance shares and restricted stock units ("RSUs")) outstanding during each respective period. Our diluted EPS reflects the dilution from potential common stock issuable pursuant to the exercise of equity-classified stock-based awards, settlement of escrow arrangements related to our acquisition of UHP Networks Inc. ("UHP") and the assumed conversion of Convertible Preferred Stock, if dilutive, outstanding during each respective period. Pursuant to FASB ASC 260 " Earnings Per Share " ("ASC 260"), shares whose issuance is contingent upon the satisfaction of certain conditions are included in diluted EPS based on the number of shares, if any, that would be issuable if the end of the reporting period were the end of the contingency period. When calculating our diluted earnings per share, we consider the amount an employee must pay upon assumed exercise of stock-based awards and the amount of stock-based compensation cost attributed to future services and not yet recognized. There were no repurchases of our common stock during the three and nine months ended April 30, 2024 and 2023. See Note (18) - " Stockholders’ Equity " for more information. Weighted average stock options, RSUs and restricted stock outstanding of 930,000 and 956,000 shares for the three months ended April 30, 2024 and 2023, respectively, and 1,067,000 and 1,001,000 shares for the nine months ended April 30, 2024 and 2023, respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Our EPS calculations exclude 469,000 and 429,000 weighted average performance shares outstanding for the three months ended April 30, 2024 and 2023, respectively, and 624,000 and 384,000 for the nine months ended April 30, 2024 and 2023, respectively, as the performance conditions have not yet been satisfied. However, the numerator for EPS calculations for each respective period is reduced by the compensation expense related to these awards. Weighted average common shares of 67,000 and 228,000 for the three months ended April 30, 2024 and 2023, respectively, and 131,000 and 293,000 for the nine months ended April 30, 2024 and 2023, respectively, related to our acquisition of UHP in March 2021 were not included in our diluted EPS calculation because their effect would have been anti-dilutive. As of April 30, 2024, all of the shares held in escrow related to the UHP acquisition were settled. Weighted average common shares underlying the assumed conversion of convertible preferred stock, on an if-converted basis, of 21,308,000 and 4,606,000 for the three months ended April 30, 2024 and 2023, respectively, and 10,902,000 and 4,533,000 for the nine months ended April 30, 2024 and 2023, respectively, were not included in our diluted EPS calculation for the respective periods because their effect would have been anti-dilutive. As a result, the numerator for our basic and diluted EPS calculation for the three and nine months ended April 30, 2024 and 2023 is the respective net loss attributable to common stockholders. The following table reconciles the numerators and denominators used in the basic and diluted EPS calculations: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Numerator: Net income (loss) $ 2,795,000 (7,458,000) $ (9,200,000) (23,359,000) Loss on extinguishment of convertible — — (13,640,000) — Convertible preferred stock issuance costs (76,000) — (4,349,000) — Dividend on convertible preferred stock (3,759,000) (1,766,000) (7,643,000) (5,213,000) Net loss attributable to common stockholders $ (1,040,000) (9,224,000) $ (34,832,000) (28,572,000) Denominator: Denominator for basic and diluted calculation 28,854,000 28,071,000 28,753,000 27,950,000 As discussed further in Note (17) - " Convertible Preferred Stock ," such shares of preferred stock represent a "participating security" as defined in ASC 260. As a result, our EPS calculations for the three and nine months ended April 30, 2024 and 2023 were based on the two-class method. Given the net loss attributable to common stockholders for the three and nine months ended April 30, 2024 and 2023, there was no impact of applying the two-class method to our reported basic or diluted earnings per common share. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Apr. 30, 2024 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consist of the following at: April 30, 2024 July 31, 2023 Receivables from commercial and international customers $ 39,770,000 52,438,000 Unbilled receivables from commercial and international customers 76,932,000 54,469,000 Receivables from the U.S. government and its agencies 21,316,000 31,149,000 Unbilled receivables from the U.S. government and its agencies 64,334,000 27,192,000 Total accounts receivable 202,352,000 165,248,000 Less allowance for doubtful accounts 2,706,000 2,089,000 Accounts receivable, net $ 199,646,000 163,159,000 Unbilled receivables as of April 30, 2024 relate to contracts-in-progress for which revenue has been recognized, but for which we have not yet earned the right to bill the customer for work performed to-date. Under ASC 606, unbilled receivables constitute contract assets. Management estimates that a substantial portion of the amounts not yet billed at April 30, 2024 will be billed and collected within one year. Accounts receivable in the table above excludes $417,000 and $2,993,000 of long-term unbilled receivables presented within "Other assets, net" in the Condensed Consolidated Balance Sheets as of April 30, 2024 and July 31, 2023, respectively. As of April 30, 2024, except for the U.S. government (and its agencies), which represented 42.3% of total accounts receivable, there were no other customers which accounted for greater than 10% of total accounts receivable. |
Inventories
Inventories | 9 Months Ended |
Apr. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following at: April 30, 2024 July 31, 2023 Raw materials and components $ 73,811,000 87,139,000 Work-in-process and finished goods 40,801,000 43,365,000 Total inventories 114,612,000 130,504,000 Less reserve for excess and obsolete inventories 18,492,000 24,659,000 Inventories, net $ 96,120,000 105,845,000 As of April 30, 2024 and July 31, 2023, the amount of inventory directly related to long-term contracts (including contracts-in-progress) was $4,310,000 and $5,911,000, respectively, and the amount of inventory related to contracts from third-party commercial customers who outsource their manufacturing to us was $2,386,000 and $3,277,000, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Apr. 30, 2024 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following at: April 30, 2024 July 31, 2023 Accrued wages and benefits $ 18,060,000 21,994,000 Accrued contract costs 21,395,000 19,041,000 Accrued warranty obligations 6,992,000 8,285,000 Accrued commissions and royalties 4,948,000 4,659,000 Accrued legal costs 2,800,000 688,000 Other 10,674,000 12,323,000 Accrued expenses and other current liabilities $ 64,869,000 66,990,000 Accrued contract costs represent direct and indirect costs on contracts as well as estimates of amounts owed for invoices not yet received from vendors or reflected in accounts payable. Accrued warranty obligations as of April 30, 2024 relate to estimated liabilities for assurance type warranty coverage that we provide to our customers. We generally provide warranty coverage for some of our products for a period of at least one year from the date of delivery. We record a liability for estimated warranty expense based on historical claims, product failure rates, consideration of contractual obligations, future costs to resolve software issues and other factors. Some of our product warranties are provided under long-term contracts, the costs of which are incorporated into our estimates of total contract costs. Changes in our accrued warranty obligations during the nine months ended April 30, 2024 and 2023 were as follows: Nine months ended April 30, 2024 2023 Balance at beginning of period $ 8,285,000 9,420,000 Provision for warranty obligations 768,000 1,756,000 Adjustments for changes in estimates (393,000) (1,500,000) Charges incurred (1,250,000) (1,436,000) PST Divestiture (418,000) — Balance at end of period $ 6,992,000 8,240,000 |
Credit Facility
Credit Facility | 9 Months Ended |
Apr. 30, 2024 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility On Nov ember 7, 2023, we entered into a Third Amended and Restated Credit Agreement (the "Prior Credit Facility " ), which provided f or a senior secured loan facility of up to $200,000,000 consisting of: (i) a revolving loan facility with an initial borrowing limit of $150,000,000, including a $20,000,000 letter of credit sublimit; and (ii) a $50,000,000 te rm loan . The Prior Credit Fac ility also provided for the following: effective January 31, 2024 and April 30, 2024, (a) our borrowing limit under the revolving loan facilit y reduced to $140,000,000 and $135,000,000 , respectively; (b) the term loa n amortization increased from $1,250,000 to $1,875,000 per quarter, with the remaining balance due upon maturity; (c) the accordion and swingline loan features were both eliminated; (d) the Applicable Rate increased 0.25%; (e) cash in excess of $20,000,000 on the last day of any wee k was required to repay borrowings under the revolving loan fa cility; and (f) financial covenants were measured on a monthly basis beginning February 2024. In connection with entering the Prior Credit Facility, we capitalized $5,941,000 of total financing costs and accounted for the amendments as debt modifications. The amount outstanding under our Prior Credit Facility was as follows: April 30, 2024 July 31, 2023 Term loan $ 27,512,000 $ 48,125,000 Less unamortized deferred financing costs related to term loan 545,000 621,000 Term loan, net 26,967,000 47,504,000 Revolving loan facility 134,454,000 116,900,000 Amount outstanding unde r Prior Credit Facility, net $ 161,421,000 $ 164,404,000 Less current portion of long-term debt 3,712,000 4,375,000 Non-current portion of long-term debt $ 157,709,000 $ 160,029,000 At April 30, 2024, we had $481,000 of standby letters of credit outstanding under our Prior Credit Facility related to guarantees of future performance on certain customer contracts and no outstanding commercial letters of credit. During the nine months ended April 30, 2024, we had outstanding balances under the Prior Credit Facility ranging from $156,241,000 to $196,800,000. As of April 30, 2024, total net deferred financing costs related to the Prior Credit Facility were $2,267,000 and being amortized over the term of our Prior Credit Facility through the Maturity Date. However, as discussed further below, subsequent to quarter end, we refinanced our Prior Credit Facility with the New Credit Facility. As the refinancing of the Prior Credit Facility is considered a debt extinguishment, net deferred financing costs related to the Prior Credit Facility will be expensed during our fourth quarter of fiscal 2024 and included in interest expense reported on our Condensed Consolidated Statement of Operations. Interest expense related to our Prior Credit Facility, including amortization of deferred financing costs, recorded during the three months ended April 30, 2024 and 2023 was $5,130,000 and $4,400,000, respectively. Interest expense related to our Prior Credit Facility including amortization of deferred financing costs, recorded during the nine months ended April 30, 2024 and 2023 was $15,286,000 and $10,401,000, respectively. Our blended interest rate approximated 12.26% and 10.10%, respectively, for the three months ended April 30, 2024 and 2023 and 11.35% and 8.34%, respectively, for the nine months ended April 30, 2024 and 2023. As of April 30, 2024, our Secured Leverage Ratio under our Prior Credit Facility was 2.89x trailing twelve months ("TTM") Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), compared to the maximum allowable Secured Leverage Ratio of 3.50x TTM Adjusted EBITDA; our Interest Expense Coverage Ratio under our Prior Credit Facility was 3.36x TTM Adjusted EBITDA, compared to the Minimum Interest Expense Coverage Ratio of 3.25x TTM Adjusted EBITDA; and our Minimum Liquidity was $26,800,000, compared to the Minimum Liquidity requirement of $25,000,000. Subsequent Event On June 17, 2024, we entered into a $222,000,000 credit facility with a new syndicate of lenders (the “New Credit Facility”), which replaces our Prior Credit Facility and which is expected to fund on or around June 18, 2024. The New Credit Facility matures on July 31, 2028, consists of a committed $162,000,000 Term Loan and $60,000,000 Revolver and is expected to have outstanding borrowings at close of $187,000,000, reflecting $25,000,000 drawn on the Revolver. The New Credit Facility provides that (a) Revolving Loans comprised of (i) Base Rate Loans shall bear interest at the Base Rate plus an additional margin ranging from 3.75% to 4.25%, depending on the average quarterly revolving loan usage during the applicable determination period and (ii) SOFR Loans shall bear interest at the Term SOFR rate plus an additional margin ranging from 4.75% to 5.25%, depending on the average quarterly revolving loan usage during the applicable determination period and (b) Term Loans comprised of (i) Base Rate Loans shall bear interest at the Base Rate plus an additional margin ranging from 7.50% to 9.00%, depending on our net leverage ratio during the applicable determination period and (ii) SOFR Loans shall bear interest at the Term SOFR rate plus an additional margin ranging from 8.50% to 10.00%, depending on our net leverage ratio during the applicable determination period. The Term Loan is subject to 2.50% amortization per annum, payable on the last day of each fiscal quarter. The first Term Loan repayment of $675,000 is due on July 31, 2024 and quarterly Term Loan repayments thereafter are $1,012,500, with the remaining Term Loan balance due on the Maturity Date. Based on the refinancing of our Prior Credit Facility subsequent to the balance sheet date, we have classified $157,709,000 of the outstanding borrowings as of April 30, 2024 under our Prior Credit Facility as a non-current liability. The New Credit Facility contains (a) customary representations, warranties and affirmative covenants; (b) customary conditions to drawing the Revolver; (c) customary negative covenants, subject to negotiated exceptions, including but not limited to: (i) liens, (ii) investments, (iii) indebtedness, (iv) significant corporate changes, including mergers and acquisitions, (v) dispositions, including the disposition of assets by any Loan Party to any Subsidiary that is not a Subsidiary Loan Party, (vi) restricted payments, including stockholder dividends, (vii) distributions, including the repayment of subordinated intercompany and third party indebtedness, and (viii) certain other restrictive agreements; (d) certain financial covenants, including a maximum Net Leverage Ratio, minimum Fixed Charge Coverage Ratio, Minimum Average Liquidity and Minimum EBITDA; (e) customary optional and mandatory prepayment events; and (f) customary events of default (subject to grace periods, as appropriate), such as payment defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency, the occurrence of a defined change in control and the failure to observe the negative covenants and other covenants related to the operation of our business. In addition, under certain circumstances, we may be required to enter into amendments to the New Credit Facility in connection with any further syndication of the New Credit Facility. In connection with entering the New Credit Facility, the Term Loan lenders received 1,435,884 detachable warrants granted at an exercise price of $0.10 per common share. If the Term Loan is refinanced, the Term Loan lenders have the right to sell up to 50.0% of the warrants back to us for cash, at a 10.0% discount to the 30-day volume weighted average price of our common stock. The obligations under the New Credit Facility are guaranteed by certain of our domestic and foreign subsidiaries (the “Guarantors”). As collateral security under the New Credit Facility and the guarantees thereof, we and the Guarantors granted to the administrative agent, for the benefit of the lenders, a lien on, and first priority security interest in, all of our tangible and intangible assets. Capitalized terms used but not defined herein have the meanings set forth for such terms in the Prior Credit Facility and the New Credit Facility, which have been or will be documented and filed with the SEC. |
Leases
Leases | 9 Months Ended |
Apr. 30, 2024 | |
Leases [Abstract] | |
Leases | Leases Our leases historically relate to the leasing of facilities and equipment. In accordance with FASB ASC 842 - " Leases " ("ASC 842"), we determine at inception whether an arrangement is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. At lease commencement, we recognize a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the estimated lease term. We have elected to not recognize a ROU asset or lease liability for any leases with terms of twelve months or less. Instead, for such short-term leases, we recognize lease expense on a straight-line basis over the lease term. Certain of our leases include options to extend the term of the lease or to terminate the lease early. When it is reasonably certain that we will exercise a renewal option or will not exercise a termination option, we include the impact of exercising or not exercising such option, respectively, in the estimate of the lease term. As our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate ("IBR") on the commencement date to calculate the present value of future lease payments. Such IBR represents our estimated rate of interest to borrow on a collateralized basis over a term commensurate with the expected lease term. Some of our leases include payments that are based on the Consumer Price Index ("CPI") or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability using the index as of the lease commencement date. Other variable lease payments, such as common area maintenance, property taxes, and usage-based amounts, are required by ASC 842 to be excluded from the ROU asset and lease liability and expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset would also consider, to the extent applicable, any deferred rent upon adoption, lease pre-payments or initial direct costs of obtaining the lease (e.g., such as commissions). For all classes of leased assets, we elected the practical expedient to not separate lease components (i.e., the actual item being leased, such as the facility or piece of equipment) from non-lease components (i.e., the distinct elements of a contract not related to securing the use of the leased asset, such as common area maintenance and consumable supplies). Certain of our facility lease agreements (which are classified as operating leases) contain rent holidays or rent escalation clauses. For rent holidays and rent escalation clauses during the lease term, we record rental expense on a straight-line basis over the term of the lease. As of April 30, 2024, none of our leases contained a residual value guarantee and covenants included in our lease agreements are customary for the types of facilities and equipment being leased. The components of lease expense are as follows: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Finance lease expense: Amortization of ROU assets $ — 1,000 $ — 5,000 Operating lease expense 2,023,000 2,495,000 6,361,000 8,088,000 Short-term lease expense 44,000 108,000 217,000 326,000 Variable lease expense 1,259,000 783,000 3,204,000 2,881,000 Sublease income (17,000) (17,000) (50,000) (50,000) Total lease expense $ 3,309,000 3,370,000 $ 9,732,000 11,250,000 Additional information related to leases is as follows: Nine months ended April 30, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating leases - Operating cash outflows $ 6,796,000 $ 8,183,000 Finance leases - Financing cash outflows — 4,000 ROU assets obtained in the exchange for lease liabilities (non-cash): Operating leases $ 37,000 $ 2,850,000 The following table is a reconciliation of future cash flows relating to operating lease liabilities presented on our Condensed Consolidated Balance Sheet as of April 30, 2024: Remainder of fiscal 2024 $ 2,183,000 Fiscal 2025 8,123,000 Fiscal 2026 6,688,000 Fiscal 2027 4,582,000 Fiscal 2028 3,844,000 Thereafter 18,850,000 Total future undiscounted cash flows 44,270,000 Less: Present value discount 5,006,000 Lease liabilities $ 39,264,000 Weighted-average remaining lease terms (in years) 8.07 Weighted-average discount rate 3.47% |
Leases | Leases Our leases historically relate to the leasing of facilities and equipment. In accordance with FASB ASC 842 - " Leases " ("ASC 842"), we determine at inception whether an arrangement is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. At lease commencement, we recognize a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the estimated lease term. We have elected to not recognize a ROU asset or lease liability for any leases with terms of twelve months or less. Instead, for such short-term leases, we recognize lease expense on a straight-line basis over the lease term. Certain of our leases include options to extend the term of the lease or to terminate the lease early. When it is reasonably certain that we will exercise a renewal option or will not exercise a termination option, we include the impact of exercising or not exercising such option, respectively, in the estimate of the lease term. As our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate ("IBR") on the commencement date to calculate the present value of future lease payments. Such IBR represents our estimated rate of interest to borrow on a collateralized basis over a term commensurate with the expected lease term. Some of our leases include payments that are based on the Consumer Price Index ("CPI") or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability using the index as of the lease commencement date. Other variable lease payments, such as common area maintenance, property taxes, and usage-based amounts, are required by ASC 842 to be excluded from the ROU asset and lease liability and expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset would also consider, to the extent applicable, any deferred rent upon adoption, lease pre-payments or initial direct costs of obtaining the lease (e.g., such as commissions). For all classes of leased assets, we elected the practical expedient to not separate lease components (i.e., the actual item being leased, such as the facility or piece of equipment) from non-lease components (i.e., the distinct elements of a contract not related to securing the use of the leased asset, such as common area maintenance and consumable supplies). Certain of our facility lease agreements (which are classified as operating leases) contain rent holidays or rent escalation clauses. For rent holidays and rent escalation clauses during the lease term, we record rental expense on a straight-line basis over the term of the lease. As of April 30, 2024, none of our leases contained a residual value guarantee and covenants included in our lease agreements are customary for the types of facilities and equipment being leased. The components of lease expense are as follows: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Finance lease expense: Amortization of ROU assets $ — 1,000 $ — 5,000 Operating lease expense 2,023,000 2,495,000 6,361,000 8,088,000 Short-term lease expense 44,000 108,000 217,000 326,000 Variable lease expense 1,259,000 783,000 3,204,000 2,881,000 Sublease income (17,000) (17,000) (50,000) (50,000) Total lease expense $ 3,309,000 3,370,000 $ 9,732,000 11,250,000 Additional information related to leases is as follows: Nine months ended April 30, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating leases - Operating cash outflows $ 6,796,000 $ 8,183,000 Finance leases - Financing cash outflows — 4,000 ROU assets obtained in the exchange for lease liabilities (non-cash): Operating leases $ 37,000 $ 2,850,000 The following table is a reconciliation of future cash flows relating to operating lease liabilities presented on our Condensed Consolidated Balance Sheet as of April 30, 2024: Remainder of fiscal 2024 $ 2,183,000 Fiscal 2025 8,123,000 Fiscal 2026 6,688,000 Fiscal 2027 4,582,000 Fiscal 2028 3,844,000 Thereafter 18,850,000 Total future undiscounted cash flows 44,270,000 Less: Present value discount 5,006,000 Lease liabilities $ 39,264,000 Weighted-average remaining lease terms (in years) 8.07 Weighted-average discount rate 3.47% |
Income Taxes
Income Taxes | 9 Months Ended |
Apr. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for the three months ended April 30, 2024 was 208.1%, which includes a net discrete tax benefit of $802,000 primarily related to the reversal of tax contingencies no longer required due to the expiration of applicable statute of limitations and the deductible portion of CEO transition costs. Our effective tax rate for the nine months ended April 30, 2024 was (7.5)%, which includes a net discrete tax expense of $961,000 primarily related to the anticipated timing of the settlement of contingent consideration related to the PST Divestiture. Upon settlement of the contingent consideration, if any, we would expect an offsetting net discrete tax benefit due to the utilization of capital losses that had been previously subject to a full valuation allowance. Our effective tax rate for the three months ended April 30, 2023 was 28.2%, which includes a net discrete tax benefit of $1,203,000 primarily related to the reversal of tax contingencies no longer required due to the expiration of applicable statute of limitations, offset in part by the finalization of certain tax accounts in connection with our fiscal 2022 federal income tax return. Our effective tax rate for the nine months ended April 30, 2023 was 13.9%, which includes a net discrete tax benefit of $1,193,000 primarily related to the reversal of tax contingencies no longer required due to the expiration of applicable statute of limitations and the deductible portion of CEO transition costs, offset in part by the settlement of stock-based awards and the finalization of certain tax accounts in connection with our fiscal 2022 federal income tax return. Excluding discrete items, our effective tax rate for the three and nine months ended April 30, 2024 and 2023 was 2.0% and 14.25%, respectively. For purposes of determining our estimated annual effective tax rate for fiscal 2024, the estimated gain, net on the PST Divestiture, CEO transition costs and change in fair value of warrants are considered significant, unusual or infrequently occurring discrete tax items and are excluded from the computation of our effective tax rate. For purposes of determining our estimated annual effective tax rate for fiscal 2023, CEO transition costs are considered significant, unusual or infrequently occurring discrete tax items and are excluded from the computation of our effective tax rate. The change in rate from 14.25% to 2.0% is primarily due to changes in expected product and geographic mix. At April 30, 2024 and July 31, 2023, total unrecognized tax benefits were $8,427,000 and $9,166,000, respectively, including interest of $163,000 and $210,000, respectively. Unrecognized tax benefits result from income tax positions taken or expected to be taken on our income tax returns for which a tax benefit has not been recorded in our consolidated financial statements. We believe it is reasonably possible that the gross unrecognized tax benefits could decrease by as much as $521,000 in the next twelve months due to the expiration of a statute of limitations related to federal, state and foreign tax positions. Our U.S. federal income tax returns for fiscal 2021 through 2023 are subject to potential future Internal Revenue Service ("IRS") audit. None of our state income tax returns prior to fiscal 2019 are subject to audit. Future tax assessments or settlements could have a material adverse effect on our consolidated results of operations and financial condition. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Apr. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Overview In December 2023, our stockholders approved the Comtech Telecommunications Corp. 2023 Equity and Incentive Plan (the “2023 Plan”). The 2023 Plan replaced the Comtech Telecommunications Corp. Amended and Restated 2000 Stock Incentive Plan (the "Prior Plan" and collectively, the "Plans"). Under the 2023 Plan, the number of shares of common stock initially available for all awards, other than substitute awards granted in connection with a corporate transaction, will be (i) 1,600,000 shares plus (ii) 69,683 shares of common stock that were available for awards under the Prior Plan, as of the effective date of the 2023 Plan and (iii) certain expired or cancelled awards recycled back into the 2023 Plan. We issue stock-based awards to certain of our employees and our Board of Directors pursuant to the 2023 Plan, as amended and/or restated from time to time and our 2001 Employee Stock Purchase Plan, as amended and/or restated from time to time (the "ESPP"), and recognize related stock-based compensation in our condensed consolidated financial statements. The 2023 Plan provides for the granting to employees and consultants of Comtech (including prospective employees and consultants): (i) incentive and non-qualified stock options, (ii) restricted stock units ("RSUs"), (iii) RSUs with performance measures (which we refer to as "performance shares"), (iv) restricted stock, (v) stock units (reserved for issuance to non-employee directors) and share units (reserved for issuance to employees) (collectively, "share units") and (vi) stock appreciation rights ("SARs"), among other types of awards. Our non-employee directors are eligible to receive non-discretionary grants of stock-based awards, subject to certain limitations. As of April 30, 2024, the aggregate number of shares of common stock which may be issued may not exceed 13,562,500. Stock options granted may not have a term exceeding ten years or, in the case of an incentive stock award granted to a stockholder who owns stock representing more than 10.0% of the voting power, no more than five years. We expect to settle all outstanding awards under the Plan and employee purchases under the ESPP with the issuance of new shares of our common stock. As of April 30, 2024, we had granted stock-based awards pursuant to the Plans representing the right to purchase and/or acquire an aggregate of 10,735,517 shares (net of 6,594,458 expired and canceled awards), of which an aggregate of 9,173,530 have been exercised or settled. As of April 30, 2024, the following stock-based awards, by award type, were outstanding: April 30, 2024 Stock options 170,150 Performance shares 379,353 RSUs, restricted stock, share units and other stock-based awards 1,012,484 Total 1,561,987 Our ESPP provides for the issuance of up to 1,300,000 shares of our common stock. Our ESPP is intended to provide our eligible employees the opportunity to acquire our common stock at 85% of fair market value on the first or last day of each calendar quarter, whichever is lower. Through April 30, 2024, we have cumulatively issued 1,037,060 shares of our common stock to participating employees in connection with our ESPP. Stock-based compensation for awards issued is reflected in the following line items in our Condensed Consolidated Statements of Operations : Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Cost of sales $ 67,000 141,000 $ 480,000 452,000 Selling, general and administrative expenses 313,000 3,896,000 4,480,000 5,559,000 Research and development expenses 24,000 89,000 278,000 287,000 Stock-based compensation expense before CEO transition costs 404,000 4,126,000 5,238,000 6,298,000 CEO transition costs related to equity-classified stock-based awards — — — 3,764,000 Total stock-based compensation expense before income tax benefit 404,000 4,126,000 5,238,000 10,062,000 Estimated income tax benefit (81,000) (915,000) (1,149,000) (1,701,000) Net stock-based compensation expense $ 323,000 3,211,000 $ 4,089,000 8,361,000 Stock-based compensation for equity-classified awards is measured at the date of grant, based on an estimate of the fair value of the award and is generally expensed over the vesting period of the award. At April 30, 2024, unrecognized stock-based compensation of $6,819,000, net of estimated forfeitures of $833,000, is expected to be recognized over a weighted average period of 1.9 years. Total stock-based compensation capitalized and included in ending inventory at both April 30, 2024 and July 31, 2023 was $198,000. Stock-based compensation expense, by award type, is summarized as follows: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Stock options $ 11,000 22,000 $ 42,000 66,000 Performance shares (662,000) 335,000 280,000 690,000 RSUs, restricted stock and share units 1,040,000 3,738,000 4,850,000 5,449,000 ESPP 15,000 31,000 66,000 93,000 Stock-based compensation expense before CEO transition costs 404,000 4,126,000 5,238,000 6,298,000 CEO transition costs related to equity-classified stock-based awards — — — 3,764,000 Total stock-based compensation expense before income tax benefit 404,000 4,126,000 5,238,000 10,062,000 Estimated income tax benefit (81,000) (915,000) (1,149,000) (1,701,000) Net stock-based compensation expense $ 323,000 3,211,000 $ 4,089,000 8,361,000 In connection with the March 12, 2024 termination of our former CEO for cause, a combined total of 581,021 performance shares and RSUs were cancelled. ESPP stock-based compensation expense primarily relates to the 15% discount offered to participants in the ESPP. The estimated income tax benefit as shown in the above table was computed using income tax rates expected to apply when the awards are settled. Such deferred tax asset was recorded net as part of our non-current deferred tax liability on our Condensed Consolidated Balance Sheets as of April 30, 2024 and July 31, 2023. The actual income tax benefit recognized for tax reporting is based on the fair market value of our common stock at the time of settlement and can significantly differ from the estimated income tax benefit recorded for financial reporting. Stock Options The following table summarizes the Plan's activity: Awards Weighted Average Weighted Average Aggregate Outstanding at July 31, 2023 240,510 $ 23.96 Expired/canceled (6,250) 24.31 Outstanding at October 31, 2023 234,260 23.95 Expired/canceled (9,680) 24.25 Outstanding at January 31, 2024 224,580 23.93 Expired/canceled (54,430) 28.68 Outstanding at April 30, 2024 170,150 $ 22.42 3.97 $ — Exercisable at April 30, 2024 147,450 $ 23.11 3.65 $ — Vested and expected to vest at April 30, 2024 168,498 $ 22.46 3.95 $ — Stock options outstanding as of April 30, 2024 have exercise prices ranging from $17.88 - $31.44, representing the fair market value of our common stock on the date of grant, a contractual term of ten years and a vesting period of five years. Performance Shares, RSUs, Restricted Stock, Share Units and Other Stock-based Awards The following table summarizes the Plan's activity relating to performance shares, RSUs, restricted stock, share units and other stock-based awards: Awards Weighted Average Aggregate Intrinsic Value Outstanding at July 31, 2023 1,876,230 $ 13.21 Granted 913,908 9.93 Settled (296,198) 16.03 Canceled/Forfeited (41,814) 15.80 Outstanding at October 31, 2023 2,452,126 11.60 Settled (383,565) 10.64 Canceled/Forfeited (41,927) 12.78 Outstanding at January 31, 2024 2,026,634 11.76 Settled (9,642) 14.10 Canceled/Forfeited (625,155) 8.47 Outstanding at April 30, 2024 1,391,837 $ 13.22 $ 2,616,653 Vested at April 30, 2024 451,975 $ 14.99 $ 849,713 Vested and expected to vest at April 30, 2024 1,333,129 $ 13.19 $ 2,506,283 The total intrinsic value relating to fully-vested awards settled during the three and nine months ended April 30, 2024 was $33,000 and $7,478,000, respectively. The total intrinsic value relating to fully-vested awards settled during the three and nine months ended April 30, 2023 was $669,000 and $3,633,000, respectively. The performance shares granted to employees principally vest over a three-year performance period, if pre-established performance goals are attained, or as specified pursuant to the Plan and related agreements. As of April 30, 2024, the number of outstanding performance shares included in the above table, and the related compensation expense prior to consideration of estimated pre-vesting forfeitures, assume achievement of the pre-established goals at a target level, except for two of our former CEOs, whose achievement was based on maximum performance pursuant to their pre-existing change-in-control agreements. RSUs and restricted stock granted to non-employee directors prior to August 2022 had a vesting period of five years and are convertible into shares of our common stock generally at the time of termination, on a one-for-one basis for no cash consideration, or earlier under certain circumstances. Commencing in August 2022, such awards have a vesting period of one year. RSUs granted to employees prior to August 2022 have a vesting period of five years and are convertible into shares of our common stock generally at the time of vesting, on a one-for-one basis for no cash consideration. Commencing in August 2022, such RSUs have a vesting period of three years. Share units granted prior to July 31, 2017 were vested when issued and are convertible into shares of our common stock, generally at the time of termination, on a one-for-one basis for no cash consideration, or earlier under certain circumstances. Share units granted on or after July 31, 2017 were granted to certain employees in lieu of non-equity incentive compensation and are convertible into shares of our common stock on the one-year anniversary of the respective grant date. In July 2023, we granted shares of our common stock to certain employees in lieu of non-equity incentive compensation. The fair value of performance shares, RSUs, restricted stock and share units is determined using the closing market price of our common stock on the date of grant, less the present value of any estimated future dividend equivalents such awards are not entitled to receive and an applicable estimated discount for any post-vesting transfer restrictions. RSUs, performance shares and restricted stock are entitled to dividend equivalents, as applicable, unless forfeited before vesting occurs. Share units and other stock-based awards would be entitled to dividend equivalents while the underlying shares are unissued. Dividend equivalents are subject to forfeiture, similar to the terms of the underlying stock-based awards, and are payable in cash generally at the time of settlement of the underlying award. During the three and nine months ended April 30, 2024, we reversed $68,000 and $104,000, respectively, of previously accrued dividend equivalents due to forfeitures and paid out $2,000 and $267,000, respectively. During the three months ended April 30, 2023, we reversed $22,000 of previously accrued dividend equivalents due to forfeitures and paid out $13,000. During the nine months ended April 30, 2023, we accrued $342,000 of dividend equivalents (net of forfeitures) and paid out $363,000. Accrued dividend equivalents were recorded as a reduction to retained earnings; whereas, reversals of accrued dividend equivalents were recorded as an increase to retained earnings. As of April 30, 2024 and July 31, 2023, accrued dividend equivalents were $320,000 and $691,000, respectively. |
Segment Information
Segment Information | 9 Months Ended |
Apr. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Reportable operating segments are determined based on Comtech’s management approach. The management approach, as defined by FASB ASC 280 "Segment Reporting" is based on the way that the CODM organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our CODM, for purposes of FASB ASC 280, is our interim Chief Executive Officer. Satellite and Space Communications is organized into three technology areas: satellite modem technologies and amplifier technologies, troposcatter and SATCOM solutions, and space components and antennas. This segment offers customers: satellite ground station technologies, services and system integration that facilitate the transmission of voice, video and data over GEO, MEO and LEO satellite constellations, including traveling wave tube power amplifiers, modems, VSAT platforms and frequency converters; satellite communications and tracking antenna systems, including high precision full motion fixed and mobile X/Y tracking antennas, RF feeds, reflectors and radomes; over-the-horizon microwave equipment that can transmit digitized voice, video, and data over distances up to 200 miles using the troposphere and diffraction, including the Comtech COMET™; and procurement and supply chain management of high reliability Electrical, Electronic and Electromechanical ("EEE") parts for satellite, launch vehicle and manned space applications. Terrestrial and Wireless Networks is organized into three service areas: next generation 911 and call delivery, Solacom call handling solutions, and trusted location and messaging solutions. This segment offers customers: SMS text to 911 services, providing alternate paths for individuals who need to request assistance (via text messaging) a method to reach Public Safety Answering Points ("PSAPs"); next generation 911 solutions, providing emergency call routing, location validation, policy-based routing rules, logging and security functionality; Emergency Services IP Network transport infrastructure for emergency services communications and support of next generation 911 services; call handling applications for PSAPs; wireless emergency alerts solutions for network operators; and software and equipment for location-based and text messaging services for various applications, including for public safety, commercial and government services. Our CODM primarily uses a metric that we refer to as Adjusted EBITDA to measure an operating segment’s performance and to make decisions about resources to be allocated. Our Adjusted EBITDA metric for the Satellite and Space Communications and Terrestrial and Wireless Networks segments do not consider allocation of any indirect expenses that are unrelated to the segment's operations, or any of the following: income taxes, interest, change in fair value of the convertible preferred stock purchase option liability, change in fair value of warrants, write-off of deferred financing costs, amortization of stock-based compensation, amortization of intangibles, depreciation expense, amortization of cost to fulfill assets, acquisition plan expenses, restructuring costs, COVID-19 related costs, strategic emerging technology costs (for next-generation satellite technology), facility exit costs, CEO transition costs, proxy solicitation costs, strategic alternatives expenses and other. These items, while periodically affecting our results, may vary significantly from period to period and may have a disproportionate effect in a given period, thereby affecting the comparability of results. Any amounts shown in the Adjusted EBITDA calculation for our Satellite and Space Communications and Terrestrial and Wireless Networks segments are directly attributable to those segments. Our Adjusted EBITDA is also used by our management in assessing the Company's operating results. Although closely aligned, the Company's definition of Adjusted EBITDA is different than the Consolidated EBITDA or EBITDA (as such terms are defined in our Prior Credit Facility and New Credit Facility) utilized for financial covenant calculations and also may differ from the definition of EBITDA or Adjusted EBITDA used by other companies and, therefore, may not be comparable to similarly titled measures used by other companies. Operating segment information, along with a reconciliation of segment net income (loss) and consolidated net income (loss) to Adjusted EBITDA is presented in the tables below: Three months ended April 30, 2024 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 71,445,000 56,631,000 — $ 128,076,000 Operating income (loss) $ 2,796,000 5,727,000 (11,993,000) $ (3,470,000) Net income (loss) $ 1,828,000 5,266,000 (4,299,000) $ 2,795,000 Provision for (benefit from) income taxes 11,000 274,000 (5,666,000) (5,381,000) Interest expense 884,000 — 4,262,000 5,146,000 Interest (income) and other 73,000 187,000 149,000 409,000 Change in fair value of warrants — — (6,439,000) (6,439,000) Amortization of stock-based compensation — — 404,000 404,000 Amortization of intangibles 1,671,000 3,618,000 — 5,289,000 Depreciation 1,047,000 1,985,000 89,000 3,121,000 Amortization of cost to fulfill assets 240,000 — — 240,000 CEO transition costs — — 2,492,000 2,492,000 Restructuring costs 549,000 — 2,206,000 2,755,000 Strategic emerging technology costs 880,000 — — 880,000 Loss on business divestiture, net — — 200,000 200,000 Adjusted EBITDA $ 7,183,000 11,330,000 (6,602,000) $ 11,911,000 Purchases of property, plant and equipment $ 388,000 2,154,000 125,000 $ 2,667,000 Total assets at April 30, 2024 $ 498,449,000 455,169,000 37,381,000 $ 990,999,000 Three months ended April 30, 2023 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 82,249,000 54,067,000 — $ 136,316,000 Operating income (loss) $ 37,000 3,160,000 (8,473,000) $ (5,276,000) Net income (loss) $ 650,000 2,902,000 (11,010,000) $ (7,458,000) (Benefit from) provision for income taxes (1,188,000) 84,000 (1,828,000) (2,932,000) Interest expense (25,000) — 4,411,000 4,386,000 Interest (income) and other 600,000 174,000 (46,000) 728,000 Amortization of stock-based compensation — — 4,126,000 4,126,000 Amortization of intangibles 1,828,000 3,521,000 — 5,349,000 Depreciation 1,027,000 1,921,000 33,000 2,981,000 Amortization of cost to fulfill assets 240,000 — — 240,000 Restructuring costs 2,191,000 548,000 1,357,000 4,096,000 Strategic emerging technology costs 1,029,000 — — 1,029,000 Adjusted EBITDA $ 6,352,000 9,150,000 (2,957,000) $ 12,545,000 Purchases of property, plant and equipment $ 1,106,000 3,549,000 300,000 $ 4,955,000 Total assets at April 30, 2023 $ 488,814,000 475,380,000 25,665,000 $ 989,859,000 Nine months ended April 30, 2024 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 252,436,000 161,776,000 $ 414,212,000 Operating income (loss) $ 14,756,000 17,901,000 (31,068,000) $ 1,589,000 Net income (loss) $ 10,672,000 17,011,000 (36,883,000) $ (9,200,000) Provision for (benefit from) income taxes 547,000 696,000 (604,000) 639,000 Interest expense 2,659,000 — 12,684,000 15,343,000 Interest (income) and other 878,000 194,000 174,000 1,246,000 Change in fair value of warrants — — (6,439,000) (6,439,000) Amortization of stock-based compensation — — 5,238,000 5,238,000 Amortization of intangibles 5,014,000 10,852,000 — 15,866,000 Depreciation 2,865,000 5,933,000 275,000 9,073,000 Amortization of cost to fulfill assets 720,000 — — 720,000 CEO transition costs — — 2,492,000 2,492,000 Restructuring costs 2,793,000 8,000 6,396,000 9,197,000 Strategic emerging technology costs 3,228,000 — — 3,228,000 Gain on business divestiture, net — — (2,013,000) (2,013,000) Adjusted EBITDA $ 29,376,000 $ 34,694,000 $ (18,680,000) $ 45,390,000 Purchases of property, plant and equipment $ 1,763,000 6,175,000 966,000 $ 8,904,000 Total assets at April 30, 2024 $ 498,449,000 455,169,000 37,381,000 $ 990,999,000 Nine months ended April 30, 2023 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 243,529,000 157,651,000 — $ 401,180,000 Operating income (loss) $ 8,380,000 7,216,000 (31,377,000) $ (15,781,000) Net income (loss) $ 9,588,000 7,070,000 (40,017,000) $ (23,359,000) Benefit from income taxes (1,832,000) (197,000) (1,733,000) (3,762,000) Interest expense 2,000 — 10,410,000 10,412,000 Interest (income) and other 622,000 343,000 (37,000) 928,000 Amortization of stock-based compensation — — 6,298,000 6,298,000 Amortization of intangibles 5,484,000 10,563,000 — 16,047,000 Depreciation 3,057,000 5,579,000 110,000 8,746,000 Amortization of cost to fulfill assets 720,000 — — 720,000 Restructuring costs 4,336,000 548,000 2,080,000 6,964,000 Strategic emerging technology costs 2,513,000 — — 2,513,000 CEO transition costs — — 9,090,000 9,090,000 Adjusted EBITDA $ 24,490,000 23,906,000 (13,799,000) $ 34,597,000 Purchases of property, plant and equipment $ 5,660,000 8,505,000 708,000 $ 14,873,000 Total assets at April 30, 2023 $ 488,814,000 475,380,000 25,665,000 $ 989,859,000 Unallocated expenses result from corporate expenses such as executive compensation, accounting, legal and other regulatory compliance related costs and also includes all of our amortization of stock-based compensation. See Note (1) - " General - CEO Transition Related " for information related to such costs. During the three and nine months ended April 30, 2024, our Unallocated segment incurred $2,206,000 and $6,396,000, respectively, of restructuring costs focused on: (i) streamlining our operations and supply chain, (ii) legal and other expenses primarily related to divestiture activities, and (iii) efforts to refinance our Prior Credit Facility and improve liquidity. During the three and nine months ended April 30, 2023, our Unallocated segment incurred $1,357,000 and $2,080,000, respectively, of restructuring costs focused on streamlining our operations. In addition, during the three and nine months ended April 30, 2024, we recorded a reduction to the estimated gain of $200,000 and an estimated gain of $2,013,000, respectively, related to the PST Divestiture. During the three and nine months ended April 30, 2024, our Satellite and Space Communications segment recorded $549,000 and $2,793,000, respectively, of restructuring costs primarily incurred to streamline our operations and improve efficiency, including costs related to the relocation of certain of our satellite ground station production facilities to our new 146,000 square foot facility in Chandler, Arizona. Similar restructuring costs of $2,191,000 and $4,336,000 were incurred during the three and nine months ended April 30, 2023, respectively. In addition, during the three and nine months ended April 30, 2024, we incurred $880,000 and $3,228,000 of strategic emerging technology costs for next-generation satellite technology to advance our solutions offerings to be used with new broadband satellite constellations. Similar strategic emerging technology costs of $1,029,000 and $2,513,000 were incurred during the three and nine months ended April 30, 2023, respectively. During both the three and nine months ended April 30, 2023, our Terrestrial and Wireless Networks segment recorded $548,000 of restructuring costs primarily incurred to streamline our operations and improve efficiency. Similar costs incurred in fiscal 2024 were nominal. Interest expense in the tables above primarily relates to our Prior Credit Facility, and includes the amortization of deferred financing costs. See Note (10) - " Credit Facility " for further discussion. Intersegment sales for both the three and nine months ended April 30, 2024 and 2023 between the Satellite and Space Communications segment and the Terrestrial and Wireless Networks segment were nominal. All intersegment sales are eliminated in consolidation and are excluded from the tables above. Unallocated assets at April 30, 2024 consist principally of cash and cash equivalents, corporate property, plant and equipment, operating lease right of use assets and deferred financing costs. The large majority of our long-lived assets are located in the U.S. |
Goodwill
Goodwill | 9 Months Ended |
Apr. 30, 2024 | |
Goodwill [Abstract] | |
Goodwill | Goodwill The following table represents goodwill by reportable operating segment as of April 30, 2024 and July 31, 2023. Satellite and Space Communications Terrestrial and Wireless Networks Total Balance as of July 31, 2023 $ 173,602,000 174,090,000 $ 347,692,000 PST Divestiture (14,587,000) — (14,587,000) Balance as of April 30, 2024 $ 159,015,000 174,090,000 $ 333,105,000 In accordance with FASB ASC 350, we perform a goodwill impairment analysis at least annually (in the first quarter of each fiscal year), unless indicators of impairment exist in interim periods. If we fail the quantitative assessment of goodwill impairment ("quantitative assessment"), we would be required to recognize an impairment loss equal to the amount that a reporting unit's carrying value exceeded its fair value; however, any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. On August 1, 2023 (the first day of fiscal 2024), we performed our annual quantitative assessment using market participant assumptions to determine if the fair value of each of our reporting units with goodwill exceeded its carrying value. In making this assessment, we considered, among other things, expectations of projected net sales and cash flows, assumptions impacting the weighted average cost of capital, trends in trading multiples of comparable companies, changes in our stock price and changes in the carrying values of our reporting units with goodwill. We also considered overall business conditions. In performing the quantitative assessment, we estimated the fair value of each of our reporting units using a combination of the income and market approaches. The income approach, also known as the discounted cash flow ("DCF") method, utilizes the present value of cash flows to estimate fair value. The future cash flows for our reporting units were projected based on our estimates, at that time, of future revenues, operating income and other factors (such as working capital and capital expenditures). For purposes of conducting our impairment analysis, we assumed revenue growth rates and cash flow projections that are below our actual long-term expectations. The discount rates used in our DCF method were based on a weighted-average cost of capital ("WACC") determined from relevant market comparisons, adjusted upward for specific reporting unit risks (primarily the uncertainty of achieving projected operating cash flows). A terminal value growth rate was applied to the final year of the projected period, which reflects our estimate of stable, perpetual growth. We then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach. Under the market approach, we estimated a fair value based on comparable companies' market multiples of revenues and earnings before interest, taxes, depreciation and amortization and factored in a control premium. Finally, we compared our estimates of fair values to our total public market capitalization and assessed implied control premiums based on our common stock price of $10.09 as of the date of testing. Ultimately, based on our quantitative evaluations, we determined that our Satellite and Space Communications and Terrestrial and Wireless Networks reporting units had estimated fair values in excess of their carrying values of at least 18.3% and 8.9%, respectively, and concluded that our goodwill was not impaired and that neither of our two reporting units was at risk of failing the quantitative assessment. During the first quarter of fiscal 2024, we determined that the PST Disposal Group met the criteria to be classified as held for sale. Because the PST Disposal Group represented the disposal of a portion of the Satellite and Space Communications reporting unit, we assigned $14,587,000 of goodwill to the PST Disposal Group on a relative fair value basis. For purposes of allocating goodwill to the PST Disposal Group, we determined the fair value of the PST Disposal Group (based on consideration received from the sale transaction) and the fair value of the retained businesses of the Satellite and Space Communications reporting unit (based on a combination of the income and market approach). In conjunction with the relative fair value allocation, we tested goodwill assigned to the PST Disposal Group and retained businesses of the Satellite and Space Communications reporting unit for impairment and concluded that no impairment existed at the time the held for sale criteria were met. As discussed further in Note (2) - " Business Divestiture, " we completed the PST Divestiture in the second quarter of fiscal 2024 and reduced goodwill by $14,587,000 as part of determining the estimated gain on business divestiture, net. During the second and third quarters of fiscal 2024, net sales (primarily in our Satellite and Space Communications segment) reflected delays in the timing of our receipt of and performance on orders, principally as a result of our financial condition at the time, including uncertainties relating to the refinancing of our Prior Credit Facility (which we completed subsequent to quarter end). Such conditions affected our liquidity and gave rise to substantial doubt regarding our ability to continue as a going concern, which we believe: (i) temporarily slowed down our receipt of orders from customers, as well as components from suppliers, and (ii) caused a decline in our common stock price of approximately 81.4% between August 1, 2023 and April 30, 2024, from $10.09 per share to $1.88 per share. We determined the sustained decline in market capitalization, based on our publicly quoted share price, represented a triggering event requiring an interim impairment test of goodwill. We performed an interim step one quantitative test for our Satellite and Space Communications and Terrestrial and Wireless Networks reporting units as of April 30, 2024, utilizing the same approaches as the August 1, 2023 quantitative test discussed above. Ultimately, based on our quantitative evaluations, we determined that our Satellite and Space Communications and Terrestrial and Wireless Networks reporting units had estimated fair values in excess of their carrying values of at least 10.2% and 11.7%, respectively, and concluded that our goodwill was not impaired. Our interim analysis used significant assumptions, including expected future revenue growth rates, profit margins and discount rates. Although we believe the assumptions and estimates we have made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results. Different assumptions of the anticipated future results and growth from our businesses could result in an impairment charge, which would decrease GAAP operating income and result in lower asset values on our condensed consolidated balance sheet. The estimated fair values of our Satellite and Space Communications and Terrestrial and Wireless Networks reporting units exceed their carrying values by more than 10.0%. As a measure of sensitivity of the fair value for the Satellite and Space Communications and Terrestrial and Wireless Networks reporting units, while holding all other assumptions constant, an increase in the discount rate of 100 basis points or a decrease of 100 basis points in the revenue growth rate assumptions for each forecasted period used to determine the fair value of each reporting unit would not result in an impairment of goodwill. In addition, as disclosed in Note (1) - " General - Liquidity and Going Concern, " we have engaged a third-party financial advisor to assist us with, among other things, discussions and negotiations with our existing and new lenders, as well as to seek other sources of credit and outside capital. Although we have completed the refinancing of our Prior Credit Facility subsequent to quarter end, a sustained significant decline in our actual operating performance, as compared to our forecast, and/or a continued sustained decline in our common stock price, may require us to perform another interim quantitative goodwill impairment test, which may result in an impairment of the goodwill assigned to one or both of our reporting units by an amount that could be material if we conclude our forecasted operating results will be adversely impacted for the foreseeable future. In any event, we are required to perform our next annual goodwill impairment analysis on August 1, 2024 (the start of our fiscal 2025). If our assumptions and related estimates change in the future, or if we change our reporting unit structure or other events and circumstances change (e.g., a sustained decrease in the price of our common stock (considered on both absolute terms and relative to peers)), we may be required to record impairment charges when we perform these tests, or in other future periods. Any impairment charges that we may record in the future could be material to our results of operations and financial condition. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Apr. 30, 2024 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets with finite lives are as follows: April 30, 2024 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.2 $ 302,058,000 132,789,000 $ 169,269,000 Technologies 14.8 113,149,000 82,058,000 31,091,000 Trademarks and other 16.7 32,926,000 23,245,000 9,681,000 Total $ 448,133,000 238,092,000 $ 210,041,000 July 31, 2023 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.2 $ 302,058,000 121,786,000 $ 180,272,000 Technologies 14.8 114,949,000 80,672,000 34,277,000 Trademarks and other 16.7 32,926,000 21,568,000 11,358,000 Total $ 449,933,000 224,026,000 $ 225,907,000 The weighted average amortization period in the above table excludes fully amortized intangible assets. Amortization expense for the three and nine months ended April 30, 2024 was $5,289,000 and $15,866,000, respectively. Amortization expense for the three and nine months ended April 30, 2023 $5,349,000 and $16,047,000, respectively. The estimated amortization expense consists of the following for the fiscal years ending July 31: 2024 $ 21,154,000 2025 21,039,000 2026 19,888,000 2027 18,534,000 2028 18,534,000 We review net intangible assets with finite lives for impairment when an event occurs indicating the potential for impairment. Based on our last assessment, we believe that the carrying values of our net intangible assets were recoverable as of April 30, 2024. However, if business conditions deteriorate, we may be required to record impairment losses, and/or increase the amortization of intangibles in the future. Any impairment charges that we may record in the future could be material to our results of operations and financial condition. |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended |
Apr. 30, 2024 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | Convertible Preferred Stock On October 18, 2021, we entered into a Subscription Agreement (the “Subscription Agreement”) with certain affiliates and related funds of White Hat Capital Partners LP and Magnetar Capital LLC (collectively, the “Investors”), relating to the issuance and sale of up to 125,000 shares of our Series A Convertible Preferred Stock, par value $0.10 per share (the “Series A Convertible Preferred Stock”), for an aggregate purchase price of up to $125,000,000, or $1,000 per share. On October 19, 2021, pursuant to the terms of the Subscription Agreement, the Investors purchased an aggregate of 100,000 shares of Series A Convertible Preferred Stock for an aggregate purchase price of $100,000,000. White Hat Capital Partners LP is affiliated with Mark Quinlan, who serves as Chairman of our Board of Directors. On December 13, 2023, we and the Investors agreed to change certain terms of the Series A Convertible Preferred Stock, effected through an Exchange Agreement (the “Exchange Agreement”), pursuant to which the Investors exchanged (the “Series A Exchange”) all 100,000 shares of Series A Convertible Preferred Stock outstanding for 100,000 shares of our newly issued Series A-1 Convertible Preferred Stock, par value $0.10 per share (the “Series A-1 Convertible Preferred Stock”), with an initial liquidation preference of $1,134.20 per share. As a result of the Series A Exchange, no shares of Series A Convertible Preferred Stock remain outstanding. On January 22, 2024, we entered into a Subscription and Exchange Agreement (the “Subscription and Exchange Agreement”) with the Investors, relating to: (i) the issuance and sale of 45,000 shares of Series B Convertible Preferred Stock, par value $0.10 per share (the “Series B Convertible Preferred Stock”), for an aggregate purchase price of $45,000,000, or $1,000 per share (the “Primary Issuance”), (ii) the exchange of 100,000 shares of our Series A-1 Convertible Preferred Stock for 115,721.22 shares of Series B Convertible Preferred Stock (the “Series B Exchange”) and (iii) the issuance to the Investors of 5,400 shares of Series B Convertible Preferred Stock in lieu of cash for certain expense reimbursements (the “Additional Issuance” and, together with the Primary Issuance and the Series B Exchange, the “Series B Issuance”). As a result of the Series B Exchange, no shares of Series A-1 Convertible Preferred Stock remain outstanding. We received $43,200,000 of cash proceeds from the Primary Issuance, net of $1,800,000 for certain expense reimbursements. The Series B Convertible Preferred Stock ranks senior to the shares of our common stock, with respect to the payment of dividends and the distribution of assets upon a liquidation, dissolution or winding up of the Company. The Series B Convertible Preferred Stock has an initial liquidation preference of $1,000 per share with each share entitled to a cumulative dividend (the “Dividend”) at the rate of 9.00% per annum, compounding quarterly, paid-in-kind, or 7.75% per annum, compounding quarterly, paid in cash, at our election, or 6.50% per annum, in respect of any shares of Series B Convertible Preferred Stock that remain outstanding following the redemption of at least fifty percent (50%) of the Series B Preferred Stock pursuant to the exercise of an asset sale put right and/or an asset sale call right as described below. For any quarter in which we elect not to pay the Dividend in cash, such Dividend becomes part of the liquidation preference of the Series B Convertible Preferred Stock. In addition, no dividend or other distribution on our common stock will be declared or paid on our common stock unless, at the time of such declaration and payment, an equivalent dividend or distribution is declared and paid on the Series B Convertible Preferred Stock (the “Participating Dividend”), provided that in the case of any such dividend in the form of cash, in lieu of a cash payment, such Participating Dividend will become part of the liquidation preference of the Series B Convertible Preferred Stock. Such Participating Dividend results in the Series B Convertible Preferred Stock meeting the definition of a "participating security" for purposes of our earnings per share calculations. The shares of Series B Convertible Preferred Stock are convertible into shares of common stock at the option of the holder thereof at any time. At any time after July 22, 2027, we have the right to mandate conversion of the Series B Convertible Preferred Stock, subject to certain restrictions based on the price of our common stock in the preceding thirty (30) trading days. The conversion price for the Series B Convertible Preferred Stock is $7.99, subject to certain adjustments set forth in the certificate of designations governing the Series B Convertible Preferred Stock (the "Series B Certificate of Designations"). Holders of the Series B Convertible Preferred Stock are entitled to vote with the holders of our common stock on an as-converted basis, and are entitled to a separate class vote with respect to, among other things, amendments to our organizational documents that have an adverse effect on the Series B Convertible Preferred Stock, authorizations or issuances of securities of the Company (other than the issuance of up $50,000,000 of shares of common stock), the payment of dividends, related party transactions, repurchases or redemptions of securities of the Company, dispositions of businesses or assets involving consideration having a fair value in excess of $75,000,000, the incurrence of certain indebtedness and certain amendments or extensions of our Credit Facility on terms and conditions that, taken as a whole, (A) are materially different from the existing Credit Facility or (B) adversely affect our ability to perform our obligations in connection with an optional repurchase of the Series B Convertible Preferred Stock, in each case, subject to the exceptions and qualifications set forth in the Series B Certificate of Designations. Holders have the right to require us to repurchase their Series B Convertible Preferred Stock (at 1.0x the liquidation preference, plus accrued and unpaid dividends) on a date occurring either: (a) on or after October 31, 2028 or (b) upon the consummation of an asset sale meeting certain criteria. We have the right to repurchase all, or less than all, of the Series B Convertible Preferred Stock upon the consummation of an asset sale meeting the same criteria, other than an asset sale that would result in a change of control. In addition, each holder will have the right to cause us to repurchase its Series B Convertible Preferred Stock in connection with a change of control at 1.5x (or 1.0x in the case of Series B Convertible Preferred Stock issued in the Additional Issuance) the liquidation preference, plus accrued and unpaid dividends. Any repurchase described above would be subject to the terms set forth in the Series B Certificate of Designations. Upon a repurchase of the Series B Convertible Preferred Stock occurring as a result of an asset sale described above, we will issue each respective holder a warrant (a “Warrant”). A Warrant will represent the right to acquire our common stock, as further described in the Subscription and Exchange Agreement, for a term of five years and six months from the issuance of such Warrant, at an initial exercise price equal to the conversion price on the date of issuance of such Warrant, subject to certain adjustments. We determined that our obligation to issue a Warrant met the definition of a freestanding financial instrument that should be accounted for as a liability. We established an initial Warrant liability of $6,440,000, which was included in the consideration given to the Investors for purposes of determining the loss on extinguishment of the Series A-1 Convertible Preferred Stock as of January 31, 2024. The Warrant liability is classified in " Other Liabilities " on the Condensed Consolidated Balance Sheets and is remeasured to its estimated fair value each reporting period, using Level 3 fair value inputs, until the Warrant is exercised or expires. Changes in the estimated fair value of the Warrant will be recognized in our Condensed Consolidated Statement of Operations as a non-cash expense or benefit. As of April 30, 2024, the Warrant liability was remeasured, resulting in a $6,439,000 reduction to its estimated fair value. We accounted for the Series B Issuance and cancellation of Series A-1 Convertible Preferred Stock as an extinguishment based on a qualitative assessment of the terms of the preferred shares exchanged. We recognized a $13,640,000 loss on extinguishment, representing the aggregate value of the Warrant, the Additional Issuance and certain expense reimbursements. As the Series A-1 Convertible Preferred Stock was classified as temporary equity, the loss on extinguishment was accounted for as a dividend to the holders and charged against retained earnings, and included in net loss attributable to common shareholders. In accordance with ASC 480, " Distinguishing Liabilities from Equity ," specifically ASC 480-10-S99-3A(2), SEC Staff Announcement: Classification and Measurement of Redeemable Securities , we classified the Series B Convertible Preferred Stock outside of permanent equity as temporary equity since the redemption of such shares is not solely within our control and we could be required by the holder to redeem the shares for cash or other assets, at their option. Upon the Series B Issuance, the initial redemption value (and estimated fair value) of the Series B Convertible Preferred Stock was $166,121,000, which was recorded at an initial carrying value of $161,848,000, net of initial issuance costs of $4,273,000. We have elected to adjust the carrying value of the Series B Convertible Preferred Stock to its current redemption value of $170,254,000, which includes $2,866,000 of cumulative dividends paid in kind and $1,267,000 of accumulated and unpaid dividends. During the nine months ended April 30, 2024, the adjustments charged against retained earnings to increase the carrying value of outstanding convertible preferred stock to their respective redemption values totaled $11,992,000, of which $8,482,000 related to the Series B Convertible Preferred Stock and $3,510,000 related to the Series A and A-1 Convertible Preferred Stock (while outstanding). Subsequent Event In connection with entering into the New Credit Facility discussed in Note (10) - "Credit Facility," on June 17, 2024, we and the Investors agreed to change certain terms of the Series B Convertible Preferred Stock. The changes altered the preferred holders’ existing consent rights and existing put rights alongside payments upon a change of control following specified asset sales, in each case consistent with the New Credit Facility. To effect these changes, we and the Investors entered into a Subscription and Exchange Agreement (the “Series B-1 Exchange”), pursuant to which the Investors: (i) exchanged, in a transaction exempt from registration under the Securities Act of 1933, all of the 166,121.22 shares of Series B Convertible Preferred Stock outstanding for 166,121.22 shares of our newly issued Series B-1 Convertible Preferred Stock, par value $0.10 per share, with an initial liquidation preference of $1,036.58 per share, and (ii) received 5,705.83 additional shares of Series B-1 Convertible Preferred Stock. Also, on June 17, 2024, we and the Investors entered into a Voting Agreement and Registration Rights Agreement and filed a Series B-1 Certificate of Designations with the Secretary of State of Delaware, complete copies of which are documented and filed with the SEC. Except for the changes described above, the powers, preferences and rights of the Series B-1 Convertible Preferred Stock are substantially the same as those of the Series B Convertible Preferred Stock, including, without limitation, that the shares of Series B-1 Convertible Preferred Stock are convertible into shares of common stock at a conversion price of $7.99 per share (the same as the current conversion price of the Series B Convertible Preferred Stock, and subject to the same adjustments). We did not receive any cash proceeds from the Series B-1 Exchange. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Apr. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Shelf Registration On July 13, 2022, we filed a $200,000,000 shelf registration statement with the SEC for the sale of various types of securities, including debt securities. This shelf registration statement was declared effective by the SEC as of July 25, 2022 and expires on July 25, 2025. As of the date of this Quarterly Report on Form 10-Q, we have not issued any securities pursuant to our $200,000,000 shelf registration statement. Common Stock Repurchase Program On September 29, 2020, our Board of Directors authorized a new $100,000,000 stock repurchase program, which replaced our prior program. The new $100,000,000 stock repurchase program has no time restrictions and repurchases may be made from time to time in open-market or privately negotiated transactions, or by other means in accordance with federal securities laws. There were no repurchases during the nine months ended April 30, 2024 or 2023. |
Legal Proceedings and Other Mat
Legal Proceedings and Other Matters | 9 Months Ended |
Apr. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Other Matters | Legal Proceedings and Other Matters Other Matters In the ordinary course of business, we include indemnification provisions in certain of our customer contracts to indemnify, hold harmless and reimburse such customers for certain losses, including but not limited to losses related to third-party claims of intellectual property infringement arising from the customer’s use of our products or services. We may also, from time to time, receive indemnification requests from customers related to third-party claims that 911 calls were improperly routed during an emergency. We evaluate such claims as and when they arise. We do not always agree with customers that they are entitled to indemnification and in such cases reject their claims. Despite maintaining that we have properly carried out our duties, we may seek coverage under our various insurance policies; however, we cannot be sure that we will be able to maintain or obtain insurance coverage at acceptable costs or in sufficient amounts or that our insurer will not disclaim coverage as to such claims. Accordingly, pending or future claims asserted against us by a party that we are obligated to indemnify could result in legal costs and damages that could have a material adverse effect on our consolidated results of operations and financial condition. There are certain other pending and threatened legal actions which arise in the normal course of business, in addition to a certain matter, which is in its preliminary stage, related to the termination of our former CEO for cause in March 2024. Although the ultimate outcome of these matters is difficult to accurately predict, we believe that the outcome of these other matters will not have a material adverse effect on our consolidated financial condition or results of operations. Employment, Change of Control and Indemnification Agreements We previously entered into an employment agreement with our former CEO, generally providing for an annual salary, bonus award, sign-on bonus, equity incentive awards and, under certain terminations of employment, severance payment. We have also entered into employment and/or change of control agreements with certain of our executive officers and certain key employees. All of these agreements may require payments by us, in certain circumstances, including, but not limited to, a change in control of the Company or termination of the employee. |
Cost Reduction
Cost Reduction | 9 Months Ended |
Apr. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Cost Reduction | Cost Reduction In fiscal 2023, we transformed and integrated our individual businesses into two segments to improve operational performance. This transformation has provided insight into opportunities to manage costs, streamline operations, improve efficiency, and accelerate decision-making by eliminating management layers and other redundancies. In doing so, during fiscal 2023, we recorded $3,872,000 of severance costs in selling, general and administrative expenses in our Condensed Consolidated Statements of Operations , of which $1,989,000, $1,220,000 and $663,000 related to our Satellite and Space Communications, Terrestrial and Wireless Networks and Unallocated segments, respectively. We paid $2,320,000 of severance costs during fiscal 2023 and our severance liability as of July 31, 2023 was $1,552,000. In fiscal 2024, we recorded additional severance costs of $1,488,000 in selling, general and administrative expenses in our Condensed Consolidated Statements of Operations , of which a substantial portion was related to our Satellite and Space Communications segment. After net payments of $2,687,000, our severance liability as of April 30, 2024 was $353,000. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net loss | $ 2,795,000 | $ (7,458,000) | $ (9,200,000) | $ (23,359,000) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Apr. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
General (Policy)
General (Policy) | 9 Months Ended |
Apr. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | The accompanying Condensed Consolidated Financial Statements of Comtech Telecommunications Corp. and its subsidiaries ("Comtech," "we," "us," or "our") as of and for the three and nine months ended April 30, 2024 and 2023 are unaudited. In the opinion of management, the information furnished reflects all material adjustments (which include normal recurring adjustments) necessary for a fair presentation of the results for the unaudited interim periods. Our results of operations for such periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. The preparation of our Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements , and the reported amounts of net sales and expenses during the reported period. Actual results may differ from those estimates. Our Condensed Consolidated Financial Statements should be read in conjunction with our audited consolidated financial statements, filed with the Securities and Exchange Commission ("SEC"), for the fiscal year ended July 31, 2023 and the notes thereto contained in our Annual Report on Form 10-K, and all of our other filings with the SEC. Liquidity and Going Concern The accompanying unaudited Condensed Consolidated Financial Statements have been prepared assuming we will continue as a going concern. The going concern basis of presentation assumes that we will continue in operation one year after the date these unaudited Condensed Consolidated Financial Statements are issued and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Pursuant to the requirements of ASC Topic 205-40, " Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern ," we are required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern. This evaluation does not take into consideration the potential mitigating effect of our plans that have not been fully implemented or are not within our control as of the date the unaudited Condensed Consolidated Financial Statements are issued. When substantial doubt exists, we evaluate whether the mitigating effect of our plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of our plans, however, is only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the unaudited Condensed Consolidated Financial Statements are issued, and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited Condensed Consolidated Financial Statements are issued. As of the date these financial statements were issued (the "issuance date"), we evaluated whether the following conditions or events, considered in the aggregate, raise substantial doubt about the Company's ability to continue as a going concern over the next twelve months beyond the issuance date. Over the past three fiscal years, we incurred operating losses of $14,660,000, $33,752,000, and $68,298,000 in fiscal 2023, 2022 and 2021, respectively. More recently, we recognized an operating loss of $3,470,000 in the three months ended April 30, 2024 and operating income of $1,589,000 in the nine months ended April 30, 2024. In addition, over the past three fiscal years, net cash used in operating activities was $4,433,000 and $40,638,000 in fiscal 2023 and 2021, respectively, and net cash provided by operating activities was $1,997,000 in fiscal 2022. More recently, net cash used in operating activities was $44,998,000 in the nine months ended April 30, 2024. As of April 30, 2024, we were in compliance with all restrictive and financial covenants under our Prior Credit Facility (see Note (10) – “ Credit Facility ” for defined terms). As of April 30, 2024, our Secured Leverage Ratio was 2.89x TTM Adjusted EBITDA compared to the maximum allowable Secured Leverage Ratio of 3.50x TTM Adjusted EBITDA. Our Interest Expense Coverage Ratio as of April 30, 2024 was 3.36x TTM Adjusted EBITDA compared to the Minimum Interest Expense Coverage Ratio of 3.25x TTM Adjusted EBITDA. Our Minimum Liquidity as of April 30, 2024 was $26,800,000 compared to the Minimum Liquidity requirement of $25,000,000. As discussed in Note (10) – “Credit Facility,” on June 17, 2024, we entered into a $222,000,000 credit facility with a new syndicate of lenders (the “New Credit Facility”), which replaces our Prior Credit Facility and which is expected to fund on or around June 18, 2024. The New Credit Facility matures on July 31, 2028, consists of a committed $162,000,000 term loan (“Term Loan”) and $60,000,000 revolver loan facility (“Revolver”) and is expected to have outstanding borrowings at close of $187,000,000, reflecting $25,000,000 drawn on the Revolver. The New Credit Facility, among other things, requires compliance with new restrictive and financial covenants. Considering the New Credit Facility entered into subsequent to quarter end and our forecasted results over the next twelve months beyond the issuance date, we anticipate in the future that we will be in compliance with all restrictive and financial covenants under our New Credit Facility. As of the issuance date and closing of the New Credit Facility, our available sources of liquidity will approximate $63,000,000, consisting of qualified cash and cash equivalents of approximately $28,000,000 and $35,000,000 of excess availability under the Revolver, both as defined in the New Credit Facility. Our ability to meet our current obligations as they come due may be impacted by our ability to remain compliant with the financial covenants under our New Credit Facility or to obtain waivers or amendments that impact the related financial covenants. If we are unable to satisfy certain covenants and not able to obtain waivers or amendments, such event would constitute an Event of Default and could cause an immediate acceleration and repayment of all outstanding principal, interest and fees due under our New Credit Facility. If there is an Event of Default, there can be no assurances that we will be able to continue as a going concern, which could force us to delay, reduce or discontinue certain aspects of our business strategy. Additionally, our ability to meet future anticipated liquidity needs will largely depend on our ability to generate positive cash inflows from operations and/or secure other sources of outside capital. As it relates to sources of outside capital, we can raise up to $50,000,000 through the issuance of common shares without the consent of the holders of Convertible Preferred Stock. Based on our current business plans, including projected capital expenditures, we believe our current level of cash and cash equivalents, excess availability under our Revolver and liquidity expected to be generated from future cash flows will be sufficient to fund our operations over the next twelve months beyond the issuance date. However, such a determination is dependent on several factors including, but not limited to, general business conditions and our ability to reduce investments in working capital (such as unbilled receivables). If we are unable to maintain our current level of cash and cash equivalents, excess availability under our Revolver or generate sufficient liquidity from future cash flows, our business, financial condition and results of operations could be materially and adversely affected. Our ability to generate cash in the future or have sufficient access to credit from financial institutions and/or financing from public and/or private debt and equity markets on acceptable terms, or at all, (i) is subject to (a) general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control and (b) under certain circumstances, a majority vote consent right of the holders of the Convertible P ref erred Stock (as discussed further in Note (17) – " Convertible Preferred Stock "), and (ii) could (x) dilute the ownership interest of our stockholders, (y) include terms that adversely affect the rights of our common stockholders, or (z) restrict our ability to take specific actions such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. Also, our transition to sustained profitability is dependent upon the successful completion of our ongoing One Comtech transformation and integration of individual businesses into two segments and related restructuring activities to optimize our cost structure and reduce investments in working capital and/or capital expenditures. As a result of the foregoing, although we have successfully refinanced our Prior Credit Facility and significantly enhanced our liquidity position as of the issuance date, we continue to believe that substantial doubt exists regarding our ability to continue as a going concern. This determination considers: (i) the proximity of the refinancing to the issuance date not allowing us adequate time to evaluate our financial performance subsequent to such refinancing, and (ii) those conditions and events as of the issuance date described above that could negatively impact our forecasted results and liquidity, which in turn could result in our inability to comply with the financial covenants contained in our New Credit Facility. Now having completed the refinancing of our Prior Credit Facility as of the issuance date, our other plans to address our ability to continue as a going concern include, among other things: • implementing certain cost savings and restructuring activities to reduce cash used in operations, as discussed further in Note (20) – “Cost Reduction;” • pursuing initiatives to reduce investments in working capital, namely accounts receivable and inventory; • improving process disciplines to attain and maintain profitable operations by entering into more favorable sales or service contracts; • reevaluating our business plans to identify opportunities to further reduce capital expenditures; • seeking opportunities to improve liquidity through any combination of debt and/or equity financing (including possibly restructuring our existi ng Convertible Preferred S tock); and • seeking other strategic transactions and/or measures including, but not limited to, the potential sale or divestiture of assets. While we believe the implementation of some or all of the elements of our plans over the next twelve months beyond the issuance date will be successful, these plans are not all solely within management’s control and, as such, we can provide no assurance our plans are probable of being effectively implemented as of the issuance date. Therefore, those potential adverse c onditions and events described above raise substantial doubt about our ability to continue as a going concern as of the issuance date. We prepared these unaudited condensed consolidated financial statements on a going concern basis, assuming our financial resources will be sufficient to meet our capital needs over the next twelve months and did not include any adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation for the next twelve months. |
Adoption of Accounting Standards and Updates | Adoption of Accounting Standards and Updates We are required to prepare our Condensed Consolidated Financial Statements in accordance with the FASB ASC, which is the source for all authoritative U.S. generally accepted accounting principles, which are commonly referred to as "GAAP." The FASB ASC is subject to updates by the FASB, which are known as Accounting Standards Updates ("ASUs"). During the nine months ended April 30, 2024, the following FASB ASUs have been issued and incorporated into the FASB ASC and have not yet been adopted by us as of April 30, 2024: • FASB ASU No. 2023-07, which requires the disclosure of significant segment expenses, by reportable segment, regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss. The disclosure of other segment items by reportable segment are also required and would constitute the difference between segment revenues less these significant segment expenses and reported segment profit or loss. On an annual basis, the update requires an entity to disclose the CODM's title and position, as well as describe how the CODM uses the reported measures. Additionally, all existing annual disclosures about segment profit or loss must be provided on an interim basis in addition to the disclosure of significant segment expenses and other segment items. This ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year beginning on August 1, 2024) and for interim periods within fiscal years beginning after December 15, 2024 (our interim period beginning on August 1, 2025), with early adoption permitted. • FASB ASU No. 2023-09 enhances and establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Most notably under the new requirements is greater disaggregation of information in the effective tax rate reconciliation, including the inclusion of both percentages and amounts, specific categories, and additional information for reconciling items meeting a quantitative threshold defined by the guidance. Additionally, disclosures of income taxes paid and income tax expense must be disaggregated by federal, state and foreign taxes, with income taxes paid further disaggregated for individual jurisdictions that represent 5 percent or more of total income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (our fiscal year beginning on August 1, 2025), with early adoption permitted. We are evaluating the impact of this ASU on our Condensed Consolidated Financial Statements and disclosures. |
Revenue Recognition | Revenue Recognition In accordance with FASB ASC 606, " Revenue from Contracts with Customers " ("ASC 606"), we record revenue in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, we follow a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue using one of the following two methods: • Over time - We recognize revenue using the over time method when there is a continuous transfer of control to the customer over the contractual period of performance. This generally occurs when we enter into a long-term contract relating to the design, development or manufacture of complex equipment or technology platforms to a buyer’s specification (or to provide services related to the performance of such contracts) for which we have determined there is no alternative use, as defined in ASC 606. Continuous transfer of control is typically supported by contract clauses which allow our customers to unilaterally terminate a contract for convenience, pay for costs incurred plus a reasonable profit and take control of work-in-process. Revenue recognized over time is generally based on the extent of progress toward completion of the related performance obligations. The selection of the method to measure progress requires judgment and is based on the nature of the products or services provided. In certain instances, typically for firm fixed-price contracts, we use the cost-to-cost measure because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion, including warranty costs. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill generally include direct labor, materials, subcontractor costs, other direct costs and an allocation of indirect costs. When these contracts are modified, the additional goods or services are generally not distinct from those already provided. As a result, these modifications form part of an existing contract and we must update the transaction price and our measure of progress for the single performance obligation and recognize a cumulative catch-up to revenue and gross profits. For over time contracts using a cost-to-cost measure of progress, we have an estimate at completion ("EAC") process in which management reviews the progress and execution of our performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Since certain contracts extend over a long period of time, the impact of revisions in revenue and/or cost estimates during the progress of work may impact current period earnings through a cumulative adjustment. Additionally, if the EAC process indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract revenue and cost estimates for significant contracts are generally reviewed and reassessed at least quarterly. The cost-to-cost method is principally used to account for contracts in our Satellite and Space Communications segment and, to a lesser extent, certain location-based and messaging infrastructure contracts in our public safety and location technologies product line within our Terrestrial and Wireless Networks segment. For service-based contracts in our Terrestrial and Wireless Networks segment, we also recognize revenue over time. These services are typically recognized as a series of services performed over the contract term using the straight-line method, or based on our customers’ actual usage of the networks and platforms which we provide. • Point in time - When a performance obligation is not satisfied over time, we must record revenue using the point in time accounting method which generally results in revenue being recognized upon shipment or delivery of a promised good or service to a customer. This generally occurs when we enter into short-term contracts or purchase orders where items are provided to customers with relatively quick turn-around times. Modifications to such contracts and/or purchase orders, which typically provide for additional quantities or services, are accounted for as a new contract because the pricing for these additional quantities or services are based on standalone selling prices. Point in time accounting is principally applied to contracts in our satellite ground station technologies product line (which includes satellite modems and traveling wave tube amplifiers). The contracts related to these product lines do not meet the requirements for over time revenue recognition because our customers cannot utilize the equipment for its intended purpose during any phase of our manufacturing process; customers do not simultaneously receive and/or consume the benefits provided by our performance; customers do not control the asset (i.e., prior to delivery, customers cannot direct the use of the asset, sell or exchange the equipment, etc.); and, although many of our contracts have termination for convenience clauses and/or an enforceable right to payment for performance completed to date, our performance creates an asset with an alternative use through the point of delivery. In determining that our equipment has alternative use, we considered the underlying manufacturing process for our products. In the early phases of manufacturing, raw materials and work in process (including subassemblies) consist of common parts that are highly fungible among many different types of products and customer applications. Finished products are either configured to our standard configuration or based on our customers’ specifications. Finished products, whether built to our standard specification or to a customers’ specification, can be sold to a variety of customers and across many different end use applications with minimal rework, if needed, and without incurring a significant economic loss. When identifying a contract with our customer, we consider when it has approval and commitment from both parties, if the rights of the parties are identified, if the payment terms are identified, if it has commercial substance and if collectability is probable. When identifying performance obligations, we consider whether there are multiple promises and how to account for them. In our contracts, multiple promises are separated if they are distinct, both individually and in the context of the contract. If multiple promises in a contract are highly interrelated or comprise a series of distinct services performed over time, they are combined into a single performance obligation. In some cases, we may also provide the customer with an additional service-type warranty, which we recognize as a separate performance obligation. Service-type warranties do not represent a significant portion of our consolidated net sales. When service-type warranties represent a separate performance obligation, the revenue is deferred and recognized ratably over the extended warranty period. Our contracts, from time-to-time, may also include options for additional goods and services. To date, these options have not represented material rights to the customer as the pricing for them reflects standalone selling prices. As a result, we do not consider options we offer to be performance obligations for which we must allocate a portion of the transaction price. In many cases, we provide assurance-type warranty coverage for some of our products for a period of at least one year from the date of delivery. When identifying the transaction price, we typically utilize the contract's stated price as a starting point. The transaction price in certain arrangements may include estimated amounts of variable consideration, including award fees, incentive fees or other provisions that can either increase or decrease the transaction price. We estimate variable consideration as the amount to which we expect to be entitled, and we include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the estimation uncertainty is resolved. The estimation of this variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (e.g., historical, current and forecasted) that is reasonably available to us. When allocating the contract’s transaction price, we consider each distinct performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We determine standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions, including geographic or regional specific factors, competitive positioning, internal costs, profit objectives and internally approved pricing guidelines related to the performance obligations. The timing of revenue recognition, billings and collections results in receivables, unbilled receivables and contract liabilities on our Condensed Consolidated Balance Sheet . Under typical payment terms for our contracts accounted for over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly) or upon achievement of contractual milestones. For certain contracts with provisions that are intended to protect customers in the event we do not satisfy our performance obligations, billings occur subsequent to revenue recognition, resulting in unbilled receivables. Under ASC 606, unbilled receivables constitute contract assets. There were no material impairment losses recognized on contract assets during the three and nine months ended April 30, 2024 and 2023, respectively. On large long-term contracts, and for contracts with international customers that do not do business with us regularly, payment terms typically require advanced payments and deposits. Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability. These contract liabilities are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract. Under the typical payment terms for our contracts accounted for at a point in time, costs are accumulated in inventory until the time of billing, which generally coincides with revenue recognition. Of the current contract liability balance of $66,351,000 at July 31, 2023 and $64,601,000 at July 31, 2022, $39,877,000 and $43,125,000 was recognized as revenue during the nine months ended April 30, 2024 and 2023, respectively. We recognize the incremental costs to obtain or fulfill a contract as an expense when incurred if the amortization period of the asset is one year or less; otherwise, such costs are capitalized and amortized over the estimated life of the contract. During the nine months ended April 30, 2024 and 2023, incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material. Commissions payable to our internal sales and marketing employees or contractors that are incremental to the acquisition of long-term customer contracts are capitalized and amortized consistent with the pattern of revenue recognition through cost of sales on our Condensed Consolidated Statements of Operations . Commissions payable that are not incremental to the acquisition of long-term contracts are expensed as incurred in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations . |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Using the fair value hierarchy described in FASB ASC 820 " Fair Value Measurements and Disclosures," we valued our cash and cash equivalents using Level 1 inputs that were based on quoted market prices. We believe that the carrying amounts of our other current financial assets (such as accounts receivable) and other current liabilities (including accounts payable, accrued expenses and the current portion of long-term debt) approximate their fair values due to their short-term maturities. The fair value of the non-current portion of our long-term debt approximates its carrying amount due to its variable interest rate and pricing grid dependent upon our leverage ratio as of such date. See Note (10) - " Credit Facility" for more information. As further discussed in Note (17) - " Convertible Preferred Stock," we used Level 3 inputs to value warrants contingently issuable under the terms of our Convertible Preferred Stock. Level 3 inputs are unobservable inputs developed using the best available information under the circumstances. Level 3 inputs are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect our assumptions related to how market participants would use similar inputs to price the asset or liability. As of April 30, 2024, we determined the fair value of Convertible Preferred Stock warrants using the Monte Carlo simulation model with the following assumptions: expected life of six months; risk free rate of 4.7%; expected volatility of 55.0%; and dividend yield of 0%. As of April 30, 2024 and July 31, 2023, other than the cash and cash equivalents and warrants discussed above, we had no other significant assets or liabilities included in our Condensed Consolidated Balance Sheets recorded at fair value, as such term is defined by FASB ASC 820. |
Earnings Per Share | Earnings Per Share Our basic earnings per share ("EPS") is computed based on the weighted average number of common shares (including vested but unissued share units, performance shares and restricted stock units ("RSUs")) outstanding during each respective period. Our diluted EPS reflects the dilution from potential common stock issuable pursuant to the exercise of equity-classified stock-based awards, settlement of escrow arrangements related to our acquisition of UHP Networks Inc. ("UHP") and the assumed conversion of Convertible Preferred Stock, if dilutive, outstanding during each respective period. Pursuant to FASB ASC 260 " Earnings Per Share |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The carrying amount of the major classes of assets and liabilities related to the PST Divestiture ("PST Disposal Group") as of November 7, 2023 are as follows: Cash and cash equivalents $ (71,000) Accounts receivable, net 4,168,000 Inventories, net 17,822,000 Prepaid expenses and other current assets 201,000 Property, plant and equipment, net 2,790,000 Operating lease right-of-use assets, net 5,379,000 Goodwill 14,587,000 Other assets, net 35,000 Total assets of disposal group held for sale $ 44,911,000 Accounts payable $ 3,081,000 Accrued expenses and other current liabilities 1,622,000 Operating lease liabilities, current 545,000 Contract liabilities 656,000 Operating lease liabilities, non-current 4,894,000 Deferred tax liability, net (451,000) Total liabilities of disposal group held for sale $ 10,347,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Sale by geography and customer type | Sales by geography and customer type, as a percentage of consolidated net sales, are as follows: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 United States U.S. government 34.4 % 29.1 % 33.8 % 30.3 % Domestic 48.1 % 43.8 % 43.5 % 45.7 % Total United States 82.5 % 72.9 % 77.3 % 76.0 % International 17.5 % 27.1 % 22.7 % 24.0 % Total 100.0 % 100.0 % 100.0 % 100.0 % |
Disaggregation of revenue | The following tables summarize our disaggregation of revenue consistent with information reviewed by our CODM for the three and nine months ended April 30, 2024 and 2023. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors which impact our business: Three months ended April 30, 2024 Nine months ended April 30, 2024 Satellite and Space Communications Terrestrial and Wireless Networks Total Satellite and Space Communications Terrestrial and Wireless Networks Total Geographical region U.S. government $ 43,546,000 593,000 $ 44,139,000 $ 138,253,000 1,762,000 $ 140,015,000 Domestic 11,569,000 49,998,000 61,567,000 36,325,000 144,018,000 180,343,000 Total United States 55,115,000 50,591,000 105,706,000 174,578,000 145,780,000 320,358,000 International 16,330,000 6,040,000 22,370,000 77,858,000 15,996,000 93,854,000 Total $ 71,445,000 56,631,000 $ 128,076,000 $ 252,436,000 161,776,000 $ 414,212,000 Contract type Firm fixed-price $ 60,691,000 56,631,000 $ 117,322,000 $ 217,524,000 161,776,000 $ 379,300,000 Cost reimbursable 10,754,000 — 10,754,000 34,912,000 — 34,912,000 Total $ 71,445,000 56,631,000 $ 128,076,000 $ 252,436,000 161,776,000 $ 414,212,000 Transfer of control Point in time $ 25,257,000 129,000 $ 25,386,000 $ 103,569,000 1,461,000 $ 105,030,000 Over time 46,188,000 56,502,000 102,690,000 148,867,000 160,315,000 309,182,000 Total $ 71,445,000 56,631,000 $ 128,076,000 $ 252,436,000 161,776,000 $ 414,212,000 Three months ended April 30, 2023 Nine months ended April 30, 2023 Satellite and Space Communications Terrestrial and Wireless Networks Total Satellite and Space Communications Terrestrial and Wireless Networks Total Geographical region and customer type U.S. government $ 38,779,000 855,000 $ 39,634,000 $ 118,739,000 2,841,000 $ 121,580,000 Domestic 12,146,000 47,555,000 59,701,000 41,819,000 141,542,000 183,361,000 Total United States 50,925,000 48,410,000 99,335,000 160,558,000 144,383,000 304,941,000 International 31,324,000 5,657,000 36,981,000 82,971,000 13,268,000 96,239,000 Total $ 82,249,000 54,067,000 $ 136,316,000 $ 243,529,000 157,651,000 $ 401,180,000 Contract type Firm fixed-price $ 68,010,000 54,067,000 $ 122,077,000 $ 210,343,000 157,651,000 $ 367,994,000 Cost reimbursable 14,239,000 — 14,239,000 33,186,000 — 33,186,000 Total $ 82,249,000 54,067,000 $ 136,316,000 $ 243,529,000 157,651,000 $ 401,180,000 Transfer of control Point in time $ 30,870,000 268,000 $ 31,138,000 $ 152,157,000 1,994,000 $ 154,151,000 Over time 51,379,000 53,799,000 105,178,000 91,372,000 155,657,000 247,029,000 Total $ 82,249,000 54,067,000 $ 136,316,000 $ 243,529,000 157,651,000 $ 401,180,000 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of numerators and denominators used in basic and diluted EPS calculations | The following table reconciles the numerators and denominators used in the basic and diluted EPS calculations: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Numerator: Net income (loss) $ 2,795,000 (7,458,000) $ (9,200,000) (23,359,000) Loss on extinguishment of convertible — — (13,640,000) — Convertible preferred stock issuance costs (76,000) — (4,349,000) — Dividend on convertible preferred stock (3,759,000) (1,766,000) (7,643,000) (5,213,000) Net loss attributable to common stockholders $ (1,040,000) (9,224,000) $ (34,832,000) (28,572,000) Denominator: Denominator for basic and diluted calculation 28,854,000 28,071,000 28,753,000 27,950,000 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Receivables [Abstract] | |
Accounts receivable | Accounts receivable consist of the following at: April 30, 2024 July 31, 2023 Receivables from commercial and international customers $ 39,770,000 52,438,000 Unbilled receivables from commercial and international customers 76,932,000 54,469,000 Receivables from the U.S. government and its agencies 21,316,000 31,149,000 Unbilled receivables from the U.S. government and its agencies 64,334,000 27,192,000 Total accounts receivable 202,352,000 165,248,000 Less allowance for doubtful accounts 2,706,000 2,089,000 Accounts receivable, net $ 199,646,000 163,159,000 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following at: April 30, 2024 July 31, 2023 Raw materials and components $ 73,811,000 87,139,000 Work-in-process and finished goods 40,801,000 43,365,000 Total inventories 114,612,000 130,504,000 Less reserve for excess and obsolete inventories 18,492,000 24,659,000 Inventories, net $ 96,120,000 105,845,000 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following at: April 30, 2024 July 31, 2023 Accrued wages and benefits $ 18,060,000 21,994,000 Accrued contract costs 21,395,000 19,041,000 Accrued warranty obligations 6,992,000 8,285,000 Accrued commissions and royalties 4,948,000 4,659,000 Accrued legal costs 2,800,000 688,000 Other 10,674,000 12,323,000 Accrued expenses and other current liabilities $ 64,869,000 66,990,000 |
Product warranty rollforward | Changes in our accrued warranty obligations during the nine months ended April 30, 2024 and 2023 were as follows: Nine months ended April 30, 2024 2023 Balance at beginning of period $ 8,285,000 9,420,000 Provision for warranty obligations 768,000 1,756,000 Adjustments for changes in estimates (393,000) (1,500,000) Charges incurred (1,250,000) (1,436,000) PST Divestiture (418,000) — Balance at end of period $ 6,992,000 8,240,000 |
Credit Facility (Tables)
Credit Facility (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Line of Credit Facility [Abstract] | |
Schedule of Line of Credit Facilities | The amount outstanding under our Prior Credit Facility was as follows: April 30, 2024 July 31, 2023 Term loan $ 27,512,000 $ 48,125,000 Less unamortized deferred financing costs related to term loan 545,000 621,000 Term loan, net 26,967,000 47,504,000 Revolving loan facility 134,454,000 116,900,000 Amount outstanding unde r Prior Credit Facility, net $ 161,421,000 $ 164,404,000 Less current portion of long-term debt 3,712,000 4,375,000 Non-current portion of long-term debt $ 157,709,000 $ 160,029,000 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Leases [Abstract] | |
Components of lease expense and additional information | The components of lease expense are as follows: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Finance lease expense: Amortization of ROU assets $ — 1,000 $ — 5,000 Operating lease expense 2,023,000 2,495,000 6,361,000 8,088,000 Short-term lease expense 44,000 108,000 217,000 326,000 Variable lease expense 1,259,000 783,000 3,204,000 2,881,000 Sublease income (17,000) (17,000) (50,000) (50,000) Total lease expense $ 3,309,000 3,370,000 $ 9,732,000 11,250,000 Additional information related to leases is as follows: Nine months ended April 30, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating leases - Operating cash outflows $ 6,796,000 $ 8,183,000 Finance leases - Financing cash outflows — 4,000 ROU assets obtained in the exchange for lease liabilities (non-cash): Operating leases $ 37,000 $ 2,850,000 |
Future cash flows relating to operating lease liabilities | The following table is a reconciliation of future cash flows relating to operating lease liabilities presented on our Condensed Consolidated Balance Sheet as of April 30, 2024: Remainder of fiscal 2024 $ 2,183,000 Fiscal 2025 8,123,000 Fiscal 2026 6,688,000 Fiscal 2027 4,582,000 Fiscal 2028 3,844,000 Thereafter 18,850,000 Total future undiscounted cash flows 44,270,000 Less: Present value discount 5,006,000 Lease liabilities $ 39,264,000 Weighted-average remaining lease terms (in years) 8.07 Weighted-average discount rate 3.47% |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of stock-based awards outstanding by award type | As of April 30, 2024, the following stock-based awards, by award type, were outstanding: April 30, 2024 Stock options 170,150 Performance shares 379,353 RSUs, restricted stock, share units and other stock-based awards 1,012,484 Total 1,561,987 |
Stock-based compensation for awards detailing where recorded in Consolidated Statement of Operations | Stock-based compensation for awards issued is reflected in the following line items in our Condensed Consolidated Statements of Operations : Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Cost of sales $ 67,000 141,000 $ 480,000 452,000 Selling, general and administrative expenses 313,000 3,896,000 4,480,000 5,559,000 Research and development expenses 24,000 89,000 278,000 287,000 Stock-based compensation expense before CEO transition costs 404,000 4,126,000 5,238,000 6,298,000 CEO transition costs related to equity-classified stock-based awards — — — 3,764,000 Total stock-based compensation expense before income tax benefit 404,000 4,126,000 5,238,000 10,062,000 Estimated income tax benefit (81,000) (915,000) (1,149,000) (1,701,000) Net stock-based compensation expense $ 323,000 3,211,000 $ 4,089,000 8,361,000 |
Summary of stock-based compensation expense by award type | Stock-based compensation expense, by award type, is summarized as follows: Three months ended April 30, Nine months ended April 30, 2024 2023 2024 2023 Stock options $ 11,000 22,000 $ 42,000 66,000 Performance shares (662,000) 335,000 280,000 690,000 RSUs, restricted stock and share units 1,040,000 3,738,000 4,850,000 5,449,000 ESPP 15,000 31,000 66,000 93,000 Stock-based compensation expense before CEO transition costs 404,000 4,126,000 5,238,000 6,298,000 CEO transition costs related to equity-classified stock-based awards — — — 3,764,000 Total stock-based compensation expense before income tax benefit 404,000 4,126,000 5,238,000 10,062,000 Estimated income tax benefit (81,000) (915,000) (1,149,000) (1,701,000) Net stock-based compensation expense $ 323,000 3,211,000 $ 4,089,000 8,361,000 |
Summary of the Plan's activity relating to stock options | The following table summarizes the Plan's activity: Awards Weighted Average Weighted Average Aggregate Outstanding at July 31, 2023 240,510 $ 23.96 Expired/canceled (6,250) 24.31 Outstanding at October 31, 2023 234,260 23.95 Expired/canceled (9,680) 24.25 Outstanding at January 31, 2024 224,580 23.93 Expired/canceled (54,430) 28.68 Outstanding at April 30, 2024 170,150 $ 22.42 3.97 $ — Exercisable at April 30, 2024 147,450 $ 23.11 3.65 $ — Vested and expected to vest at April 30, 2024 168,498 $ 22.46 3.95 $ — |
Summary of the Plan's activity relating to performance shares, RSUs, restricted stock and share units | The following table summarizes the Plan's activity relating to performance shares, RSUs, restricted stock, share units and other stock-based awards: Awards Weighted Average Aggregate Intrinsic Value Outstanding at July 31, 2023 1,876,230 $ 13.21 Granted 913,908 9.93 Settled (296,198) 16.03 Canceled/Forfeited (41,814) 15.80 Outstanding at October 31, 2023 2,452,126 11.60 Settled (383,565) 10.64 Canceled/Forfeited (41,927) 12.78 Outstanding at January 31, 2024 2,026,634 11.76 Settled (9,642) 14.10 Canceled/Forfeited (625,155) 8.47 Outstanding at April 30, 2024 1,391,837 $ 13.22 $ 2,616,653 Vested at April 30, 2024 451,975 $ 14.99 $ 849,713 Vested and expected to vest at April 30, 2024 1,333,129 $ 13.19 $ 2,506,283 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Operating segment information, along with a reconciliation of segment net income (loss) and consolidated net income (loss) to Adjusted EBITDA is presented in the tables below: Three months ended April 30, 2024 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 71,445,000 56,631,000 — $ 128,076,000 Operating income (loss) $ 2,796,000 5,727,000 (11,993,000) $ (3,470,000) Net income (loss) $ 1,828,000 5,266,000 (4,299,000) $ 2,795,000 Provision for (benefit from) income taxes 11,000 274,000 (5,666,000) (5,381,000) Interest expense 884,000 — 4,262,000 5,146,000 Interest (income) and other 73,000 187,000 149,000 409,000 Change in fair value of warrants — — (6,439,000) (6,439,000) Amortization of stock-based compensation — — 404,000 404,000 Amortization of intangibles 1,671,000 3,618,000 — 5,289,000 Depreciation 1,047,000 1,985,000 89,000 3,121,000 Amortization of cost to fulfill assets 240,000 — — 240,000 CEO transition costs — — 2,492,000 2,492,000 Restructuring costs 549,000 — 2,206,000 2,755,000 Strategic emerging technology costs 880,000 — — 880,000 Loss on business divestiture, net — — 200,000 200,000 Adjusted EBITDA $ 7,183,000 11,330,000 (6,602,000) $ 11,911,000 Purchases of property, plant and equipment $ 388,000 2,154,000 125,000 $ 2,667,000 Total assets at April 30, 2024 $ 498,449,000 455,169,000 37,381,000 $ 990,999,000 Three months ended April 30, 2023 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 82,249,000 54,067,000 — $ 136,316,000 Operating income (loss) $ 37,000 3,160,000 (8,473,000) $ (5,276,000) Net income (loss) $ 650,000 2,902,000 (11,010,000) $ (7,458,000) (Benefit from) provision for income taxes (1,188,000) 84,000 (1,828,000) (2,932,000) Interest expense (25,000) — 4,411,000 4,386,000 Interest (income) and other 600,000 174,000 (46,000) 728,000 Amortization of stock-based compensation — — 4,126,000 4,126,000 Amortization of intangibles 1,828,000 3,521,000 — 5,349,000 Depreciation 1,027,000 1,921,000 33,000 2,981,000 Amortization of cost to fulfill assets 240,000 — — 240,000 Restructuring costs 2,191,000 548,000 1,357,000 4,096,000 Strategic emerging technology costs 1,029,000 — — 1,029,000 Adjusted EBITDA $ 6,352,000 9,150,000 (2,957,000) $ 12,545,000 Purchases of property, plant and equipment $ 1,106,000 3,549,000 300,000 $ 4,955,000 Total assets at April 30, 2023 $ 488,814,000 475,380,000 25,665,000 $ 989,859,000 Nine months ended April 30, 2024 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 252,436,000 161,776,000 $ 414,212,000 Operating income (loss) $ 14,756,000 17,901,000 (31,068,000) $ 1,589,000 Net income (loss) $ 10,672,000 17,011,000 (36,883,000) $ (9,200,000) Provision for (benefit from) income taxes 547,000 696,000 (604,000) 639,000 Interest expense 2,659,000 — 12,684,000 15,343,000 Interest (income) and other 878,000 194,000 174,000 1,246,000 Change in fair value of warrants — — (6,439,000) (6,439,000) Amortization of stock-based compensation — — 5,238,000 5,238,000 Amortization of intangibles 5,014,000 10,852,000 — 15,866,000 Depreciation 2,865,000 5,933,000 275,000 9,073,000 Amortization of cost to fulfill assets 720,000 — — 720,000 CEO transition costs — — 2,492,000 2,492,000 Restructuring costs 2,793,000 8,000 6,396,000 9,197,000 Strategic emerging technology costs 3,228,000 — — 3,228,000 Gain on business divestiture, net — — (2,013,000) (2,013,000) Adjusted EBITDA $ 29,376,000 $ 34,694,000 $ (18,680,000) $ 45,390,000 Purchases of property, plant and equipment $ 1,763,000 6,175,000 966,000 $ 8,904,000 Total assets at April 30, 2024 $ 498,449,000 455,169,000 37,381,000 $ 990,999,000 Nine months ended April 30, 2023 Satellite and Space Communications Terrestrial and Wireless Networks Unallocated Total Net sales $ 243,529,000 157,651,000 — $ 401,180,000 Operating income (loss) $ 8,380,000 7,216,000 (31,377,000) $ (15,781,000) Net income (loss) $ 9,588,000 7,070,000 (40,017,000) $ (23,359,000) Benefit from income taxes (1,832,000) (197,000) (1,733,000) (3,762,000) Interest expense 2,000 — 10,410,000 10,412,000 Interest (income) and other 622,000 343,000 (37,000) 928,000 Amortization of stock-based compensation — — 6,298,000 6,298,000 Amortization of intangibles 5,484,000 10,563,000 — 16,047,000 Depreciation 3,057,000 5,579,000 110,000 8,746,000 Amortization of cost to fulfill assets 720,000 — — 720,000 Restructuring costs 4,336,000 548,000 2,080,000 6,964,000 Strategic emerging technology costs 2,513,000 — — 2,513,000 CEO transition costs — — 9,090,000 9,090,000 Adjusted EBITDA $ 24,490,000 23,906,000 (13,799,000) $ 34,597,000 Purchases of property, plant and equipment $ 5,660,000 8,505,000 708,000 $ 14,873,000 Total assets at April 30, 2023 $ 488,814,000 475,380,000 25,665,000 $ 989,859,000 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Goodwill [Abstract] | |
Schedule of goodwill by segment | The following table represents goodwill by reportable operating segment as of April 30, 2024 and July 31, 2023. Satellite and Space Communications Terrestrial and Wireless Networks Total Balance as of July 31, 2023 $ 173,602,000 174,090,000 $ 347,692,000 PST Divestiture (14,587,000) — (14,587,000) Balance as of April 30, 2024 $ 159,015,000 174,090,000 $ 333,105,000 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Apr. 30, 2024 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible assets with finite lives | Intangible assets with finite lives are as follows: April 30, 2024 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.2 $ 302,058,000 132,789,000 $ 169,269,000 Technologies 14.8 113,149,000 82,058,000 31,091,000 Trademarks and other 16.7 32,926,000 23,245,000 9,681,000 Total $ 448,133,000 238,092,000 $ 210,041,000 July 31, 2023 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.2 $ 302,058,000 121,786,000 $ 180,272,000 Technologies 14.8 114,949,000 80,672,000 34,277,000 Trademarks and other 16.7 32,926,000 21,568,000 11,358,000 Total $ 449,933,000 224,026,000 $ 225,907,000 |
Estimated amortization expense | The estimated amortization expense consists of the following for the fiscal years ending July 31: 2024 $ 21,154,000 2025 21,039,000 2026 19,888,000 2027 18,534,000 2028 18,534,000 |
General (Details)
General (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Jan. 22, 2024 USD ($) | Aug. 09, 2022 USD ($) | Apr. 30, 2024 USD ($) | Apr. 30, 2023 USD ($) | Jan. 31, 2024 USD ($) | Apr. 30, 2024 USD ($) segment | Apr. 30, 2023 USD ($) | Jul. 31, 2023 USD ($) segment | Jul. 31, 2022 USD ($) | Jul. 31, 2021 USD ($) | Jun. 17, 2024 USD ($) | Nov. 07, 2023 USD ($) | Nov. 30, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Operating income (loss) | $ (3,470,000) | $ (5,276,000) | $ 1,589,000 | $ (15,781,000) | $ (14,660,000) | $ (33,752,000) | $ (68,298,000) | ||||||
Net cash used in operating activities | 44,998,000 | 177,000 | 4,433,000 | $ (1,997,000) | $ 40,638,000 | ||||||||
Net loss | (2,795,000) | 7,458,000 | 9,200,000 | 23,359,000 | |||||||||
Cash and cash equivalents | 27,192,000 | $ 27,192,000 | $ 18,961,000 | ||||||||||
Number of operating segments | segment | 2 | 2 | |||||||||||
Transition costs | 2,492,000 | 0 | $ 2,492,000 | 9,090,000 | |||||||||
CEO transition costs related to equity-classified stock-based awards | 0 | $ 0 | 0 | $ 3,764,000 | |||||||||
Severance costs | $ 1,488,000 | $ 3,872,000 | |||||||||||
Series B Preferred Stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Convertible preferred stock | $ 50,000,000 | ||||||||||||
Former CEO | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Transition costs | $ 7,424,000 | ||||||||||||
CEO transition costs related to equity-classified stock-based awards | 3,764,000 | ||||||||||||
Severance costs | 3,660,000 | ||||||||||||
Cash portion of transition costs | 3,660,000 | ||||||||||||
President and CEO | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Cash sign-on bonus | $ 1,000,000 | ||||||||||||
Credit Facility | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Actual secured leverage ratio | 2.89 | ||||||||||||
Maximum secured leverage ratio | 3.50 | ||||||||||||
Actual interest expense coverage ratio | 3.36 | ||||||||||||
Minimum interest expense coverage ratio | 3.25 | ||||||||||||
Minimum liquidity | 26,800,000 | $ 26,800,000 | $ 25,000,000 | ||||||||||
Credit Facility | Subsequent Event | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Borrowings under credit facility | $ 187,000,000 | ||||||||||||
Credit Facility | Revolving Loan Facility | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | 135,000,000 | $ 140,000,000 | $ 135,000,000 | $ 150,000,000 | |||||||||
Credit Facility | Revolving Loan Facility | Subsequent Event | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Cash and cash equivalents | 28,000,000 | ||||||||||||
Borrowings under credit facility | 25,000,000 | ||||||||||||
Line of credit facility, maximum borrowing capacity | 222,000,000 | ||||||||||||
Debt Instrument, Covenant, Current Liquidity | 63,000,000 | ||||||||||||
Remaining borrowing capacity | 35,000,000 | ||||||||||||
Credit Facility | Line of Credit | Revolving Loan Facility | Subsequent Event | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Borrowings under credit facility | 60,000,000 | ||||||||||||
Credit Facility | Line of Credit | Term Loan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | ||||||||||||
Line of credit facility, quarterly amortization | $ 1,875,000 | $ 1,250,000 | |||||||||||
Credit Facility | Line of Credit | Term Loan | Subsequent Event | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Borrowings under credit facility | $ 162,000,000 |
Disposition - Narrative (Detail
Disposition - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 07, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Contingent consideration on sale of stock | $ 5,000,000 | ||||
Proceeds from divestiture | $ 33,225,000 | $ 0 | |||
Gain (loss) on disposition of business | $ (200,000) | $ 0 | 2,013,000 | $ 0 | |
Contingent receivable | $ 3,300,000 | $ 3,300,000 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Solid-State RF Microwave High Power Amplifiers and Control Components Product Line | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Divestiture preliminary purchase price | 35,459,000 | ||||
Proceeds from divestiture | 33,277,000 | ||||
Proceeds held in escrow, receipt | 800,000 | ||||
Proceeds held in escrow | 1,000,000 | ||||
Transaction costs | $ 2,182,000 |
Disposition - Carrying Amount o
Disposition - Carrying Amount of the Major Classes of Assets and Liabilities (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - Solid-State RF Microwave High Power Amplifiers and Control Components Product Line | Nov. 07, 2023 USD ($) |
Disposal Group, Including Discontinued Operation, Assets [Abstract] | |
Cash and cash equivalents | $ (71,000) |
Accounts receivable, net | 4,168,000 |
Inventories, net | 17,822,000 |
Prepaid expenses and other current assets | 201,000 |
Property, plant and equipment, net | 2,790,000 |
Operating lease right-of-use assets, net | 5,379,000 |
Goodwill | 14,587,000 |
Other assets, net | 35,000 |
Total assets of disposal group held for sale | 44,911,000 |
Disposal Group, Including Discontinued Operation, Liabilities [Abstract] | |
Accounts payable | 3,081,000 |
Accrued expenses and other current liabilities | 1,622,000 |
Operating lease liabilities, current | 545,000 |
Contract liabilities | 656,000 |
Operating lease liabilities, non-current | 4,894,000 |
Deferred tax liability, net | (451,000) |
Total liabilities of disposal group held for sale | $ 10,347,000 |
Revenue Recognition (Sales by G
Revenue Recognition (Sales by Geography and Customer Type) (Details) - Net sales | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | |
Geographic Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 100% | 100% | 100% | 100% |
Geographic Concentration Risk | U.S. government | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 34.40% | 29.10% | 33.80% | 30.30% |
Geographic Concentration Risk | Domestic | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 48.10% | 43.80% | 43.50% | 45.70% |
Geographic Concentration Risk | Total United States | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 82.50% | 72.90% | 77.30% | 76% |
Geographic Concentration Risk | International | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 17.50% | 27.10% | 22.70% | 24% |
Customer Concentration Risk | Verizon Communications Inc. | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.20% |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 128,076,000 | $ 136,316,000 | $ 414,212,000 | $ 401,180,000 |
Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 25,386,000 | 31,138,000 | 105,030,000 | 154,151,000 |
Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 102,690,000 | 105,178,000 | 309,182,000 | 247,029,000 |
Firm fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 117,322,000 | 122,077,000 | 379,300,000 | 367,994,000 |
Cost reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 10,754,000 | 14,239,000 | 34,912,000 | 33,186,000 |
U.S. government | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 44,139,000 | 39,634,000 | 140,015,000 | 121,580,000 |
Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 61,567,000 | 59,701,000 | 180,343,000 | 183,361,000 |
Total United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 105,706,000 | 99,335,000 | 320,358,000 | 304,941,000 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,370,000 | 36,981,000 | 93,854,000 | 96,239,000 |
Satellite and Space Communications | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 71,445,000 | 82,249,000 | 252,436,000 | 243,529,000 |
Satellite and Space Communications | Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 25,257,000 | 30,870,000 | 103,569,000 | 152,157,000 |
Satellite and Space Communications | Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 46,188,000 | 51,379,000 | 148,867,000 | 91,372,000 |
Satellite and Space Communications | Firm fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 60,691,000 | 68,010,000 | 217,524,000 | 210,343,000 |
Satellite and Space Communications | Cost reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 10,754,000 | 14,239,000 | 34,912,000 | 33,186,000 |
Satellite and Space Communications | U.S. government | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 43,546,000 | 38,779,000 | 138,253,000 | 118,739,000 |
Satellite and Space Communications | Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 11,569,000 | 12,146,000 | 36,325,000 | 41,819,000 |
Satellite and Space Communications | Total United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 55,115,000 | 50,925,000 | 174,578,000 | 160,558,000 |
Satellite and Space Communications | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 16,330,000 | 31,324,000 | 77,858,000 | 82,971,000 |
Terrestrial and Wireless Networks | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 56,631,000 | 54,067,000 | 161,776,000 | 157,651,000 |
Terrestrial and Wireless Networks | Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 129,000 | 268,000 | 1,461,000 | 1,994,000 |
Terrestrial and Wireless Networks | Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 56,502,000 | 53,799,000 | 160,315,000 | 155,657,000 |
Terrestrial and Wireless Networks | Firm fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 56,631,000 | 54,067,000 | 161,776,000 | 157,651,000 |
Terrestrial and Wireless Networks | Cost reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Terrestrial and Wireless Networks | U.S. government | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 593,000 | 855,000 | 1,762,000 | 2,841,000 |
Terrestrial and Wireless Networks | Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 49,998,000 | 47,555,000 | 144,018,000 | 141,542,000 |
Terrestrial and Wireless Networks | Total United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 50,591,000 | 48,410,000 | 145,780,000 | 144,383,000 |
Terrestrial and Wireless Networks | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 6,040,000 | $ 5,657,000 | $ 15,996,000 | $ 13,268,000 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) - USD ($) | 9 Months Ended | |||
Apr. 30, 2024 | Apr. 30, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Concentration Risk [Line Items] | ||||
Contract liabilities | $ 61,014,000 | $ 66,351,000 | $ 64,601,000 | |
Revenue recognized | 39,877,000 | $ 43,125,000 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-05-01 | ||||
Concentration Risk [Line Items] | ||||
Remaining performance obligations, amount | $ 653,414,000 | |||
Remaining performance obligations, period | 24 months |
Revenue Recognition (Remaining
Revenue Recognition (Remaining Performance Obligations) (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-05-01 | Apr. 30, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, amount | $ 653,414,000 |
Remaining performance obligations, period | 24 months |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Details) - Series B Preferred Stock | 9 Months Ended |
Apr. 30, 2024 | |
Class of Stock [Line Items] | |
Risk free, percent | 4.70% |
Expected volatility, percent | 55% |
Dividend rate, percent | 0% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Reduction in weighted average shares as a result of the repurchase of common shares (in shares) | 0 | 0 | 0 | 0 |
Weighted average performance shares outstanding during the period that are excluded from EPS calculation | 469,000 | 429,000 | 624,000 | 384,000 |
Numerator: | ||||
Net income (loss) | $ 2,795,000 | $ (7,458,000) | $ (9,200,000) | $ (23,359,000) |
Loss on extinguishment of convertible preferred stock | 0 | 0 | 13,640,000 | 0 |
Convertible preferred stock issuance costs | 76,000 | 0 | 4,349,000 | 0 |
Dividend on convertible preferred stock | (3,759,000) | (1,766,000) | (7,643,000) | (5,213,000) |
Numerator for diluted calculation | $ (1,040,000) | $ (9,224,000) | $ (34,832,000) | $ (28,572,000) |
Denominator: | ||||
Denominator for basic calculation (in shares) | 28,854,000 | 28,071,000 | 28,753,000 | 27,950,000 |
Denominator for diluted calculation (in shares) | 28,854,000 | 28,071,000 | 28,753,000 | 27,950,000 |
Stock-based Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive equity-classified stock-based awards not included in calculation of diluted earnings per share (in shares) | 930,000 | 956,000 | 1,067,000 | 1,001,000 |
Common Shares Related to Business Acquisition | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive equity-classified stock-based awards not included in calculation of diluted earnings per share (in shares) | 67,000 | 228,000 | 131,000 | 293,000 |
Common Shares Related to Conversion of Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive equity-classified stock-based awards not included in calculation of diluted earnings per share (in shares) | 21,308,000 | 4,606,000 | 10,902,000 | 4,533,000 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Apr. 30, 2024 | Jul. 31, 2023 | |
Statement [Line Items] | ||
Total accounts receivable | $ 202,352,000 | $ 165,248,000 |
Less allowance for doubtful accounts | 2,706,000 | 2,089,000 |
Accounts receivable, net | $ 199,646,000 | $ 163,159,000 |
Accounts Receivable | Customer Concentration Risk | U.S. government | ||
Statement [Line Items] | ||
Concentration risk, percentage | 42.30% | 35.30% |
Accounts Receivable | Customer Concentration Risk | AT&T, Inc. | ||
Statement [Line Items] | ||
Concentration risk, percentage | 11% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-05-01 | ||
Statement [Line Items] | ||
Remaining performance obligations, period | 24 months | |
Billed Receivables | Commercial and International Customers | ||
Statement [Line Items] | ||
Total accounts receivable | $ 39,770,000 | $ 52,438,000 |
Billed Receivables | U.S. Government and Its Agencies | ||
Statement [Line Items] | ||
Total accounts receivable | 21,316,000 | 31,149,000 |
Unbilled Receivables | ||
Statement [Line Items] | ||
Long-term receivables | 417,000 | 2,993,000 |
Unbilled Receivables | Commercial and International Customers | ||
Statement [Line Items] | ||
Total accounts receivable | 76,932,000 | 54,469,000 |
Unbilled Receivables | U.S. Government and Its Agencies | ||
Statement [Line Items] | ||
Total accounts receivable | $ 64,334,000 | $ 27,192,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Apr. 30, 2024 | Jul. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials and components | $ 73,811,000 | $ 87,139,000 |
Work-in-process and finished goods | 40,801,000 | 43,365,000 |
Total inventories | 114,612,000 | 130,504,000 |
Less reserve for excess and obsolete inventories | 18,492,000 | 24,659,000 |
Inventories, net | 96,120,000 | 105,845,000 |
Inventory directly related to long-term contracts | 4,310,000 | 5,911,000 |
Inventory related to contracts from third party commercial customers who outsource their manufacturing to us | $ 2,386,000 | $ 3,277,000 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Components) (Details) - USD ($) | Apr. 30, 2024 | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 |
Payables and Accruals [Abstract] | ||||
Accrued wages and benefits | $ 18,060,000 | $ 21,994,000 | ||
Accrued contract costs | 21,395,000 | 19,041,000 | ||
Accrued warranty obligations | 6,992,000 | 8,285,000 | $ 8,240,000 | $ 9,420,000 |
Accrued commissions and royalties | 4,948,000 | 4,659,000 | ||
Accrued legal costs | 2,800,000 | 688,000 | ||
Other | 10,674,000 | 12,323,000 | ||
Accrued expenses and other current liabilities | $ 64,869,000 | $ 66,990,000 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Narrative) (Details) | 9 Months Ended |
Apr. 30, 2024 | |
Payables and Accruals [Abstract] | |
Minimum coverage period of product warranty from the date of shipment | 1 year |
Accrued Expenses and Other Cu_5
Accrued Expenses and Other Current Liabilities (Product Warranty Rollforward) (Details) - USD ($) | 9 Months Ended | |
Apr. 30, 2024 | Apr. 30, 2023 | |
Changes in Product Warranty Liability | ||
Balance at beginning of period | $ 8,285,000 | $ 9,420,000 |
Provision for warranty obligations | 768,000 | 1,756,000 |
Adjustments for changes in estimates | (393,000) | (1,500,000) |
Charges incurred | (1,250,000) | (1,436,000) |
PST Divestiture | (418,000) | 0 |
Balance at end of period | $ 6,992,000 | $ 8,240,000 |
Credit Facility (Details)
Credit Facility (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Jun. 17, 2024 USD ($) $ / shares shares | Apr. 30, 2024 USD ($) | Apr. 30, 2023 USD ($) | Jan. 31, 2024 USD ($) | Apr. 30, 2024 USD ($) | Apr. 30, 2023 USD ($) | Nov. 07, 2023 USD ($) | Jul. 31, 2023 USD ($) | Nov. 30, 2022 USD ($) | Oct. 18, 2021 $ / shares | |
New Credit Facility Warrants | Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Warrants outstanding (in shares) | shares | 1,435,884 | |||||||||
Exercise price of warrants or rights | $ / shares | $ 0.10 | |||||||||
Convertible Preferred Stock | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Convertible preferred stock, aggregate purchase price, price per share (in dollars per share) | $ / shares | $ 1,000 | |||||||||
Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Capitalized deferred financing costs | $ 5,941,000 | |||||||||
Outstanding standby letters of credit at period end | $ 481,000 | $ 481,000 | ||||||||
Outstanding balance during period, minimum | 156,241,000 | |||||||||
Outstanding balance during period, maximum | 196,800,000 | |||||||||
Total net deferred financing costs | 2,267,000 | 2,267,000 | ||||||||
Interest expense related to credit facility | $ 5,130,000 | $ 4,400,000 | $ 15,286,000 | $ 10,401,000 | ||||||
Weighted average interest rate | 12.26% | 10.10% | 11.35% | 8.34% | ||||||
Minimum interest expense coverage ratio | 3.25 | |||||||||
Minimum liquidity | $ 26,800,000 | $ 26,800,000 | $ 25,000,000 | |||||||
Actual secured leverage ratio | 2.89 | |||||||||
Maximum secured leverage ratio | 3.50 | |||||||||
Actual interest expense coverage ratio | 3.36 | |||||||||
Long-term debt | 161,421,000 | $ 161,421,000 | $ 164,404,000 | |||||||
Credit Facility | Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan | $ 187,000,000 | |||||||||
Secured Credit Facility | Credit Facility | Line of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 200,000,000 | |||||||||
Maximum cash triggering repayment | $ 20,000,000 | |||||||||
Line of credit facility, quarterly amortization | $ 1,875,000 | 1,250,000 | ||||||||
Borrowing rate, increase | 0.25% | |||||||||
Secured Credit Facility | Credit Facility | Line of Credit | Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan | $ 162,000,000 | |||||||||
Debt instrument, amortization percent | 2.50% | |||||||||
Debt instrument, periodic payment | $ 675,000 | |||||||||
Debt instrument, annual principal payment | 1,012,500 | |||||||||
Revolving Loan Facility | Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 135,000,000 | $ 140,000,000 | 135,000,000 | 150,000,000 | ||||||
Long-term debt | 134,454,000 | 134,454,000 | 116,900,000 | |||||||
Revolving Loan Facility | Credit Facility | Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 222,000,000 | |||||||||
Term loan | 25,000,000 | |||||||||
Revolving Loan Facility | Credit Facility | Line of Credit | Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan | 60,000,000 | |||||||||
Revolving Loan Facility | Prior Credit Facility | Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term debt | $ 157,709,000 | |||||||||
Letter of Credit | Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 20,000,000 | |||||||||
Term Loan A | Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | |||||||||
Total net deferred financing costs | 545,000 | 545,000 | 621,000 | |||||||
Term loan | 27,512,000 | 27,512,000 | 48,125,000 | |||||||
Long-term debt | 26,967,000 | 26,967,000 | $ 47,504,000 | |||||||
Commercial Letter of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Outstanding standby letters of credit at period end | $ 0 | $ 0 |
Credit Facility (Schedule) (Det
Credit Facility (Schedule) (Details) - USD ($) | Apr. 30, 2024 | Jul. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Less current portion of long-term debt | $ 3,712,000 | $ 4,375,000 |
Non-current portion of long-term debt | 157,709,000 | 160,029,000 |
Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Less unamortized deferred financing costs related to term loan | 2,267,000 | |
Amount outstanding under Prior Credit Facility, net | 161,421,000 | 164,404,000 |
Less current portion of long-term debt | 3,712,000 | 4,375,000 |
Non-current portion of long-term debt | 157,709,000 | 160,029,000 |
Credit Facility | Term Loan A | ||
Line of Credit Facility [Line Items] | ||
Term loan | 27,512,000 | 48,125,000 |
Less unamortized deferred financing costs related to term loan | 545,000 | 621,000 |
Amount outstanding under Prior Credit Facility, net | 26,967,000 | 47,504,000 |
Credit Facility | Revolving Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Amount outstanding under Prior Credit Facility, net | $ 134,454,000 | $ 116,900,000 |
Leases (Lease Cost and Addition
Leases (Lease Cost and Additional Information) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | |
Leases [Abstract] | ||||
Amortization of ROU assets | $ 0 | $ 1,000 | $ 0 | $ 5,000 |
Operating lease expense | 2,023,000 | 2,495,000 | 6,361,000 | 8,088,000 |
Short-term lease expense | 44,000 | 108,000 | 217,000 | 326,000 |
Variable lease expense | 1,259,000 | 783,000 | 3,204,000 | 2,881,000 |
Sublease income | (17,000) | (17,000) | (50,000) | (50,000) |
Total lease expense | $ 3,309,000 | $ 3,370,000 | 9,732,000 | 11,250,000 |
Operating leases - Operating cash outflows | 6,796,000 | 8,183,000 | ||
Finance leases - Financing cash outflows | 0 | 4,000 | ||
ROU assets obtained in the exchange for lease liabilities (non-cash): operating leases | $ 37,000 | $ 2,850,000 |
Leases (Lease Liabilities) (Det
Leases (Lease Liabilities) (Details) | Apr. 30, 2024 USD ($) |
Operating | |
Remainder of fiscal 2024 | $ 2,183,000 |
Fiscal 2025 | 8,123,000 |
Fiscal 2026 | 6,688,000 |
Fiscal 2027 | 4,582,000 |
Fiscal 2028 | 3,844,000 |
Thereafter | 18,850,000 |
Total future undiscounted cash flows | 44,270,000 |
Less: Present value discount | 5,006,000 |
Lease liabilities | $ 39,264,000 |
Weighted-average remaining lease terms (in years) | 8 years 25 days |
Weighted-average discount rate | 3.47% |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | Apr. 30, 2024 USD ($) |
Leases [Abstract] | |
Rent | $ 2,183,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | Jul. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 208.10% | 28.20% | (7.50%) | 13.90% | |
Discrete tax expense (benefit) | $ 802,000 | $ (1,203,000) | $ 961,000 | $ (1,193,000) | |
Effective tax rate, excluding discrete items | 2% | 14.25% | |||
Unrecognized tax benefits, including interest | 8,427,000 | $ 8,427,000 | $ 9,166,000 | ||
Interest accrued relating to income taxes | 163,000 | 163,000 | $ 210,000 | ||
Decrease in gross unrecognized tax benefits that is reasonably possible | $ 521,000 | $ 521,000 |
Stock-Based Compensation (Overv
Stock-Based Compensation (Overview) (Details) - shares | 9 Months Ended | ||||
Apr. 30, 2024 | Jan. 31, 2024 | Dec. 31, 2023 | Oct. 31, 2023 | Jul. 31, 2023 | |
Stock options | |||||
Stock-Based Awards Outstanding By Award Type (In Shares) | |||||
Number of stock-based awards outstanding at period end (in shares) | 170,150 | 224,580 | 234,260 | 240,510 | |
2000 Stock Incentive Plan | |||||
2000 Stock Incentive Plan | |||||
Aggregate maximum number of shares of common stock which may be issued under stock option plan (in shares) | 13,562,500 | 69,683 | |||
Aggregate net number of stock-based awards granted (in shares) | 10,735,517 | ||||
Aggregate number of stock based awards expired and canceled (in shares) | 6,594,458 | ||||
Aggregate number of stock-based awards exercised (in shares) | 9,173,530 | ||||
Stock-Based Awards Outstanding By Award Type (In Shares) | |||||
Number of total stock-based awards outstanding (in shares) | 1,561,987 | ||||
2000 Stock Incentive Plan | Stock options | |||||
2000 Stock Incentive Plan | |||||
Maximum term for grants of incentive and non-qualified stock-based awards, excluding incentive stock-based awards granted to stockholders who own more than 10% of the voting power | 10 years | ||||
Percentage of a stockholder's voting power that limits the contractual term of an incentive stock-based award | 10% | ||||
Maximum term for incentive stock-based awards granted to stockholders who own more than 10% of the voting power | 5 years | ||||
Stock-Based Awards Outstanding By Award Type (In Shares) | |||||
Number of stock-based awards outstanding at period end (in shares) | 170,150 | ||||
2000 Stock Incentive Plan | Performance shares | |||||
Stock-Based Awards Outstanding By Award Type (In Shares) | |||||
Number of stock-based awards outstanding at period end (in shares) | 379,353 | ||||
2000 Stock Incentive Plan | RSUs and restricted stock | |||||
Stock-Based Awards Outstanding By Award Type (In Shares) | |||||
Number of stock-based awards outstanding at period end (in shares) | 1,012,484 | ||||
2001 Employee Stock Purchase Plan | ESPP | |||||
2001 Employee Stock Purchase Plan | |||||
Total number of common shares reserved for issuance under employee stock purchase plan (in shares) | 1,300,000 | ||||
Discount rate from market value, on purchase date, offered to employees participating in the Employee Stock Purchase Plan (ESPP) | 85% | ||||
Total number of shares of common stock issued to employees under employee stock purchase plan and through the end of the reporting period (in shares) | 1,037,060 | ||||
2023 Equity and Incentive Plan | |||||
2000 Stock Incentive Plan | |||||
Aggregate maximum number of shares of common stock which may be issued under stock option plan (in shares) | 1,600,000 |
Stock-Based Compensation (Expen
Stock-Based Compensation (Expenses) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 12, 2024 | Apr. 30, 2024 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | Jan. 31, 2024 | Oct. 31, 2023 | Jul. 31, 2023 | |
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | $ 404,000 | $ 4,126,000 | $ 5,238,000 | $ 6,298,000 | ||||
CEO transition costs related to equity-classified stock-based awards | 0 | 0 | 0 | 3,764,000 | ||||
Total stock-based compensation expense before income tax benefit | 404,000 | 4,126,000 | 5,238,000 | 10,062,000 | ||||
Estimated Income tax benefit | (81,000) | (915,000) | (1,149,000) | (1,701,000) | ||||
Net stock-based compensation expense | 323,000 | 3,211,000 | 4,089,000 | 8,361,000 | ||||
Total remaining unrecognized compensation cost related to the unvested stock-based awards | 6,819,000 | 6,819,000 | ||||||
Estimated forfeitures related to unvested stock-based awards | 833,000 | $ 833,000 | ||||||
Weighted average number of years net compensation cost is expected to be recognized over | 1 year 10 months 24 days | |||||||
Stock-based compensation capitalized and included in ending inventory | 198,000 | $ 198,000 | $ 198,000 | |||||
Stock options | ||||||||
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | $ 11,000 | 22,000 | $ 42,000 | 66,000 | ||||
Number of stock-based awards outstanding at period end (in shares) | 170,150 | 170,150 | 224,580 | 234,260 | 240,510 | |||
Performance shares | ||||||||
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | $ (662,000) | 335,000 | $ 280,000 | 690,000 | ||||
RSUs and restricted stock | ||||||||
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | 1,040,000 | 3,738,000 | 4,850,000 | 5,449,000 | ||||
ESPP | ||||||||
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | $ 15,000 | 31,000 | $ 66,000 | 93,000 | ||||
Discount offered to employees participating in the ESPP as a percentage of market price | 15% | |||||||
RSU and Performance Shares | ||||||||
Stock-based Compensation Expenses | ||||||||
Performance shares cancelled (in shares) | 581,021 | |||||||
2000 Stock Incentive Plan | Stock options | ||||||||
Stock-based Compensation Expenses | ||||||||
Number of stock-based awards outstanding at period end (in shares) | 170,150 | 170,150 | ||||||
Cost of sales | ||||||||
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | $ 67,000 | 141,000 | $ 480,000 | 452,000 | ||||
Selling, general and administrative expenses | ||||||||
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | 313,000 | 3,896,000 | 4,480,000 | 5,559,000 | ||||
Research and development expenses | ||||||||
Stock-based Compensation Expenses | ||||||||
Stock-based compensation expense before CEO transition costs | $ 24,000 | $ 89,000 | $ 278,000 | $ 287,000 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2024 | Jan. 31, 2024 | Oct. 31, 2023 | Apr. 30, 2024 | |
Weighted Average Remaining Contractual Term (Years) | ||||
Outstanding, Ending Balance | 3 years 11 months 19 days | |||
Aggregated Intrinsic Value | ||||
Outstanding, Ending Balance | $ 0 | $ 0 | ||
Stock options | ||||
Awards (In Shares) | ||||
Outstanding, Beginning Balance (in shares) | 224,580 | 234,260 | 240,510 | 240,510 |
Expired/canceled (in shares) | (54,430) | (9,680) | (6,250) | |
Outstanding, Ending Balance (in shares) | 170,150 | 224,580 | 234,260 | 170,150 |
Exercisable, Ending Balance (in shares) | 147,450 | 147,450 | ||
Vested and Expected to Vest, Ending Balance (in shares) | 168,498 | 168,498 | ||
Weighted Average Exercise Price (Per Share) | ||||
Outstanding, Beginning Balance (in dollars per share) | $ 23.93 | $ 23.95 | $ 23.96 | $ 23.96 |
Expired/canceled (in dollars per share) | 28.68 | 24.25 | 24.31 | |
Outstanding, Ending Balance (in dollars per share) | 22.42 | $ 23.93 | $ 23.95 | 22.42 |
Exercisable, Ending Balance (in dollars per share) | 23.11 | 23.11 | ||
Vested and Expected to Vest, Ending Balance (in dollars per share) | $ 22.46 | $ 22.46 | ||
Weighted Average Remaining Contractual Term (Years) | ||||
Exercisable, Ending Balance | 3 years 7 months 24 days | |||
Vested And Expected To Vest, Ending Balance | 3 years 11 months 12 days | |||
Aggregated Intrinsic Value | ||||
Exercisable, Ending Balance | $ 0 | $ 0 | ||
Vested and Expected to Vest, Ending Balance | $ 0 | $ 0 | ||
Additional Disclosures | ||||
Exercise price, lower range limit (in dollars per share) | $ 17.88 | |||
Exercise price, upper range limit (in dollars per share) | $ 31.44 | |||
Stock options | Maximum | ||||
Additional Disclosures | ||||
Contractual term (in years) | 10 years | |||
Stock options | Tranche Two | ||||
Additional Disclosures | ||||
Vesting period | 5 years |
Stock-Based Compensation (Perfo
Stock-Based Compensation (Performance Shares, RSUs, Restricted Stock and Share Unit Awards) (Details) | 3 Months Ended | 9 Months Ended | |||||||||
Aug. 01, 2022 | Jul. 31, 2022 | Jul. 31, 2017 | Apr. 30, 2024 USD ($) $ / shares shares | Jan. 31, 2024 $ / shares shares | Oct. 31, 2023 $ / shares shares | Apr. 30, 2023 USD ($) | Apr. 30, 2024 USD ($) $ / shares shares | Apr. 30, 2023 USD ($) | Jul. 31, 2023 USD ($) | Jul. 30, 2017 | |
Dividend Equivalents [Abstract] | |||||||||||
Reversal of dividend equivalents | $ 68,000 | $ (22,000) | $ 104,000 | ||||||||
Accrual of dividend equivalents | $ 342,000 | ||||||||||
Carrying value at period end | 414,326,000 | 414,326,000 | $ 445,727,000 | ||||||||
Income tax (expense) benefit from settlement of stock-based awards | $ 76,000 | (15,000) | $ (379,000) | (560,000) | |||||||
Performance shares, RSUs, Restricted stock and share units | |||||||||||
Awards (In Shares) | |||||||||||
Outstanding, Beginning Balance (in shares) | shares | 2,026,634 | 2,452,126 | 1,876,230 | 1,876,230 | |||||||
Granted (in shares) | shares | 913,908 | ||||||||||
Settled (in shares) | shares | (9,642) | (383,565) | (296,198) | ||||||||
Canceled/Forfeited (in shares) | shares | (625,155) | (41,927) | (41,814) | ||||||||
Outstanding, Ending Balance (in shares) | shares | 1,391,837 | 2,026,634 | 2,452,126 | 1,391,837 | |||||||
Vested, Ending Balance (in shares) | shares | 451,975 | 451,975 | |||||||||
Vested and Expected to Vest, Ending Balance (in shares) | shares | 1,333,129 | 1,333,129 | |||||||||
Weighted Average Grant Date Fair Value | |||||||||||
Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 11.76 | $ 11.60 | $ 13.21 | $ 13.21 | |||||||
Granted (in dollars per share) | $ / shares | 9.93 | ||||||||||
Settled (in dollars per share) | $ / shares | 14.10 | 10.64 | 16.03 | ||||||||
Canceled/Forfeited (in dollars per share) | $ / shares | 8.47 | 12.78 | 15.80 | ||||||||
Outstanding, Ending Balance (in dollars per share) | $ / shares | 13.22 | $ 11.76 | $ 11.60 | 13.22 | |||||||
Vested, Ending Balance (in dollars per share) | $ / shares | 14.99 | 14.99 | |||||||||
Vested and Expected to Vest, Ending Balance (in dollars per share) | $ / shares | $ 13.19 | $ 13.19 | |||||||||
Aggregate Intrinsic Value | |||||||||||
Outstanding, Ending Balance | $ 2,616,653 | $ 2,616,653 | |||||||||
Vested, Ending Balance | 849,713 | ||||||||||
Vested and Expected to Vest, Ending Balance | 2,506,283 | 2,506,283 | |||||||||
Additional Disclosures | |||||||||||
Total intrinsic value relating to fully vested stock-based awards converted during the period | 33,000 | 669,000 | $ 7,478,000 | 3,633,000 | |||||||
Performance shares | Employees | Granted since fiscal 2014 | |||||||||||
Additional Disclosures | |||||||||||
Performance period (in years) | 3 years | ||||||||||
RSUs and restricted stock | Employees | |||||||||||
Additional Disclosures | |||||||||||
Vesting period | 3 years | 5 years | |||||||||
Common stock, conversion ratio (in shares) | 1 | ||||||||||
RSUs and restricted stock | Non-Employee Director | |||||||||||
Additional Disclosures | |||||||||||
Vesting period | 1 year | 5 years | 1 year | ||||||||
Common stock, conversion ratio (in shares) | 1 | 1 | |||||||||
Dividend equivalents | |||||||||||
Dividend Equivalents [Abstract] | |||||||||||
Reversal of dividend equivalents | 68,000 | $ 104,000 | |||||||||
Accrual of dividend equivalents | 22,000 | 342,000 | |||||||||
Paid during the period | 2,000 | $ 13,000 | 267,000 | $ 363,000 | |||||||
Carrying value at period end | $ 320,000 | $ 320,000 | $ 691,000 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 30, 2024 USD ($) ft² | Apr. 30, 2023 USD ($) | Apr. 30, 2024 USD ($) ft² productArea | Apr. 30, 2023 USD ($) | Jul. 31, 2023 USD ($) | Jul. 31, 2022 USD ($) | Jul. 31, 2021 USD ($) | |
Segment Reporting Information, Profit (Loss) | |||||||
Net sales | $ 128,076,000 | $ 136,316,000 | $ 414,212,000 | $ 401,180,000 | |||
Operating income (loss) | (3,470,000) | (5,276,000) | 1,589,000 | (15,781,000) | $ (14,660,000) | $ (33,752,000) | $ (68,298,000) |
Net income (loss) | 2,795,000 | (7,458,000) | (9,200,000) | (23,359,000) | |||
Provision for (benefit from) income taxes | (5,381,000) | (2,932,000) | 639,000 | (3,762,000) | |||
Interest expense | 5,146,000 | 4,386,000 | 15,343,000 | 10,412,000 | |||
Interest (income) and other | 409,000 | 728,000 | 1,246,000 | 928,000 | |||
Change in fair value of warrants | 6,439,000 | 0 | 6,439,000 | 0 | |||
Amortization of stock-based compensation | 404,000 | 4,126,000 | 5,238,000 | 6,298,000 | |||
Amortization of intangibles | 5,289,000 | 5,349,000 | 15,866,000 | 16,047,000 | |||
Depreciation | 3,121,000 | 2,981,000 | 9,073,000 | 8,746,000 | |||
Amortization of cost to fulfill assets | 240,000 | 240,000 | 720,000 | 720,000 | |||
CEO transition costs | 2,492,000 | 0 | 2,492,000 | 9,090,000 | |||
Restructuring costs | 2,755,000 | 4,096,000 | 9,197,000 | 6,964,000 | |||
Strategic emerging technology costs | 880,000 | 1,029,000 | 3,228,000 | 2,513,000 | |||
Loss (gain) on business divestiture, net | 200,000 | 0 | (2,013,000) | 0 | |||
Adjusted EBITDA | 11,911,000 | 12,545,000 | 45,390,000 | 34,597,000 | |||
Purchases of property, plant and equipment | 8,904,000 | 14,873,000 | |||||
Total assets | 990,999,000 | 989,859,000 | 990,999,000 | 989,859,000 | $ 996,237,000 | ||
Purchases of property, plant and equipment | $ 2,667,000 | 4,955,000 | $ 8,904,000 | 14,873,000 | |||
Chandler, Arizona | |||||||
Segment Reporting Information, Profit (Loss) | |||||||
Area of property (in sq ft) | ft² | 146,000 | 146,000 | |||||
Satellite and Space Communications | |||||||
Segment Reporting Information, Profit (Loss) | |||||||
Net sales | $ 71,445,000 | 82,249,000 | $ 252,436,000 | 243,529,000 | |||
Terrestrial and Wireless Networks | |||||||
Segment Reporting Information [Line Items] | |||||||
Number of product areas | productArea | 3 | ||||||
Segment Reporting Information, Profit (Loss) | |||||||
Net sales | 56,631,000 | 54,067,000 | $ 161,776,000 | 157,651,000 | |||
Operating Segments | Satellite and Space Communications | |||||||
Segment Reporting Information, Profit (Loss) | |||||||
Net sales | 71,445,000 | 82,249,000 | 252,436,000 | 243,529,000 | |||
Operating income (loss) | 2,796,000 | 37,000 | 14,756,000 | 8,380,000 | |||
Net income (loss) | 1,828,000 | 650,000 | 10,672,000 | 9,588,000 | |||
Provision for (benefit from) income taxes | 11,000 | (1,188,000) | 547,000 | (1,832,000) | |||
Interest expense | 884,000 | (25,000) | 2,659,000 | 2,000 | |||
Interest (income) and other | 73,000 | 600,000 | 878,000 | 622,000 | |||
Amortization of stock-based compensation | 0 | 0 | 0 | 0 | |||
Amortization of intangibles | 1,671,000 | 1,828,000 | 5,014,000 | 5,484,000 | |||
Depreciation | 1,047,000 | 1,027,000 | 2,865,000 | 3,057,000 | |||
Amortization of cost to fulfill assets | 240,000 | 240,000 | 720,000 | 720,000 | |||
CEO transition costs | 0 | 0 | |||||
Restructuring costs | 549,000 | 2,191,000 | 2,793,000 | 4,336,000 | |||
Strategic emerging technology costs | 880,000 | 1,029,000 | 3,228,000 | 2,513,000 | |||
Loss (gain) on business divestiture, net | 0 | 0 | |||||
Adjusted EBITDA | 7,183,000 | 6,352,000 | 29,376,000 | 24,490,000 | |||
Purchases of property, plant and equipment | 1,763,000 | 5,660,000 | |||||
Total assets | 498,449,000 | 488,814,000 | 498,449,000 | 488,814,000 | |||
Purchases of property, plant and equipment | 388,000 | 1,106,000 | |||||
Operating Segments | Terrestrial and Wireless Networks | |||||||
Segment Reporting Information, Profit (Loss) | |||||||
Net sales | 56,631,000 | 54,067,000 | 161,776,000 | 157,651,000 | |||
Operating income (loss) | 5,727,000 | 3,160,000 | 17,901,000 | 7,216,000 | |||
Net income (loss) | 5,266,000 | 2,902,000 | 17,011,000 | 7,070,000 | |||
Provision for (benefit from) income taxes | 274,000 | 84,000 | 696,000 | (197,000) | |||
Interest expense | 0 | 0 | 0 | 0 | |||
Interest (income) and other | 187,000 | 174,000 | 194,000 | 343,000 | |||
Amortization of stock-based compensation | 0 | 0 | 0 | 0 | |||
Amortization of intangibles | 3,618,000 | 3,521,000 | 10,852,000 | 10,563,000 | |||
Depreciation | 1,985,000 | 1,921,000 | 5,933,000 | 5,579,000 | |||
Amortization of cost to fulfill assets | 0 | 0 | 0 | 0 | |||
CEO transition costs | 0 | 0 | |||||
Restructuring costs | 0 | 548,000 | 8,000 | 548,000 | |||
Strategic emerging technology costs | 0 | 0 | 0 | 0 | |||
Loss (gain) on business divestiture, net | 0 | 0 | |||||
Adjusted EBITDA | 11,330,000 | 9,150,000 | 34,694,000 | 23,906,000 | |||
Purchases of property, plant and equipment | 6,175,000 | 8,505,000 | |||||
Total assets | 455,169,000 | 475,380,000 | 455,169,000 | 475,380,000 | |||
Purchases of property, plant and equipment | 2,154,000 | 3,549,000 | |||||
Operating Segments | Government Solutions Segment | |||||||
Segment Reporting Information, Profit (Loss) | |||||||
Change in fair value of warrants | 0 | 0 | |||||
CEO transition costs | 0 | ||||||
Operating Segments | Commercial Solutions Segment | |||||||
Segment Reporting Information, Profit (Loss) | |||||||
Change in fair value of warrants | 0 | 0 | |||||
CEO transition costs | 0 | ||||||
Unallocated | |||||||
Segment Reporting Information, Profit (Loss) | |||||||
Net sales | 0 | 0 | 0 | ||||
Operating income (loss) | (11,993,000) | (8,473,000) | (31,068,000) | (31,377,000) | |||
Net income (loss) | (4,299,000) | (11,010,000) | (36,883,000) | (40,017,000) | |||
Provision for (benefit from) income taxes | (5,666,000) | (1,828,000) | (604,000) | (1,733,000) | |||
Interest expense | 4,262,000 | 4,411,000 | 12,684,000 | 10,410,000 | |||
Interest (income) and other | 149,000 | (46,000) | 174,000 | (37,000) | |||
Change in fair value of warrants | 6,439,000 | 6,439,000 | |||||
Amortization of stock-based compensation | 404,000 | 4,126,000 | 5,238,000 | 6,298,000 | |||
Amortization of intangibles | 0 | 0 | 0 | 0 | |||
Depreciation | 89,000 | 33,000 | 275,000 | 110,000 | |||
Amortization of cost to fulfill assets | 0 | 0 | 0 | 0 | |||
CEO transition costs | 2,492,000 | 2,492,000 | 9,090,000 | ||||
Restructuring costs | 2,206,000 | 1,357,000 | 6,396,000 | 2,080,000 | |||
Strategic emerging technology costs | 0 | 0 | 0 | 0 | |||
Loss (gain) on business divestiture, net | 200,000 | 2,013,000 | |||||
Adjusted EBITDA | (6,602,000) | (2,957,000) | (18,680,000) | (13,799,000) | |||
Purchases of property, plant and equipment | 966,000 | 708,000 | |||||
Total assets | 37,381,000 | 25,665,000 | $ 37,381,000 | $ 25,665,000 | |||
Purchases of property, plant and equipment | $ 125,000 | $ 300,000 |
Goodwill (Details)
Goodwill (Details) | 9 Months Ended | 12 Months Ended | ||
Apr. 30, 2024 USD ($) segment $ / shares | Jul. 31, 2023 USD ($) segment | May 01, 2024 | Aug. 01, 2023 $ / shares | |
Goodwill [Roll Forward] | ||||
Balance as of July 31, 2023 | $ 347,692,000 | |||
Balance as of April 30, 2024 | $ 333,105,000 | $ 347,692,000 | ||
Common stock price, decrease, percent | 81.40% | |||
Number of operating segments | segment | 2 | 2 | ||
Power Systems Technologies (PST) | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Purchase Accounting Adjustments | $ (14,587,000) | |||
Common Stock | ||||
Goodwill [Roll Forward] | ||||
Share price (in dollars per share) | $ / shares | $ 1.88 | $ 10.09 | ||
Satellite and Space Communications | ||||
Goodwill [Roll Forward] | ||||
Balance as of July 31, 2023 | $ 173,602,000 | |||
Balance as of April 30, 2024 | 159,015,000 | $ 173,602,000 | ||
Percentage of fair value in excess of carrying amount for reporting unit | 10.20% | 18.30% | ||
Satellite and Space Communications | Power Systems Technologies (PST) | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Purchase Accounting Adjustments | (14,587,000) | |||
Terrestrial and Wireless Networks | ||||
Goodwill [Roll Forward] | ||||
Balance as of July 31, 2023 | 174,090,000 | |||
Balance as of April 30, 2024 | 174,090,000 | $ 174,090,000 | ||
Percentage of fair value in excess of carrying amount for reporting unit | 11.70% | 8.90% | ||
Terrestrial and Wireless Networks | Power Systems Technologies (PST) | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Purchase Accounting Adjustments | $ 0 |
Intangible Assets (Intangible A
Intangible Assets (Intangible Assets with Finite Lives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Apr. 30, 2024 | Oct. 31, 2023 | Apr. 30, 2023 | Apr. 30, 2024 | Apr. 30, 2023 | Jul. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | $ 448,133,000 | $ 448,133,000 | $ 449,933,000 | |||
Accumulated Amortization | 238,092,000 | 238,092,000 | 224,026,000 | |||
Net Carrying Amount | 210,041,000 | 210,041,000 | 225,907,000 | |||
Amortization of intangibles | 5,289,000 | $ 5,349,000 | $ 15,866,000 | $ 16,047,000 | ||
Customer relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Amortization Period | 20 years 2 months 12 days | 20 years 2 months 12 days | ||||
Gross Carrying Amount | 302,058,000 | $ 302,058,000 | 302,058,000 | |||
Accumulated Amortization | 132,789,000 | 132,789,000 | 121,786,000 | |||
Net Carrying Amount | 169,269,000 | $ 169,269,000 | 180,272,000 | |||
Technologies | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Amortization Period | 14 years 9 months 18 days | 14 years 9 months 18 days | ||||
Gross Carrying Amount | 113,149,000 | $ 113,149,000 | 114,949,000 | |||
Accumulated Amortization | 82,058,000 | 82,058,000 | 80,672,000 | |||
Net Carrying Amount | 31,091,000 | $ 31,091,000 | 34,277,000 | |||
Trademarks and other | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Amortization Period | 16 years 8 months 12 days | 16 years 8 months 12 days | ||||
Gross Carrying Amount | 32,926,000 | $ 32,926,000 | 32,926,000 | |||
Accumulated Amortization | 23,245,000 | 23,245,000 | 21,568,000 | |||
Net Carrying Amount | $ 9,681,000 | $ 9,681,000 | $ 11,358,000 |
Intangible Assets (Estimated Am
Intangible Assets (Estimated Amortization Expense) (Details) | Apr. 30, 2024 USD ($) |
Finite-Lived Intangible Assets, Net [Abstract] | |
2024 | $ 21,154,000 |
2025 | 21,039,000 |
2026 | 19,888,000 |
2027 | 18,534,000 |
2028 | $ 18,534,000 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - USD ($) | 6 Months Ended | 9 Months Ended | |||||||||
Jun. 17, 2024 | Jan. 22, 2024 | Dec. 13, 2023 | Oct. 19, 2021 | Oct. 18, 2021 | Jan. 31, 2024 | Apr. 30, 2024 | Apr. 30, 2023 | Jul. 31, 2023 | Jan. 31, 2023 | Jul. 31, 2022 | |
Class of Stock [Line Items] | |||||||||||
Series A convertible preferred stock, shares authorized (in shares) | 166,121 | 125,000 | |||||||||
Series A convertible preferred stock, par value per share (in dollars per share) | $ 0.10 | $ 0.10 | |||||||||
Convertible preferred stock, aggregate purchase price | $ 166,121,000 | ||||||||||
Issuance of convertible preferred stock | 100,000 | 100,000 | 166,121 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | |||||||||
Shares issued upon conversion (in shares) | 115,721.22 | ||||||||||
Proceeds from issuance of convertible preferred stock | $ 43,200,000 | $ 0 | |||||||||
Expense reimbursement | $ 1,800,000 | ||||||||||
Warrant, term | 5 years 6 months | ||||||||||
Warrant liability | $ 6,440,000 | $ 6,439,000 | |||||||||
Conversion of stock, loss | 13,640,000 | ||||||||||
Current redemption value | 170,254,000 | $ 112,211,000 | |||||||||
Convertible preferred stock, accrued dividends | 1,267,000 | $ 604,000 | |||||||||
Carrying value adjustment in the period | $ 11,992,000 | ||||||||||
Temporary equity, shares outstanding (in shares) | 166,121 | 166,121 | 100,000 | 100,000 | 100,000 | 100,000 | |||||
Convertible Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Liquidation preference per share (in dollars per share) | $ 7.99 | ||||||||||
Series A convertible preferred stock, shares authorized (in shares) | 50,000,000 | 125,000 | |||||||||
Series A convertible preferred stock, par value per share (in dollars per share) | $ 0.10 | ||||||||||
Convertible preferred stock, aggregate purchase price | $ 125,000,000 | ||||||||||
Dividend rate, in cash | 7.75% | ||||||||||
Dividend rate | 6.50% | ||||||||||
Preferred stock redemption rate | 50% | ||||||||||
Stock price change period | 30 days | ||||||||||
Disposition of business, maximum fair value | $ 75,000,000 | ||||||||||
Carrying amount, attributable to parent | 166,121,000 | ||||||||||
Initial carrying amount | 161,848,000 | ||||||||||
Proceeds from initial issuance, net of issuance costs | $ 4,273,000 | ||||||||||
Current redemption value | $ 170,254,000 | ||||||||||
Convertible preferred stock, accrued dividends | 2,866,000 | ||||||||||
Carrying value adjustment in the period | 3,510,000 | ||||||||||
Convertible Preferred Stock | IPO | |||||||||||
Class of Stock [Line Items] | |||||||||||
Convertible preferred stock, aggregate purchase price | $ 100,000,000 | ||||||||||
Series B Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Conversion rate | 150% | ||||||||||
Shares issued and sold (in shares) | 45,000 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.10 | ||||||||||
Shares issued during period, value | $ 45,000,000 | ||||||||||
Shares issued, price per shares (usd per share) | $ 1,000 | ||||||||||
Shares, issued (in shares) | 5,400 | ||||||||||
Proceeds from issuance of convertible preferred stock | $ 43,200,000 | ||||||||||
Dividend rate, percent | 9% | ||||||||||
Carrying value adjustment in the period | $ 8,482,000 | ||||||||||
Liquidation rate | 100% | ||||||||||
Series B Preferred Stock | Subsequent Event | |||||||||||
Class of Stock [Line Items] | |||||||||||
Temporary equity, shares outstanding (in shares) | 166,121.22 | ||||||||||
Series A-1 Convertible Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Series A convertible preferred stock, par value per share (in dollars per share) | $ 0.10 | ||||||||||
Issuance of convertible preferred stock | 100,000 | 100,000 | |||||||||
Liquidation preference per share (usd per share) | $ 1,134.2 | ||||||||||
Series B-1 Convertible Preferred Stock | Subsequent Event | |||||||||||
Class of Stock [Line Items] | |||||||||||
Series A convertible preferred stock, par value per share (in dollars per share) | $ 0.10 | ||||||||||
Issuance of convertible preferred stock | 5,705.83 | ||||||||||
Temporary equity, stock issued during period, shares, exchanged (in shares) | 166,121.22 | ||||||||||
Temporary equity, liquidation preference | $ 1,036.58 | ||||||||||
Preferred stock, convertible, conversion price (in dollars per share) | $ 7.99 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 9 Months Ended | |||
Apr. 30, 2024 | Apr. 30, 2023 | Jul. 13, 2022 | Sep. 29, 2020 | |
Stockholders' Equity Note [Abstract] | ||||
Shelf registration authorized amount | $ 200,000,000 | |||
Stock Repurchase Program | ||||
Maximum amount authorized by the board of directors for the repurchase of shares of the company's common stock | $ 100,000,000 | |||
Shares acquired (in shares) | 0 | 0 |
Cost Reduction (Details)
Cost Reduction (Details) | 9 Months Ended | 12 Months Ended |
Apr. 30, 2024 USD ($) segment | Jul. 31, 2023 USD ($) segment | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | 2 |
Severance costs | $ 1,488,000 | $ 3,872,000 |
Severance costs paid | 2,687,000 | 2,320,000 |
Severance liability | $ 353,000 | 1,552,000 |
Operating Segments | Satellite and Space Communications | ||
Segment Reporting Information [Line Items] | ||
Severance costs | 1,989,000 | |
Operating Segments | Terrestrial and Wireless Networks | ||
Segment Reporting Information [Line Items] | ||
Severance costs | 1,220,000 | |
Unallocated | ||
Segment Reporting Information [Line Items] | ||
Severance costs | $ 663,000 |