Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2017 | Oct. 01, 2017 | Jan. 31, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jul. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MLNK | ||
Entity Registrant Name | MODUSLINK GLOBAL SOLUTIONS INC | ||
Entity Central Index Key | 914,712 | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 55,555,973 | ||
Entity Public Float | $ 63,711,482 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 110,670 | $ 130,790 |
Trading securities | 11,898 | 16,768 |
Accounts receivable, trade, net of allowance for doubtful accounts of $616 and $489 at July 31, 2017 and July 31, 2016, respectively | 81,450 | 111,336 |
Inventories | 34,369 | 40,270 |
Funds held for clients | 13,454 | 12,549 |
Prepaid expenses and other current assets | 6,005 | 8,178 |
Total current assets | 257,846 | 319,891 |
Property and equipment, net | 18,555 | 22,271 |
Other assets | 4,897 | 5,770 |
Total assets | 281,298 | 347,932 |
Current liabilities: | ||
Accounts payable | 71,476 | 114,432 |
Accrued restructuring | 186 | 2,936 |
Accrued expenses | 37,898 | 37,740 |
Funds held for clients | 13,454 | 12,549 |
Other current liabilities | 26,141 | 27,109 |
Total current liabilities | 149,155 | 194,766 |
Long-term portion of accrued restructuring | 93 | |
Notes payable | 59,758 | 57,169 |
Other long-term liabilities | 9,414 | 9,964 |
Long-term liabilities | 69,172 | 67,226 |
Total liabilities | 218,327 | 261,992 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share. Authorized 5,000,000 shares; zero issued or outstanding shares at July 31, 2017 and July 31, 2016 | ||
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 55,555,973 issued and outstanding shares at July 31, 2017; 55,249,076 issued and outstanding shares at July 31, 2016 | 556 | 553 |
Additional paid-in capital | 7,457,051 | 7,456,490 |
Accumulated deficit | (7,398,949) | (7,373,122) |
Accumulated other comprehensive income | 4,313 | 2,019 |
Total stockholders' equity | 62,971 | 85,940 |
Total liabilities and stockholders' equity | $ 281,298 | $ 347,932 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Accounts receivable, trade, allowance for doubtful accounts | $ 616 | $ 489 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares Authorized | 1,400,000,000 | 1,400,000,000 |
Common stock, shares issued | 55,555,973 | 55,249,076 |
Common stock, shares outstanding | 55,555,973 | 55,249,076 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Net revenue | $ 436,620 | $ 459,023 | $ 561,673 |
Cost of revenue | 400,255 | 434,265 | 507,188 |
Gross profit | 36,365 | 24,758 | 54,485 |
Operating expenses | |||
Selling, general and administrative | 54,159 | 57,604 | 59,667 |
Amortization of intangible assets | 667 | ||
Impairment of goodwill and long-lived assets | 305 | 3,360 | |
Restructuring, net | 1,967 | 7,421 | 5,130 |
Total operating expenses | 56,126 | 65,330 | 68,824 |
Operating loss | (19,761) | (40,572) | (14,339) |
Other income (expense): | |||
Interest income | 399 | 668 | 893 |
Interest expense | (8,247) | (10,924) | (10,618) |
Other gains (losses), net | 3,200 | (5,757) | 15,005 |
Impairment of investments in affiliates | (42) | (7,295) | |
Total other income (expense) | (4,648) | (16,055) | (2,015) |
Loss before income taxes | (24,409) | (56,627) | (16,354) |
Income tax expense | 2,696 | 5,443 | 2,283 |
(Gains) losses on investment on affiliates, net of tax | (1,278) | (789) | (208) |
Net loss | $ (25,827) | $ (61,281) | $ (18,429) |
Basic and diluted net loss per share | $ (0.47) | $ (1.18) | $ (0.35) |
Weighted average common shares used in basic and diluted earnings per share | 55,134 | 51,934 | 51,940 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Net loss | $ (25,827) | $ (61,281) | $ (18,429) |
Other comprehensive loss: | |||
Foreign currency translation adjustment | 1,391 | (1,539) | (8,163) |
Pension liability adjustments, net of tax | 830 | (2,306) | |
Net unrealized holding gain (loss) on securities, net of tax | 73 | 48 | 11 |
Other comprehensive gain (loss) | 2,294 | (1,491) | (10,458) |
Comprehensive loss | $ (23,533) | $ (62,772) | $ (28,887) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
Balance at Jul. 31, 2014 | $ 171,618 | $ 521 | $ 7,450,541 | $ (7,293,412) | $ 13,968 |
Balance, shares at Jul. 31, 2014 | 52,100,763 | ||||
Net loss | (18,429) | (18,429) | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises, shares | 33,358 | ||||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises | 113 | 113 | |||
Restricted stock grants, shares | 111,110 | ||||
Restricted stock grants | $ 1 | (1) | |||
Restricted stock forfeitures, shares | (11,343) | ||||
Share-based compensation | 1,757 | 1,757 | |||
Other comprehensive items | (10,458) | (10,458) | |||
Balance at Jul. 31, 2015 | 144,601 | $ 522 | 7,452,410 | (7,311,841) | 3,510 |
Balance, shares at Jul. 31, 2015 | 52,233,888 | ||||
Net loss | (61,281) | (61,281) | |||
Equity portion of convertible notes | (64) | (64) | |||
Issuance of common stock to Highbridge International LLC and Highbridge Tactical Credit & Convertibles Master Fund, L.P.,Shares | 2,656,336 | ||||
Issuance of common stock to Highbridge International LLC and Highbridge Tactical Credit & Convertibles Master Fund, L.P. | 3,134 | $ 27 | 3,107 | ||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises, shares | 70,136 | ||||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises | 51 | 51 | |||
Restricted stock grants, shares | 340,259 | ||||
Restricted stock grants | $ 4 | (4) | |||
Restricted stock forfeitures, shares | (51,543) | ||||
Restricted stock forfeitures | (136) | (136) | |||
Share-based compensation | 1,126 | 1,126 | |||
Other comprehensive items | (1,491) | (1,491) | |||
Balance at Jul. 31, 2016 | $ 85,940 | $ 553 | 7,456,490 | (7,373,122) | 2,019 |
Balance, shares at Jul. 31, 2016 | 55,249,076 | 55,249,076 | |||
Net loss | $ (25,827) | (25,827) | |||
Equity portion of convertible notes | (135) | (135) | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises, shares | 10,605 | ||||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises | 18 | 18 | |||
Restricted stock grants, shares | 296,292 | ||||
Restricted stock grants | $ 3 | (3) | |||
Share-based compensation | 681 | 681 | |||
Other comprehensive items | 2,294 | 2,294 | |||
Balance at Jul. 31, 2017 | $ 62,971 | $ 556 | $ 7,457,051 | $ (7,398,949) | $ 4,313 |
Balance, shares at Jul. 31, 2017 | 55,555,973 | 55,555,973 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Cash flows from operating activities: | |||
Net loss | $ (25,827) | $ (61,281) | $ (18,429) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 8,206 | 8,119 | 8,668 |
Amortization of intangible assets | 667 | ||
Amortization of deferred financing costs | 566 | 733 | 557 |
Accretion of debt discount | 3,919 | 4,967 | 4,473 |
Impairment of goodwill and long-lived assets | 261 | 305 | 3,360 |
Share-based compensation | 681 | 1,126 | 1,757 |
Non-cash (gains) losses, net | (3,200) | 4,519 | (15,005) |
(Gains) losses on investments in affiliates and impairments | (1,278) | (747) | 7,087 |
Changes in operating assets and liabilities: | |||
Trade accounts receivable, net | 31,102 | 19,130 | (14,970) |
Inventories | 6,852 | 7,752 | 11,839 |
Prepaid expenses and other current assets | 1,572 | 10,763 | (26,580) |
Accounts payable, accrued restructuring and accrued expenses | (45,314) | (4,245) | 22,258 |
Refundable and accrued income taxes, net | (1,014) | 2,660 | 367 |
Other assets and liabilities | (971) | (13,589) | 33,145 |
Net cash used in operating activities | (24,445) | (19,788) | 19,194 |
Cash flows from investing activities: | |||
Additions to property and equipment | (4,730) | (7,936) | (8,518) |
Proceeds from the disposition of property and equipment | 187 | 1,318 | |
Proceeds from the termination of defined benefit pension plan | 905 | ||
Purchase of Trading Securities | (1,220) | (69,221) | |
Proceeds from the sale of Trading Securities | 7,998 | 59,327 | 2,325 |
Investments in affiliates | (42) | (323) | |
Proceeds from investments in affiliates | 1,278 | 789 | 408 |
Net cash provided by investing activities | 5,638 | 52,236 | (75,329) |
Cash flows from financing activities: | |||
Purchase of the Company's Convertible Notes | (1,763) | (20,257) | |
Repayments on capital lease obligations | (171) | (228) | (216) |
Net proceeds from revolving line of credit | (4,453) | ||
Proceeds from issuance of common stock | 18 | 51 | 113 |
Repurchase of common stock | (127) | ||
Net cash used in financing activities | (1,916) | (20,561) | (4,556) |
Net effect of exchange rate changes on cash and cash equivalents | 603 | (528) | (3,393) |
Net increase (decrease) in cash and cash equivalents | (20,120) | 11,359 | (64,084) |
Cash and cash equivalents at beginning of period | 130,790 | 119,431 | 183,515 |
Cash and cash equivalents at end of period | $ 110,670 | $ 130,790 | $ 119,431 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Jul. 31, 2017 | |
NATURE OF OPERATIONS | (1) NATURE OF OPERATIONS ModusLink Global Solutions, Inc. (together with its consolidated subsidiaries, “ModusLink Global Solutions” or the “Company”), through its wholly owned subsidiaries, ModusLink Corporation (“ModusLink”) and ModusLink PTS, Inc. (“ModusLink PTS”), is a leader in global supply chain business process management serving clients in markets such as consumer electronics, communications, computing, medical devices, software, and retail. The Company designs and executes critical elements in its clients’ global supply chains to improve speed to market, product customization, flexibility, cost, quality and service. These benefits are delivered through a combination of industry expertise, innovative service solutions, integrated operations, proven business processes, expansive global footprint and world-class technology. The Company has an integrated network of strategically located facilities in various countries, including numerous sites throughout North America, Europe and Asia. The Company previously operated under the names CMGI, Inc. and CMG Information Services, Inc. and was incorporated in Delaware in 1986. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jul. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain significant accounting policies described below. Principles of Consolidation The accompanying consolidated financial statements of the Company include the results of its wholly-owned and majority- owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company accounts for investments in businesses in which it owns between 20% and 50% of the voting interest using the equity method, if the Company has the ability to exercise significant influence over the investee company. All other investments in privately held businesses over which the Company does not have the ability to exercise significant influence, or for which there is not a readily determinable market value, are accounted for under the cost method of accounting. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, allowance for doubtful accounts, inventories, fair value of its trading and available-for-sale securities, intangible assets, income taxes, restructuring, valuation of long-lived assets, impairments, contingencies, restructuring charges, litigation, pension obligations and the fair value of stock options and share bonus awards granted under the Company’s stock based compensation plans. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. Revenue Recognition The Company’s revenue primarily comes from the sale of supply chain management services to its clients. Amounts billed to clients under these arrangements include revenue attributable to the services performed as well as for materials procured on the Company’s clients’ behalf as part of its service to them. Other sources of revenue include the sale of products and other services. Revenue is recognized for services when the services are performed and for product sales when the products are shipped or in certain cases when products are built and title had transferred, if the client has also contracted with us for warehousing and/or logistics services for a separate fee, assuming all other applicable revenue recognition criteria are met. The Company recognizes revenue in accordance with the provisions of the Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” (“ASC Topic 605”). Specifically, the Company recognizes revenue when persuasive evidence of an arrangement exists, title and risk of loss have passed or services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. The Company’s shipping terms vary by client and can include FOB shipping point, which means that risk of loss passes to the client when it is shipped from the Company’s location, as well as other terms such as ex-works, meaning that title and risk of loss transfer upon delivery of product to the customer’s designated carrier. The Company also evaluates the terms of each major client contract relative to a number of criteria that management considers in making its determination with respect to gross versus net reporting of revenue for transactions with its clients. Management’s criteria for making these judgments place particular emphasis on determining the primary obligor in a transaction and which party bears general inventory risk. The Company records all shipping and handling fees billed to clients as revenue, and related costs as cost of sales, when incurred. The Company applies the provisions of ASC Topic 985, “Software” (“ASC Topic 985”), with respect to certain transactions involving the sale of software products by the Company’s e-Business operations. The Company applies the guidance of Accounting Standards Codification (“ASC”) 605-25 “Revenue – Multiple-Element Arrangements” for determining whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the arrangement consideration should be measured and allocated to the separate units of accounting. Under this guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. For those contracts which contain multiple deliverables, management must first determine whether each service, or deliverable, meets the separation criteria. In general, a deliverable (or a group of deliverables) meets the separation criteria if the deliverable has standalone value to the client. Each deliverable that meets the separation criteria is considered a “separate unit of accounting.” Management allocates the total arrangement consideration to each separate unit of accounting based on the relative selling price of each separate unit of accounting. After the arrangement consideration has been allocated to each separate unit of accounting, management applies the appropriate revenue recognition method for each separate unit of accounting as described previously based on the nature of the arrangement. In general, revenue is recognized upon completion of the last deliverable. All deliverables that do not meet the separation criteria are combined into one unit of accounting and the appropriate revenue recognition method is applied. Accounts Receivable and Allowance for Doubtful Accounts The Company’s unsecured accounts receivable are stated at original invoice amount less an estimate made for doubtful receivables based on a monthly review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer’s financial condition, credit history and current economic conditions. The Company writes off accounts receivable when management deems them uncollectible and records recoveries of accounts receivable previously written off when received. When accounts receivable are considered past due, the Company generally does not charge interest on past due balances. Foreign Currency Translation All assets and liabilities of the Company’s foreign subsidiaries, whose functional currency is the local currency, are translated to U.S. dollars at the rates in effect at the balance sheet date. All amounts in the Consolidated Statements of Operations are translated using the average exchange rates in effect during the year. Resulting translation adjustments are reflected in the accumulated other comprehensive income (loss) component of stockholders’ equity. Settlement of receivables and payables in a foreign currency that is not the functional currency result in foreign currency transaction gains and losses. Foreign currency transaction gains and losses are included in “Other gains (losses), net” in the Consolidated Statements of Operations. Cash, Cash Equivalents and Short-term Investments The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Investments with maturities greater than three months to twelve months at the time of purchase are considered short- term investments. Cash and cash equivalents consisted of the following: July 31, 2017 July 31, 2016 (In thousands) Cash and bank deposits $ 24,987 $ 29,566 Money market funds 85,683 101,224 $ 110,670 $ 130,790 Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, accounts payable, current liabilities and the revolving line of credit approximate fair value because of the short maturity of these instruments. The carrying value of capital lease obligations approximates fair value, as estimated by using discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The fair values of the Company’s Trading Securities are estimated using quoted market prices. The fair value of the Company’s Notes payable is $63.9 million as of July 31, 2017, which represents the value at which its lenders could trade its debt with in the financial markets, and does not represent the settlement value of these long-term debt liabilities to us. The fair value of the Notes payable could vary each period based on fluctuations in market interest rates, the Company’s stock price, as well as changes to the Company’s credit ratings. The Notes payable are traded and their fair values are based upon traded prices as of the reporting dates. The defined benefit plans have assets invested in insurance contracts and bank managed portfolios. Conservation of capital with some conservative growth potential is the strategy for the plans. The Company’s pension plans are outside the United States, where asset allocation decisions are typically made by an independent board of trustees. Investment objectives are aligned to generate returns that will enable the plans to meet their future obligations. The Company acts in a consulting and governance role in reviewing investment strategy and providing a recommended list of investment managers for each plan, with final decisions on asset allocation and investment manager made by local trustees. ASC Topic 820 provides that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC Topic 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the assets or liabilities Investments Marketable securities held by the Company which meet the criteria for classification as trading securities or available-for-sale are carried at fair value. Gains and losses on securities classified as trading are reflected in other income (expense) in the Company’s Consolidated Statements of Operations. Unrealized holding gains and losses on securities classified as available-for-sale are carried net of income taxes, when applicable, as a component of accumulated other comprehensive income (loss) in the Consolidated Statements of Stockholders’ Equity. The Company maintained interests in a small number of privately held companies primarily through its various venture capital funds. The Company’s venture capital investment portfolio, Ventures, invested in early-stage technology companies. These investments are generally made in connection with a round of financing with other third-party investors. Investments in which the Company’s interest is less than 20% and which are not classified as available-for-sale securities, are accounted for under the cost method of accounting, and are carried at the lower of cost or net realizable value. Under this method, the investment balance, originally recorded at is cost, is only adjusted for impairments to the investment. Gains and losses realized upon the sale of the investment are reflected in “Gains on investments in affiliates, net of tax” in the Company’s Consolidated Statements of Operations. If it is determined that the Company exercises significant influence over the investee company, then the equity method of accounting is used. For those investments in which the Company’s voting interest is between 20% and 50%, the equity method of accounting is generally used. Under this method, the investment balance, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the investee company as they occur, limited to the extent of the Company’s investment in, advances to and commitments for the investee. The Company assesses the need to record impairment losses on its investments and records such losses when the impairment of an investment is determined to be other than temporary in nature. The process of assessing whether a particular equity investment’s net realizable value is less than its carrying cost requires a significant amount of judgment. This valuation process is based primarily on information that the Company obtains from these privately held companies who are not subject to the same disclosure and audit requirements as the reports required of U.S. public companies. As such, the timeliness and completeness of the data may vary. Based on the Company’s evaluation, it recorded impairment charges related to its investments in privately held companies of approximately $42 thousand and $7.3 million for the fiscal years ended July 31, 2016 and 2015, respectively. These impairment losses are reflected in “Impairment of investments in affiliates” in the Company’s Consolidated Statements of Operations. At the time an equity method investee issues its stock to unrelated parties, the Company accounts for that share issuance as if the Company has sold a proportionate share of its investment. The Company records any gain or loss resulting from an equity method investee’s share issuance in its Consolidated Statements of Operations. Funds held for clients Funds held for clients represent assets that are restricted for use solely for the purposes of satisfying the obligations to remit client’s customer funds to the Company’s clients. These funds are classified as a current asset and a corresponding other current liability on the Company’s Consolidated Balance Sheets. Inventory Inventories are stated at the lower of cost or market. Cost is determined by both the moving average and the first-in, first-out methods. Materials that the Company typically procures on behalf of its clients that are included in inventory include materials such as compact discs, printed materials, manuals, labels, hardware accessories, hard disk drives, consumer packaging, shipping boxes and labels, power cords and cables for client-owned electronic devices. Inventories consisted of the following: July 31, 2017 July 31, (In thousands) Raw materials $ 24,129 $ 28,506 Work-in-process 713 590 Finished goods 9,527 11,174 $ 34,369 $ 40,270 The Company continuously monitors inventory balances and records inventory provisions for any excess of the cost of the inventory over its estimated market value. The Company also monitors inventory balances for obsolescence and excess quantities as compared to projected demands. The Company’s inventory methodology is based on assumptions about average shelf life of inventory, forecasted volumes, forecasted selling prices, contractual provisions with its clients, write-down history of inventory and market conditions. While such assumptions may change from period to period, in determining the net realizable value of its inventories, the Company uses the best information available as of the balance sheet date. If actual market conditions are less favorable than those projected, or the Company experiences a higher incidence of inventory obsolescence because of rapidly changing technology and client requirements, additional inventory provisions may be required. Once established, write-downs of inventory are considered permanent adjustments to the cost basis of inventory and cannot be reversed due to subsequent increases in demand forecasts. Accordingly, if inventory previously written down to its net realizable value is subsequently sold, gross profit margins may be favorably impacted. Long-Lived Assets, Goodwill and Other Intangible Assets The Company follows ASC Topic 360, “Property, Plant, and Equipment” (“ASC Topic 360”). Under ASC Topic 360, the Company tests certain long-lived assets or group of assets for recoverability whenever events or changes in circumstances indicate that the Company may not be able to recover the asset’s carrying amount. ASC Topic 360 defines impairment as the condition that exists when the carrying amount of a long-lived asset or group, including property and equipment and other definite-lived intangible assets, exceeds its fair value. The Company evaluates recoverability by determining whether the undiscounted cash flows expected to result from the use and eventual disposition of that asset or group cover the carrying value at the evaluation date. If the undiscounted cash flows are not sufficient to cover the carrying value, the Company measures an impairment loss as the excess of the carrying amount of the long-lived asset or group over its fair value. Management may use third party valuation experts to assist in its determination of fair value. The Company is required to test goodwill for impairment annually or if a triggering event occurs in accordance with the provisions of ASC Topic 350, “Goodwill and Other” (“ASC Topic 350”). The Company’s policy is to perform its annual impairment testing for all reporting units with goodwill on July 31 of each fiscal year. As a result of the annual impairment analysis and in connection with the preparation of its annual financial statements for the fiscal year ended July 31, 2015, the Company concluded that its remaining goodwill was fully impaired and recorded a $3.1 million non-cash goodwill impairment charge. The Company’s valuation methodology for assessing impairment of long-lived assets, goodwill and other intangible assets requires management to make judgments and assumptions based on historical experience and on projections of future operating performance. Management may use third party valuation advisors to assist in its determination of the fair value of reporting units subject to impairment testing. The Company operates in highly competitive environments and projections of future operating results and cash flows may vary significantly from actual results. If the assumptions used in estimating the valuations of the Company’s reporting units for purposes of impairment testing differ materially from actual future results, the Company may record impairment charges in the future and our financial results may be materially adversely affected. Restructuring Expenses The Company follows the provisions of ASC Topic 420, “Exit or Disposal Cost Obligations”, which addresses financial accounting and reporting for costs associated with exit or disposal activities. The statement requires companies to recognize costs associated with exit or disposal activities when a liability has been incurred rather than at the date of a commitment to an exit or disposal plan. The Company records liabilities that primarily include estimated severance and other costs related to employee benefits and certain estimated costs related to equipment and facility lease obligations and other service contracts. These contractual obligations principally represent future obligations under non-cancelable real estate leases. Restructuring estimates relating to real estate leases involve consideration of a number of factors including: potential sublet rental rates, estimated vacancy period for the property, brokerage commissions and certain other costs. Estimates relating to potential sublet rates and expected vacancy periods are most likely to have a material impact on the Company’s results of operations in the event that actual amounts differ significantly from estimates. These estimates involve judgment and uncertainties, and the settlement of these liabilities could differ materially from recorded amounts. Property and Equipment Property, plant and equipment are stated at cost. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Depreciation and amortization is provided on the straight-line basis over the estimated useful lives of the respective assets. The Company capitalizes certain computer software development costs when incurred in connection with developing or obtaining computer software for internal use. The estimated useful lives are as follows: Buildings 32 years Machinery & equipment 3 to 5 years Furniture & fixtures 5 to 7 years Automobiles 5 years Software 3 to 8 years Leasehold improvements Shorter of the remaining lease term or the estimated useful life of the asset Income Taxes Income taxes are accounted for under the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”), using the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC Topic 740 also requires that the deferred tax assets be reduced by a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. This methodology is subjective and requires significant estimates and judgments in the determination of the recoverability of deferred tax assets and in the calculation of certain tax liabilities. In accordance with ASC Topic 740, the Company applies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. ASC Topic 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. In accordance with the Company’s accounting policy, interest and penalties related to uncertain tax positions is included in the “income tax expense” line of the Consolidated Statements of Operations. See Note 14, “Income Taxes,” for additional information. Earnings (Loss) Per Share The following table reconciles earnings per share for the fiscal years ended July 31, 2017, 2016 and 2015. Twelve Months Ended July 31, 2017 2016 2015 (In thousands, except per share data) Net loss $ (25,827 ) $ (61,281 ) $ (18,429 ) Weighted average common shares outstanding 55,134 51,934 51,940 Weighted average common equivalent shares arising from dilutive stock options and restricted stock — — — Weighted average number of common and potential common shares 55,134 51,934 51,940 Basic and diluted net loss per share $ (0.47 ) $ (1.18 ) $ (0.35 ) Approximately 14.2 million, 21.1 million and 21.6 million common stock equivalent shares relating to the effects of outstanding stock options and restricted stock were excluded from the denominator in the calculation of diluted earnings per share for the fiscal years ended July 31, 2017, 2016 and 2015, respectively, as their effect would be anti-dilutive due to the fact that the Company recorded a net loss for those periods. Approximately 11.4 million and 16.5 million and 16.6 million common shares outstanding associated with the convertible Notes, using the if-converted method, were excluded from the denominator in the calculation of diluted earnings (loss) per share for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. Share-Based Compensation Plans The Company recognizes share-based compensation in accordance with the provisions of ASC Topic 718, “Compensation— Stock Compensation” (“ASC Topic 718”) which requires the measurement and recognition of compensation expense for all share- based payment awards made to employees and directors including employee stock options and employee stock purchases based on estimated fair values. The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods. The Company estimates forfeitures at the time of grant and revises those estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses a binomial-lattice option-pricing model (“binomial-lattice model”) for valuation of share-based awards with time-based vesting. The Company believes that the binomial-lattice model is an accurate model for valuing employee stock options since it reflects the impact of stock price changes on option exercise behavior. For performance-based awards, stock-based compensation expense is recognized over the expected performance achievement period of individual performance milestones when the achievement of each individual performance milestone becomes probable. For share-based awards based on market conditions, specifically, the Company’s stock price, the compensation cost and derived service periods are estimated using the Monte Carlo valuation method. The Company uses third party analyses to assist in developing the assumptions used in its binomial-lattice model and Monte Carlo valuations and the resulting fair value used to record compensation expense. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Any significant changes in these assumptions may materially affect the estimated fair value of the share-based award. Major Clients and Concentration of Credit Risk For the fiscal year ended July 31, 2017, 2016 and 2015, the Company’s 10 largest clients accounted for approximately 70%, 71% and 76% of consolidated net revenue, respectively. Sales to a consumer electronics client (“Client A”) accounted for approximately 15%, 13%, and 10% of the Company’s consolidated net revenue for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. Sales to another consumer electronics client (“Client B”) accounted for approximately 10%, 13%, and 19% of the Company’s consolidated net revenue for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. The Europe reportable segment reports revenue associated with Client A. All four reportable segments report revenues associated with Client B. A computing market client accounted for approximately 13% and 3% of the Company’s Net Accounts Receivable balance as of July 31, 2017 and 2016, respectively. A consumer electronics client accounted for approximately 11% and 16% of the Company’s Net Accounts Receivable balance as of July 31, 2017 and 2016, respectively. To manage risk, the Company performs ongoing credit evaluations of its clients’ financial condition. The Company generally does not require collateral on accounts receivable. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. Financial instruments which potentially subject the Company to concentrations of credit risk are cash, cash equivalents and accounts receivable. The Company’s cash equivalent portfolio is diversified and consists primarily of short-term investment grade securities placed with high credit quality financial institutions. Cash and cash equivalents are maintained at accredited financial institutions, and those and the balances associated with Funds Held for Clients are at times without and in excess of federally insured limits. The Company has never experienced any losses related to these balances and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with financial institutions. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date will be the first quarter of fiscal year 2019 using one of two retrospective application methods or a cumulative effect approach. The Company is evaluating the potential effects on the consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15 Presentation of Financial Statements—Going Concern (Subtopic 205-40), In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30)—Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. The Company adopted this guidance beginning in the first quarter of fiscal year 2017. Upon adoption, an entity must apply the guidance retrospectively to all prior periods presented in the financial statements. As such, the prior year consolidated balance sheets were also adjusted. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330), which provides guidance related to inventory measurement. The new standard requires entities to measure inventory at the lower of cost and net realizable value thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The new standard is effective for the Company beginning in the first quarter of fiscal year 2018. The adoption of the guidance is not expected to have material impact on the Company’s financial statement disclosures, results of operations and financial position. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This guidance allowed for adoption on either a prospective or retrospective basis. The Company had elected to early adopt this guidance on a prospective basis and, as a result, prior consolidated balance sheets were not retrospectively adjusted. The adoption of this guidance did increase the assets and liabilities balance on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to today’s accounting. This ASU will be effective for the Company beginning in the first quarter of fiscal year 2020. The Company is currently evaluating the effect the guidance will have on the Company’s financial statement disclosures, results of operations and financial p |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Jul. 31, 2017 | |
ACCOUNTS RECEIVABLE | (3) ACCOUNTS RECEIVABLE The Company’s unsecured accounts receivable are stated at original invoice amount less an estimate made for doubtful receivables based on a monthly review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer’s financial condition, credit history and current economic conditions. The Company writes off accounts receivable when management deems them uncollectible and records recoveries of accounts receivable previously written off when received. When accounts receivable are considered past due, the Company generally does not charge interest on past due balances. The allowance for doubtful accounts consisted of the following: July 31, 2017 2016 2015 (In thousands) Balance at beginning of year $ 489 $ 57 $ 63 Provisions charged to expense 132 458 — Accounts written off (5 ) (26 ) (6 ) $ 616 $ 489 $ 57 During the fourth quarter of fiscal 2013, as a part of its working capital management, the Company entered into a factoring agreement with a third party financial institution for the sale of certain accounts receivables without recourse. The activity under this agreement is accounted for as a sale of accounts receivable under ASC 860 “Transfers and Servicing”. This agreement relates exclusively to the accounts receivables of one of the Company’s significant clients. The amount sold varies each month based on the amount of underlying receivables and cash flow requirements of the Company. The factoring agreement is permitted under the Company’s Credit Facility agreement. The total amount of accounts receivable factored was $41.1 million and $0.9 million for the years ended July 31, 2017 and 2016, respectively. The cost incurred on the sale of these receivables was immaterial for years ended July 31, 2017 and 2016, respectively. The cost of selling these receivable is dependent upon the number of days between the sale date of the receivable and the date the client’s invoice is due and the interest rate. The interest rate associated with the sale of these receivables is equal to LIBOR plus 0.85%. The expense associated with the sale of these receivables is recorded as a component of selling, general and administrative expense in the accompanying consolidated statements of operations. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jul. 31, 2017 | |
PROPERTY AND EQUIPMENT | (4) PROPERTY AND EQUIPMENT Property and equipment at cost, consists of the following: July 31, 2017 2016 (In thousands) Buildings $ 24,476 $ 24,344 Machinery and equipment 24,504 24,676 Leasehold improvements 14,815 14,735 Software 48,536 44,579 Other 22,126 24,156 134,457 132,490 Less: Accumulated depreciation and amortization (115,902 ) (110,219 ) Property and equipment, net $ 18,555 $ 22,271 Assets under capital leases which are included in the amounts above are summarized as follows: July 31, 2017 2016 (In thousands) Machinery and equipment $ 492 $ 370 Other 13 118 505 488 Less: Accumulated depreciation and amortization (431 ) (455 ) $ 74 $ 33 The Company recorded depreciation expense of $8.2 million, $8.1 million and $8.7 million for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. Depreciation expense within the Americas, Asia, Europe, and e-Business was $1.2 million, $1.9 million, $1.8 million, and $0.6 million, respectively, for the year ended July 31, 2017, $1.5 million, $3.2 million, $2.6 million, and $0.8 million, respectively, for the year ended July 31, 2016, and $2.3 million, $3.2 million, $2.5 million, and $0.6 million, respectively, for the year ended July 31, 2015. Amortization of assets recorded under capital leases is included in the depreciation expense amounts. During the year ended, July 31, 2017, the Company recorded impairment charges totaling $0.2 million across multiple segments. During the year ended, July, 2016, the Company recorded an impairment charge of $0.3 million to adjust the carrying value of its building in Kildare, Ireland to its estimated fair value. During the year ended July 31, 2015, the Company recorded $0.3 million in impairment charges related to the write-down of leasehold improvements associated with the planned closure of a facility. These charges are reflected in “impairment of goodwill and long-lived assets” in the Consolidated Statements of Operations. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Jul. 31, 2017 | |
INVESTMENTS | (5) INVESTMENTS Trading securities During the year ended July 31, 2017, the Company received $8.0 million in proceeds associated with the sale of publicly traded securities (“Trading Securities”), which included a $0.9 million cash gain. During the year ended July 31, 2017, the Company recognized $2.2 million in net non-cash net gains associated with its Trading Securities. During the year ended July 31, 2016, the Company sold $57.2 million in publicly traded securities, with a realized gain of $6.4 million. During the year ended July 31, 2016, the Company received proceeds of $59.3 million associated with the sale of publicly traded securities. However, $2.1 million of these proceeds are related to trades executed during the year ended July 31, 2015. During the year ended July 31, 2016, the Company acquired publicly traded securities of $1.2 million. During the year ended July 31, 2016, the Company recognized $12.3 million in net non-cash losses associated with its Trading Securities. As of July 31, 2017, the Company had $11.9 million in investments in Trading Securities. As of July 31, 2016, the Company had $16.8 million in investments in Trading Securities, $12.6 million of which were the publicly traded convertible debentures. The Company’s purchases of the publicly traded convertible debentures were on the open market. The chairman of the board of the company issuing the publicly traded convertible debentures is also the chairman of the board of ModusLink Global Solutions, Inc. The Trading Securities were classified within Level 1 of the fair value hierarchy. Investments in affiliates The Company maintained interests in a small number of privately held companies. As of July 31, 2017 and 2016, the value of these investments was fully impaired. As of July 31, 2017, the Company is not committed to fund any follow-on investments in any of the portfolio companies. Investments in which the Company’s interest is less than 20% and which are not classified as available-for-sale securities, are accounted for under the cost method of accounting, and are carried at the lower of cost or net realizable value. Under this method, the investment balance, originally recorded at is cost, is only adjusted for impairments to the investment. Gains and losses realized upon the sale of the investment are reflected in “Gains on investments in affiliates, net of tax” in the Company’s Consolidated Statements of Operations. For the fiscal years ended July 31, 2017, 2016 and 2015, the Company recorded gains of $1.3 million, $0.8 million and $0.2 million, respectively, associated with its cost method investments. If it is determined that the Company exercises significant influence over the investee company, then the equity method of accounting is used. For those investments in which the Company’s voting interest is between 20% and 50%, the equity method of accounting is generally used. Under this method, the investment balance, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the investee company as they occur, limited to the extent of the Company’s investment in, advances to and commitments for the investee. During the year ended July 31, 2015, the Company became aware in various quarters that there may be indicators of impairment for certain investments in the portfolio of companies. During the same year, the Company performed evaluations of its portfolio companies and determined that due to market conditions and their recent performance the portfolio companies were unable to secure potential investors or buyers to fund them as a going concern. As a result, these investments were impaired and the Company recorded impairment charges of $7.3 million during the year ended July 31, 2015. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jul. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | (6) GOODWILL AND INTANGIBLE ASSETS The Company conducted its annual goodwill impairment test on July 31 of each fiscal year ended July 31, 2015. In addition, if and when events or circumstances changed that would more likely than not reduce the fair value of any of its reporting units below its carrying value, an interim test would be performed. In making this assessment, the Company relied on a number of factors including operating results, business plans, economic projections, anticipated future cash flows, transactions and marketplace data. The Company’s reporting units are the same as the operating segments: Americas, Asia, Europe and e-Business. If the carrying value of a reporting unit exceeds its fair value, the Company calculates the implied fair value of the reporting unit’s goodwill and compares it to the carrying value. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recorded for the difference. The fair value of a reporting unit is primarily based on a discounted cash flow (“DCF”) method. The DCF approach requires that the Company forecast future cash flows for the reporting unit and discount the cash flow streams based on a weighted average cost of capital that is derived, in part, from comparable companies within similar industries. The DCF calculations also include a terminal value calculation that is based upon an expected long-term growth rate for the applicable reporting unit. The Company believes that the use of the income approach is appropriate due to lack of comparability to guideline companies and the lack of comparable transactions under the market approach. The income approach incorporates many assumptions including future growth rates, discount factors, expected capital expenditures and income tax cash flows. The carrying values of each reporting unit include assets and liabilities which relate to the reporting unit’s operations. During the fourth quarter of fiscal year 2015, the Company completed its annual impairment analysis of goodwill and determined that the fair value of the reporting unit, derived from forecasted cash flows, did not exceed its carrying value. As a result of the annual impairment analysis and in connection with the preparation of its annual financial statements for the fiscal year ended July 31, 2015, the Company concluded that its remaining goodwill was fully impaired and recorded a $3.1 million non-cash goodwill impairment charge. The impairment charge was not deductible for tax purposes. The impairment charge did not affect the Company’s liquidity or cash flows and had no effect on the Company’s compliance with the financial covenants under its credit agreement. The intangible asset amortization relates to certain amortizable intangible assets acquired by the Company in connection with its acquisitions. The intangible assets were fully amortized as of July 31, 2015. Amortization expense for intangible assets for the fiscal years ended July 31, 2015 was $0.7 million. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Jul. 31, 2017 | |
RESTRUCTURING | (7) RESTRUCTURING The following tables summarize the activity in the restructuring accrual for the fiscal years ended July 31, 2017, 2016, and 2015: Employee Contractual Total (In thousands) Accrued restructuring balance at July 31, 2014 $ 1,687 $ 598 $ 2,285 Restructuring charges 5,063 324 5,387 Restructuring adjustments (193 ) (64 ) (257 ) Cash paid (4,949 ) (691 ) (5,640 ) Non-cash adjustments (171 ) (76 ) (247 ) Accrued restructuring balance at July 31, 2015 1,437 91 1,528 Restructuring charges 6,025 1,536 7,561 Restructuring adjustments (108 ) (32 ) (140 ) Cash paid (5,244 ) (641 ) (5,885 ) Non-cash adjustments (36 ) 1 (35 ) Accrued restructuring balance at July 31, 2016 2,074 955 3,029 Restructuring charges 1,853 439 2,292 Restructuring adjustments (416 ) 91 (325 ) Cash paid (3,357 ) (1,419 ) (4,776 ) Non-cash adjustments (54 ) 20 (34 ) Accrued restructuring balance at July 31, 2017 $ 100 $ 86 $ 186 Restructuring and other costs for the year ended July 31, 2017 primarily included continuing charges for personnel reductions and facility consolidations in an effort to streamline operations across our global supply chain operations. The payments of employee-related charges were substantially completed during the fiscal year ended July 31, 2017. The remaining contractual obligations include facility lease obligations for vacant space resulting from the previous restructuring activities of the Company. The Company anticipates that these contractual obligations will be substantially fulfilled by the end of December 2017. During the fiscal year ended July 31, 2017, the Company recorded a net restructuring charge of $2.0 million. Of this amount, $1.5 million primarily related to the workforce reduction of 78 employees across all operating segments, and $0.5 million related to contractual obligations. During the fiscal year ended July 31, 2016, the Company recorded a net restructuring charge of $7.4 million. Of this amount, $5.9 million primarily related to the workforce reduction of 228 employees across all operating segments, and $1.5 million related to contractual obligations. During the fiscal year ended July 31, 2015, the Company recorded a net restructuring charge of $5.1 million. Of this amount, $4.9 million primarily related to the workforce reduction of 235 employees across all operating segments, and $0.2 million related to contractual obligations The net restructuring charges for the fiscal years ended July 31, 2017, 2016 and 2015 would have been allocated as follows had the Company recorded the expense and adjustments within the functional department of the restructured activities: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Cost of revenue $ 563 $ 4,812 $ 4,718 Selling, general and administrative 1,404 2,609 412 $ 1,967 $ 7,421 $ 5,130 The following tables summarize the restructuring accrual by operating segment for the fiscal years ended July 31, 2017, 2016 and 2015: Americas Asia Europe e-Business Consolidated (In thousands) Accrued restructuring balance at July 31, 2014 $ 195 $ 274 $ 1,750 $ 66 $ 2,285 Restructuring charges 1,073 1,056 3,158 100 5,387 Restructuring adjustments (164 ) (59 ) 7 (41 ) (257 ) Cash paid (869 ) (1,106 ) (3,655 ) (10 ) (5,640 ) Non-cash adjustments — 88 (234 ) (101 ) (247 ) Accrued restructuring balance at July 31, 2015 235 253 1,026 14 1,528 Restructuring charges 1,885 2,293 2,353 1,030 7,561 Restructuring adjustments — (46 ) (94 ) — (140 ) Cash paid (1,258 ) (1,563 ) (2,895 ) (169 ) (5,885 ) Non-cash adjustments — (43 ) 8 — (35 ) Accrued restructuring balance at July 31, 2016 862 894 398 875 3,029 Restructuring charges 500 972 698 122 2,292 Restructuring adjustments (162 ) (154 ) (75 ) 66 (325 ) Cash paid (1,172 ) (1,672 ) (984 ) (948 ) (4,776 ) Non-cash adjustments 23 (40 ) (14 ) (3 ) (34 ) Accrued restructuring balance at July 31, 2017 $ 51 $ — $ 23 $ 112 $ 186 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Jul. 31, 2017 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | (8) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following schedules reflect the components of “Accrued expenses” and “Other Current Liabilities”: July 31, July 31, (In thousands) Accrued taxes $ 2,272 $ 3,068 Accrued compensation 10,678 9,590 Accrued interest 1,366 1,346 Accrued audit, tax and legal 2,759 2,544 Accrued contract labor 1,632 2,966 Accrued other 19,191 18,226 $ 37,898 $ 37,740 July 31, July 31, (In thousands) Accrued pricing liabilities $ 18,882 $ 18,882 Other 7,259 8,227 $ 26,141 $ 27,109 As of July 31, 2017 and 2016, the Company had accrued pricing liabilities of approximately $18.9 million. As previously reported by the Company, several principal adjustments were made to its historic financial statements for periods ending on or before January 31, 2012, the most significant of which related to the treatment of vendor rebates in its pricing policies. Where the retention of a rebate or a mark-up was determined to have been inconsistent with a client contract (collectively referred to as “pricing adjustments”), the Company concluded that these amounts were not properly recorded as revenue. Accordingly, revenue was reduced by an equivalent amount for the period that the rebate was estimated to have been affected. A corresponding liability for the same amount was recorded in that period (referred to as accrued pricing liabilities). The Company believes that it may not ultimately be required to pay all of the accrued pricing liabilities, due in part to the nature of the interactions with its clients. The remaining accrued pricing liabilities at July 31, 2017 will be derecognized when there is sufficient information for the Company to conclude that such liabilities have been extinguished, which may occur through payment, legal release, or other legal or factual determination. |
DEBT
DEBT | 12 Months Ended |
Jul. 31, 2017 | |
DEBT | (9) DEBT Notes Payable On March 18, 2014, the Company entered into an indenture (the “Indenture”) with Wells Fargo Bank, National Association, as trustee, relating to the Company’s issuance of $100 million of 5.25% Convertible Senior Notes (the “Notes”). The Notes bear interest at the rate of 5.25% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2014. The Notes will mature on March 1, 2019, unless earlier repurchased by the Company or converted by the holder in accordance with their terms prior to such maturity date. Holders of the Notes may convert all or any portion of their notes, in multiples of $1,000 principal amount, at their option at any time prior to the close of business or the business day immediately preceding the maturity date. Each $1,000 of principal of the Notes will initially be convertible into 166.2593 shares of our common stock, which is equivalent to an initial conversion price of approximately $6.01 per share, subject to adjustment upon the occurrence of certain events, or, if the Company obtains the required consent from its stockholders, into shares of the Company’s common stock, cash or a combination of cash and shares of its common stock, at the Company’s election. If the Company has received stockholder approval, and it elects to settle conversions through the payment of cash or payment or delivery of a combination of cash and shares, the Company’s conversion obligation will be based on the volume weighted average prices (“VWAP”) of its common stock for each VWAP trading day in a 40 VWAP trading day observation period. The Notes and any of the shares of common stock issuable upon conversion have not been registered. As of July 31, 2017, the if-converted value of the Notes did not exceed the principal value of the Notes. Holders will have the right to require the Company to repurchase their Notes, at a repurchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest, upon the occurrence of certain fundamental changes, subject to certain conditions. No fundamental changes occurred during the year ended July 31, 2017. The Company may not redeem the Notes prior to the mandatory date, and no sinking fund is provided for the Notes. The Company will have the right to elect to cause the mandatory conversion of the Notes in whole, and not in part, at any time on or after March 6, 2017, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company notifies holders of its election to mandatorily convert the Notes, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company notifies holders of its election to mandatorily convert the notes. Per the Indenture, if the Notes are assigned a restricted CUSIP or the Notes are not otherwise freely tradable by holders at any time during the three months immediately preceding as of the 365th day after the last date of original issuance of the Notes, the Company shall pay additional interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the restrictive legend on the Notes has been removed. The restrictive legend was removed on August 26, 2015 and, as such, the Company paid $0.2 million in additional interest associated with this restriction. The Company has valued the debt using similar nonconvertible debt as of the original issuance date of the Notes and bifurcated the conversion option associated with the Notes from the host debt instrument and recorded the conversion option of $28.1 million in stockholders’ equity prior to the allocation of debt issuance costs. The initial value of the equity component, which reflects the equity conversion feature, is equal to the initial debt discount. The resulting debt discount on the Notes is being accreted to interest expense at the effective interest rate over the estimated life of the Notes. The equity component is included in the additional paid-in-capital portion of stockholders’ equity on the Company’s consolidated balance sheet. In addition, the debt issuance costs of $3.4 million are allocated between the liability and equity components in proportion to the allocation of the proceeds. During the first quarter of fiscal year 2017, the Company adopted ASU No. 2015-03. As such, the issuance costs allocated to the liability component ($2.5 million) are capitalized as a reduction of the principal amount of the Notes payable on the Company’s balance sheet and amortized, using the effective-interest method, as additional interest expense over the term of the Notes. The issuance costs allocated to the equity component is recorded as a reduction to additional paid-in capital. During the year ended July 31, 2017, the Company purchased $2.0 million in face value of the Notes in the open market at a purchase price of $1.8 million. The gain of $0.1 million on this transaction is presented as a component of other gains and losses. The fair value of the Company’s Notes payable, calculated as of the closing price of the traded securities, was $63.9 million and $51.0 million as of July 31, 2017 and July 31, 2016, respectively. This value does not represent the settlement value of these long-term debt liabilities to the Company. The fair value of the Notes payable could vary each period based on fluctuations in market interest rates, as well as changes to our credit ratings. The Notes payable are traded and their fair values are based upon traded prices as of the reporting dates. As of July 31, 2017 and July 31, 2016, the net carrying value of the Notes was $59.8 million and $57.2 million, respectively. July 31, July 31, (In thousands) Carrying amount of equity component (net of allocated debt issuance costs) $ 26,961 $ 27,099 Principal amount of Notes $ 67,625 $ 69,625 Unamortized debt discount (7,227 ) (11,443 ) Unamortized debt issuance costs (640 ) (1,013 ) Net carrying amount $ 59,758 $ 57,169 As of July 31, 2017, the remaining period over which the unamortized discount will be amortized is 19 months. Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Interest expense related to contractual interest coupon $ 3,651 $ 5,159 $ 5,310 Interest expense related to accretion of the discount 3,919 4,967 4,473 Interest expense related to debt issuance costs 347 439 344 $ 7,917 $ 10,565 $ 10,127 During the year ended July 31, 2017, 2016 and 2015, the Company recognized interest expense of $7.9 million, $10.6 million and $10.1 million associated with the Notes, respectively. The effective interest rate on the Notes, including amortization of debt issuance costs and accretion of the discount, is 13.9%. The notes bear interest of 5.25%. PNC Bank Credit Facility On June 30, 2014, two direct and wholly owned subsidiaries of the Company (the “Borrowers”) entered into a revolving credit and security agreement (the “Credit Agreement”), as borrowers and guarantors, with PNC Bank and National Association, as lender and as agent, respectively. The Credit Agreement has a five (5) year term which expires on June 30, 2019. It includes a maximum credit commitment of $50.0 million, is available for letters of credit (with a sublimit of $5.0 million) and has a $20.0 million uncommitted accordion feature. The actual maximum credit available under the Credit Agreement varies from time to time and is determined by calculating the applicable borrowing base, which is based upon applicable percentages of the values of eligible accounts receivable and eligible inventory minus reserves determined by the Agent (including other reserves that the Agent may establish from time to time in its permitted discretion), all as specified in the Credit Agreement. Generally, borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the Borrowers’ option, either (a) LIBOR (adjusted to reflect any required bank reserves) for an interest period equal to one, two or three months (as selected by the Borrowers) plus a margin of 2.25% per annum or (b) a base rate determined by reference to the highest of (1) the base commercial lending rate publicly announced from time to time by PNC Bank, National Association, (2) the sum of the Federal Funds Open Rate in effect on such day plus one half of one percent (0.5%) per annum, or (3) the LIBOR rate (adjusted to reflect any required bank reserves) in effect on such day plus 1.00% per annum. In addition to paying interest on outstanding principal under the Credit Agreement, the Borrowers are required to pay a commitment fee, in respect of the unutilized commitments thereunder, of 0.25% per annum, paid quarterly in arrears. The Borrowers are also required to pay a customary letter of credit fee equal to the applicable margin on revolving credit LIBOR loans and fronting fees. Obligations under the Credit Agreement are guaranteed by the Borrowers’ existing and future direct and indirect wholly-owned domestic subsidiaries, subject to certain limited exceptions; and the Credit Agreement is secured by security interests in substantially all the Borrowers’ assets and the assets of each subsidiary guarantor, whether owned as of the closing or thereafter acquired, including a pledge of 100.0% of the equity interests of each subsidiary guarantor that is a domestic entity (subject to certain limited exceptions) and 65.0% of the voting equity interests of any direct first tier foreign entity owned by either Borrower or by a subsidiary guarantor. The Company is not a borrower or a guarantor under the Credit Agreement. The Credit Agreement contains certain customary negative covenants, which include limitations on mergers and acquisitions, the sale of assets, liens, guarantees, investments, loans, capital expenditures, dividends, indebtedness, changes in the nature of business, transactions with affiliates, the creation of subsidiaries, changes in fiscal year and accounting practices, changes to governing documents, compliance with certain statutes, and prepayments of certain indebtedness. The Credit Agreement also contains certain customary affirmative covenants (including periodic reporting obligations) and events of default, including upon a change of control. The Credit Agreement requires compliance with certain financial covenants providing for maintenance of specified liquidity, maintenance of a minimum fixed charge coverage ratio and/or maintenance of a maximum leverage ratio following the occurrence of certain events and/or prior to taking certain actions, all as more fully described in the Credit Agreement. The Company believes that the Credit Agreement provides greater financial flexibility to the Company and the Borrowers and may enhance their ability to consummate one or several larger and/or more attractive acquisitions and should provide the Company’s clients and/or potential clients with greater confidence in the Company’s and the Borrowers’ liquidity. During the year ended July 31, 2017, the Company did not meet the criteria that would cause its financial covenants to be applicable. As of July 31, 2017 and 2016, the Company did not have any balance outstanding on the PNC Bank credit facility. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jul. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | (10) COMMITMENTS AND CONTINGENCIES The Company leases facilities and certain other machinery and equipment under various non-cancelable operating leases and executory contracts expiring through December 2021. Certain non-cancelable leases are classified as capital leases and the leased assets are included in property, plant and equipment, at cost. Future annual minimum payments, including restructuring related obligations as of July 31, 2017, are as follows: Operating Capital Purchase Convertible Total (In thousands) For the fiscal years ended July 31: 2018 $ 9,947 $ 64 $ 30,998 $ 3,550 $ 44,559 2019 6,318 101 — 71,175 77,594 2020 3,398 55 — — 3,453 2021 2,358 55 — — 2,413 2022 2,160 30 — — 2,190 Thereafter — — — — — $ 24,181 $ 305 $ 30,998 $ 74,725 $ 130,209 Total rent and equipment lease expense charged to continuing operations was $15.6 million, $17.3 million and $19.7 million for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. From time to time, the Company agrees to provide indemnification to its clients in the ordinary course of business. Typically, the Company agrees to indemnify its clients for losses caused by the Company. As of July 31, 2017, the Company had no recorded liabilities with respect to these arrangements. Purchase obligations represent an estimate of all open purchase orders and contractual obligations in the ordinary course of business for which the Company has not received the goods or services. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust the Company’s requirements based on its business needs prior to the delivery of goods or performance of services. Legal Proceedings On June 8, 2015, Sean Peters, a former employee filed a complaint (the “Complaint”) against ModusLink Corporation (together, the “parties”) in Superior Court of California asserting claims, among other things, for failure to pay wages, breach of contract, wrongful retaliation and termination, fraud, violations of California Business and Professions Code Section 17200, et seq., and civil penalties pursuant to California Labor Code Sections and pursuant to the California Private Attorney General Act, seeking over $1.0 million in damages, attorneys’ fees and costs and penalties. ModusLink filed an Answer to the Complaint making a general denial and asserting various affirmative defenses. The parties agreed to mediate the matter and on June 29, 2017, the parties attended a confidential mediation. At mediation ModusLink Corporation and its insurance carrier agreed to pay an immaterial amount to settle the matter. On May 12, 2017, the Excise Tax Branch of the Internal Revenue Service issued a claim associated with the Company’s compliance with the self-assessment of excise tax on Ozone Depleting Chemicals. The Company is objecting to the assessment on a number of technical and substantive grounds, and plans to vigorously defend itself against this claim. Currently the Company is unable to determine the probability of an unfavorable outcome or a range of outcomes. Accordingly, the Company has not recorded a reserve associated with this matter. |
DEFINED BENEFIT PENSION PLANS
DEFINED BENEFIT PENSION PLANS | 12 Months Ended |
Jul. 31, 2017 | |
DEFINED BENEFIT PENSION PLANS | (11) DEFINED BENEFIT PENSION PLANS During the year ended July 31, 2017, the Company terminated the defined benefit pension plan (the “Taiwan Plan”) covering certain of its employees in its Taiwan facility. As of the Taiwan Plan termination date, the fair value of the Taiwan Plan assets were in excess of the project benefit obligation. The Company received $0.9 million in cash proceeds associated with the termination of this defined benefit pension plan. The termination of this defined benefit pension plan did not result in a gain or loss for the year ended July 31, 2017. As of July 31, 2017, the Company sponsored two defined benefit pension plans covering certain of its employees in its Netherlands facility and one unfunded defined benefit pension plan covering certain of its employees in Japan. Pension costs are actuarially determined. The plan assets are primarily related to the defined benefit plan associated with the Company’s Netherlands facility. It consists of an insurance contract that guarantees the payment of the funded pension entitlements. Insurance contract assets are recorded at fair value, which is determined based on the cash surrender value of the insured benefits which is the present value of the guaranteed funded benefits. Insurance contracts are valued using unobservable inputs, primarily by discounting expected future cash flows relating to benefits paid from a notional investment portfolio in order to determine the cash surrender value of the policy. The following table presents the plan assets measured at fair value on a recurring basis as of July 31, 2017 and 2016, classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2017 Asset Level 1 Level 2 Level 3 Insurance contract $ 20,726 98 % $ — $ — $ 20,726 Other investments 478 2 % — — 478 $ 21,204 100 % $ — $ — $ 21,204 Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2016 Asset Level 1 Level 2 Level 3 Insurance contract $ 24,012 94 % $ — $ — $ 24,012 Other investments 1,461 6 % — — 1,461 $ 25,473 100 % $ — $ — $ 25,473 The aggregate change in benefit obligation and plan assets related to these plans was as follows: July 31, 2017 2016 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 31,667 $ 25,617 Service cost 700 632 Interest cost 573 637 Actuarial (gain) loss (6,814 ) 5,351 Employee contributions 103 120 Benefits and administrative expenses paid (157 ) (269 ) Adjustments — 156 Settlements (279 ) (55 ) Effect of curtailment — (941 ) Currency translation 1,671 419 Benefit obligation at end of year 27,464 31,667 Change in plan assets Fair value of plan assets at beginning of year 25,473 19,350 Actual return on plan assets (5,005 ) 5,556 Employee contributions 104 120 Employer contributions (withdrawals), net (342 ) 539 Settlements (279 ) (55 ) Benefits and administrative expenses paid (157 ) (269 ) Currency translation 1,410 232 Fair value of plan assets at end of year 21,204 25,473 Funded status Assets — 889 Current liability (12 ) (68 ) Noncurrent liability (6,248 ) (7,015 ) Net amount recognized in statement of financial position as a noncurrent asset (liability) $ (6,260 ) $ (6,194 ) The accumulated benefit obligation was approximately $25.5 million and $29.0 million at July 31, 2017 and 2016, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows: July 31, 2017 2016 (In thousands) Projected benefit obligation $ 27,464 $ 31,667 Accumulated benefit obligation $ 25,531 $ 29,031 Fair value of plan assets $ 21,204 $ 24,584 Components of net periodic pension cost were as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Service cost $ 700 $ 632 $ 658 Interest costs 573 637 604 Expected return on plan assets (457 ) (491 ) (537 ) Amortization of net actuarial (gain) loss 201 222 64 Curtailment gain — (844 ) (164 ) Net periodic pension costs $ 1,017 $ 156 $ 625 The amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2018 is approximately $4.7 million related to amortization of a net actuarial loss and prior service cost. Assumptions: Weighted-average assumptions used to determine benefit obligations was as follows: Twelve Months Ended July 31, 2017 2016 2015 Discount rate 2.47 % 1.72 % 2.46 % Rate of compensation increase 1.93 % 1.92 % 1.95 % Weighted-average assumptions used to determine net periodic pension cost was as follows: Twelve Months Ended July 31, 2017 2016 2015 Discount rate 1.69 % 1.95 % 3.05 % Expected long-term rate of return on plan assets 1.69 % 2.41 % 3.02 % Rate of compensation increase 1.91 % 1.83 % 2.41 % The discount rate reflects the Company’s best estimate of the interest rate at which pension benefits could be effectively settled as of the valuation date. It is based on the Mercer Yield Curve for the Eurozone as per July 31, 2017 for the appropriate duration of the plan. To develop the expected long-term rate of return on assets assumptions consideration is given to the current level of expected returns on risk free investments, the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for the future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. Benefit payments: The following table summarizes expected benefit payments from the plans through fiscal year 2026. Actual benefit payments may differ from expected benefit payments. The minimum required contributions to the plans are expected to be approximately $0.2 million in fiscal year 2018. Pension Benefit (in thousands) For the fiscal years ended July 31: 2018 168 2019 211 2020 210 2021 252 2022 254 Next 5 years 2,095 The current target allocations for plan assets are primarily insurance contracts. The market value of plan assets using Level 3 inputs is approximately $21.2 million. Valuation Technique: Benefit obligations are computed using the projected unit credit method. Benefits are attributed to service based on the plan’s benefit formula. Cumulative gains and losses in excess of 10% of the greater of the pension benefit obligation or market-related value of plan assets are amortized over the expected average remaining future service of the current active membership. |
OTHER GAINS (LOSSES), NET
OTHER GAINS (LOSSES), NET | 12 Months Ended |
Jul. 31, 2017 | |
OTHER GAINS (LOSSES), NET | (12) OTHER GAINS (LOSSES), NET The following schedule reflects the components of “Other gains (losses), net”: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Foreign currency exchange gain (losses) $ 199 $ (593 ) $ 1,796 Gains (losses) on Trading Securities 3,128 (5,920 ) 13,611 Other, net (127 ) 756 (402 ) $ 3,200 $ (5,757 ) $ 15,005 Other gains (losses), net totaled approximately $3.2 million for the fiscal years ended July 31, 2017. The balance consists primarily of $2.2 million and $0.9 million, in net non-cash and cash gains, respectively, associated with its Trading Securities, and $0.2 million in net realized and unrealized foreign exchange gains, offset by other gain and losses. Other gains (losses), net totaled approximately $(5.8) million for the fiscal years ended July 31, 2016. The balance consists primarily of $(12.3) million and $6.4 million, in net non-cash and cash gains and (losses), respectively, associated with its Trading Securities, $0.8 million in non-cash gains associated with the repurchase of the Company’s Notes and $(0.6) million in net realized and unrealized foreign exchange losses, offset by other gain and losses. Other gains (losses), net totaled approximately $15.0 million for the fiscal years ended July 31, 2015. The balance consists primarily of $12.8 million and $0.8 million, in net non-cash and cash gains, respectively, associated with its Trading Securities and $1.8 million in net realized and unrealized foreign exchange gains, offset by other gain and losses. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Jul. 31, 2017 | |
SHARE-BASED PAYMENTS | (13) SHARE-BASED PAYMENTS Stock Option Plans During the fiscal year ended July 31, 2017, the Company had outstanding awards for stock options under two plans: the 2010 Incentive Award Plan (the “2010 Plan”) and the 2005 Non-Employee Director Plan (the “2005 Plan”). Historically, the Company has had the 2004 Stock Incentive Plan (the “2004 Plan”), the 2002 Non-Officer Employee Stock Incentive Plan (the “2002 Plan”), and the 2000 Stock Incentive Plan (the “2000 Plan”). Options granted under the 2010 Plan are generally exercisable as to 25% of the shares underlying the options beginning one year after the date of grant, with the option being exercisable as to the remaining shares in equal monthly installments over the next three years. The Company may also grant awards other than stock options under the 2010 Plan. Options granted under the 2005 plan are exercisable in equal monthly installments over three years, and have a term of ten years. As of December 2010, no additional grants may be issued under this plan. Stock options granted under all other plans have contractual terms of seven years. During the fiscal year ended July 31, 2013, under the 2010 Plan, the Company issued to certain officers options that vest based on market conditions, specifically, the performance of the Company’s stock (the “Market Options”). The Market Options have a seven-year term and vest and become exercisable as to 20% of the total number of shares subject to the Market Option on each of the first five anniversaries of the grant date, subject to a minimum average share price being achieved as of each such vesting date (the “Price Performance Threshold”), which shall be (i) 1.5 times the exercise price, (ii) 2 times the exercise price, (iii) 2.5 times the exercise price, (iv) 3 times the exercise price and (v) 3.5 times the exercise price, respectively. If the specified minimum average share price for the applicable anniversary date is not achieved, 20% of the total number of shares subject to the Market Option shall not vest and become exercisable but may vest on the subsequent anniversary date if the minimum average share price related to the earlier anniversary date is achieved or exceeded on the subsequent anniversary date. These options were no longer outstanding as of July 31, 2017. Under the 2010 Plan, pursuant to which the Company may grant stock options, stock appreciation rights, restricted stock awards and other equity-based awards for the issuance of (i) 5,000,000 shares of common stock of the Company plus (ii) the number of shares subject to outstanding awards under the Company’s 2000 Plan, 2002 Plan and 2004 Plan (collectively, the “Prior Plans”) that expire or are forfeited following December 8, 2010, the effective date of the 2010 Plan. As of December 8, 2010, the Company ceased making any further awards under its Prior Plans. As of December 8, 2010, the effective date of the 2010 Plan, there were an additional 2,922,258 shares of common stock underlying equity awards issued under the Company’s Prior Plans. This amount represents the maximum number of additional shares that may be added to the 2010 Plan should these awards expire or be forfeited subsequent to December 8, 2010. Any awards that were outstanding under the Prior Plans as of the effective date continued to be subject to the terms and conditions of such Prior Plan. As of July 31, 2017, 5,299,305 shares were available for future issuance under the 2010 Plan. The Board of Directors administers all stock plans, approves the individuals to whom options will be granted, and determines the number of shares and exercise price of each option and may delegate this authority to a committee of the Board or to certain officers of the Company in accordance with SEC regulations and applicable Delaware law. Employee Stock Purchase Plan The Company offers to its employees an Employee Stock Purchase Plan, (the “ESPP”) under which an aggregate of 600,000 shares of the Company’s stock may be issued. Employees who elect to participate in the ESPP instruct the Company to withhold a specified amount through payroll deductions during each quarterly period. On the last business day of each applicable quarterly payment period, the amount withheld is used to purchase the Company’s common stock at a purchase price equal to 85% of the lower of the market price on the first or last business day of the quarterly period. During the fiscal years ended July 31, 2017, 2016 and 2015, the Company issued approximately 11,000, 30,000 and 15,000 shares, respectively, under the ESPP. Approximately 136,000 shares are available for future issuance as of July 31, 2017. Stock Option Valuation and Expense Information The following table summarizes share-based compensation expense related to employee stock options, employee stock purchases and nonvested shares for the fiscal years ended July 31, 2017, 2016 and 2015: Twelve Months Ended July 31, 2017 2016 2015 Cost of revenue $ 53 $ 96 $ 171 Selling, general and administrative 628 1,030 1,586 $ 681 $ 1,126 $ 1,757 The Company estimates the fair value of stock option awards on the date of grant using a binomial-lattice model. No employee stock options were granted during the fiscal year ended July 31, 2017. The weighted-average grant date fair value of employee stock options granted during the fiscal years ended July 31, 2016, and 2015 was $1.11 and $1.59, respectively, using the binomial-lattice model with the following weighted-average assumptions: Twelve Months Ended July 31, 2016 2015 Expected volatility 55.80 % 56.30 % Risk-free interest rate 1.28 % 1.24 % Expected term (in years) 4.41 4.41 Expected dividend yield 0.00 % 0.00 % The volatility assumption for fiscal years 2016 and 2015 is based on the weighted-average of the historical volatility of the Company’s common shares for a period equal to the expected term of the stock option awards. The weighted-average risk-free interest rate assumption is based upon the interpolation of various U.S. Treasury rates, as of the month of the grants. The expected term of employee stock options represents the weighted-average period the stock options are expected to remain outstanding and is based on historical option activity. The determination of the expected term of employee stock options assumes that employees’ exercise behavior is comparable to historical option activity. The binomial-lattice model estimates the probability of exercise as a function of time based on the entire history of exercises and cancellations on all past option grants made by the Company. The expected term generated by these probabilities reflects actual and anticipated exercise behavior of options granted historically. As share-based compensation expense recognized in the Consolidated Statements of Operations for the fiscal years ended July 31, 2017, 2016 and 2015 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience. Stock Options A summary of option activity for the fiscal year ended July 31, 2017 is as follows: Number Weighted- Weighted-Average Aggregate (in thousands, except exercise price and years) Stock options outstanding, July 31, 2016 1,368 $ 4.36 Granted — — Exercised — — Forfeited or expired (795 ) 4.37 Stock options outstanding, July 31, 2017 573 4.36 2.70 $ — Stock options exercisable, July 31, 2017 532 $ 4.40 2.60 $ — As of July 31, 2017, unrecognized share-based compensation related to stock options was approximately $0.1 million. This cost is expected to be expensed over a weighted average period of 0.9 years. The aggregate intrinsic value of options exercised during the fiscal years ended July 31, 2017, 2016 and 2015 was immaterial. As of July 31, 2017, there were 0.6 million stock options that were vested and expected to vest in the future with a weighted- average remaining contractual term of 2.71 years. The aggregate intrinsic value of these awards is immaterial. Nonvested Stock Nonvested stock consists of shares of common stock that are subject to restrictions on transfer and risk of forfeiture until the fulfillment of specified conditions. Nonvested stock is expensed ratably over the term of the restriction period, ranging from one to five years unless there are performance restrictions placed on the nonvested stock, in which case the nonvested stock is expensed using graded vesting. Nonvested stock compensation expense for the fiscal years ended July 31, 2017, 2016 and 2015 was $0.5 million, $0.7 million and $0.6 million, respectively. A summary of the activity of the Company’s nonvested stock for the fiscal year ended July 31, 2017, is as follows: Number Weighted-Average (share amounts in thousands) Nonvested stock outstanding, July 31, 2016 258 $ 2.48 Granted 296 — Vested (245 ) 2.45 Forfeited (13 ) 3.05 Nonvested stock outstanding, July 31, 2017 296 $ — The fair value of nonvested shares is determined based on the market price of the Company’s common stock on the grant date. The total grant date fair value of nonvested stock that vested during the fiscal years ended July 31, 2017, 2016 and 2015 was approximately $0.6 million, $1.0 million and $0.3 million, respectively. As of July 31, 2017, there was approximately $0.2 million of total unrecognized compensation cost related to nonvested stock to be recognized over a weighted-average period of 0.4 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jul. 31, 2017 | |
INCOME TAXES | (14) INCOME TAXES The components of loss from continuing operations before provision for income taxes are as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Income (loss) from operations before income taxes: U.S. $ (34,884 ) $ (69,861 ) $ (8,476 ) Foreign 10,475 13,234 (7,878 ) Total loss from operations before income taxes $ (24,409 ) $ (56,627 ) $ (16,354 ) The components of income tax expense have been recorded in the Company’s consolidated financial statements as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Income tax expense from continuing operations 2,696 5,443 2,283 Total income tax expense $ 2,696 $ 5,443 $ 2,283 The components of income tax expense from continuing operations consist of the following: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Current provision Federal $ — $ — $ — State — — — Foreign 2,298 3,090 4,323 2,298 3,090 4,323 Deferred provision: Federal — — — State — — — Foreign 398 2,353 (2,040 ) 398 2,353 (2,040 ) Total tax provision $ 2,696 $ 5,443 $ 2,283 Deferred income tax assets and liabilities have been classified on the Consolidated Balance Sheets in accordance with the nature of the item giving rise to the temporary differences. During the year ended July 31, 2016, the Company elected to early adopt ASU No. 2015-17, which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This guidance allows for adoption on either a prospective or retrospective basis. As of July 31, 2017, the Company recorded a non-current deferred tax asset of $1.9 million and a non-current deferred tax liability of $0.7 million in Other Assets, and Other Long-term Liabilities, respectively. As of July 31, 2016, the Company recorded a non-current deferred tax asset of $2.3 million and a non-current deferred tax liability of $0.8 million in Other Assets and Other Long-term Liabilities, respectively. The components of deferred tax assets and liabilities are as follows: July 31, 2017 July 31, 2016 (In thousands) Deferred tax assets: Accruals and reserves $ 12,193 $ 12,240 Tax basis in excess of financial basis of investments in affiliates 18,332 19,051 Tax basis in excess of financial basis for intangible and fixed assets 7,689 8,455 Net operating loss and capital loss carry forwards 751,435 744,357 Total gross deferred tax assets 789,649 784,103 Less: valuation allowance (771,884 ) (760,906 ) Net deferred tax assets $ 17,765 $ 23,197 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (784 ) $ (861 ) Convertible Debt (2,655 ) (4,241 ) Undistributed accumulated earnings of foreign subsidiaries (13,150 ) (16,554 ) Total gross deferred tax liabilities (16,589 ) (21,656 ) Net deferred tax asset $ 1,176 $ 1,541 Subsequently reported tax benefits relating to the valuation allowance for deferred tax assets as of July 31, 2017 will be allocated as follows (in thousands): Income tax benefit recognized in the consolidated statement of operations $ (756,423 ) Additional paid in capital (15,461 ) $ (771,884 ) The net change in the total valuation allowance for the fiscal year ended July 31, 2017 was an increase of approximately $11.0 million. This increase is primarily due to the U.S. valuation allowance as well as the valuation allowance provided for Taiwan and France for the year ended July 31, 2017. A valuation allowance has been recorded against the gross deferred tax asset in the U.S and certain foreign subsidiaries since management believes that after considering all the available objective evidence, both positive and negative, historical and prospective, it is more likely than not that certain assets will not be realized. The net change in the total valuation allowance for the fiscal year ended July 31, 2016 was an increase of approximately $10.3 million. The Company has certain deferred tax benefits, including those generated by net operating losses and certain other tax attributes (collectively, the “Tax Benefits”). The Company’s ability to use these Tax Benefits could be substantially limited if it were to experience an “ownership change,” as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an ownership change would occur if there is a greater than 50-percentage point change in ownership of securities by stockholders owning (or deemed to own under Section 382 of the Code) five percent or more of a corporation’s securities over a rolling three-year period. On October 17, 2011, the Company’s Board of Directors adopted a Tax Benefit Preservation Plan between the Company and American Stock Transfer & Trust Company, LLC, as rights agent (as amended from time to time, the “Tax Plan”). The Tax Plan reduces the likelihood that changes in the Company’s investor base would have the unintended effect of limiting the Company’s use of its Tax Benefits. The Tax Plan is intended to require any person acquiring shares of the Company’s securities equal to or exceeding 4.99% of the Company’s outstanding shares to obtain the approval of the Board of Directors. This would protect the Tax Benefits because changes in ownership by a person owning less than 4.99% of the Company’s stock are considered and included in one or more public groups in the calculation of “ownership change” for purposes of Section 382 of the Code. On October 9, 2014, the Tax Plan was amended by the Company’s Board of Directors to extend the expiration of the Tax Plan until October 17, 2017. Following the stockholders’ approval of the Protective Amendment (as described in the following paragraphs) at the Company’s 2014 Annual Meeting, the Tax Plan was further amended so that it expired at the close of business on December 31, 2014. On December 29, 2014, the Company filed an Amendment to its Restated Certificate of Incorporation (the “Protective Amendment”) with the Delaware Secretary of State to protect the significant potential long-term tax benefits presented by its net operating losses and other tax benefits (collectively, the “NOLs”). The Protective Amendment was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders held on December 9, 2014. As a result of the filing of the Protective Amendment with the Delaware Secretary of State, the Company amended its Tax Benefit Preservation Plan so that it expired at the close of business on December 31, 2014. The Protective Amendment limits certain transfers of the Company’s common stock, to assist the Company in protecting the long-term value of its accumulated NOLs. The Protective Amendment’s transfer restrictions generally restrict any direct or indirect transfers of the common stock if the effect would be to increase the direct or indirect ownership of the common stock by any person (as defined in the Protective Amendment) from less than 4.99% to 4.99% or more of the common stock, or increase the percentage of the common stock owned directly or indirectly by a Person owning or deemed to own 4.99% or more of the common stock. Any direct or indirect transfer attempted in violation of the Protective Amendment will be void as of the date of the prohibited transfer as to the purported transferee. The Board of Directors of the Company has discretion to grant waivers to permit transfers otherwise restricted by the Protective Amendment. In accordance with the Protective Amendment, Handy & Harman (“HNH”), a related party, requested, and the Company granted HNH and its affiliates, a waiver under the Protective Amendment to permit their acquisition of up to 45% of the Company’s outstanding shares of common stock in the aggregate (subject to proportionate adjustment, the “45% Cap”), in addition to acquisitions of common stock in connection with the exercise of certain warrants of the Company (the “Warrants”) held by Steel Partners Holdings L.P. (“SPH”), an affiliate of HNH, as well as a limited waiver under Section 203 of the Delaware General Corporation Law for this purpose. Notwithstanding the foregoing, HNH and its affiliates (and any group of which HNH or any of its affiliates is a member) are not permitted to acquire securities that would result in an “ownership change” of the Company for purposes of Section 382 of the Internal Revenue Code of 1986, as amended, that would have the effect of impairing any of the Company’s NOLs. The foregoing waiver was approved by the independent directors of the Company. The Company has net operating loss carryforwards for federal and state tax purposes of approximately $2.1 billion and $209.8 million, respectively, at July 31, 2017. The federal net operating losses will expire from fiscal year 2022 through 2037 and the state net operating losses will expire from fiscal year 2018 through 2037. The Company has a foreign net operating loss carryforward of approximately $84.1 million, of which $58.8 million has an indefinite carryforward period. In addition, the Company has an immaterial amount of capital loss carryforwards for federal and state tax purposes. The federal and state capital losses will expire in fiscal year 2018. The Company’s ModusLink Corporation subsidiary has undistributed earnings from its foreign subsidiaries of approximately $39.1 million at July 31, 2017, of which approximately $2.0 million is considered to be permanently reinvested due to certain restrictions under local laws as well as the Company’s plans to reinvest such earnings for future expansion in certain foreign jurisdictions. The amount of taxes attributable to the permanently undistributed earnings is estimated at $0.7 million. The Company has recorded a deferred tax liability of $13.2 million on the remaining $37.1 million of undistributed earnings that are not considered to be permanently reinvested. Income tax expense attributable to income from continuing operations differs from the expense computed by applying the U.S. federal income tax rate of 35% to income (loss) from continuing operations before income taxes as a result of the following: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Computed “expected” income tax expense (benefit) $ (8,106 ) $ (19,368 ) $ (5,653 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance 10,978 22,907 2,067 Foreign dividends 2,724 4,730 732 Foreign tax rate differential (2,386 ) (1,082 ) 1,262 Capitalized costs — — (478 ) Nondeductible goodwill impairment — — 1,070 Nondeductible expenses 20 262 417 Foreign withholding taxes 239 762 (19 ) Reversal of uncertain tax position reserves (481 ) (2,768 ) — Other (292 ) — 2,885 Actual income tax expense $ 2,696 $ 5,443 $ 2,283 The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations in several tax jurisdictions. The Company is periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves when necessary. Based on the evaluation of current tax positions, the Company believes it has appropriately accrued for exposures. The Company operates in multiple taxing jurisdictions, both within and outside of the United States. At July 31, 2017, 2016 and 2015, the total amount of the liability for unrecognized tax benefits, including interest, related to federal, state and foreign taxes was approximately $0.7 million, $1.2 million and $3.9 million, respectively. To the extent the unrecognized tax benefits are recognized, the entire amount would impact income tax expense. The Company files income tax returns in the U.S., various states and in foreign jurisdictions. The federal and state income tax returns are generally subject to tax examinations for the tax years ended July 31, 2013 through July 31, 2017. To the extent the Company has tax attribute carryforwards, the tax year in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period. In addition, a number of tax years remain subject to examination by the appropriate government agencies for certain countries in the Europe and Asia regions. In Europe, the Company’s 2009 through 2016 tax years remain subject to examination in most locations while the Company’s 2005 through 2016 tax years remain subject to examination in most Asia locations. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Balance as of beginning of year $ 994 $ 3,756 $ 1,028 Additions for current year tax positions — 19 2,884 Currency translation 18 — (156 ) Reductions for lapses in statute of limitations (331 ) (27 ) — Reductions of prior year tax positions — (2,754 ) — Balance as of end of year $ 681 $ 994 $ 3,756 In accordance with the Company’s accounting policy, interest related to income taxes is included in the provision of income taxes line of the Consolidated Statements of Operations. For the fiscal year ended July 31, 2017, the Company has not recognized any material interest expense related to uncertain tax positions. As of July 31, 2017, 2016 and 2015, the Company had recorded liabilities for increases (decreases) in interest expense related to uncertain tax positions in the amount of ($168,000), $40,000 and $48,000, respectively. The Company did not accrue for penalties related to income tax positions as there were no income tax positions that required the Company to accrue penalties. The Company does not expect that any unrecognized tax benefits will reverse in the next twelve months. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Jul. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | (15) ACCUMULATED OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive income, net of income taxes, are as follows: Foreign Pension Unrealized Total (In thousands) Accumulated other comprehensive income (loss) at July 31, 2016 $ 6,131 $ (4,206 ) $ 94 $ 2,019 Foreign currency translation adjustment 1,391 — — 1,391 Pension liability adjustments — 830 — 830 Net unrealized holding gain on securities — — 73 73 Net current-period other comprehensive income (loss) 1,391 830 73 2,294 Accumulated other comprehensive income (loss) at July 31, 2017 $ 7,522 $ (3,376 ) $ 167 $ 4,313 In the fiscal years ended July 31, 2017, the Company recorded approximately $0.3 million in taxes related to other comprehensive income. In the fiscal years ended July 31, 2016, the Company recorded an immaterial amount in taxes related to other comprehensive income. In the fiscal years ended July 31, 2015, the Company recorded approximately $0.5 million in taxes related to other comprehensive income. |
STATEMENT OF CASH FLOWS SUPPLEM
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | 12 Months Ended |
Jul. 31, 2017 | |
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | (16) STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION Cash used for operating activities reflect cash payments for interest and income taxes as follows: Years Ended July 31, 2017 2016 2015 (In thousands) Cash paid for interest $ 3,783 $ 6,111 $ 5,281 Cash paid for income taxes $ 2,500 $ 3,287 $ 2,078 Cash paid for taxes can be higher than income tax expense as shown on the Company’s consolidated statements of operations due to prepayments made in certain jurisdictions as well as to the timing of required payments in relation to recorded expense, which can cross fiscal years. Non-cash Activities Non-cash financing activities during the fiscal years ended July 31, 2017, 2016 and 2015 included the issuance of approximately 0.3 million, 0.2 million and 0.1 million shares, respectively, of nonvested common stock, valued at approximately $0.5 million, $0.6 million and $0.5 million, respectively, to certain employees of the Company. Non-cash financing activities during the fiscal year ended July 31, 2016 also included the issuance of 2.7 million shares of the Company’s common stock, valued at $3.1 million, associated with the repurchase of the Company’s Notes. See Note 17 for further details. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jul. 31, 2017 | |
STOCKHOLDERS' EQUITY | (17) STOCKHOLDERS’ EQUITY Preferred Stock The Company’s board of directors has the authority, subject to any limitations prescribed by Delaware law, to issue shares of preferred stock in one or more series and to fix and determine the designation, privileges, preferences and rights and the qualifications, limitations and restrictions of those shares, including dividend rights, conversion rights, voting rights, redemption rights, terms of sinking funds, liquidation preferences and the number of shares constituting any series or the designation of the series, without any further vote or action by the stockholders. Any shares of the Company’s preferred stock so issued may have priority over its common stock with respect to dividend, liquidation and other rights. The Company’s board of directors may authorize the issuance of preferred stock with voting rights or conversion features that could adversely affect the voting power or other rights of the holders of its common stock. Although the issuance of preferred stock could provide us with flexibility in connection with possible acquisitions and other corporate purposes, under some circumstances, it could have the effect of delaying, deferring or preventing a change of control. Common Stock Each holder of the Company’s common stock is entitled to: • one vote per share on all matters submitted to a vote of the stockholders, subject to the rights of any preferred stock that may be outstanding; • dividends as may be declared by the Company’s board of directors out of funds legally available for that purpose, subject to the rights of any preferred stock that may be outstanding; and • a pro rata share in any distribution of the Company’s assets after payment or providing for the payment of liabilities and the liquidation preference of any outstanding preferred stock in the event of liquidation. Holders of the Company’s common stock have no cumulative voting rights, redemption rights or preemptive rights to purchase or subscribe for any shares of its common stock or other securities. All of the outstanding shares of common stock are fully paid and nonassessable. The rights, preferences and privileges of holders of its common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any existing series of preferred stock and any series of preferred stock that the Company may designate and issue in the future. There are no redemption or sinking fund provisions applicable to the Company’s common stock. On March 12, 2013, stockholders of the Company approved the sale of 7,500,000 shares of newly issued common stock to Steel Partners Holdings L.P. (“Steel Partners”) at a price of $4.00 per share, resulting in aggregate proceeds of $30.0 million before transaction costs. The Company incurred $2.3 million of transaction costs, which consisted primarily of investment banking and legal fees, resulting in net proceeds from the sale of $27.7 million. In addition, as part of the transaction, the Company issued Steel Partners a warrant to acquire an additional 2,000,000 shares at an exercise price of $5.00 per share. These warrants expire after a term of five years after issuance. All the warrants were outstanding as of July 31, 2017. Pursuant to the investment agreement, the Company agreed to grant Steel Partners certain registration rights. The Company agreed to file a resale registration statement on Form S-3 as soon as practicable after it is eligible to do so, covering the shares of common stock purchased by Steel Partners and the shares of common stock issuable upon exercise of the warrants. The Company is required to keep the resale registration statement effective for three years following the date it is declared effective. Steel Partners also has the right, until such time as it owns less than one-third of the common stock originally issued to it under the investment agreement, to require that the Company file a prospectus supplement or amendment to cover sales of common stock through a firm commitment underwritten public offering. The underwriters of any underwritten offering have the right to limit the number of shares to be included in any such offering. In addition, the Company has agreed to certain “piggyback registration rights.” If the Company registers any securities for public sale, Steel Partners has the right to include its shares in the registration, subject to certain exceptions. The underwriters of any underwritten offering have the right to limit the number of Steel Partners’ shares to be included in any such offering for marketing reasons. The Company has agreed to pay the expenses of Steel Partners in connection with any registration of the securities issued in the Steel Partners investment and to provide customary indemnification to Steel Partners in connection with such registration. On July 21, 2016, the Company entered into an agreement with Highbridge International LLC and Highbridge Tactical Credit & Convertibles Master Fund, L.P. (together “Highbridge”) for the repurchase of 5.25% Convertible Senior Notes of the Company. The consideration paid to Highbridge included 2,656,336 newly issued shares of the Company’s common stock, par value $0.01 per share (valued based on the closing price of the ModusLink Common Stock on July 21, 2016), a cash payment of $18.5 million and a cash payment in the amount of the unpaid interest ($0.6 million). The transaction was executed in a private transaction and closed on July 27, 2016. The Notes were cancelled following closing. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jul. 31, 2017 | |
FAIR VALUE MEASUREMENTS | (18) FAIR VALUE MEASUREMENTS ASC Topic 820 provides that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC Topic 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the assets or liabilities The carrying value of cash and cash equivalents, accounts receivable, funds held for clients, accounts payable, current liabilities and the revolving line of credit approximate fair value because of the short maturity of these instruments. The carrying value of capital lease obligations approximates fair value, as estimated by using discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The fair values of the Company’s Trading Securities are estimated using quoted market prices. The Company values foreign exchange forward contracts using observable inputs which primarily consist of an income approach based on the present value of the forward rate less the contract rate multiplied by the notional amount. The defined benefit plans have 100% of their assets invested in bank-managed portfolios of debt securities and other assets. Conservation of capital with some conservative growth potential is the strategy for the plans. The Company’s pension plans are outside the United States, where asset allocation decisions are typically made by an independent board of trustees. Investment objectives are aligned to generate returns that will enable the plans to meet their future obligations. The Company acts in a consulting and governance role in reviewing investment strategy and providing a recommended list of investment managers for each plan, with final decisions on asset allocation and investment manager made by local trustees. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The following tables present the Company’s financial assets measured at fair value on a recurring basis as of July 31, 2017 and 2016, classified by fair value hierarchy: Fair Value Measurements at (In thousands) July 31, 2017 Level 1 Level 2 Level 3 Assets: Marketable equity securities $ 11,898 $ 11,898 $ — $ — Money market funds 85,683 85,683 — — Fair Value Measurements at (In thousands) July 31, 2016 Level 1 Level 2 Level 3 Assets: Marketable equity securities $ 4,209 $ 4,209 $ — $ — Marketable corporate bonds 12,559 12,559 — — Money market funds 101,224 101,224 — — The following table presents the pension plan assets measured at fair value on a recurring basis as of July 31, 2017 and 2016, classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2017 Asset Level 1 Level 2 Level 3 Insurance contract $ 20,726 98 % $ — $ — $ 20,726 Other investments 478 2 % — — 478 $ 21,204 100 % $ — $ — $ 21,204 Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2016 Asset Level 1 Level 2 Level 3 Insurance contract $ 24,012 94 % $ — $ — $ 24,012 Other investments 1,461 6 % — — 1,461 $ 25,473 100 % $ — $ — $ 25,473 The following table sets forth a summary of the changes in the fair value of the pension plan assets for the years ended July 31, 2017 and 2016: July 31, 2017 2016 (In thousands) Fair value of plan assets at beginning of year 25,473 19,350 Actual return on plan assets (5,005 ) 5,556 Employee contributions 104 120 Employer contributions (withdrawals), net (342 ) 539 Settlements (279 ) (55 ) Benefits and administrative expenses paid (157 ) (269 ) Currency translation 1,410 232 Fair value of plan assets at end of year 21,204 25,473 There were no transfers between Levels 1, 2 or 3 during any of the periods presented. When available, quoted prices were used to determine fair value. When quoted prices in active markets were available, investments were classified within Level 1 of the fair value hierarchy. When quoted prices in active markets were not available, fair values were determined using pricing models, and the inputs to those pricing models were based on observable market inputs. The inputs to the pricing models were typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis The Company reviews the carrying amounts of these assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized when the carrying amount of the asset group or reporting unit is not recoverable and exceeds its fair value. The Company estimated the fair values of assets subject to impairment based on the Company’s own judgments about the assumptions that market participants would use in pricing the assets and on observable market data, when available. Fair Value of Financial Instruments The Company’s financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and long-term debt and are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value for these items due to their short-term nature. Included in trading securities in the accompanying balance sheet are marketable equity securities and marketable corporate bonds. These instruments are valued at quoted market prices in active markets. Included in cash and cash equivalents in the accompanying balance sheet are money market funds. These are valued at quoted market prices in active markets. The following table presents the Company’s debt not carried at fair value: July 31, 2017 July 31, 2016 Carrying Fair Carrying Fair Value Fair Value (In thousands) Notes payable $ 59,758 $ 63,852 $ 57,169 $ 50,957 Level 1 The fair value of the Company’s Notes payable represents the value at which its lenders could trade its debt within the financial markets, and does not represent the settlement value of these long-term debt liabilities to us. The fair value of the Notes payable could vary each period based on fluctuations in market interest rates, as well as changes to our credit ratings. The Notes payable are traded and their fair values are based upon traded prices as of the reporting dates. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jul. 31, 2017 | |
SEGMENT INFORMATION | (19) SEGMENT INFORMATION The Company has four operating segments: Americas; Asia; Europe; and e-Business. Based on the information provided to the Company’s chief operating decision-maker (“CODM”) for purposes of making decisions about allocating resources and assessing performance and quantitative thresholds, the Company has determined that it has four reportable segments: Americas, Asia, Europe and e-Business. During the prior year, the Company had determined that it had three reportable segments: Americas; Asia; and Europe. e-Business was reported as a part of the All Other category in the prior year. The Company also has Corporate-level activity, which consists primarily of costs associated with certain corporate administrative functions such as legal and finance, which are not allocated to the Company’s reportable segments. The Corporate-level balance sheet information includes cash and cash equivalents, trading securities, Notes payables and other assets and liabilities which are not identifiable to the operations of the Company’s operating segments. All significant intra-segment amounts have been eliminated. Management evaluates segment performance based on segment net revenue, operating income (loss) and “adjusted operating income (loss)”, which is defined as the operating income (loss) excluding net charges related to depreciation, amortization of intangible assets, goodwill and long-lived asset impairment, share-based compensation and restructuring. These items are excluded because they may be considered to be of a non-operational or non-cash nature. Historically, the Company has recorded significant impairment and restructuring charges and therefore management uses adjusted operating income to assist in evaluating the performance of the Company’s core operations. Summarized financial information of the Company’s continuing operations by operating segment is as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Net revenue: Americas $ 92,324 $ 106,143 $ 200,929 Asia 158,048 167,861 163,262 Europe 159,085 151,842 160,602 e-Business 27,163 33,177 36,880 $ 436,620 $ 459,023 $ 561,673 Operating income (loss): Americas $ (10,342 ) $ (14,731 ) $ (4,407 ) Asia 5,620 (855 ) 10,003 Europe (9,008 ) (13,825 ) (6,479 ) e-Business (1,185 ) (4,384 ) (2,367 ) Total Segment operating income (loss) (14,915 ) (33,795 ) (3,250 ) Corporate-level activity (4,846 ) (6,777 ) (11,089 ) Total operating loss (19,761 ) (40,572 ) (14,339 ) Total other expense 4,648 16,055 2,015 Loss before income taxes $ (24,409 ) $ (56,627 ) $ (16,354 ) July 31, July 31, (In thousands) Total assets: Americas $ 21,876 $ 28,280 Asia 63,819 89,242 Europe 64,639 75,952 e-Business 20,703 22,884 Sub-total—segment assets 171,037 216,358 Corporate 110,261 131,574 $ 281,298 $ 347,932 Summarized financial information of the Company’s net revenue from external customers by group of services is as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Supply chain services $ 409,457 $ 425,846 $ 524,793 e-Business services 27,163 33,177 36,880 $ 436,620 $ 459,023 $ 561,673 As of July 31, 2017, approximately $9.3 million, $3.3 million, $3.6 million $2.4 million and $2.2 million of the Company’s long-lived assets were located in the U.S.A., Netherlands, Ireland, Singapore and China, respectively. As of July 31, 2016, approximately $5.2 million, $3.0 million, $3.5 million, $2.9 million and $3.0 million of the Company’s long-lived assets were located in the U.S.A., Netherlands, Ireland, Singapore and China, respectively. For the fiscal year ended July 31, 2017, the Company’s net revenues within U.S.A., China, Netherlands and Czech Republic were $95.1 million, $128.3 million, $70.8 million and $79.8 million, respectively. For the fiscal year ended July 31, 2016, the Company’s net revenues within U.S.A., China, Netherlands and Czech Republic were $110.9 million, $140.2 million, $68.1 million and $75.7 million, respectively. For the fiscal year ended July 31, 2015, the Company’s net revenues within U.S.A., China, Netherlands and Czech Republic were $205.0 million, $134.5 million, $71.9 million and $80.6 million, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jul. 31, 2017 | |
RELATED PARTY TRANSACTIONS | (20) RELATED PARTY TRANSACTIONS On December 24, 2014, the Company entered into a Management Services Agreement with SP Corporate Services LLC (“SP Corporate”), effective as of January 1, 2015 (as amended, the “Management Services Agreement”). SP Corporate is an indirect wholly owned subsidiary of Steel Partners Holdings L.P. (“Steel Holdings”) and is a related party. Pursuant to the Management Services Agreement, SP Corporate provided the Company and its subsidiaries with the services of certain employees, including certain executive officers, and other corporate services. The Management Services Agreement had an initial term of six months. On June 30, 2015, the Company entered into an amendment that extended the term of the Management Services Agreement to December 31, 2015 and provided for automatic renewal for successive one year periods, unless and until terminated in accordance with the terms set forth therein, which include, under certain circumstances, the payment by the Company of certain termination fees to SP Corporate. On March 10, 2016, the Company entered into a Second Amendment to the Management Services Agreement with SPH Services, Inc. (“SPH Services”) pursuant to which SPH Services assumed rights and responsibilities of SP Corporate and the services provided by SPH Services to the Company were modified pursuant to the terms of the amendment. SPH Services is the parent of SP Corporate and an affiliate of SPH Group Holdings LLC. On March 10, 2016, the Company entered into a Transfer Agreement with SPH Services pursuant to which the parties agreed to transfer to the Company certain individuals who provide corporate services to the Company. SPH Services has since changed its name to Steel Services Ltd. (“Steel Services”). During the year ended July 31, 2017, pursuant to the Management Services Agreement, the Company paid a fixed monthly fee of $175,000 in consideration for the services and incremental costs as incurred. A third amendment to the Management Services Agreement, effective September 1, 2017, reduced the fixed monthly fee paid by the Company to Steel Services under the Management Services Agreement from $175,000 per month to $95,641 per month. The monthly fee is subject to review and adjustment by agreement between the Company and Steel Services for periods commencing in fiscal 2016 and beyond. Additionally, the Company may be required to reimburse Steel Services and its affiliates for all reasonable and necessary business expenses incurred on the Company’s behalf in connection with the performance of the services under the Management Services Agreement. Total expenses incurred related to this agreement for the twelve months ended July 31, 2017 and 2016 were $2.3 million and $2.2 million, respectively. As of July 31, 2017 and 2016, amounts due to SP Corporate and Steel Services were $0.3 million and $0.5 million, respectively. The Related Party Transactions Committee of the Board (the “Related Party Transactions Committee”) approved the entry into the Management Services Agreement (and the first and second amendments thereto) and the Transfer Agreement. The Audit Committee of the Board approved the third amendment to the Management Services Agreement. The Related Party Transactions Committee held the responsibility to review, approve and ratify related party transactions from November 20, 2014, until October 11, 2016. On October 11, 2016, the Board adopted a Related Person Transaction Policy that is administered by the Audit Committee and applies to all related party transactions. As of October 11, 2016, the Audit Committee reviews all related party transactions on an ongoing basis and all such transactions must be approved or ratified by the Audit Committee. Mutual Securities, Inc. (“Mutual Securities”) serves as the broker and record-keeper for all the transactions associated with the Trading Securities. An officer of SP Corporate and of the General Partner of Steel Partners Holdings L.P., is a registered principal of Mutual Securities. Commissions charged by Mutual Securities are generally commensurate with commissions charged by other institutional brokers, and the Company believes its use of Mutual Securities is consistent with its desire to obtain best price and execution. During the year ended July 31, 2017, Mutual Securities received an immaterial amount in commissions associated with these transactions. During the year ended July 31, 2016, Mutual Securities received $0.1 million in commissions associated with these transactions. |
SELECTED QUARTERLY FINANCIAL IN
SELECTED QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Jul. 31, 2017 | |
SELECTED QUARTERLY FINANCIAL INFORMATION | (21) SELECTED QUARTERLY FINANCIAL INFORMATION (Unaudited) The following table sets forth selected quarterly financial information for the fiscal years ended July 31, 2017 and 2016. The operating results for any given quarter are not necessarily indicative of results for any future period. Quarter Ended Quarter Ended Oct. 31, ‘16 Jan. 31, ‘17 Apr. 30, ‘17 Jul. 31, ‘17 Oct. 31, ‘15 Jan. 31, ‘16 Apr. 30, ‘16 Jul. 31, ‘16 (In thousands, except per share data) (In thousands, except per share data) Net revenue $ 121,327 $ 117,568 $ 97,948 $ 99,777 $ 141,089 $ 119,966 $ 96,460 $ 101,508 Cost of revenue 111,994 106,370 89,406 92,485 $ 128,637 $ 116,311 $ 94,286 $ 95,031 Gross profit 9,333 11,198 8,542 7,292 12,452 3,655 2,174 6,477 Total operating expenses 14,975 12,702 13,785 14,664 14,021 15,318 14,671 21,320 Operating loss (5,642 ) (1,504 ) (5,243 ) (7,372 ) (1,569 ) (11,663 ) (12,497 ) (14,843 ) Total other income (expense) (2,352 ) (1,075 ) 763 (1,984 ) (12,354 ) (2,338 ) (260 ) (1,103 ) Income tax expense (1,049 ) (723 ) (819 ) (105 ) (850 ) (206 ) (408 ) (3,979 ) Gains on investments in affiliates, net of tax 500 396 232 150 — 259 316 214 Net loss $ (8,543 ) $ (2,906 ) $ (5,067 ) $ (9,311 ) $ (14,773 ) $ (13,948 ) $ (12,849 ) $ (19,711 ) Basic and diluted earnings (loss) per share: Net income (loss) $ (0.16 ) $ (0.05 ) $ (0.09 ) $ (0.17 ) $ (0.29 ) $ (0.27 ) $ (0.25 ) $ (0.38 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jul. 31, 2017 | |
SUBSEQUENT EVENTS | (22) SUBSEQUENT EVENTS Subsequent to July 31, 2017, and prior to the issuance of these financial statements, the Company sold $11.9 million in Trading Securities. During this period, the Company received approximately $13.7 in cash proceeds associated with the trading activities. Subsequent to July 31, 2017, and prior to the issuance of these financial statements, the Company completed the sale of its facility in Kildare, Ireland for the sale price of approximately $4.5 million, less legal and administrative expense. |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jul. 31, 2017 | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements of the Company include the results of its wholly-owned and majority- owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company accounts for investments in businesses in which it owns between 20% and 50% of the voting interest using the equity method, if the Company has the ability to exercise significant influence over the investee company. All other investments in privately held businesses over which the Company does not have the ability to exercise significant influence, or for which there is not a readily determinable market value, are accounted for under the cost method of accounting. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, allowance for doubtful accounts, inventories, fair value of its trading and available-for-sale securities, intangible assets, income taxes, restructuring, valuation of long-lived assets, impairments, contingencies, restructuring charges, litigation, pension obligations and the fair value of stock options and share bonus awards granted under the Company’s stock based compensation plans. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. |
Revenue Recognition | Revenue Recognition The Company’s revenue primarily comes from the sale of supply chain management services to its clients. Amounts billed to clients under these arrangements include revenue attributable to the services performed as well as for materials procured on the Company’s clients’ behalf as part of its service to them. Other sources of revenue include the sale of products and other services. Revenue is recognized for services when the services are performed and for product sales when the products are shipped or in certain cases when products are built and title had transferred, if the client has also contracted with us for warehousing and/or logistics services for a separate fee, assuming all other applicable revenue recognition criteria are met. The Company recognizes revenue in accordance with the provisions of the Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” (“ASC Topic 605”). Specifically, the Company recognizes revenue when persuasive evidence of an arrangement exists, title and risk of loss have passed or services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. The Company’s shipping terms vary by client and can include FOB shipping point, which means that risk of loss passes to the client when it is shipped from the Company’s location, as well as other terms such as ex-works, meaning that title and risk of loss transfer upon delivery of product to the customer’s designated carrier. The Company also evaluates the terms of each major client contract relative to a number of criteria that management considers in making its determination with respect to gross versus net reporting of revenue for transactions with its clients. Management’s criteria for making these judgments place particular emphasis on determining the primary obligor in a transaction and which party bears general inventory risk. The Company records all shipping and handling fees billed to clients as revenue, and related costs as cost of sales, when incurred. The Company applies the provisions of ASC Topic 985, “Software” (“ASC Topic 985”), with respect to certain transactions involving the sale of software products by the Company’s e-Business operations. The Company applies the guidance of Accounting Standards Codification (“ASC”) 605-25 “Revenue – Multiple-Element Arrangements” for determining whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the arrangement consideration should be measured and allocated to the separate units of accounting. Under this guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. For those contracts which contain multiple deliverables, management must first determine whether each service, or deliverable, meets the separation criteria. In general, a deliverable (or a group of deliverables) meets the separation criteria if the deliverable has standalone value to the client. Each deliverable that meets the separation criteria is considered a “separate unit of accounting.” Management allocates the total arrangement consideration to each separate unit of accounting based on the relative selling price of each separate unit of accounting. After the arrangement consideration has been allocated to each separate unit of accounting, management applies the appropriate revenue recognition method for each separate unit of accounting as described previously based on the nature of the arrangement. In general, revenue is recognized upon completion of the last deliverable. All deliverables that do not meet the separation criteria are combined into one unit of accounting and the appropriate revenue recognition method is applied. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s unsecured accounts receivable are stated at original invoice amount less an estimate made for doubtful receivables based on a monthly review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer’s financial condition, credit history and current economic conditions. The Company writes off accounts receivable when management deems them uncollectible and records recoveries of accounts receivable previously written off when received. When accounts receivable are considered past due, the Company generally does not charge interest on past due balances. |
Foreign Currency Translation | Foreign Currency Translation All assets and liabilities of the Company’s foreign subsidiaries, whose functional currency is the local currency, are translated to U.S. dollars at the rates in effect at the balance sheet date. All amounts in the Consolidated Statements of Operations are translated using the average exchange rates in effect during the year. Resulting translation adjustments are reflected in the accumulated other comprehensive income (loss) component of stockholders’ equity. Settlement of receivables and payables in a foreign currency that is not the functional currency result in foreign currency transaction gains and losses. Foreign currency transaction gains and losses are included in “Other gains (losses), net” in the Consolidated Statements of Operations. |
Cash, Cash Equivalents and Short-term Investments | Cash, Cash Equivalents and Short-term Investments The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Investments with maturities greater than three months to twelve months at the time of purchase are considered short- term investments. Cash and cash equivalents consisted of the following: July 31, 2017 July 31, 2016 (In thousands) Cash and bank deposits $ 24,987 $ 29,566 Money market funds 85,683 101,224 $ 110,670 $ 130,790 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, accounts payable, current liabilities and the revolving line of credit approximate fair value because of the short maturity of these instruments. The carrying value of capital lease obligations approximates fair value, as estimated by using discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The fair values of the Company’s Trading Securities are estimated using quoted market prices. The fair value of the Company’s Notes payable is $63.9 million as of July 31, 2017, which represents the value at which its lenders could trade its debt with in the financial markets, and does not represent the settlement value of these long-term debt liabilities to us. The fair value of the Notes payable could vary each period based on fluctuations in market interest rates, the Company’s stock price, as well as changes to the Company’s credit ratings. The Notes payable are traded and their fair values are based upon traded prices as of the reporting dates. The defined benefit plans have assets invested in insurance contracts and bank managed portfolios. Conservation of capital with some conservative growth potential is the strategy for the plans. The Company’s pension plans are outside the United States, where asset allocation decisions are typically made by an independent board of trustees. Investment objectives are aligned to generate returns that will enable the plans to meet their future obligations. The Company acts in a consulting and governance role in reviewing investment strategy and providing a recommended list of investment managers for each plan, with final decisions on asset allocation and investment manager made by local trustees. ASC Topic 820 provides that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC Topic 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the assets or liabilities |
Investments | Investments Marketable securities held by the Company which meet the criteria for classification as trading securities or available-for-sale are carried at fair value. Gains and losses on securities classified as trading are reflected in other income (expense) in the Company’s Consolidated Statements of Operations. Unrealized holding gains and losses on securities classified as available-for-sale are carried net of income taxes, when applicable, as a component of accumulated other comprehensive income (loss) in the Consolidated Statements of Stockholders’ Equity. The Company maintained interests in a small number of privately held companies primarily through its various venture capital funds. The Company’s venture capital investment portfolio, Ventures, invested in early-stage technology companies. These investments are generally made in connection with a round of financing with other third-party investors. Investments in which the Company’s interest is less than 20% and which are not classified as available-for-sale securities, are accounted for under the cost method of accounting, and are carried at the lower of cost or net realizable value. Under this method, the investment balance, originally recorded at is cost, is only adjusted for impairments to the investment. Gains and losses realized upon the sale of the investment are reflected in “Gains on investments in affiliates, net of tax” in the Company’s Consolidated Statements of Operations. If it is determined that the Company exercises significant influence over the investee company, then the equity method of accounting is used. For those investments in which the Company’s voting interest is between 20% and 50%, the equity method of accounting is generally used. Under this method, the investment balance, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the investee company as they occur, limited to the extent of the Company’s investment in, advances to and commitments for the investee. The Company assesses the need to record impairment losses on its investments and records such losses when the impairment of an investment is determined to be other than temporary in nature. The process of assessing whether a particular equity investment’s net realizable value is less than its carrying cost requires a significant amount of judgment. This valuation process is based primarily on information that the Company obtains from these privately held companies who are not subject to the same disclosure and audit requirements as the reports required of U.S. public companies. As such, the timeliness and completeness of the data may vary. Based on the Company’s evaluation, it recorded impairment charges related to its investments in privately held companies of approximately $42 thousand and $7.3 million for the fiscal years ended July 31, 2016 and 2015, respectively. These impairment losses are reflected in “Impairment of investments in affiliates” in the Company’s Consolidated Statements of Operations. At the time an equity method investee issues its stock to unrelated parties, the Company accounts for that share issuance as if the Company has sold a proportionate share of its investment. The Company records any gain or loss resulting from an equity method investee’s share issuance in its Consolidated Statements of Operations. |
Funds held for clients | Funds held for clients Funds held for clients represent assets that are restricted for use solely for the purposes of satisfying the obligations to remit client’s customer funds to the Company’s clients. These funds are classified as a current asset and a corresponding other current liability on the Company’s Consolidated Balance Sheets. |
Inventory | Inventory Inventories are stated at the lower of cost or market. Cost is determined by both the moving average and the first-in, first-out methods. Materials that the Company typically procures on behalf of its clients that are included in inventory include materials such as compact discs, printed materials, manuals, labels, hardware accessories, hard disk drives, consumer packaging, shipping boxes and labels, power cords and cables for client-owned electronic devices. Inventories consisted of the following: July 31, 2017 July 31, (In thousands) Raw materials $ 24,129 $ 28,506 Work-in-process 713 590 Finished goods 9,527 11,174 $ 34,369 $ 40,270 The Company continuously monitors inventory balances and records inventory provisions for any excess of the cost of the inventory over its estimated market value. The Company also monitors inventory balances for obsolescence and excess quantities as compared to projected demands. The Company’s inventory methodology is based on assumptions about average shelf life of inventory, forecasted volumes, forecasted selling prices, contractual provisions with its clients, write-down history of inventory and market conditions. While such assumptions may change from period to period, in determining the net realizable value of its inventories, the Company uses the best information available as of the balance sheet date. If actual market conditions are less favorable than those projected, or the Company experiences a higher incidence of inventory obsolescence because of rapidly changing technology and client requirements, additional inventory provisions may be required. Once established, write-downs of inventory are considered permanent adjustments to the cost basis of inventory and cannot be reversed due to subsequent increases in demand forecasts. Accordingly, if inventory previously written down to its net realizable value is subsequently sold, gross profit margins may be favorably impacted. |
Long-Lived Assets, Goodwill and Other Intangible Assets | Long-Lived Assets, Goodwill and Other Intangible Assets The Company follows ASC Topic 360, “Property, Plant, and Equipment” (“ASC Topic 360”). Under ASC Topic 360, the Company tests certain long-lived assets or group of assets for recoverability whenever events or changes in circumstances indicate that the Company may not be able to recover the asset’s carrying amount. ASC Topic 360 defines impairment as the condition that exists when the carrying amount of a long-lived asset or group, including property and equipment and other definite-lived intangible assets, exceeds its fair value. The Company evaluates recoverability by determining whether the undiscounted cash flows expected to result from the use and eventual disposition of that asset or group cover the carrying value at the evaluation date. If the undiscounted cash flows are not sufficient to cover the carrying value, the Company measures an impairment loss as the excess of the carrying amount of the long-lived asset or group over its fair value. Management may use third party valuation experts to assist in its determination of fair value. The Company is required to test goodwill for impairment annually or if a triggering event occurs in accordance with the provisions of ASC Topic 350, “Goodwill and Other” (“ASC Topic 350”). The Company’s policy is to perform its annual impairment testing for all reporting units with goodwill on July 31 of each fiscal year. As a result of the annual impairment analysis and in connection with the preparation of its annual financial statements for the fiscal year ended July 31, 2015, the Company concluded that its remaining goodwill was fully impaired and recorded a $3.1 million non-cash goodwill impairment charge. The Company’s valuation methodology for assessing impairment of long-lived assets, goodwill and other intangible assets requires management to make judgments and assumptions based on historical experience and on projections of future operating performance. Management may use third party valuation advisors to assist in its determination of the fair value of reporting units subject to impairment testing. The Company operates in highly competitive environments and projections of future operating results and cash flows may vary significantly from actual results. If the assumptions used in estimating the valuations of the Company’s reporting units for purposes of impairment testing differ materially from actual future results, the Company may record impairment charges in the future and our financial results may be materially adversely affected. |
Restructuring Expenses | Restructuring Expenses The Company follows the provisions of ASC Topic 420, “Exit or Disposal Cost Obligations”, which addresses financial accounting and reporting for costs associated with exit or disposal activities. The statement requires companies to recognize costs associated with exit or disposal activities when a liability has been incurred rather than at the date of a commitment to an exit or disposal plan. The Company records liabilities that primarily include estimated severance and other costs related to employee benefits and certain estimated costs related to equipment and facility lease obligations and other service contracts. These contractual obligations principally represent future obligations under non-cancelable real estate leases. Restructuring estimates relating to real estate leases involve consideration of a number of factors including: potential sublet rental rates, estimated vacancy period for the property, brokerage commissions and certain other costs. Estimates relating to potential sublet rates and expected vacancy periods are most likely to have a material impact on the Company’s results of operations in the event that actual amounts differ significantly from estimates. These estimates involve judgment and uncertainties, and the settlement of these liabilities could differ materially from recorded amounts. |
Property and Equipment | Property and Equipment Property, plant and equipment are stated at cost. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Depreciation and amortization is provided on the straight-line basis over the estimated useful lives of the respective assets. The Company capitalizes certain computer software development costs when incurred in connection with developing or obtaining computer software for internal use. The estimated useful lives are as follows: Buildings 32 years Machinery & equipment 3 to 5 years Furniture & fixtures 5 to 7 years Automobiles 5 years Software 3 to 8 years Leasehold improvements Shorter of the remaining lease term or the estimated useful life of the asset |
Income Taxes | Income Taxes Income taxes are accounted for under the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”), using the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC Topic 740 also requires that the deferred tax assets be reduced by a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. This methodology is subjective and requires significant estimates and judgments in the determination of the recoverability of deferred tax assets and in the calculation of certain tax liabilities. In accordance with ASC Topic 740, the Company applies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. ASC Topic 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. In accordance with the Company’s accounting policy, interest and penalties related to uncertain tax positions is included in the “income tax expense” line of the Consolidated Statements of Operations. See Note 14, “Income Taxes,” for additional information. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table reconciles earnings per share for the fiscal years ended July 31, 2017, 2016 and 2015. Twelve Months Ended July 31, 2017 2016 2015 (In thousands, except per share data) Net loss $ (25,827 ) $ (61,281 ) $ (18,429 ) Weighted average common shares outstanding 55,134 51,934 51,940 Weighted average common equivalent shares arising from dilutive stock options and restricted stock — — — Weighted average number of common and potential common shares 55,134 51,934 51,940 Basic and diluted net loss per share $ (0.47 ) $ (1.18 ) $ (0.35 ) Approximately 14.2 million, 21.1 million and 21.6 million common stock equivalent shares relating to the effects of outstanding stock options and restricted stock were excluded from the denominator in the calculation of diluted earnings per share for the fiscal years ended July 31, 2017, 2016 and 2015, respectively, as their effect would be anti-dilutive due to the fact that the Company recorded a net loss for those periods. Approximately 11.4 million and 16.5 million and 16.6 million common shares outstanding associated with the convertible Notes, using the if-converted method, were excluded from the denominator in the calculation of diluted earnings (loss) per share for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. |
Share-Based Compensation Plans | Share-Based Compensation Plans The Company recognizes share-based compensation in accordance with the provisions of ASC Topic 718, “Compensation— Stock Compensation” (“ASC Topic 718”) which requires the measurement and recognition of compensation expense for all share- based payment awards made to employees and directors including employee stock options and employee stock purchases based on estimated fair values. The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods. The Company estimates forfeitures at the time of grant and revises those estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses a binomial-lattice option-pricing model (“binomial-lattice model”) for valuation of share-based awards with time-based vesting. The Company believes that the binomial-lattice model is an accurate model for valuing employee stock options since it reflects the impact of stock price changes on option exercise behavior. For performance-based awards, stock-based compensation expense is recognized over the expected performance achievement period of individual performance milestones when the achievement of each individual performance milestone becomes probable. For share-based awards based on market conditions, specifically, the Company’s stock price, the compensation cost and derived service periods are estimated using the Monte Carlo valuation method. The Company uses third party analyses to assist in developing the assumptions used in its binomial-lattice model and Monte Carlo valuations and the resulting fair value used to record compensation expense. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Any significant changes in these assumptions may materially affect the estimated fair value of the share-based award. |
Major Clients and Concentration of Credit Risk | Major Clients and Concentration of Credit Risk For the fiscal year ended July 31, 2017, 2016 and 2015, the Company’s 10 largest clients accounted for approximately 70%, 71% and 76% of consolidated net revenue, respectively. Sales to a consumer electronics client (“Client A”) accounted for approximately 15%, 13%, and 10% of the Company’s consolidated net revenue for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. Sales to another consumer electronics client (“Client B”) accounted for approximately 10%, 13%, and 19% of the Company’s consolidated net revenue for the fiscal years ended July 31, 2017, 2016 and 2015, respectively. The Europe reportable segment reports revenue associated with Client A. All four reportable segments report revenues associated with Client B. A computing market client accounted for approximately 13% and 3% of the Company’s Net Accounts Receivable balance as of July 31, 2017 and 2016, respectively. A consumer electronics client accounted for approximately 11% and 16% of the Company’s Net Accounts Receivable balance as of July 31, 2017 and 2016, respectively. To manage risk, the Company performs ongoing credit evaluations of its clients’ financial condition. The Company generally does not require collateral on accounts receivable. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. Financial instruments which potentially subject the Company to concentrations of credit risk are cash, cash equivalents and accounts receivable. The Company’s cash equivalent portfolio is diversified and consists primarily of short-term investment grade securities placed with high credit quality financial institutions. Cash and cash equivalents are maintained at accredited financial institutions, and those and the balances associated with Funds Held for Clients are at times without and in excess of federally insured limits. The Company has never experienced any losses related to these balances and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with financial institutions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date will be the first quarter of fiscal year 2019 using one of two retrospective application methods or a cumulative effect approach. The Company is evaluating the potential effects on the consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15 Presentation of Financial Statements—Going Concern (Subtopic 205-40), In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30)—Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. The Company adopted this guidance beginning in the first quarter of fiscal year 2017. Upon adoption, an entity must apply the guidance retrospectively to all prior periods presented in the financial statements. As such, the prior year consolidated balance sheets were also adjusted. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330), which provides guidance related to inventory measurement. The new standard requires entities to measure inventory at the lower of cost and net realizable value thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The new standard is effective for the Company beginning in the first quarter of fiscal year 2018. The adoption of the guidance is not expected to have material impact on the Company’s financial statement disclosures, results of operations and financial position. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This guidance allowed for adoption on either a prospective or retrospective basis. The Company had elected to early adopt this guidance on a prospective basis and, as a result, prior consolidated balance sheets were not retrospectively adjusted. The adoption of this guidance did increase the assets and liabilities balance on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to today’s accounting. This ASU will be effective for the Company beginning in the first quarter of fiscal year 2020. The Company is currently evaluating the effect the guidance will have on the Company’s financial statement disclosures, results of operations and financial position. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments in this update relate to when another party, along with the Company, are involved in providing a good or service to a customer and are intended to improve the operability and understandability of the implementation guidance on principal versus agent. Revenue recognition guidance requires companies to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the Company is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the Company is an agent). This ASU will be effective for the Company beginning in the first quarter of fiscal year 2019. The Company is currently in the process of assessing what impact this new update may have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This ASU will be effective for the Company beginning in the first quarter of fiscal year 2018. The adoption of the guidance is not expected to have material impact on the Company’s financial statement disclosures, results of operations and financial position. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances, which is similar to what is required today for Securities and Exchange Commission Registrants. This ASU will be effective for the Company beginning in the first quarter of fiscal year 2019. The Company is currently in the process of assessing what impact this new standard may have on its combined financial statements but does not believe that implementing this standard will have a significant impact on the Company’s current presentation and disclosures. In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715), which requires that the service cost component of net periodic pension and postretirement benefit cost be presented in the same line item as other employee compensation costs, while the other components be presented separately as non-operating income (expense). This ASU will be effective for the Company beginning in the first quarter of fiscal year 2019. The Company is currently in the process of assessing what impact this new standard may have on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: July 31, 2017 July 31, 2016 (In thousands) Cash and bank deposits $ 24,987 $ 29,566 Money market funds 85,683 101,224 $ 110,670 $ 130,790 |
Components of Inventories | Inventories consisted of the following: July 31, 2017 July 31, (In thousands) Raw materials $ 24,129 $ 28,506 Work-in-process 713 590 Finished goods 9,527 11,174 $ 34,369 $ 40,270 |
Estimated Useful Lives of Property and Equipment | The estimated useful lives are as follows: Buildings 32 years Machinery & equipment 3 to 5 years Furniture & fixtures 5 to 7 years Automobiles 5 years Software 3 to 8 years Leasehold improvements Shorter of the remaining lease term or the estimated useful life of the asset |
Reconciliation of Earnings Per Share | The following table reconciles earnings per share for the fiscal years ended July 31, 2017, 2016 and 2015. Twelve Months Ended July 31, 2017 2016 2015 (In thousands, except per share data) Net loss $ (25,827 ) $ (61,281 ) $ (18,429 ) Weighted average common shares outstanding 55,134 51,934 51,940 Weighted average common equivalent shares arising from dilutive stock options and restricted stock — — — Weighted average number of common and potential common shares 55,134 51,934 51,940 Basic and diluted net loss per share $ (0.47 ) $ (1.18 ) $ (0.35 ) |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Allowance for Doubtful Accounts | The allowance for doubtful accounts consisted of the following: July 31, 2017 2016 2015 (In thousands) Balance at beginning of year $ 489 $ 57 $ 63 Provisions charged to expense 132 458 — Accounts written off (5 ) (26 ) (6 ) $ 616 $ 489 $ 57 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Property and Equipment at Cost | Property and equipment at cost, consists of the following: July 31, 2017 2016 (In thousands) Buildings $ 24,476 $ 24,344 Machinery and equipment 24,504 24,676 Leasehold improvements 14,815 14,735 Software 48,536 44,579 Other 22,126 24,156 134,457 132,490 Less: Accumulated depreciation and amortization (115,902 ) (110,219 ) Property and equipment, net $ 18,555 $ 22,271 |
Assets under Capital Leases | Assets under capital leases which are included in the amounts above are summarized as follows: July 31, 2017 2016 (In thousands) Machinery and equipment $ 492 $ 370 Other 13 118 505 488 Less: Accumulated depreciation and amortization (431 ) (455 ) $ 74 $ 33 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Summary of Restructuring Accrual by Expense Category | The following tables summarize the activity in the restructuring accrual for the fiscal years ended July 31, 2017, 2016, and 2015: Employee Contractual Total (In thousands) Accrued restructuring balance at July 31, 2014 $ 1,687 $ 598 $ 2,285 Restructuring charges 5,063 324 5,387 Restructuring adjustments (193 ) (64 ) (257 ) Cash paid (4,949 ) (691 ) (5,640 ) Non-cash adjustments (171 ) (76 ) (247 ) Accrued restructuring balance at July 31, 2015 1,437 91 1,528 Restructuring charges 6,025 1,536 7,561 Restructuring adjustments (108 ) (32 ) (140 ) Cash paid (5,244 ) (641 ) (5,885 ) Non-cash adjustments (36 ) 1 (35 ) Accrued restructuring balance at July 31, 2016 2,074 955 3,029 Restructuring charges 1,853 439 2,292 Restructuring adjustments (416 ) 91 (325 ) Cash paid (3,357 ) (1,419 ) (4,776 ) Non-cash adjustments (54 ) 20 (34 ) Accrued restructuring balance at July 31, 2017 $ 100 $ 86 $ 186 |
Summary of Net Restructuring Charges | The net restructuring charges for the fiscal years ended July 31, 2017, 2016 and 2015 would have been allocated as follows had the Company recorded the expense and adjustments within the functional department of the restructured activities: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Cost of revenue $ 563 $ 4,812 $ 4,718 Selling, general and administrative 1,404 2,609 412 $ 1,967 $ 7,421 $ 5,130 |
Summary of Restructuring Accrual by Reportable Segment | The following tables summarize the restructuring accrual by operating segment for the fiscal years ended July 31, 2017, 2016 and 2015: Americas Asia Europe e-Business Consolidated (In thousands) Accrued restructuring balance at July 31, 2014 $ 195 $ 274 $ 1,750 $ 66 $ 2,285 Restructuring charges 1,073 1,056 3,158 100 5,387 Restructuring adjustments (164 ) (59 ) 7 (41 ) (257 ) Cash paid (869 ) (1,106 ) (3,655 ) (10 ) (5,640 ) Non-cash adjustments — 88 (234 ) (101 ) (247 ) Accrued restructuring balance at July 31, 2015 235 253 1,026 14 1,528 Restructuring charges 1,885 2,293 2,353 1,030 7,561 Restructuring adjustments — (46 ) (94 ) — (140 ) Cash paid (1,258 ) (1,563 ) (2,895 ) (169 ) (5,885 ) Non-cash adjustments — (43 ) 8 — (35 ) Accrued restructuring balance at July 31, 2016 862 894 398 875 3,029 Restructuring charges 500 972 698 122 2,292 Restructuring adjustments (162 ) (154 ) (75 ) 66 (325 ) Cash paid (1,172 ) (1,672 ) (984 ) (948 ) (4,776 ) Non-cash adjustments 23 (40 ) (14 ) (3 ) (34 ) Accrued restructuring balance at July 31, 2017 $ 51 $ — $ 23 $ 112 $ 186 |
ACCRUED EXPENSES AND OTHER CU35
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Components of Accrued Expenses | July 31, July 31, (In thousands) Accrued taxes $ 2,272 $ 3,068 Accrued compensation 10,678 9,590 Accrued interest 1,366 1,346 Accrued audit, tax and legal 2,759 2,544 Accrued contract labor 1,632 2,966 Accrued other 19,191 18,226 $ 37,898 $ 37,740 |
Components of Other Current Liabilities | July 31, July 31, (In thousands) Accrued pricing liabilities $ 18,882 $ 18,882 Other 7,259 8,227 $ 26,141 $ 27,109 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Net Carrying Value of the Notes | July 31, July 31, (In thousands) Carrying amount of equity component (net of allocated debt issuance costs) $ 26,961 $ 27,099 Principal amount of Notes $ 67,625 $ 69,625 Unamortized debt discount (7,227 ) (11,443 ) Unamortized debt issuance costs (640 ) (1,013 ) Net carrying amount $ 59,758 $ 57,169 |
Summary of Interest Expense Related to Convertible Notes | Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Interest expense related to contractual interest coupon $ 3,651 $ 5,159 $ 5,310 Interest expense related to accretion of the discount 3,919 4,967 4,473 Interest expense related to debt issuance costs 347 439 344 $ 7,917 $ 10,565 $ 10,127 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Future Annual Minimum Payments | Future annual minimum payments, including restructuring related obligations as of July 31, 2017, are as follows: Operating Capital Purchase Convertible Total (In thousands) For the fiscal years ended July 31: 2018 $ 9,947 $ 64 $ 30,998 $ 3,550 $ 44,559 2019 6,318 101 — 71,175 77,594 2020 3,398 55 — — 3,453 2021 2,358 55 — — 2,413 2022 2,160 30 — — 2,190 Thereafter — — — — — $ 24,181 $ 305 $ 30,998 $ 74,725 $ 130,209 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Plan Assets Measured at Fair Value on Recurring Basis Classified by Fair Value Hierarchy | The following table presents the plan assets measured at fair value on a recurring basis as of July 31, 2017 and 2016, classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2017 Asset Level 1 Level 2 Level 3 Insurance contract $ 20,726 98 % $ — $ — $ 20,726 Other investments 478 2 % — — 478 $ 21,204 100 % $ — $ — $ 21,204 Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2016 Asset Level 1 Level 2 Level 3 Insurance contract $ 24,012 94 % $ — $ — $ 24,012 Other investments 1,461 6 % — — 1,461 $ 25,473 100 % $ — $ — $ 25,473 |
Financial Assets Measured at Fair Value on Recurring Basis and Classified by Fair Value Hierarchy | The following tables present the Company’s financial assets measured at fair value on a recurring basis as of July 31, 2017 and 2016, classified by fair value hierarchy: Fair Value Measurements at (In thousands) July 31, 2017 Level 1 Level 2 Level 3 Assets: Marketable equity securities $ 11,898 $ 11,898 $ — $ — Money market funds 85,683 85,683 — — Fair Value Measurements at (In thousands) July 31, 2016 Level 1 Level 2 Level 3 Assets: Marketable equity securities $ 4,209 $ 4,209 $ — $ — Marketable corporate bonds 12,559 12,559 — — Money market funds 101,224 101,224 — — |
Summary of Changes in Fair Value of Pension Plan Assets | The following table sets forth a summary of the changes in the fair value of the pension plan assets for the years ended July 31, 2017 and 2016: July 31, 2017 2016 (In thousands) Fair value of plan assets at beginning of year 25,473 19,350 Actual return on plan assets (5,005 ) 5,556 Employee contributions 104 120 Employer contributions (withdrawals), net (342 ) 539 Settlements (279 ) (55 ) Benefits and administrative expenses paid (157 ) (269 ) Currency translation 1,410 232 Fair value of plan assets at end of year 21,204 25,473 |
Debt not Carried at Fair Value | The following table presents the Company’s debt not carried at fair value: July 31, 2017 July 31, 2016 Carrying Fair Carrying Fair Value Fair Value (In thousands) Notes payable $ 59,758 $ 63,852 $ 57,169 $ 50,957 Level 1 |
DEFINED BENEFIT PENSION PLANS (
DEFINED BENEFIT PENSION PLANS (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Aggregate Change in Benefit Obligation and Plan Assets | The aggregate change in benefit obligation and plan assets related to these plans was as follows: July 31, 2017 2016 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 31,667 $ 25,617 Service cost 700 632 Interest cost 573 637 Actuarial (gain) loss (6,814 ) 5,351 Employee contributions 103 120 Benefits and administrative expenses paid (157 ) (269 ) Adjustments — 156 Settlements (279 ) (55 ) Effect of curtailment — (941 ) Currency translation 1,671 419 Benefit obligation at end of year 27,464 31,667 Change in plan assets Fair value of plan assets at beginning of year 25,473 19,350 Actual return on plan assets (5,005 ) 5,556 Employee contributions 104 120 Employer contributions (withdrawals), net (342 ) 539 Settlements (279 ) (55 ) Benefits and administrative expenses paid (157 ) (269 ) Currency translation 1,410 232 Fair value of plan assets at end of year 21,204 25,473 Funded status Assets — 889 Current liability (12 ) (68 ) Noncurrent liability (6,248 ) (7,015 ) Net amount recognized in statement of financial position as a noncurrent asset (liability) $ (6,260 ) $ (6,194 ) |
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets | Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows: July 31, 2017 2016 (In thousands) Projected benefit obligation $ 27,464 $ 31,667 Accumulated benefit obligation $ 25,531 $ 29,031 Fair value of plan assets $ 21,204 $ 24,584 |
Components of Net Periodic Pension Cost | Components of net periodic pension cost were as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Service cost $ 700 $ 632 $ 658 Interest costs 573 637 604 Expected return on plan assets (457 ) (491 ) (537 ) Amortization of net actuarial (gain) loss 201 222 64 Curtailment gain — (844 ) (164 ) Net periodic pension costs $ 1,017 $ 156 $ 625 |
Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost | Weighted-average assumptions used to determine benefit obligations was as follows: Twelve Months Ended July 31, 2017 2016 2015 Discount rate 2.47 % 1.72 % 2.46 % Rate of compensation increase 1.93 % 1.92 % 1.95 % Weighted-average assumptions used to determine net periodic pension cost was as follows: Twelve Months Ended July 31, 2017 2016 2015 Discount rate 1.69 % 1.95 % 3.05 % Expected long-term rate of return on plan assets 1.69 % 2.41 % 3.02 % Rate of compensation increase 1.91 % 1.83 % 2.41 % |
Summary of Expected Benefit Payments from the Plans through Fiscal 2026 | The following table summarizes expected benefit payments from the plans through fiscal year 2026. Pension Benefit (in thousands) For the fiscal years ended July 31: 2018 168 2019 211 2020 210 2021 252 2022 254 Next 5 years 2,095 |
OTHER GAINS (LOSSES), NET (Tabl
OTHER GAINS (LOSSES), NET (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Components of Other Gains (Losses), Net | The following schedule reflects the components of “Other gains (losses), net”: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Foreign currency exchange gain (losses) $ 199 $ (593 ) $ 1,796 Gains (losses) on Trading Securities 3,128 (5,920 ) 13,611 Other, net (127 ) 756 (402 ) $ 3,200 $ (5,757 ) $ 15,005 |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Summary of Share-Based Compensation Expense Related to Employee Stock Options, Employee Stock Purchases and Nonvested Shares | The following table summarizes share-based compensation expense related to employee stock options, employee stock purchases and nonvested shares for the fiscal years ended July 31, 2017, 2016 and 2015: Twelve Months Ended July 31, 2017 2016 2015 Cost of revenue $ 53 $ 96 $ 171 Selling, general and administrative 628 1,030 1,586 $ 681 $ 1,126 $ 1,757 |
Weighted-Average Grant Date Fair Value of Employee Stock Options Granted | The weighted-average grant date fair value of employee stock options granted during the fiscal years ended July 31, 2016, and 2015 was $1.11 and $1.59, respectively, using the binomial-lattice model with the following weighted-average assumptions: Twelve Months Ended July 31, 2016 2015 Expected volatility 55.80 % 56.30 % Risk-free interest rate 1.28 % 1.24 % Expected term (in years) 4.41 4.41 Expected dividend yield 0.00 % 0.00 % |
Summary of Option Activity | A summary of option activity for the fiscal year ended July 31, 2017 is as follows: Number Weighted- Weighted-Average Aggregate (in thousands, except exercise price and years) Stock options outstanding, July 31, 2016 1,368 $ 4.36 Granted — — Exercised — — Forfeited or expired (795 ) 4.37 Stock options outstanding, July 31, 2017 573 4.36 2.70 $ — Stock options exercisable, July 31, 2017 532 $ 4.40 2.60 $ — |
Summary of Activity of Nonvested Stock | A summary of the activity of the Company’s nonvested stock for the fiscal year ended July 31, 2017, is as follows: Number Weighted-Average (share amounts in thousands) Nonvested stock outstanding, July 31, 2016 258 $ 2.48 Granted 296 — Vested (245 ) 2.45 Forfeited (13 ) 3.05 Nonvested stock outstanding, July 31, 2017 296 $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Components of Loss from Continuing Operations before Provision for Income Taxes | The components of loss from continuing operations before provision for income taxes are as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Income (loss) from operations before income taxes: U.S. $ (34,884 ) $ (69,861 ) $ (8,476 ) Foreign 10,475 13,234 (7,878 ) Total loss from operations before income taxes $ (24,409 ) $ (56,627 ) $ (16,354 ) |
Components of Income Tax Expense | The components of income tax expense have been recorded in the Company’s consolidated financial statements as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Income tax expense from continuing operations 2,696 5,443 2,283 Total income tax expense $ 2,696 $ 5,443 $ 2,283 |
Components of Income Tax Expense from Continuing Operations | The components of income tax expense from continuing operations consist of the following: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Current provision Federal $ — $ — $ — State — — — Foreign 2,298 3,090 4,323 2,298 3,090 4,323 Deferred provision: Federal — — — State — — — Foreign 398 2,353 (2,040 ) 398 2,353 (2,040 ) Total tax provision $ 2,696 $ 5,443 $ 2,283 |
Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows: July 31, 2017 July 31, 2016 (In thousands) Deferred tax assets: Accruals and reserves $ 12,193 $ 12,240 Tax basis in excess of financial basis of investments in affiliates 18,332 19,051 Tax basis in excess of financial basis for intangible and fixed assets 7,689 8,455 Net operating loss and capital loss carry forwards 751,435 744,357 Total gross deferred tax assets 789,649 784,103 Less: valuation allowance (771,884 ) (760,906 ) Net deferred tax assets $ 17,765 $ 23,197 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (784 ) $ (861 ) Convertible Debt (2,655 ) (4,241 ) Undistributed accumulated earnings of foreign subsidiaries (13,150 ) (16,554 ) Total gross deferred tax liabilities (16,589 ) (21,656 ) Net deferred tax asset $ 1,176 $ 1,541 |
Subsequently Reported Tax Benefits Relating to Valuation Allowance for Deferred Tax Assets | Subsequently reported tax benefits relating to the valuation allowance for deferred tax assets as of July 31, 2017 will be allocated as follows (in thousands): Income tax benefit recognized in the consolidated statement of operations $ (756,423 ) Additional paid in capital (15,461 ) $ (771,884 ) |
Reconciliation of Income Tax Expense Attributable to Income from Continuing Operations | Income tax expense attributable to income from continuing operations differs from the expense computed by applying the U.S. federal income tax rate of 35% to income (loss) from continuing operations before income taxes as a result of the following: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Computed “expected” income tax expense (benefit) $ (8,106 ) $ (19,368 ) $ (5,653 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance 10,978 22,907 2,067 Foreign dividends 2,724 4,730 732 Foreign tax rate differential (2,386 ) (1,082 ) 1,262 Capitalized costs — — (478 ) Nondeductible goodwill impairment — — 1,070 Nondeductible expenses 20 262 417 Foreign withholding taxes 239 762 (19 ) Reversal of uncertain tax position reserves (481 ) (2,768 ) — Other (292 ) — 2,885 Actual income tax expense $ 2,696 $ 5,443 $ 2,283 |
Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Balance as of beginning of year $ 994 $ 3,756 $ 1,028 Additions for current year tax positions — 19 2,884 Currency translation 18 — (156 ) Reductions for lapses in statute of limitations (331 ) (27 ) — Reductions of prior year tax positions — (2,754 ) — Balance as of end of year $ 681 $ 994 $ 3,756 |
ACCUMULATED OTHER COMPREHENSI43
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Accumulated Other Comprehensive Income, Net of Income Taxes | The components of accumulated other comprehensive income, net of income taxes, are as follows: Foreign Pension Unrealized Total (In thousands) Accumulated other comprehensive income (loss) at July 31, 2016 $ 6,131 $ (4,206 ) $ 94 $ 2,019 Foreign currency translation adjustment 1,391 — — 1,391 Pension liability adjustments — 830 — 830 Net unrealized holding gain on securities — — 73 73 Net current-period other comprehensive income (loss) 1,391 830 73 2,294 Accumulated other comprehensive income (loss) at July 31, 2017 $ 7,522 $ (3,376 ) $ 167 $ 4,313 |
STATEMENT OF CASH FLOWS SUPPL44
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Cash Used for Operating Activities Reflect Cash Payments for Interest and Income Taxes | Cash used for operating activities reflect cash payments for interest and income taxes as follows: Years Ended July 31, 2017 2016 2015 (In thousands) Cash paid for interest $ 3,783 $ 6,111 $ 5,281 Cash paid for income taxes $ 2,500 $ 3,287 $ 2,078 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Summarized Financial Information of Continuing Operations by Operating Segment and Corporate-Level Activity | Summarized financial information of the Company’s continuing operations by operating segment is as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Net revenue: Americas $ 92,324 $ 106,143 $ 200,929 Asia 158,048 167,861 163,262 Europe 159,085 151,842 160,602 e-Business 27,163 33,177 36,880 $ 436,620 $ 459,023 $ 561,673 Operating income (loss): Americas $ (10,342 ) $ (14,731 ) $ (4,407 ) Asia 5,620 (855 ) 10,003 Europe (9,008 ) (13,825 ) (6,479 ) e-Business (1,185 ) (4,384 ) (2,367 ) Total Segment operating income (loss) (14,915 ) (33,795 ) (3,250 ) Corporate-level activity (4,846 ) (6,777 ) (11,089 ) Total operating loss (19,761 ) (40,572 ) (14,339 ) Total other expense 4,648 16,055 2,015 Loss before income taxes $ (24,409 ) $ (56,627 ) $ (16,354 ) |
Total Assets of Continuing Operations | July 31, July 31, (In thousands) Total assets: Americas $ 21,876 $ 28,280 Asia 63,819 89,242 Europe 64,639 75,952 e-Business 20,703 22,884 Sub-total—segment assets 171,037 216,358 Corporate 110,261 131,574 $ 281,298 $ 347,932 |
Summarized Financial Information of Net Revenue from External Customers by Group of Services | Summarized financial information of the Company’s net revenue from external customers by group of services is as follows: Twelve Months Ended July 31, 2017 2016 2015 (In thousands) Supply chain services $ 409,457 $ 425,846 $ 524,793 e-Business services 27,163 33,177 36,880 $ 436,620 $ 459,023 $ 561,673 |
SELECTED QUARTERLY FINANCIAL 46
SELECTED QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2017 | |
Selected Quarterly Financial Information | The following table sets forth selected quarterly financial information for the fiscal years ended July 31, 2017 and 2016. The operating results for any given quarter are not necessarily indicative of results for any future period. Quarter Ended Quarter Ended Oct. 31, ‘16 Jan. 31, ‘17 Apr. 30, ‘17 Jul. 31, ‘17 Oct. 31, ‘15 Jan. 31, ‘16 Apr. 30, ‘16 Jul. 31, ‘16 (In thousands, except per share data) (In thousands, except per share data) Net revenue $ 121,327 $ 117,568 $ 97,948 $ 99,777 $ 141,089 $ 119,966 $ 96,460 $ 101,508 Cost of revenue 111,994 106,370 89,406 92,485 $ 128,637 $ 116,311 $ 94,286 $ 95,031 Gross profit 9,333 11,198 8,542 7,292 12,452 3,655 2,174 6,477 Total operating expenses 14,975 12,702 13,785 14,664 14,021 15,318 14,671 21,320 Operating loss (5,642 ) (1,504 ) (5,243 ) (7,372 ) (1,569 ) (11,663 ) (12,497 ) (14,843 ) Total other income (expense) (2,352 ) (1,075 ) 763 (1,984 ) (12,354 ) (2,338 ) (260 ) (1,103 ) Income tax expense (1,049 ) (723 ) (819 ) (105 ) (850 ) (206 ) (408 ) (3,979 ) Gains on investments in affiliates, net of tax 500 396 232 150 — 259 316 214 Net loss $ (8,543 ) $ (2,906 ) $ (5,067 ) $ (9,311 ) $ (14,773 ) $ (13,948 ) $ (12,849 ) $ (19,711 ) Basic and diluted earnings (loss) per share: Net income (loss) $ (0.16 ) $ (0.05 ) $ (0.09 ) $ (0.17 ) $ (0.29 ) $ (0.27 ) $ (0.25 ) $ (0.38 ) |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands, shares in Millions | 12 Months Ended | ||
Jul. 31, 2017USD ($)SegmentCustomershares | Jul. 31, 2016USD ($)Segmentshares | Jul. 31, 2015USD ($)shares | |
Significant Of Accounting Policies [Line Items] | |||
Highly liquid investment period to be considered cash equivalent | 3 months | ||
Fair value of notes payable | $ 63,852 | $ 50,957 | |
Impairment charges related to investments | $ 42 | $ 7,295 | |
Goodwill impairment charge | $ 3,100 | ||
Number of reportable segments | Segment | 4 | 3 | |
Number of largest clients | Customer | 10 | ||
Convertible Notes | |||
Significant Of Accounting Policies [Line Items] | |||
Common stock equivalent shares excluded from the denominator in calculation of diluted earnings (loss)per share | shares | 11.4 | 16.5 | 16.6 |
Sales Revenue, Net | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 70.00% | 71.00% | 76.00% |
Client A | Sales Revenue, Net | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 15.00% | 13.00% | 10.00% |
Client B | Sales Revenue, Net | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 10.00% | 13.00% | 19.00% |
Computing Market Client | Net Accounts Receivable | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 13.00% | 3.00% | |
Consumer Electronics Client | Net Accounts Receivable | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 11.00% | 16.00% | |
Stock Options And Restricted Stock | |||
Significant Of Accounting Policies [Line Items] | |||
Common stock equivalent shares excluded from the denominator in calculation of diluted earnings (loss)per share | shares | 14.2 | 21.1 | 21.6 |
Minimum | |||
Significant Of Accounting Policies [Line Items] | |||
Equity method investment ownership percentage | 20.00% | ||
Highly liquid investment period to be considered short term investments | 3 months | ||
Maximum | |||
Significant Of Accounting Policies [Line Items] | |||
Equity method investment ownership percentage | 50.00% | ||
Highly liquid investment period to be considered short term investments | 12 months |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2014 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and bank deposits | $ 24,987 | $ 29,566 | ||
Money market funds | 85,683 | 101,224 | ||
Cash and cash equivalents | $ 110,670 | $ 130,790 | $ 119,431 | $ 183,515 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 24,129 | $ 28,506 |
Work-in-process | 713 | 590 |
Finished goods | 9,527 | 11,174 |
Inventories, net | $ 34,369 | $ 40,270 |
Estimated Useful Lives of Prope
Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Jul. 31, 2017 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 32 years |
Automobiles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life, description | Shorter of the remaining lease term or the estimated useful life of the asset |
Minimum | Machinery and Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Minimum | Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Minimum | Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Maximum | Machinery and Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Maximum | Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Maximum | Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 8 years |
Reconciliation of Earnings (Los
Reconciliation of Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |||||||||||
Net loss | $ (9,311) | $ (5,067) | $ (2,906) | $ (8,543) | $ (19,711) | $ (12,849) | $ (13,948) | $ (14,773) | $ (25,827) | $ (61,281) | $ (18,429) |
Weighted average common shares outstanding | 55,134 | 51,934 | 51,940 | ||||||||
Weighted average common equivalent shares arising from dilutive stock options and restricted stock | 0 | 0 | 0 | ||||||||
Weighted average number of common and potential common shares | 55,134 | 51,934 | 51,940 | ||||||||
Basic and diluted net loss per share | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ (0.38) | $ (0.25) | $ (0.27) | $ (0.29) | $ (0.47) | $ (1.18) | $ (0.35) |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at beginning of year | $ 489 | $ 57 | $ 63 |
Provisions charged to expense | 132 | 458 | |
Accounts written off | (5) | (26) | (6) |
Balance at end of year | $ 616 | $ 489 | $ 57 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amount of accounts receivable factored | $ 41.1 | $ 0.9 |
London Interbank Offered Rate (LIBOR) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate on the sale of receivables | 0.85% |
Property and Equipment at Cost
Property and Equipment at Cost (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Buildings | $ 24,476 | $ 24,344 |
Machinery and equipment | 24,504 | 24,676 |
Leasehold improvements | 14,815 | 14,735 |
Software | 48,536 | 44,579 |
Other | 22,126 | 24,156 |
Property plant and equipment, gross | 134,457 | 132,490 |
Less: Accumulated depreciation and amortization | (115,902) | (110,219) |
Property and equipment, net | $ 18,555 | $ 22,271 |
Assets under Capital Leases (De
Assets under Capital Leases (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Capital leased assets gross | $ 505 | $ 488 |
Less: Accumulated depreciation and amortization | (431) | (455) |
Capital leased assets net | 74 | 33 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capital leased assets gross | 492 | 370 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Capital leased assets gross | $ 13 | $ 118 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 8,206 | $ 8,119 | $ 8,668 |
Impairment of goodwill and long-lived assets | 261 | 305 | 3,360 |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Impairment charges related to write-down of leasehold improvements | 300 | ||
Americas | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 1,200 | 1,500 | 2,300 |
Asia | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 1,900 | 3,200 | 3,200 |
Europe | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 1,800 | 2,600 | 2,500 |
e-Business Services | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 600 | 800 | $ 600 |
Kildare | |||
Property, Plant and Equipment [Line Items] | |||
Impairment of goodwill and long-lived assets | $ 300 |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Investment [Line Items] | ||||||||||
Sale (purchase) of trading securities | $ 8,000 | $ 59,300 | $ 2,100 | |||||||
Gains (losses) in trading securities | 3,128 | (5,920) | 13,611 | |||||||
Sale of trading securities | 57,200 | |||||||||
Acquired trading securities | 1,220 | 69,221 | ||||||||
Trading securities | $ 11,898 | $ 16,768 | 11,898 | 16,768 | ||||||
(Gains) losses on investment on affiliates, net of tax | $ 150 | $ 232 | $ 396 | $ 500 | 214 | $ 316 | $ 259 | 1,278 | 789 | 208 |
Impairment charges | 42 | 7,295 | ||||||||
Cash | ||||||||||
Investment [Line Items] | ||||||||||
Gains (losses) in trading securities | 900 | 6,400 | 800 | |||||||
Non Cash | ||||||||||
Investment [Line Items] | ||||||||||
Gains (losses) in trading securities | $ 2,200 | (12,300) | 12,800 | |||||||
Affiliates | ||||||||||
Investment [Line Items] | ||||||||||
Impairment charges | $ 7,300 | |||||||||
Affiliates | Maximum | ||||||||||
Investment [Line Items] | ||||||||||
Company's voting interest | 50.00% | 50.00% | ||||||||
Affiliates | Minimum | ||||||||||
Investment [Line Items] | ||||||||||
Company's voting interest | 20.00% | 20.00% | ||||||||
Convertible Debt Securities | ||||||||||
Investment [Line Items] | ||||||||||
Trading securities | $ 12,600 | $ 12,600 | ||||||||
Available For Sale Securities | Affiliates | Maximum | ||||||||||
Investment [Line Items] | ||||||||||
Ownership interest on investment, percent | 20.00% |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Additional Information (Detail) $ in Thousands | 12 Months Ended |
Jul. 31, 2015USD ($) | |
Goodwill [Line Items] | |
Goodwill impairment charge | $ 3,100 |
Amortization expense for intangible assets | $ 667 |
Summary of Restructuring Accrua
Summary of Restructuring Accrual by Expense Category (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | $ 3,029 | $ 1,528 | $ 2,285 |
Restructuring charges | 2,292 | 7,561 | 5,387 |
Restructuring adjustments | (325) | (140) | (257) |
Cash paid | (4,776) | (5,885) | (5,640) |
Non-cash adjustments | (34) | (35) | (247) |
Accrued restructuring, ending balance | 186 | 3,029 | 1,528 |
Employee Related Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 2,074 | 1,437 | 1,687 |
Restructuring charges | 1,853 | 6,025 | 5,063 |
Restructuring adjustments | (416) | (108) | (193) |
Cash paid | (3,357) | (5,244) | (4,949) |
Non-cash adjustments | (54) | (36) | (171) |
Accrued restructuring, ending balance | 100 | 2,074 | 1,437 |
Contractual Obligations | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 955 | 91 | 598 |
Restructuring charges | 439 | 1,536 | 324 |
Restructuring adjustments | 91 | (32) | (64) |
Cash paid | (1,419) | (641) | (691) |
Non-cash adjustments | 20 | 1 | (76) |
Accrued restructuring, ending balance | $ 86 | $ 955 | $ 91 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017USD ($)Employee | Jul. 31, 2016USD ($)Employee | Jul. 31, 2015USD ($)Employee | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | $ 1,967 | $ 7,421 | $ 5,130 |
Restructuring charge related to workforce reduction | 1,500 | 5,900 | 4,900 |
Restructuring charge related to facility closed | $ 500 | $ 1,500 | $ 200 |
Number of workforce reduction | Employee | 78 | 228 | 235 |
Summary of Net Restructuring Ch
Summary of Net Restructuring Charges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | $ 1,967 | $ 7,421 | $ 5,130 |
Cost of revenue | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | 563 | 4,812 | 4,718 |
Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | $ 1,404 | $ 2,609 | $ 412 |
Summary of Restructuring Accr62
Summary of Restructuring Accrual by Reportable Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | $ 3,029 | $ 1,528 | $ 2,285 |
Restructuring charges | 2,292 | 7,561 | 5,387 |
Restructuring adjustments | (325) | (140) | (257) |
Cash paid | (4,776) | (5,885) | (5,640) |
Non-cash adjustments | (34) | (35) | (247) |
Accrued restructuring, ending balance | 186 | 3,029 | 1,528 |
Americas | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 862 | 235 | 195 |
Restructuring charges | 500 | 1,885 | 1,073 |
Restructuring adjustments | (162) | (164) | |
Cash paid | (1,172) | (1,258) | (869) |
Non-cash adjustments | 23 | ||
Accrued restructuring, ending balance | 51 | 862 | 235 |
Asia | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 894 | 253 | 274 |
Restructuring charges | 972 | 2,293 | 1,056 |
Restructuring adjustments | (154) | (46) | (59) |
Cash paid | (1,672) | (1,563) | (1,106) |
Non-cash adjustments | (40) | (43) | 88 |
Accrued restructuring, ending balance | 894 | 253 | |
Europe | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 398 | 1,026 | 1,750 |
Restructuring charges | 698 | 2,353 | 3,158 |
Restructuring adjustments | (75) | (94) | 7 |
Cash paid | (984) | (2,895) | (3,655) |
Non-cash adjustments | (14) | 8 | (234) |
Accrued restructuring, ending balance | 23 | 398 | 1,026 |
e-Business Services | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 875 | 14 | 66 |
Restructuring charges | 122 | 1,030 | 100 |
Restructuring adjustments | 66 | (41) | |
Cash paid | (948) | (169) | (10) |
Non-cash adjustments | (3) | (101) | |
Accrued restructuring, ending balance | $ 112 | $ 875 | $ 14 |
Components of Accrued Expenses
Components of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Accrued Expenses [Line Items] | ||
Accrued taxes | $ 2,272 | $ 3,068 |
Accrued compensation | 10,678 | 9,590 |
Accrued interest | 1,366 | 1,346 |
Accrued audit, tax and legal | 2,759 | 2,544 |
Accrued contract labor | 1,632 | 2,966 |
Accrued other | 19,191 | 18,226 |
Accrued expenses | $ 37,898 | $ 37,740 |
Components of Other Current Lia
Components of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Other Current Liabilities [Line Items] | ||
Accrued pricing liabilities | $ 18,882 | $ 18,882 |
Other | 7,259 | 8,227 |
Other current liabilities | $ 26,141 | $ 27,109 |
Accrued Expenses and Other Cu65
Accrued Expenses and Other Current Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Accrued Expenses and Other Current Liabilities [Line Items] | ||
Accrued pricing liabilities | $ 18,882 | $ 18,882 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Jun. 30, 2014USD ($) | Mar. 18, 2014USD ($) | Jul. 31, 2017USD ($)d$ / shares | Jul. 31, 2016USD ($) | Jul. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||||
Debt instrument issued | $ 67,625,000 | $ 69,625,000 | |||
Debt instrument issuance costs | 640,000 | 1,013,000 | |||
Purchase of the Company's Convertible Notes | 1,763,000 | 20,257,000 | |||
Notes payable, Fair Value | 63,852,000 | 50,957,000 | |||
Debt instrument, carrying amount | $ 59,758,000 | 57,169,000 | |||
Convertible debt, remaining discount amortization period | 19 months | ||||
Debt instrument, interest expense | $ 3,919,000 | 4,967,000 | $ 4,473,000 | ||
PNC Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, term | 5 years | ||||
Line of credit facility, maximum credit commitment | $ 50,000,000 | ||||
Credit facility expiry date | Jun. 30, 2019 | ||||
Line of credit facility, unutilized commitment fee percentage | 0.25% | ||||
Outstanding indebtedness under the Credit Facility | $ 0 | 0 | |||
Domestic Subsidiaries | |||||
Debt Instrument [Line Items] | |||||
Percentage of equity interests pledged | 100.00% | ||||
Foreign Subsidiaries | |||||
Debt Instrument [Line Items] | |||||
Percentage of equity interests pledged | 65.00% | ||||
Letter of Credit Sublimit | PNC Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum credit commitment | $ 5,000,000 | ||||
Uncommitted Accordion Feature | PNC Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum credit commitment | $ 20,000,000 | ||||
Scenario 1 | London Interbank Offered Rate (LIBOR) | PNC Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 2.25% | ||||
Scenario 2 | London Interbank Offered Rate (LIBOR) | PNC Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 1.00% | ||||
Scenario 2 | Federal Funds Open Rate | PNC Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 0.50% | ||||
5.25% Convertible Senior Notes Due 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument issued | $ 100,000,000 | ||||
Debt instrument, stated interest rate | 5.25% | 0.50% | |||
Debt instrument, convertible, conversion ratio | 166.2593 | ||||
Initial Conversion price | $ / shares | $ 6.01 | ||||
Debt instrument, redemption price percentage | 100.00% | ||||
Debt instrument, convertible, earliest date | Mar. 6, 2017 | ||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||
Debt instrument, convertible, threshold trading days | d | 20 | ||||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | ||||
Additional interest paid | $ 200,000 | ||||
Debt instrument conversion option | 28,100,000 | ||||
Debt instrument issuance costs | 3,400,000 | ||||
Deferred debt instrument issuance costs | 2,500,000 | ||||
Debt instrument, interest expense | $ 7,917,000 | $ 10,565,000 | $ 10,127,000 | ||
Debt instrument, interest rate, effective percentage | 13.90% | ||||
Notes Payable One | |||||
Debt Instrument [Line Items] | |||||
Face amount of purchased Notes | $ 2,000,000 | ||||
Purchase of the Company's Convertible Notes | 1,800,000 | ||||
Gain on purchase of Notes | $ 100,000 |
Net Carrying Value of the Notes
Net Carrying Value of the Notes (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Debt Instrument [Line Items] | ||
Carrying amount of equity component (net of allocated debt issuance costs) | $ 26,961 | $ 27,099 |
Principal amount of Notes | 67,625 | 69,625 |
Unamortized debt discount | (7,227) | (11,443) |
Unamortized debt issuance costs | (640) | (1,013) |
Net carrying amount | $ 59,758 | $ 57,169 |
Summary of Interest Expense Rel
Summary of Interest Expense Related to Convertible Notes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Non Cash Convertible Debt Related Expense [Line Items] | |||
Debt instrument, interest expense | $ 3,919 | $ 4,967 | $ 4,473 |
5.25% Convertible Senior Notes Due 2019 | |||
Non Cash Convertible Debt Related Expense [Line Items] | |||
Debt instrument, interest expense | 7,917 | 10,565 | 10,127 |
5.25% Convertible Senior Notes Due 2019 | Coupon Interest | |||
Non Cash Convertible Debt Related Expense [Line Items] | |||
Debt instrument, interest expense | 3,651 | 5,159 | 5,310 |
5.25% Convertible Senior Notes Due 2019 | Accretion of Debt Discount | |||
Non Cash Convertible Debt Related Expense [Line Items] | |||
Debt instrument, interest expense | 3,919 | 4,967 | 4,473 |
5.25% Convertible Senior Notes Due 2019 | Amortization of Debt Issue Cost | |||
Non Cash Convertible Debt Related Expense [Line Items] | |||
Debt instrument, interest expense | $ 347 | $ 439 | $ 344 |
Future Annual Minimum Payments
Future Annual Minimum Payments (Detail) $ in Thousands | Jul. 31, 2017USD ($) |
Other Commitments [Line Items] | |
2,018 | $ 44,559 |
2,019 | 77,594 |
2,020 | 3,453 |
2,021 | 2,413 |
2,022 | 2,190 |
Thereafter | 0 |
Future Minimum Payments Due, Total | 130,209 |
Operating Leases | |
Other Commitments [Line Items] | |
2,018 | 9,947 |
2,019 | 6,318 |
2,020 | 3,398 |
2,021 | 2,358 |
2,022 | 2,160 |
Thereafter | 0 |
Future Minimum Payments Due, Total | 24,181 |
Capital Lease Obligations | |
Other Commitments [Line Items] | |
2,018 | 64 |
2,019 | 101 |
2,020 | 55 |
2,021 | 55 |
2,022 | 30 |
Thereafter | 0 |
Future Minimum Payments Due, Total | 305 |
Purchase Obligation | |
Other Commitments [Line Items] | |
2,018 | 30,998 |
Thereafter | 0 |
Future Minimum Payments Due, Total | 30,998 |
Convertible Notes Interest and Principal | |
Other Commitments [Line Items] | |
2,018 | 3,550 |
2,019 | 71,175 |
Thereafter | 0 |
Future Minimum Payments Due, Total | $ 74,725 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jun. 08, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
Commitments and Contingencies [Line Items] | ||||
Total rent and equipment lease expense charged to continuing operations | $ 15,600,000 | $ 17,300,000 | $ 19,700,000 | |
Pending Litigation | ||||
Commitments and Contingencies [Line Items] | ||||
Damages sought | $ 1,000,000 | |||
Vendor Agreements | ||||
Commitments and Contingencies [Line Items] | ||||
Outstanding obligations | $ 0 |
Defined Benefit Pension Plans -
Defined Benefit Pension Plans - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($)Program | Jul. 31, 2016USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Proceeds from the termination of defined benefit pension plan | $ 905 | ||
Accumulated benefit obligation | 25,500 | $ 29,000 | |
Amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2018 | 4,700 | ||
Market value of plan assets using Level 3 inputs | $ 21,200 | ||
Cumulative gains and losses in excess of the greater of the pension benefit obligation | 10.00% | ||
Netherlands | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of pension plans | Program | 2 | ||
Taiwan Plan | Taiwan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Proceeds from the termination of defined benefit pension plan | $ 900 | ||
Unfunded Defined Benefit Pension Plans | Japan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of pension plans | Program | 1 | ||
Scenario, Forecast | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum required contributions to the plans | $ 200 |
Schedule of Defined Benefit Pla
Schedule of Defined Benefit Plan Assets Fair Value Measurements (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 100.00% | 100.00% | |
Defined benefit plan, fair value of plan assets | $ 21,204 | $ 25,473 | $ 19,350 |
Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 98.00% | 94.00% | |
Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 2.00% | 6.00% | |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 21,204 | $ 25,473 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 21,204 | 25,473 | |
Fair Value, Measurements, Recurring | Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 20,726 | 24,012 | |
Fair Value, Measurements, Recurring | Insurance Contracts | Fair Value, Inputs, Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 20,726 | 24,012 | |
Fair Value, Measurements, Recurring | Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 478 | 1,461 | |
Fair Value, Measurements, Recurring | Other Investments | Fair Value, Inputs, Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 478 | $ 1,461 |
Aggregate Change in Benefit Obl
Aggregate Change in Benefit Obligation and Plan Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Change in benefit obligation | |||
Benefit obligation at beginning of year | $ 31,667 | $ 25,617 | |
Service cost | 700 | 632 | $ 658 |
Interest cost | 573 | 637 | 604 |
Actuarial (gain) loss | (6,814) | 5,351 | |
Employee contributions | 103 | 120 | |
Benefits and administrative expenses paid | (157) | (269) | |
Adjustments | 156 | ||
Settlements | (279) | (55) | |
Effect of curtailment | (941) | ||
Currency translation | 1,671 | 419 | |
Benefit obligation at end of year | 27,464 | 31,667 | 25,617 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 25,473 | 19,350 | |
Actual return on plan assets | (5,005) | 5,556 | |
Employee contributions | 104 | 120 | |
Employer contributions (withdrawals), net | (342) | 539 | |
Settlements | (279) | (55) | |
Benefits and administrative expenses paid | (157) | (269) | |
Currency translation | 1,410 | 232 | |
Fair value of plan assets at end of year | 21,204 | 25,473 | $ 19,350 |
Assets | 889 | ||
Current liability | (12) | (68) | |
Noncurrent liability | (6,248) | (7,015) | |
Net amount recognized in statement of financial position as a noncurrent asset (liability) | $ (6,260) | $ (6,194) |
Information for Pension Plans w
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 27,464 | $ 31,667 |
Accumulated benefit obligation | 25,531 | 29,031 |
Fair value of plan assets | $ 21,204 | $ 24,584 |
Components of Net Periodic Pens
Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 700 | $ 632 | $ 658 |
Interest costs | 573 | 637 | 604 |
Expected return on plan assets | (457) | (491) | (537) |
Amortization of net actuarial (gain) loss | 201 | 222 | 64 |
Curtailment gain | (844) | (164) | |
Net periodic pension costs | $ 1,017 | $ 156 | $ 625 |
Weighted Average Assumptions Us
Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.47% | 1.72% | 2.46% |
Rate of compensation increase | 1.93% | 1.92% | 1.95% |
Weighted-Average Assumptions Us
Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost (Detail) | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 1.69% | 1.95% | 3.05% |
Expected long-term rate of return on plan assets | 1.69% | 2.41% | 3.02% |
Rate of compensation increase | 1.91% | 1.83% | 2.41% |
Summary of Expected Benefit Pay
Summary of Expected Benefit Payments from Plans through Fiscal 2026 (Detail) $ in Thousands | Jul. 31, 2017USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | $ 168 |
2,019 | 211 |
2,020 | 210 |
2,021 | 252 |
2,022 | 254 |
Next 5 years | $ 2,095 |
Components of Other Gains (Loss
Components of Other Gains (Losses), Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Component Of Other Expense Income Nonoperating [Line Items] | |||
Foreign currency exchange gain (losses) | $ 199 | $ (593) | $ 1,796 |
Gains (losses) on Trading Securities | 3,128 | (5,920) | 13,611 |
Other, net | (127) | 756 | (402) |
Other gains (losses), net | $ 3,200 | $ (5,757) | $ 15,005 |
Other Gains (Losses), Net - Add
Other Gains (Losses), Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Component Of Other Expense Income Nonoperating [Line Items] | |||
Other gains (losses), net | $ 3,200 | $ (5,757) | $ 15,005 |
Gains (losses) in trading securities | 3,128 | (5,920) | 13,611 |
Net realized and unrealized foreign currency exchange gain (losses) | 200 | (600) | 1,800 |
Non Cash | |||
Component Of Other Expense Income Nonoperating [Line Items] | |||
Gains (losses) in trading securities | 2,200 | (12,300) | 12,800 |
Gain on purchase of Notes | 800 | ||
Cash | |||
Component Of Other Expense Income Nonoperating [Line Items] | |||
Gains (losses) in trading securities | $ 900 | $ 6,400 | $ 800 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Detail) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Jul. 31, 2017USD ($)$ / sharesshares | Jul. 31, 2016USD ($)$ / sharesshares | Jul. 31, 2015USD ($)$ / sharesshares | Jul. 31, 2013TradingPrice | Dec. 08, 2010shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable rate of options granted | 25.00% | ||||
Stock options outstanding | 573,000 | 1,368,000 | |||
2010 Plan number of shares pursuant to stock options granted | 0 | ||||
Weighted-average grant date fair value of employee stock options granted | $ / shares | $ 1.11 | $ 1.59 | |||
Unrecognized share-based compensation related to stock options | $ | $ 0.1 | ||||
Stock options vested and expected to vest | 600,000 | ||||
Weighted-average remaining contractual term | 2 years 8 months 16 days | ||||
Non vested stock compensation expense | $ | $ 0.5 | $ 0.7 | $ 0.6 | ||
Grant date fair value of nonvested stock | $ / shares | $ 0.6 | $ 1 | $ 0.3 | ||
Unrecognized compensation cost related to nonvested stock | $ | $ 0.2 | ||||
2005 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable terms | 3 years | ||||
2010 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
2010 Plan number of shares pursuant to stock options granted | 5,000,000 | ||||
2010 Plan additional shares of common stock | 2,922,258 | ||||
Common Stock shares available for future issuance | 5,299,305 | ||||
ESPP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock shares available for future issuance | 136,000 | ||||
Number of shares pursuant to stock options granted | 600,000 | ||||
Common stock purchase price as a percentage of market value | 85.00% | ||||
Shares issued under plan | 11,000 | 30,000 | 15,000 | ||
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual terms, share options granted | 7 years | ||||
Weighted average period of cost expected to be expensed | 10 months 25 days | ||||
Stock Option | 2005 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual terms, share options granted | 10 years | ||||
Market Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable rate of options granted | 20.00% | ||||
Contractual terms, share options granted | 7 years | ||||
Stock options outstanding | 0 | ||||
Market Options | First Anniversary | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Price performance threshold | TradingPrice | 1.5 | ||||
Market Options | Second Anniversary | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Price performance threshold | TradingPrice | 2 | ||||
Market Options | Third Anniversary | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Price performance threshold | TradingPrice | 2.5 | ||||
Market Options | Fourth Anniversary | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Price performance threshold | TradingPrice | 3 | ||||
Market Options | Fifth Anniversary | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Price performance threshold | TradingPrice | 3.5 | ||||
Non-vested restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average period of cost expected to be expensed | 4 months 24 days | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable terms | 1 year | ||||
Term of restriction period | 1 year | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable terms | 3 years | ||||
Term of restriction period | 5 years |
Summary of Share-Based Compensa
Summary of Share-Based Compensation (Benefit) Expense Related to Employee Stock Options, Employee Stock Purchases and Non-Vested Shares (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 681 | $ 1,126 | $ 1,757 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 53 | 96 | 171 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 628 | $ 1,030 | $ 1,586 |
Weighted-Average Grant Date Fai
Weighted-Average Grant Date Fair Value of Employee Stock Options Granted (Detail) | 12 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||
Expected volatility | 55.80% | 56.30% |
Risk-free interest rate | 1.28% | 1.24% |
Expected term (in years) | 4 years 4 months 28 days | 4 years 4 months 28 days |
Expected dividend yield | 0.00% | 0.00% |
Summary of Option Activity (Det
Summary of Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Jul. 31, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Stock options outstanding, July 31, 2016 | shares | 1,368 |
Granted | shares | 0 |
Exercised | shares | 0 |
Forfeited or expired | shares | (795) |
Stock options outstanding, July 31, 2017 | shares | 573 |
Stock options exercisable, July 31, 2017 | shares | 532 |
Weighted-Average Exercise Price | |
Stock options outstanding, July 31, 2016 | $ / shares | $ 4.36 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 0 |
Forfeited or expired | $ / shares | 4.37 |
Stock options outstanding, July 31, 2017 | $ / shares | 4.36 |
Stock options exercisable, July 31, 2017 | $ / shares | $ 4.40 |
Weighted-Average Remaining Contractual Term (Years) | |
Stock options outstanding, July 31, 2017 | 2 years 8 months 12 days |
Stock options exercisable, July 31, 2017 | 2 years 7 months 6 days |
Aggregate Intrinsic Value | |
Stock options outstanding, July 31, 2017 | $ | $ 0 |
Stock options exercisable, July 31, 2017 | $ | $ 0 |
Summary of Activity of Nonveste
Summary of Activity of Nonvested Stock (Detail) shares in Thousands | 12 Months Ended |
Jul. 31, 2017$ / sharesshares | |
Number of Shares | |
Nonvested stock outstanding, July 31, 2016 | 258 |
Granted | 296 |
Vested | (245) |
Forfeited | (13) |
Nonvested stock outstanding, July 31, 2017 | 296 |
Weighted-Average Grant Date Fair Value | |
Nonvested stock outstanding, July 31, 2016 | $ / shares | $ 2.48 |
Granted | $ / shares | 0 |
Vested | $ / shares | 2.45 |
Forfeited | $ / shares | $ 3.05 |
Components of Loss from Continu
Components of Loss from Continuing Operations before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Income (loss) from operations before income taxes: | |||
U.S. | $ (34,884) | $ (69,861) | $ (8,476) |
Foreign | 10,475 | 13,234 | (7,878) |
Loss before income taxes | $ (24,409) | $ (56,627) | $ (16,354) |
Components of Income Tax Expens
Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Income Tax Expense Benefit [Line Items] | |||||||||||
Income tax expense from continuing operations | $ 105 | $ 819 | $ 723 | $ 1,049 | $ 3,979 | $ 408 | $ 206 | $ 850 | $ 2,696 | $ 5,443 | $ 2,283 |
Total income tax expense | $ 2,696 | $ 5,443 | $ 2,283 |
Components of Income Tax Expe88
Components of Income Tax Expense from Continuing Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Current provision | |||||||||||
Federal | $ 0 | $ 0 | $ 0 | ||||||||
State | 0 | 0 | 0 | ||||||||
Foreign | 2,298 | 3,090 | 4,323 | ||||||||
Current Income Tax Expense (Benefit), Total | 2,298 | 3,090 | 4,323 | ||||||||
Deferred provision: | |||||||||||
Federal | 0 | 0 | 0 | ||||||||
State | 0 | 0 | 0 | ||||||||
Foreign | 398 | 2,353 | (2,040) | ||||||||
Income tax benefit recognized in the consolidated statement of operations | 398 | 2,353 | (2,040) | ||||||||
Actual income tax expense | $ 105 | $ 819 | $ 723 | $ 1,049 | $ 3,979 | $ 408 | $ 206 | $ 850 | $ 2,696 | $ 5,443 | $ 2,283 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Dec. 29, 2014 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
Income Taxes [Line Items] | ||||
Deferred tax assets, non-current | $ 1,900,000 | $ 2,300,000 | ||
Deferred tax liability, non-current | 700,000 | 800,000 | ||
Change in valuation allowance | $ 11,000,000 | 10,300,000 | ||
Stockholder owning ownership on corporation's securities percentage | 5.00% | |||
Stockholder owning ownership on corporation's securities rolling period | 3 years | |||
Net operating loss carryforwards for federal tax | $ 2,100,000,000 | |||
Net operating loss carryforwards for state tax | 209,800,000 | |||
Foreign net operating loss carryforward | 84,100,000 | |||
Undistributed earnings from foreign subsidiaries | 39,100,000 | |||
Amount of taxes attributable to the permanently undistributed earnings | 700,000 | |||
Deferred tax liability | $ 16,589,000 | $ 21,656,000 | ||
U.S. federal income tax rate | 35.00% | 35.00% | 35.00% | |
Unrecognized tax benefits, including interest, related to federal, state and foreign taxes | $ 700,000 | $ 1,200,000 | $ 3,900,000 | |
Interest expense related to uncertain tax positions | 0 | |||
Increase(decrease) in liabilities for interest expense related to uncertain tax positions | (168,000) | $ 40,000 | $ 48,000 | |
Expected any unrecognized tax benefits to reverse in the next twelve months | $ 0 | |||
Tax Benefit Preservation Plan | ||||
Income Taxes [Line Items] | ||||
Tax Benefit Preservation Plan, adoption date | Oct. 17, 2011 | |||
Tax Benefit Preservation Plan | Minimum | ||||
Income Taxes [Line Items] | ||||
Percentage of ownership require to obtain approval from board of directors to acquiring shares of the company's securities | 4.99% | |||
Indefinite Carryforward | ||||
Income Taxes [Line Items] | ||||
Foreign net operating loss carryforward with indefinite period | $ 58,800,000 | |||
Handy & Harman | Protective Amendment | Maximum | ||||
Income Taxes [Line Items] | ||||
Percentage of common shares outstanding permitted for acquired by HNH and its affiliates | 45.00% | |||
Federal | Internal Revenue Service (IRS) | ||||
Income Taxes [Line Items] | ||||
Capital losses expiration year | 2,018 | |||
Federal | Internal Revenue Service (IRS) | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2022 | |||
Tax examinations tax period | 2,013 | |||
Federal | Internal Revenue Service (IRS) | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2037 | |||
Tax examinations tax period | 2,017 | |||
State | ||||
Income Taxes [Line Items] | ||||
Capital losses expiration year | 2,018 | |||
State | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2018 | |||
Tax examinations tax period | 2,013 | |||
State | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2037 | |||
Tax examinations tax period | 2,017 | |||
Foreign | Europe Income Tax Authority | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,009 | |||
Foreign | Europe Income Tax Authority | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,016 | |||
Foreign | Asia Income Tax Authority | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,005 | |||
Foreign | Asia Income Tax Authority | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,016 | |||
Foreign Subsidiaries | ||||
Income Taxes [Line Items] | ||||
Undistributed earnings reinvested | $ 2,000,000 | |||
Deferred tax liability | 13,200,000 | |||
Undistributed earnings that are not considered to be permanently reinvested | $ 37,100,000 |
Components of Deferred Tax Asse
Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Deferred tax assets: | ||
Accruals and reserves | $ 12,193 | $ 12,240 |
Tax basis in excess of financial basis of investments in affiliates | 18,332 | 19,051 |
Tax basis in excess of financial basis for intangible and fixed assets | 7,689 | 8,455 |
Net operating loss and capital loss carry forwards | 751,435 | 744,357 |
Total gross deferred tax assets | 789,649 | 784,103 |
Less: valuation allowance | (771,884) | (760,906) |
Net deferred tax assets | 17,765 | 23,197 |
Deferred tax liabilities: | ||
Financial basis in excess of tax basis for intangible and fixed assets | (784) | (861) |
Convertible Debt | (2,655) | (4,241) |
Undistributed accumulated earnings of foreign subsidiaries | (13,150) | (16,554) |
Total gross deferred tax liabilities | (16,589) | (21,656) |
Net deferred tax asset | $ 1,176 | $ 1,541 |
Tax Benefits Relating to Valuat
Tax Benefits Relating to Valuation Allowance for Deferred Tax Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Income Taxes [Line Items] | |||
Income tax benefit recognized in the consolidated statement of operations | $ 398 | $ 2,353 | $ (2,040) |
Valuation Allowance of Deferred Tax Assets | |||
Income Taxes [Line Items] | |||
Income tax benefit recognized in the consolidated statement of operations | (756,423) | ||
Additional paid in capital | (15,461) | ||
Deferred Tax Assets Valuation Allowance Additions | $ (771,884) |
Difference of Income Tax Expens
Difference of Income Tax Expense Attributable to Income from Continuing Operations and Expense Computed using U.S. Federal Income Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Income Taxes [Line Items] | |||||||||||
Computed "expected" income tax expense (benefit) | $ (8,106) | $ (19,368) | $ (5,653) | ||||||||
Increase (decrease) in income tax expense resulting from: | |||||||||||
Change in valuation allowance | 10,978 | 22,907 | 2,067 | ||||||||
Foreign dividends | 2,724 | 4,730 | 732 | ||||||||
Foreign tax rate differential | (2,386) | (1,082) | 1,262 | ||||||||
Capitalized costs | (478) | ||||||||||
Nondeductible goodwill impairment | 1,070 | ||||||||||
Nondeductible expenses | 20 | 262 | 417 | ||||||||
Foreign withholding taxes | 239 | 762 | (19) | ||||||||
Reversal of uncertain tax position reserves | (481) | (2,768) | |||||||||
Other | (292) | 2,885 | |||||||||
Actual income tax expense | $ 105 | $ 819 | $ 723 | $ 1,049 | $ 3,979 | $ 408 | $ 206 | $ 850 | $ 2,696 | $ 5,443 | $ 2,283 |
Reconciliation of Beginning and
Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Income Tax Contingency [Line Items] | |||
Balance as of beginning of year | $ 994 | $ 3,756 | $ 1,028 |
Additions for current year tax positions | 19 | 2,884 | |
Currency translation | (156) | ||
Currency translation | 18 | ||
Reductions for lapses in statute of limitations | (331) | (27) | |
Reductions of prior year tax positions | (2,754) | ||
Balance as of end of year | $ 681 | $ 994 | $ 3,756 |
Accumulated Other Comprehensi94
Accumulated Other Comprehensive Income, Net of Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | $ 85,940 | $ 144,601 | $ 171,618 |
Foreign currency translation adjustment | 1,391 | (1,539) | (8,163) |
Pension liability adjustments | 830 | (2,306) | |
Net unrealized holding gain on securities | 73 | 48 | 11 |
Other comprehensive income (loss) | 2,294 | (1,491) | (10,458) |
Balance | 62,971 | 85,940 | 144,601 |
Foreign currency items | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | 6,131 | ||
Foreign currency translation adjustment | 1,391 | ||
Other comprehensive income (loss) | 1,391 | ||
Balance | 7,522 | 6,131 | |
Pension items | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | (4,206) | ||
Pension liability adjustments | 830 | ||
Other comprehensive income (loss) | 830 | ||
Balance | (3,376) | (4,206) | |
Unrealized gains (losses) on Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | 94 | ||
Net unrealized holding gain on securities | 73 | ||
Other comprehensive income (loss) | 73 | ||
Balance | 167 | 94 | |
Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | 2,019 | 3,510 | 13,968 |
Other comprehensive income (loss) | 2,294 | (1,491) | (10,458) |
Balance | $ 4,313 | $ 2,019 | $ 3,510 |
Accumulated Other Comprehensi95
Accumulated Other Comprehensive Income - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), tax | $ 0.3 | $ 0.5 |
Cash Used for Operating Activit
Cash Used for Operating Activities Reflect Cash Payments for Interest and Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Schedule Of Supplemental Cash Flow [Line Items] | |||
Cash paid for interest | $ 3,783 | $ 6,111 | $ 5,281 |
Cash paid for income taxes | $ 2,500 | $ 3,287 | $ 2,078 |
Statement of Cash Flows Suppl97
Statement of Cash Flows Supplemental Information - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 21, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
Cash Flow Supplemental Disclosures [Line Items] | ||||
Issuance of nonvested common stock | 300,000 | 200,000 | 100,000 | |
Issuance of nonvested common stock, value | $ 500 | $ 600 | $ 500 | |
Stock issued during period upon conversion of convertible debt, value | $ 3,134 | |||
5.25% Convertible Senior Notes Due 2019 | Highbridge | ||||
Cash Flow Supplemental Disclosures [Line Items] | ||||
Stock issued upon repurchase of convertible debt | 2,656,336 | 2,700,000 | ||
Stock issued during period upon conversion of convertible debt, value | $ 3,100 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 21, 2016 | Mar. 12, 2013 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | Mar. 18, 2014 |
Equity [Line Items] | ||||||
Issuance of common stock to Steel Partners Holdings, L.P., shares | 7,500,000 | |||||
Issuance of common stock to Steel Partners Holdings, L.P., price per share | $ 4 | |||||
Proceeds from issuance of common stock, gross | $ 30,000 | |||||
Common stock issuance, transaction cost | 2,300 | |||||
Net proceeds from issuance of common stock | $ 27,700 | $ 18 | $ 51 | $ 113 | ||
Issuance of warrants to acquire additional shares, shares | 2,000,000 | |||||
Issuance of warrants to acquire additional shares, exercise price | $ 5 | |||||
Warrants expiration term | 5 years | |||||
Common stock equity distribution agreement | The Company is required to keep the resale registration statement effective for three years following the date it is declared effective. Steel Partners also has the right, until such time as it owns less than one-third of the common stock originally issued to it under the investment agreement, to require that the Company file a prospectus supplement or amendment to cover sales of common stock through a firm commitment underwritten public offering. | |||||
Common stock, par value | $ 0.01 | $ 0.01 | ||||
Payment of interest | $ 3,783 | $ 6,111 | $ 5,281 | |||
5.25% Convertible Senior Notes Due 2019 | ||||||
Equity [Line Items] | ||||||
Debt instrument, stated interest rate | 0.50% | 5.25% | ||||
5.25% Convertible Senior Notes Due 2019 | Highbridge | ||||||
Equity [Line Items] | ||||||
Debt instrument, stated interest rate | 5.25% | |||||
Stock issued upon repurchase of convertible debt | 2,656,336 | 2,700,000 | ||||
Common stock, par value | $ 0.01 | |||||
Cash paid for repurchase of convertible debt | $ 18,500 | |||||
Payment of interest | $ 600 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Defined benefit plans assets percentage invested in bank-managed portfolios | 100.00% | 100.00% |
Fair value, assets, Level 1 to Level 2 transfers, amount | $ 0 | $ 0 |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 |
Fair value, assets, transfers into Level 3 | 0 | 0 |
Fair value, assets, transfers out of Level 3 | $ 0 | $ 0 |
Financial Assets Measured at Fa
Financial Assets Measured at Fair Value on Recurring Basis and Classified by Fair Value Hierarchy (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | $ 11,898 | $ 4,209 |
Marketable corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 12,559 | |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 85,683 | 101,224 |
Fair Value, Inputs, Level 1 | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 11,898 | 4,209 |
Fair Value, Inputs, Level 1 | Marketable corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 12,559 | |
Fair Value, Inputs, Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | $ 85,683 | $ 101,224 |
Plan Assets Measured at Fair Va
Plan Assets Measured at Fair Value on Recurring Basis Classified by Fair Value Hierarchy (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 100.00% | 100.00% | |
Defined benefit plan, fair value of plan assets | $ 21,204 | $ 25,473 | $ 19,350 |
Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 98.00% | 94.00% | |
Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 2.00% | 6.00% | |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 21,204 | $ 25,473 | |
Fair Value, Measurements, Recurring | Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 20,726 | 24,012 | |
Fair Value, Measurements, Recurring | Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 478 | 1,461 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 21,204 | 25,473 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 20,726 | 24,012 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 478 | $ 1,461 |
Summary of Changes in Fair Valu
Summary of Changes in Fair Value of Pension Plan Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Fair value of plan assets at beginning of year | $ 25,473 | $ 19,350 |
Actual return on plan assets | (5,005) | 5,556 |
Employee contributions | 104 | 120 |
Employer contributions (withdrawals), net | (342) | 539 |
Settlements | (279) | (55) |
Benefits and administrative expenses paid | (157) | (269) |
Currency translation | 1,410 | 232 |
Fair value of plan assets at end of year | $ 21,204 | $ 25,473 |
Debt not Carried at Fair Value
Debt not Carried at Fair Value (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable | $ 59,758 | $ 57,169 |
Notes payable, Fair Value | $ 63,852 | $ 50,957 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017USD ($) | Apr. 30, 2017USD ($) | Jan. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Jul. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Jan. 31, 2016USD ($) | Oct. 31, 2015USD ($) | Jul. 31, 2017USD ($)Segment | Jul. 31, 2016USD ($)Segment | Jul. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | Segment | 4 | ||||||||||
Number of reportable segments | Segment | 4 | 3 | |||||||||
Total assets | $ 281,298 | $ 347,932 | $ 281,298 | $ 347,932 | |||||||
Net revenue | 99,777 | $ 97,948 | $ 117,568 | $ 121,327 | 101,508 | $ 96,460 | $ 119,966 | $ 141,089 | 436,620 | 459,023 | $ 561,673 |
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 9,300 | 5,200 | 9,300 | 5,200 | |||||||
Net revenue | 95,100 | 110,900 | 205,000 | ||||||||
Ireland | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 3,600 | 3,500 | 3,600 | 3,500 | |||||||
China | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 2,200 | 3,000 | 2,200 | 3,000 | |||||||
Net revenue | 128,300 | 140,200 | 134,500 | ||||||||
Netherlands | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 3,300 | 3,000 | 3,300 | 3,000 | |||||||
Net revenue | 70,800 | 68,100 | 71,900 | ||||||||
Singapore | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | $ 2,400 | $ 2,900 | 2,400 | 2,900 | |||||||
Czech Republic | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 79,800 | $ 75,700 | $ 80,600 |
Summarized Financial Informatio
Summarized Financial Information of Continuing Operations by Operating Segment and Corporate-Level Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 99,777 | $ 97,948 | $ 117,568 | $ 121,327 | $ 101,508 | $ 96,460 | $ 119,966 | $ 141,089 | $ 436,620 | $ 459,023 | $ 561,673 |
Operating income (loss) | (7,372) | (5,243) | (1,504) | (5,642) | (14,843) | (12,497) | (11,663) | (1,569) | (19,761) | (40,572) | (14,339) |
Total other expense | $ 1,984 | $ (763) | $ 1,075 | $ 2,352 | $ 1,103 | $ 260 | $ 2,338 | $ 12,354 | 4,648 | 16,055 | 2,015 |
Loss before income taxes | (24,409) | (56,627) | (16,354) | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income (loss) | (14,915) | (33,795) | (3,250) | ||||||||
Operating Segments | Americas | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 92,324 | 106,143 | 200,929 | ||||||||
Operating income (loss) | (10,342) | (14,731) | (4,407) | ||||||||
Operating Segments | Asia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 158,048 | 167,861 | 163,262 | ||||||||
Operating income (loss) | 5,620 | (855) | 10,003 | ||||||||
Operating Segments | Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 159,085 | 151,842 | 160,602 | ||||||||
Operating income (loss) | (9,008) | (13,825) | (6,479) | ||||||||
Operating Segments | e-Business Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 27,163 | 33,177 | 36,880 | ||||||||
Operating income (loss) | (1,185) | (4,384) | (2,367) | ||||||||
Corporate-level activity | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income (loss) | $ (4,846) | $ (6,777) | $ (11,089) |
Total Assets of Continuing Oper
Total Assets of Continuing Operations (Detail) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 281,298 | $ 347,932 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 171,037 | 216,358 |
Operating Segments | Americas | ||
Segment Reporting Information [Line Items] | ||
Total assets | 21,876 | 28,280 |
Operating Segments | Asia | ||
Segment Reporting Information [Line Items] | ||
Total assets | 63,819 | 89,242 |
Operating Segments | Europe | ||
Segment Reporting Information [Line Items] | ||
Total assets | 64,639 | 75,952 |
Operating Segments | e-Business Services | ||
Segment Reporting Information [Line Items] | ||
Total assets | 20,703 | 22,884 |
Corporate-level activity | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 110,261 | $ 131,574 |
Summarized Financial Informa107
Summarized Financial Information of Net Revenue from External Customers by Group of Services (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net revenue | $ 99,777 | $ 97,948 | $ 117,568 | $ 121,327 | $ 101,508 | $ 96,460 | $ 119,966 | $ 141,089 | $ 436,620 | $ 459,023 | $ 561,673 |
Supply Chain Services | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net revenue | 409,457 | 425,846 | 524,793 | ||||||||
e-Business Services | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net revenue | $ 27,163 | $ 33,177 | $ 36,880 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | Sep. 01, 2017 | Jun. 30, 2015 | Dec. 24, 2014 | Jul. 31, 2017 | Jul. 31, 2016 |
SP Corporate and Steel Services | Management Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Management services agreement, effective date of agreement | Jan. 1, 2015 | ||||
Management services agreement, amended expiration date of agreement | Dec. 31, 2015 | ||||
Management services agreement, renew period | 1 year | ||||
Management services agreement term | 6 months | ||||
Steel Services Ltd. | Management Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Fixed monthly fee to be paid in consideration of services | $ 175,000 | ||||
Total expenses incurred related to Management Services Agreement and Transfer Agreement | 2,300,000 | $ 2,200,000 | |||
Steel Services Ltd. | Management Services Agreement | Subsequent Event | |||||
Related Party Transaction [Line Items] | |||||
Fixed monthly fee to be paid in consideration of services | $ 95,641 | ||||
Mutual Securities Inc | Commissions | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, amounts of transaction | 100,000 | ||||
SP Corporate Services Llc and Steel Services Limited | Management Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Amount due to related parties | $ 300,000 | $ 500,000 |
Selected Quarterly Financial109
Selected Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Quarterly Financial Information [Line Items] | |||||||||||
Net revenue | $ 99,777 | $ 97,948 | $ 117,568 | $ 121,327 | $ 101,508 | $ 96,460 | $ 119,966 | $ 141,089 | $ 436,620 | $ 459,023 | $ 561,673 |
Cost of revenue | 92,485 | 89,406 | 106,370 | 111,994 | 95,031 | 94,286 | 116,311 | 128,637 | 400,255 | 434,265 | 507,188 |
Gross profit | 7,292 | 8,542 | 11,198 | 9,333 | 6,477 | 2,174 | 3,655 | 12,452 | 36,365 | 24,758 | 54,485 |
Total operating expenses | 14,664 | 13,785 | 12,702 | 14,975 | 21,320 | 14,671 | 15,318 | 14,021 | 56,126 | 65,330 | 68,824 |
Operating loss | (7,372) | (5,243) | (1,504) | (5,642) | (14,843) | (12,497) | (11,663) | (1,569) | (19,761) | (40,572) | (14,339) |
Total other income (expense) | (1,984) | 763 | (1,075) | (2,352) | (1,103) | (260) | (2,338) | (12,354) | (4,648) | (16,055) | (2,015) |
Income tax expense | (105) | (819) | (723) | (1,049) | (3,979) | (408) | (206) | (850) | (2,696) | (5,443) | (2,283) |
(Gains) losses on investment on affiliates, net of tax | 150 | 232 | 396 | 500 | 214 | 316 | 259 | 1,278 | 789 | 208 | |
Net loss | $ (9,311) | $ (5,067) | $ (2,906) | $ (8,543) | $ (19,711) | $ (12,849) | $ (13,948) | $ (14,773) | $ (25,827) | $ (61,281) | $ (18,429) |
Basic and diluted earnings (loss) per share: | |||||||||||
Net income (loss) | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ (0.38) | $ (0.25) | $ (0.27) | $ (0.29) | $ (0.47) | $ (1.18) | $ (0.35) |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Oct. 13, 2017 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 | |
Subsequent Event [Line Items] | ||||
Sale of Securities | $ 11,898 | $ 16,768 | ||
Proceeds from sale of the trading securities | $ 7,998 | $ 59,327 | $ 2,325 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Sale of Securities | $ 11,900 | |||
Proceeds from sale of the trading securities | 13,700 | |||
Subsequent Event | Ireland | ||||
Subsequent Event [Line Items] | ||||
Purchase consideration of facility | $ 4,500 |