Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2018 | Nov. 01, 2018 | Jan. 31, 2018 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jul. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | STCN | ||
Entity Registrant Name | STEEL CONNECT, 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 Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 60,611,082 | ||
Entity Public Float | $ 81,962,522 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 92,138 | $ 110,670 |
Trading securities | 0 | 11,898 |
Accounts receivable, trade, net of allowance for doubtful accounts of $480 and $616 at July 31, 2018 and July 31, 2017, respectively | 99,254 | 81,450 |
Inventories, net | 47,786 | 34,369 |
Funds held for clients | 11,688 | 13,454 |
Prepaid expenses and other current assets | 13,415 | 6,005 |
Total current assets | 264,281 | 257,846 |
Property and equipment, net | 106,632 | 18,555 |
Goodwill | 254,352 | |
Other intangible assets, net | 192,964 | |
Other assets | 8,821 | 4,897 |
Total assets | 827,050 | 281,298 |
LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK & STOCKHOLDERS' EQUITY | ||
Accounts payable | 78,212 | 71,476 |
Accrued restructuring | 96 | 186 |
Accrued expenses | 88,330 | 37,898 |
Funds held for clients | 11,688 | 13,454 |
Current portion of long-term debt | 5,727 | |
Other current liabilities | 42,029 | 26,141 |
Notes payable | 64,530 | |
Total current liabilities | 290,612 | 149,155 |
Notes payable | 64,530 | 59,758 |
Long-term debt, excluding current portion | 383,111 | |
Other long-term liabilities | 10,507 | 9,414 |
Total long-term liabilities | 393,618 | 69,172 |
Total liabilities | 684,230 | 218,327 |
Commitments and contingencies (Note 11) | ||
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2018; zero shares authorized, issued and outstanding shares at July 31, 2017 | 35,192 | |
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share. Authorized 4,965,000 and 5,000,000 shares at July 31, 2018 and July 31, 2017, respectively; zero issued and outstanding shares at July 31, 2018 and at July 31, 2017 | ||
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 60,742,859 issued and outstanding shares at July 31, 2018; 55,555,973 issued and outstanding shares at July 31, 2017 | 608 | 556 |
Additional paid-in capital | 7,467,855 | 7,457,051 |
Accumulated deficit | (7,363,569) | (7,398,949) |
Accumulated other comprehensive income | 2,734 | 4,313 |
Total stockholders' equity | 107,628 | 62,971 |
Total liabilities, contingently redeemable preferred stock and stockholders' equity | $ 827,050 | $ 281,298 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
Accounts receivable, trade, allowance for doubtful accounts | $ 480 | $ 616 | $ 489 | $ 57 |
Preferred stock, par value | $ 0.01 | $ 0.01 | ||
Preferred stock, shares Authorized | 4,965,000 | 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 | 60,742,859 | 55,555,973 | ||
Common stock, shares outstanding | 60,742,859 | 55,555,973 | ||
Contingent Convertible Preferred Stock | ||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||
Preferred stock, shares Authorized | 35,000 | 0 | ||
Preferred stock, shares issued | 35,000 | 0 | ||
Preferred stock, shares outstanding | 35,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Net revenue: | |||
Total net revenue | $ 645,258 | $ 436,620 | $ 459,023 |
Cost of revenue: | |||
Total cost of revenue | 543,999 | 400,255 | 434,265 |
Gross profit: | |||
Total gross profit | 101,259 | 36,365 | 24,758 |
Operating expenses | |||
Selling, general and administrative | 101,701 | 54,159 | 57,604 |
Amortization of intangible assets | 20,285 | ||
Impairment of long-lived assets | 305 | ||
Gain on sale of property | (12,692) | ||
Restructuring, net | 271 | 1,967 | 7,421 |
Total operating expenses | 109,565 | 56,126 | 65,330 |
Operating loss | (8,306) | (19,761) | (40,572) |
Other income (expense): | |||
Interest income | 679 | 399 | 668 |
Interest expense | (29,884) | (8,247) | (10,924) |
Other gains (losses), net | 2,223 | 3,200 | (5,757) |
Impairment of investments in affiliates | (42) | ||
Total other expense | (26,982) | (4,648) | (16,055) |
Loss before income taxes | (35,288) | (24,409) | (56,627) |
Income tax expense (benefit) | (71,202) | 2,696 | 5,443 |
Gains on investments in affiliates, net of tax | (801) | (1,278) | (789) |
Net income (loss) | 36,715 | (25,827) | (61,281) |
Less: Preferred dividends on redeemable preferred stock | (1,335) | ||
Net income (loss) attributable to common stockholders | $ 35,380 | $ (25,827) | $ (61,281) |
Basic net earning (loss) per share attributable to common stockholders: | $ 0.60 | $ (0.47) | $ (1.18) |
Diluted net earning (loss) per share attributable to common stockholders: | $ 0.53 | $ (0.47) | $ (1.18) |
Weighted average common shares used in: | |||
Basic earnings per share | 59,179 | 55,134 | 51,934 |
Diluted earnings per share | 81,899 | 55,134 | 51,934 |
Services | |||
Net revenue: | |||
Total net revenue | $ 345,900 | $ 436,620 | $ 459,023 |
Cost of revenue: | |||
Total cost of revenue | 313,978 | 400,255 | 434,265 |
Gross profit: | |||
Total gross profit | 31,922 | $ 36,365 | $ 24,758 |
Products | |||
Net revenue: | |||
Total net revenue | 299,358 | ||
Cost of revenue: | |||
Total cost of revenue | 230,021 | ||
Gross profit: | |||
Total gross profit | $ 69,337 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Net income (loss) | $ 36,715 | $ (25,827) | $ (61,281) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | (1,174) | 1,391 | (1,539) |
Net unrealized holding gain on securities, net of tax | 14 | 73 | 48 |
Pension liability adjustments, net of tax | (419) | 830 | |
Other comprehensive gain (loss) | (1,579) | 2,294 | (1,491) |
Comprehensive income (loss) | $ 35,136 | $ (23,533) | $ (62,772) |
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, 2015 | $ 144,601 | $ 522 | $ 7,452,410 | $ (7,311,841) | $ 3,510 |
Balance, shares at Jul. 31, 2015 | 52,233,888 | ||||
Net income (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. | 3,134 | $ 27 | 3,107 | ||
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 pursuant to employee stock purchase plan and stock option exercises | 51 | 51 | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises, shares | 70,136 | ||||
Restricted stock grants | $ 4 | (4) | |||
Restricted stock grants, shares | 340,259 | ||||
Restricted stock forfeitures | (136) | (136) | |||
Restricted stock forfeitures, shares | (51,543) | ||||
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 | ||||
Net income (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 | 18 | 18 | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises, shares | 10,605 | ||||
Restricted stock grants | $ 3 | (3) | |||
Restricted stock grants, shares | 296,292 | ||||
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 | |||
Net income (loss) | $ 36,715 | 36,715 | |||
Preferred dividends | (1,335) | (1,335) | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises | 8 | 8 | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises, shares | 10,462 | ||||
Restricted stock grants | 47 | $ 52 | (5) | ||
Restricted stock grants, shares | 5,225,806 | ||||
Restricted stock forfeitures, shares | (49,382) | ||||
Share-based compensation | 10,801 | 10,801 | |||
Other comprehensive items | (1,579) | (1,579) | |||
Balance at Jul. 31, 2018 | $ 107,628 | $ 608 | $ 7,467,855 | $ (7,363,569) | $ 2,734 |
Balance, shares at Jul. 31, 2018 | 60,742,859 | 60,742,859 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 36,715 | $ (25,827) | $ (61,281) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation | 16,791 | 8,206 | 8,119 |
Amortization of intangible assets | 20,285 | ||
Amortization of deferred financing costs | 1,072 | 566 | 733 |
Accretion of debt discount | 4,384 | 3,919 | 4,967 |
Impairment of long-lived assets | 261 | 305 | |
Share-based compensation | 10,801 | 681 | 1,126 |
Other (gains) losses, net (including gain on sale of building) | (15,266) | (3,200) | 4,519 |
Gains on investments in affiliates and impairments | (801) | (1,278) | (747) |
Changes in operating assets and liabilities, net of business acquired: | |||
Accounts receivable, net | 29,735 | 31,102 | 19,130 |
Inventories, net | 19,971 | 6,852 | 7,752 |
Prepaid expenses and other current assets | 6,563 | 1,572 | 10,763 |
Accounts payable, accrued restructuring and accrued expenses | (39,945) | (45,314) | (4,245) |
Refundable and accrued income taxes, net | 6,524 | (1,014) | 2,660 |
Deferred tax assets and liabilities | (78,794) | ||
Other assets and liabilities | (6,267) | (971) | (13,589) |
Net cash provided by (used in) operating activities | 11,768 | (24,445) | (19,788) |
Cash flows from investing activities: | |||
Payments to acquire business | (469,221) | ||
Additions to property and equipment | (18,423) | (4,730) | (7,936) |
Proceeds from the disposition of property and equipment | 20,748 | 187 | 1,318 |
Proceeds from the termination of defined benefit pension plan | 905 | ||
Purchase of Trading Securities | (1,220) | ||
Proceeds from the sale of Trading Securities | 13,775 | 7,998 | 59,327 |
Investments in affiliates | (42) | ||
Proceeds from investments in affiliates | 801 | 1,278 | 789 |
Net cash provided by (used in) investing activities | (452,320) | 5,638 | 52,236 |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 393,000 | ||
Proceeds from issuance of preferred stock | 35,000 | ||
Payment of long-term debt | (3,000) | ||
Payment of deferred financing costs | (1,334) | ||
Payment of preferred dividends | (1,143) | ||
Purchase of the Company's Convertible Notes | (1,763) | (20,257) | |
Repayments on capital lease obligations | (652) | (171) | (228) |
Proceeds from issuance of common stock | 8 | 18 | 51 |
Repurchase of common stock | (127) | ||
Net cash provided by (used in) financing activities | 421,879 | (1,916) | (20,561) |
Net effect of exchange rate changes on cash and cash equivalents | 141 | 603 | (528) |
Net decrease in cash and cash equivalents | (18,532) | (20,120) | 11,359 |
Cash and cash equivalents at beginning of period | 110,670 | 130,790 | 119,431 |
Cash and cash equivalents at end of period | $ 92,138 | $ 110,670 | $ 130,790 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Jul. 31, 2018 | |
NATURE OF OPERATIONS | (1) NATURE OF OPERATIONS Steel Connect, Inc. (“Steel Connect” or the “Company”) together with its consolidated subsidiaries, operates through its wholly owned subsidiaries, ModusLink Corporation and ModusLink PTS, Inc. (together “ModusLink” or “Supply Chain“), and IWCO Direct Holdings, Inc. (“IWCO Direct” or “IWCO”). The Company was formerly known as ModusLink Global Solutions, Inc. until it changed its name to Steel Connect, Inc. effective February 27, 2018. ModusLink is a supply chain business process management company serving clients in markets such as consumer electronics, communications, computing, medical devices, software, and retail. ModusLink designs and executes elements in its clients’ global supply chains to improve speed to market, product customization, flexibility, cost, quality and service. The Company also produces and licenses an entitlement management solution for activation, provisioning, entitlement subscription and data collection from physical goods (connected products) and digital products. ModusLink has an integrated network of strategically located facilities with 20 sites operating in 21 languages in various countries, including numerous sites throughout North America, Europe and Asia. The Company previously operated under the names ModusLink Global Solutions, Inc., CMGI, Inc. and CMG Information Services, Inc. and was incorporated in Delaware in 1986. IWCO Direct delivers data-driven marketing solutions for its customers. Its full range of services includes strategy, creative and execution for omnichannel marketing campaigns, along with postal logistics programs for direct mail. Through its Mail-Gard® division, IWCO Direct also offers business continuity and disaster recovery services to protect against unexpected business interruptions, along with providing print and mail outsourcing services. IWCO has administrative offices in Chanhassen, MN. and has three facilities in Chanhassen, MN., one facility in Little Falls, MN., one facility in Warminster, PA. and two facilities in Hamburg PA. Historically, the Company has financed its operations and met its capital requirements primarily through funds generated from operations, the sale of our securities, borrowings from lending institutions, and sale of facilities that were not fully utilized. The Company believes it has access to adequate resources to meet its needs for normal operating costs, capital expenditures, mandatory debt redemptions and working capital for its existing business for at least twelve months from the date of this filing. These resources include cash and cash equivalents, the Credit Agreement, as defined in Note 10 the securitization of trade receivables not currently in the PNC Agreement and the revolving credit facility and cash, if any, provided by operating activities. At July 31, 2018 and July 31, 2017, the Company had cash and cash equivalents and Trading Securities of $92.1 million and $122.6 million, respectively. As of July 31, 2018, the Company had a deficiency in working capital which was primarily driven by the reclassification of the Company’s convertible notes from long-term to current and the additional liabilities assumed as a result of the IWCO acquisition. At July 31, 2018 and July 31, 2017, the Company had a readily available borrowing capacity under its PNC Bank Credit Facility of $9.6 million and $16.0 million, respectively. At July 31, 2018, IWCO had a readily available borrowing capacity under its Revolving Facility of $25.0 million. Per the Cerberus Credit Facility, IWCO is permitted to make distributions to the Parent, Steel Connect, Inc., an aggregate amount not to exceed $5.0 million in any fiscal year and pay reasonable documented expenses incurred by the Parent. The Parent is entitled to receive additional cash remittances under a “U.S. Federal Income Tax Sharing Agreement.” As of July 31, 2018, SPHG Holdings held $14.9 million principal amount of the Company’s 5.25% Convertible Senior Notes (the “Notes”). SPHG Holdings has confirmed to the Company that it will not require a cash payment on Notes when they mature and for a period of twelve months from the date of this filing. The Company believes it will generate sufficient cash to meet its debt covenants under the Credit Agreement with PNC Bank (the “Credit Agreement”) and the Financing Agreement to which certain of its subsidiaries are a party, to repay or restructure its the Notes, and that it will be able to obtain cash through its current credit facilities and through securitization of certain trade receivables. The Company’s historical operating results and working capital deficit indicate substantial doubt exists related to the Company’s ability to continue as a going concern. The Company believes that the actions discussed above are probable of occurring and mitigating the substantial doubt raised by the Company’s historical operating results and satisfying the Company’s estimated liquidity needs 12 months from the issuance of the financial statements. However, the Company cannot predict, with certainty, the outcome of its actions to generate liquidity, including the availability of additional debt refinancing or factoring of receivables, or whether such actions would generate the expected liquidity as currently planned. Our conclusion on going concern is predicated upon the factoring of certain accounts receivable balances, which has not yet occurred. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jul. 31, 2018 | |
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 Revenue Recognition The Supply Chain business’ 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. IWCO recognizes revenue for the majority of its products upon the transfer of title and risk of ownership, which is generally upon the delivery of the product to the United States Postal Service (“USPS”). IWCO does not have contractual purchase commitments from customers. IWCO receives purchase orders for all customer transactions and prices each order based upon the customer’s most recently agreed to pricing grid/rate card. 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, 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 The Company applies the guidance of Accounting Standards Codification (“ASC”) 605-25 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, July 31, (In thousands) Cash and bank deposits $ 44,952 $ 24,987 Money market funds 47,186 85,683 $ 92,138 $ 110,670 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. We believe that the carrying value of our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. 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 $66.7 million as of July 31, 2018, 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 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 available-for-sale 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 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 for the fiscal year ended July 31, 2016. 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 We value the inventory at the lower of cost or net realizable value. Cost is determined by both moving averages and the first-in, first-out IWCO’s inventory consists primarily of raw material (paper) used to produce direct mail packages and work-in-process, “step-up” work-in-process non-cash Inventories consisted of the following: July 31, 2018 July 31, 2017 (In thousands) Raw materials $ 23,208 $ 31,071 Work-in-process 16,147 713 Finished goods 8,431 2,585 $ 47,786 $ 34,369 Business Combinations and Valuation of Goodwill and Other Acquired Intangible Assets We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets may include, but are not limited to, future expected cash flows, acquired technology and tradenames, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Accounting for Impairment of 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 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 its reporting units on July 31, of each fiscal year. Acquired finite-lived intangible assets are amortized over their estimated useful lives. We evaluate the recoverability of our intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. 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 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 7 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, Earnings (Loss) Per Share The following table reconciles earnings (loss) per share for the fiscal years ended July 31, 2018, 2017 and 2016. Twelve Months Ended July 31, 2018 2017 2016 (In thousands, except per share data) Net income (loss) $ 36,715 $ (25,827 ) $ (61,281 ) Less: Preferred dividends on redeemable preferred stock (1,335 ) — — Net income (loss) attributable to common stockholders 35,380 (25,827 ) (61,281 ) Effect of dilutive securities: 5.25% Convertible Senior Notes 7,079 — — Redeemable preferred stock 1,335 — — Net income (loss) attributable to common stockholders after assumed conversions $ 43,794 $ (25,827 ) $ (61,281 ) Weighted average common shares outstanding 59,179 55,134 51,934 Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock 22,720 — — Weighted average number of common and potential common shares 81,899 55,134 51,934 Basic net earning (loss) per share attributable to common stockholders: $ 0.60 $ (0.47 ) $ (1.18 ) Diluted net earning (loss) per share attributable to common stockholders: $ 0.53 $ (0.47 ) $ (1.18 ) Approximately 0.5 million, 14.2 million and 21.1 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, 2018, 2017 and 2016, respectively. The common stock equivalent shares excluded during the year ended July 31, 2018 were primarily excluded as the options were out-of-the-money. if-converted 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, 2018, 2017 and 2016, the Company’s 10 largest clients accounted for approximately 44%, 70% and 71% of consolidated net revenue, respectively. No clients accounted for more than 10% of the Company’s consolidated net revenue for the fiscal year ended July 31, 2018. No clients accounted for greater than 10% of the Company’s Net Accounts Receivable balance as of July 31, 2018. 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 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 Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue The standard allows two methods of adoption: (i) retrospectively to each prior period presented (“full retrospective method”), or (ii) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). The Company will adopt the new standard using the modified retrospective method at the beginning of its first quarter of fiscal 2019. The Company and its outside consultants has substantially completed the process of evaluating the potential effects on the consolidated financial statements and establishing new accounting policies and internal controls necessary to support the requirements of the new standard. Based on the analysis to date, the Company has identified the following potential impacts: • ModusLink’s revenue primarily comes from the sale of supply chain management services to its clients. Amounts billed to customers under these arrangements include revenue attributable to the services performed as well as for materials procured on the customer’s behalf as part of its service to them. Under existing guidance, revenue was recognized for services when the services were performed and for product sales when the products were shipped or in certain cases when products were completed and title had transferred, if the client had also contracted with us for warehousing and/or logistics services for a separate fee, assuming all other applicable revenue recognition criteria were met. Under the new standard, the majority of our arrangements will consist of two distinct performance obligations (i.e., a warehousing/inventory management service and a separate kitting/packaging/assembly service), each of which will be recognized over time as services are performed using an input method based on the level of efforts expended. For the majority of the Company’s contracts under which the Company previously recognized revenue for services when the services were performed, the Company does not expect a material change in the manner and timing of revenue recognition as the input method corresponds with the transfer of value to the customer under the previous standard. However, for the limited population of contracts where the Company previously recognized revenues upon completion of all services and historically recognized revenue at a point in time (generally upon product shipment), the timing of revenue recognition will change in comparison to existing guidance as the Company’s performance enhances assets that the customer controls. The Company has estimated that the impact of this change in the manner and timing of revenue recognition will result in an estimated increase to retained earnings of approximately $1.0 million to $2.0 million and the recording of an unbilled asset in the same amount. The Company is currently refining this estimate and will record in the Company’s first quarter report on Form 10-Q. • We also recognize revenue from the sale of software in the Company’s e-Business operations. The Company has determined that it does not have any in process perpetual license arrangements at the date of adoption, as the balances at July 31, 2018 relate to maintenance renewal periods only. The Company did not identify any changes to the timing and manner of revenue recognition related to software contracts where the only performance obligation is the provision of software maintenance. • IWCO’s revenue is generated through the provision of data-driven marketing solutions, primarily through providing direct mail products to customers. Revenue recognized related to IWCO’s marketing solutions offerings, which typically consist of a single integrated performance obligation, was recognized at a point in time when the products were complete under existing guidance. Under the new standard, the majority of IWCO’s marketing solutions contracts will be recognized over time as the Company performs because the products have no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date. The Company has estimated that the impact of this change in the manner and timing of revenue recognition will result in an estimated adjustment to retained earnings of approximately $4.5 million to $6.0 million and the recording of an unbilled asset in the same amount. The Company is currently refining this estimate and will record in the Company’s first quarter report on Form 10-Q. In addition, the new standard will require incremental contract acquisition costs (such as certain sales commissions) for customer contracts to be capitalized and amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the sales commissions or other costs relate. Currently, these costs are expensed as incurred. The Company has identified certain commissions programs where it expects that incremental costs will be capitalized and recognized over a period of greater than one year. As of the date of adoption, the total commission expense that has been incurred under the commissions programs that have been identified by the Company is not material and the Company does not expect to record an adjustment for commissions at the date of adoption. The Company will be required to record cumulative effect adjustments to retained earnings (net of tax) upon adopting the new standard as of the fiscal year commencing August 1, 2018. The most significant of these adjustments will be to establish an asset and increase retained earnings related to the ModusLink supply chain management services contracts and IWCO marketing solutions contracts as noted above, given the changes to the manner and timing of revenue recognition upon adoption. The Company has not identified any other material adjustments that would need to be recorded at the time of adoption. Currently, the Company expects the cumulative effect adjustment to be within the range of $5.5 million to $8.0 million. The Company expects to finalize its estimates and record the cumulative effect adjustment for inclusion in the Company’s first quarter report on Form 10-Q. In addition, the Company has determined the adoption of the standard will result in several additional disclosures, including but not limited to additional information around performance obligations, the timing of revenue recognition, remaining performance obligations at period end, contract assets and liabilities and significant judgments made that impact the amount and timing of revenue from our contracts with customers. These additional disclosures will be included in the Company’s first quarter report on Form 10-Q. This discussion of the expected effects of the Company’s adoption of ASC 606 represents management’s best estimates of the effects of adopting ASC 606 at the time of the preparation of this Annual Report on Form 10-K. In August 2014, the FASB issued ASU No. 2014-15 205-40), In July 2015, the FASB issued ASU No. 2015-11, In February 2016, the FASB issued ASU No. 2016-02, In March 2016, the FASB issued ASU No. 2016-09, In November 2016, the FASB issued ASU No. 2016-18, In March 2017, the FASB issued ASU No. 2017-07, non-operating |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE | 12 Months Ended |
Jul. 31, 2018 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE | (3) ALLOWANCE FOR DOUBTFUL 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, 2018 2017 2016 (In thousands) Balance at beginning of year $ 616 $ 489 $ 57 Provisions charged to expense 211 132 458 Accounts written off (347 ) (5 ) (26 ) $ 480 $ 616 $ 489 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 was accounted for as a sale of accounts receivable under ASC 860 “Transfers and Servicing”. This agreement related exclusively to the accounts receivables of one of the Company’s significant clients. The amount sold varied 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 $38.0 million and $41.1 million for the years ended July 31, 2018 and 2017, respectively. The cost incurred on the sale of these receivables was immaterial for years ended July 31, 2018 and 2017, 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 was 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. The factoring agreement was discontinued during the fiscal year 2018. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jul. 31, 2018 | |
PROPERTY AND EQUIPMENT | (4) PROPERTY AND EQUIPMENT Property and equipment at cost, consists of the following: July 31, 2018 2017 (In thousands) Land $ 942 $ — Buildings — 24,476 Machinery and equipment 97,149 24,504 Leasehold improvements 21,917 14,815 Software 52,082 48,536 Other 28,147 22,126 200,237 134,457 Less: Accumulated depreciation and amortization (93,605 ) (115,902 ) Property and equipment, net $ 106,632 $ 18,555 An immaterial amount of assets are under capital leases are included in the amounts above. The Company recorded depreciation expense of $16.8 million, $8.2 million and $8.1 million for the fiscal years ended July 31, 2018, 2017 and 2016, respectively. Depreciation expense within the Americas, Asia, Europe, Direct Marketing and e-Business e-Business During the twelve months ended July 31, 2018, the Company received $20.7 million in proceeds associated with the sale of property and equipment. During the twelve months ended July 31, 2018, the Company recognized $12.7 million in gains associated with the sale of property. 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. These charges are reflected in “impairment of long-lived assets” in the Consolidated Statements of Operations. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Jul. 31, 2018 | |
INVESTMENTS | (5) INVESTMENTS Trading securities During the twelve months ended July 31, 2018, the Company sold all of its remaining publicly traded securities (“Trading Securities”). As a result, the Company received $13.8 million in proceeds associated with the sale of the Trading Securities, which included a cash gain of $4.6 million. During the twelve months ended July 31, 2018, the Company recognized $2.7 million in net non-cash During the twelve months ended July 31, 2017, the Company received $8.0 million in proceeds associated with the sale of Trading Securities, which included a $0.9 million cash gain. During the twelve months ended July 31, 2017, the Company recognized $2.2 million in net non-cash As of July 31, 2018, the Company did not have any investments in Trading Securities. As of July 31, 2017, the Company had $11.9 million in investments in Trading Securities. Investments in affiliates The Company maintained interests in a small number of privately held companies. As of July 31, 2018 and 2017, the value of these investments was fully impaired. As of July 31, 2018, the Company is not committed to fund any follow-on available-for-sale |
ACQUISITION OF IWCO DIRECT
ACQUISITION OF IWCO DIRECT | 12 Months Ended |
Jul. 31, 2018 | |
ACQUISITION OF IWCO DIRECT | (6) ACQUISITION OF IWCO DIRECT On December 15, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, MLGS Merger Company, Inc., a Delaware corporation and newly formed wholly-owned subsidiary of the Company (“MLGS”), IWCO Direct Holdings, Inc. a Delaware corporation (“IWCO”), CSC Shareholder Services, LLC, a Delaware limited liability company (solely in its capacity as representative), and the stockholders of IWCO. Pursuant to the Merger Agreement, MLGS was merged with and into IWCO, with IWCO surviving as a wholly-owned subsidiary of the Company (the “IWCO Acquisition”). The Company acquired IWCO as a part of the Company’s overall acquisition strategy to acquire profitable companies to utilize the Company’s tax net operating losses. The Company acquired IWCO for total consideration of approximately $469.2 million, net of purchase price adjustments. The Company financed the IWCO Acquisition through a combination of cash on hand and proceeds from a $393.0 million term loan made under the below described financing agreement with Cerberus Business Finance, LLC, net of $2.5 million received from escrow for working capital claims. The transaction price included one-time pre-existing The following table summarizes the preliminary fair value of assets acquired and liabilities assumed at the date of the acquisition: As Previously Adjustments As (In thousands) Accounts receivable $ 47,841 $ (433 ) $ 47,408 Inventory 27,165 5,829 32,994 Other current assets 7,427 3,574 11,001 Property and equipment 87,976 4,533 92,509 Intangible assets 210,920 2,330 213,250 Goodwill 259,085 (4,733 ) 254,352 Other assets 3,040 (300 ) 2,740 Accounts payable (31,069 ) — (31,069 ) Accrued liabilities and other current liabilities (35,790 ) (30,826 ) (66,616 ) Customer deposits (7,829 ) — (7,829 ) Deferred income taxes (79,918 ) 1,398 (78,520 ) Other liabilities (19,627 ) 18,628 (999 ) Total consideration $ 469,221 $ — $ 469,221 Acquired intangible assets include trademarks and tradenames valued at $20.5 million and customer relationships of $192.7 million. The preliminary fair value estimate of trademarks and tradenames was prepared utilizing a relief from royalties method of valuation, while the preliminary fair value estimate of customer relationships was prepared using a multi-period excess earnings method of valuation. The trademarks and tradenames intangible asset will be amortized on a straight line basis over a 3 year estimated useful life. The customer relationship intangible asset will be amortized on a double-declining basis over an estimated useful life of 15 years. The acquired property and equipment consist mainly of machinery and equipment. The fair value of the acquired property and equipment was estimated using the cost approach to value, and applying industry standard normal useful lives and inflationary indices. In the preliminary allocation of the purchase price, the Company recognized $254.4 million of goodwill which arose primarily from the synergies in its business and the assembled workforce of IWCO. Our purchase price allocation for acquisitions completed during recent periods is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information that existed as of the acquisition date but at that time was unknown to us, may become known to us during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred. The consolidated statement of operations, for the fiscal year ended July 31, 2018, includes net revenue of $299.4 million, operating income of $10.7 million, and a loss before income taxes of $11.4 million associated with IWCO. The following unaudited pro forma financial results are based on the Company’s historical consolidated financial statements and IWCO’s historical consolidated financial statements as adjusted to give effect to the Company’s acquisition of IWCO and related transactions. The unaudited pro forma financial information for the twelve months ended July 31, 2018 give effect to these transactions as if they had occurred on August 1, 2016. The unaudited pro forma results presented do not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of August 1, 2016, nor do they indicate the results of operations in future periods. Additionally, the unaudited pro forma results do not include the impact of possible business model changes, nor do they consider any potential impacts of current market conditions or revenues, reduction of expenses, asset dispositions, or other factors. The impact of these items could alter the following pro forma results. The pro forma results were adjusted to reflect a fair value step-up to work-in-process inventory, as well as incremental depreciation and amortization based on preliminary fair value adjustments for the acquired property, plant and equipment, and intangible assets. A reduction to interest expense is also reflected in the pro forma results to reflect the more favorable terms obtained with the new Credit Facility as compared to the interest rate under the former facility carried by IWCO. The pro forma results also reflect the reversal of the income tax valuation allowance that resulted from the acquisition in fiscal year 2017, rather than fiscal year 2018: Twelve Months Ended 2018 2017 (In thousands) Net revenue $ 824,825 $ 891,373 Net income (loss) $ (17,148 ) $ 16,040 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jul. 31, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | (7) GOODWILL AND INTANGIBLE ASSETS The Company conducts its goodwill impairment test on July 31 of each fiscal year. In addition, if and when events or circumstances change that could reduce the fair value of any of its reporting units below its carrying value, an interim test is performed. In making this assessment, the Company relies on a number of factors including operating results, business plans, economic projections, anticipated future cash flows, and transactions and marketplace data. The Company’s goodwill of $254.4 million as of July 31, 2018 relates to the Company’s Direct Marketing reporting unit. There were no indicators of impairment identified related to the Company’s Direct Marketing reporting unit during the twelve months ended July 31, 2018. Intangible assets, as of July 31, 2018, include trademarks and tradenames with a carrying balance of $16.2 million and customer relationships of $176.7 million. The trademarks and tradenames intangible asset are being amortized on a straight line basis over a 3 year estimated useful life. The customer relationship intangible asset are being amortized on a double-declining basis over an estimated useful life of 15 years. Intangible assets deemed to have finite lives are amortized over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to its future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. The estimated future amortization expense of intangible assets as of July 31, 2018 is as follows (in thousands): 2019 $ 30,396 2020 27,255 2021 20,258 2022 15,334 2023 11,427 Thereafter 88,294 $ 192,964 |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Jul. 31, 2018 | |
RESTRUCTURING | (8) RESTRUCTURING The following tables summarize the activity in the restructuring accrual for the fiscal years ended July 31, 2018, 2017 and 2016: Employee Contractual Total (In thousands) 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 (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 (54 ) 20 (34 ) Accrued restructuring balance at July 31, 2017 100 86 186 Restructuring charges 3 — 3 Restructuring adjustments 246 22 268 Cash paid (88 ) (108 ) (196 ) Non-cash (165 ) — (165 ) Accrued restructuring balance at July 31, 2018 $ 96 $ — $ 96 During the fiscal year ended July 31, 2018, the Company recorded a net restructuring charge of $0.3 million which primarily consisted of $0.3 million of employee-related net adjustments of previously recorded accruals in the Americas. 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. The net restructuring charges for the fiscal years ended July 31, 2018, 2017 and 2016 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 2018 2017 2016 (In thousands) Cost of revenue $ 9 $ 563 $ 4,812 Selling, general and administrative 262 1,404 2,609 $ 271 $ 1,967 $ 7,421 The following tables summarize the restructuring accrual by operating segment for the fiscal years ended July 31, 2018, 2017 and 2016: Americas Asia Europe e-Business Consolidated (In thousands) 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 — (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 23 (40 ) (14 ) (3 ) (34 ) Accrued restructuring balance at July 31, 2017 51 — 23 112 186 Restructuring charges — — — 3 3 Restructuring adjustments 257 1 2 8 268 Cash paid (88 ) — — (108 ) (196 ) Non-cash (167 ) (1 ) (25 ) 28 (165 ) Accrued restructuring balance at July 31, 2018 $ 53 $ — $ — $ 43 $ 96 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Jul. 31, 2018 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | (9) 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 $ 29,804 $ 2,272 Accrued compensation 25,603 10,678 Accrued interest 1,437 1,366 Accrued audit, tax and legal 3,264 2,759 Accrued contract labor 1,932 1,632 Accrued worker’s compensation 6,126 — Accrued other 20,164 19,191 $ 88,330 $ 37,898 July 31, July 31, (In thousands) Accrued pricing liabilities $ 18,882 $ 18,882 Customer postage deposits 12,638 — Other 10,509 7,259 $ 42,029 $ 26,141 As of July 31, 2018 and 2017, 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 |
DEBT
DEBT | 12 Months Ended |
Jul. 31, 2018 | |
DEBT | (10) DEBT 5.25% Convertible Senior 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 or restructured 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, 2018, the if-converted 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, 2018. 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 No. 2015-03. paid-in 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 $66.7 million and $63.9 million as of July 31, 2018 and July 31, 2017, respectively. This value does not represent the settlement value of these 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, 2018 and July 31, 2017, the net carrying value of the Notes was $64.5 million and $59.8 million, respectively. July 31, July 31, (In thousands) Carrying amount of equity component (net of allocated debt issuance costs) $ 26,961 $ 26,961 Principal amount of Notes $ 67,625 $ 67,625 Unamortized debt discount (2,843 ) (7,227 ) Unamortized debt issuance costs (252 ) (640 ) Net carrying amount $ 64,530 $ 59,758 As of July 31, 2018, the remaining period over which the unamortized discount will be amortized is 7 months. Twelve Months Ended July 31, 2018 2017 2016 (In thousands) Interest expense related to contractual interest coupon $ 3,655 $ 3,651 $ 5,159 Interest expense related to accretion of the discount 4,384 3,919 4,967 Interest expense related to debt issuance costs 388 347 439 $ 8,427 $ 7,917 $ 10,565 During the year ended July 31, 2018, 2017 and 2016, the Company recognized interest expense of $8.4 million, $7.9 million and $10.6 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 “ModusLink 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 ModusLink 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 ModusLink 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 ModusLink 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 ModusLink 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 ModusLink 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 ModusLink 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 ModusLink 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 ModusLink 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 ModusLink Borrowers’ liquidity. During the year ended July 31, 2018, the Company did not meet the criteria that would cause its financial covenants to be applicable. As of July 31, 2018 and 2017, the Company did not have any balance outstanding on the PNC Bank credit facility. Cerberus Credit Facility On December 15, 2017, MLGS, a wholly owned subsidiary of the Company, entered into a Financing Agreement (the “Financing Agreement”), by and among the MLGS (as the initial borrower), Instant Web, LLC, a Delaware corporation and wholly owned subsidiary of IWCO (as “Borrower”), IWCO, and certain of IWCO’s subsidiaries (together with IWCO, the “Guarantors”), the lenders from time to time party thereto, and Cerberus Business Finance, LLC, as collateral agent and administrative agent for the lenders. MLGS was the initial borrower under the Financing Agreement, but immediately upon the consummation of the IWCO Acquisition, as described above, Borrower became the borrower under the Financing Agreement. The Financing Agreement provides for $393.0 million term loan facility (the “Term Loan”) and a $25.0 million revolving credit facility (the “Revolving Facility”) (together, the “Cerberus Credit Facility”). Proceeds of the Cerberus Credit Facility were used (i) to finance a portion of the IWCO Acquisition, (ii) to repay certain existing indebtedness of the Borrower and its subsidiaries, (iii) for working capital and general corporate purposes and (iv) to pay fees and expenses related to the Financing Agreement and the IWCO Acquisition. The Cerberus Credit Facility has a maturity of five years. Borrowings under the Cerberus Credit Facility bear interest, at the Borrower’s option, at a Reference Rate plus 3.75% or a LIBOR Rate plus 6.5%, each as defined the Financing Agreement. The initial interest rate under the Cerberus Credit Facility is at the LIBOR Rate option. The Term Loan under the Cerberus Credit Facility is repayable in consecutive quarterly installments, each of which will be in an amount equal per quarter of $1.5 million and each such installment to be due and payable, in arrears, on the last day of each calendar quarter commencing on March 31, 2018 and ending on the earlier of (a) December 15, 2022 and (b) upon the payment in full of all obligations under the Financing Agreement and the termination of all commitments under the Financing Agreement. Further, the Term Loan would be permanently reduced pursuant to certain mandatory prepayment events including an annual “excess cash flow sweep” of 50% of the consolidated excess cash flow, with a step-down to 25% when the Leverage Ratio (as defined in the Financing Agreement) is below 3.50:1.00; provided that, in any calendar year, any voluntary prepayments of the Term Loan shall be credited against the Borrower’s “excess cash flow” prepayment obligations on a dollar-for-dollar Borrowings under the Financing Agreement are fully guaranteed by the Guarantors and are collateralized by substantially all the assets of the Borrower and the Guarantors and a pledge of all of the issued and outstanding equity interests of each of IWCO’s subsidiaries. The Financing Agreement contains certain representations, warranties, events of default, mandatory prepayment requirements, as well as certain affirmative and negative covenants customary for financing agreements of this type. These covenants include restrictions on borrowings, investments and dispositions, as well as limitations on the ability of the Borrower and the Guarantors to make certain capital expenditures and pay dividends. Upon the occurrence and during the continuation of an event of default under the Financing Agreement, the lenders under the Financing Agreement may, among other things, terminate all commitments and declare all or a portion of the loans under the Financing Agreement immediately due and payable and increase the interest rate at which loans and obligations under the Financing Agreement bear interest. On May 9, 2018, IWCO entered into a Waiver and Amendment No.1 to Financing Agreement (the “Amendment No. 1”) in order to, among other things, amend the definition of “Fiscal Year” to mean the twelve (12) month period ending on July 31st of each calendar year for IWCO and its subsidiaries and to make other related conforming changes to the Financing Agreement. Amendment No.1 also waived an event of default existing under the Financing Agreement that resulted from the failure of the Borrower and the Guarantors to deliver certain financial statements and an opinion for the Fiscal Year, which, prior to the effectiveness of Amendment No.1, was based on a year ending on December 31st of each year. The Company anticipates delivering the required financial statements and opinion for the “Fiscal Year” ended July 31, 2018, as now required under the amended Financing Agreement. There were no events of default under the Financing Agreement during the twelve months ended July 31, 2018 (after giving effect to the above-described waiver). During the first quarter of fiscal year 2017, the Company adopted ASU No. 2015-03. July 31, 2018 (In thousands) Principal amount outstanding on the Term Loan $ 390,000 Unamortized debt issuance costs (1,162 ) Net carrying value of the Term Loan $ 388,838 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jul. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | (11) COMMITMENTS AND CONTINGENCIES The Company leases facilities and certain machinery and equipment under various non-cancelable non-cancelable Operating Capital Purchase Debt Total (In thousands) For the fiscal years ended July 31: 2019 $ 17,367 $ 79 $ 37,920 $ 108,792 $ 164,158 2020 12,796 70 — 37,135 50,001 2021 9,980 59 — 36,653 46,692 2022 7,175 28 — 36,170 43,373 2023 3,802 — — 383,191 386,993 Thereafter 24,689 — — — 24,689 $ 75,809 $ 236 $ 37,920 $ 601,941 $ 715,906 Total rent and equipment lease expense charged to continuing operations was $19.2 million, $15.6 million and $17.3 million for the fiscal years ended July 31, 2018, 2017 and 2016, 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, 2018, 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 April 13, 2018, a purported shareholder, Donald Reith, filed a verified complaint, Reith v. Lichtenstein, et al., 2018-0277 (Del. Ch.) in the Delaware Court of Chancery. The complaint alleges class and derivative claims for breach of fiduciary duty and/or aiding and abetting breach of fiduciary duty and unjust enrichment against the Company’s Board of Directors, Warren Lichtenstein, Glen Kassan, William T. Fejes, Jack L. Howard, Jeffrey J. Fenton, Philip E. Lengyel and Jeffrey S. Wald; and stockholders Steel Holdings, Steel Partners, L.P., SPHG Holdings, Handy & Harman Ltd. and WHX CS Corp. (collectively, “Steel Parties”) in connection with the acquisition of $35 million of the Series C Preferred Stock by SPHG Holdings and equity grants made to Lichtenstein, Howard and Fejes on December 15, 2017 (collectively, “Challenged Transactions”). The Company is named as a nominal defendant. The complaint alleges that although the Challenged Transactions were approved by a Special Committee consisting of the independent members of the Board (Messrs. Fenton, Lengyel and Wald), the Steel Parties dominated and controlled the Special Committee, who approved the Challenged Transactions in breach of their fiduciary duty. Plaintiff alleges that the Challenged Transactions unfairly diluted shareholders and therefore unjustly enriched Steel Holdings, SPHG Holdings and Messrs. Lichtenstein, Howard and Fejes. The complaint also alleges that the Board made misleading disclosures in the Company’s proxy statement for the 2017 Meeting in connection with seeking approval to amend the 2010 Incentive Award Plan to authorize the issuance of additional shares to accommodate certain shares underlying the equity grants. Remedies requested include rescission of the Series C Convertible Preferred Stock and equity grants, disgorgement of any unjustly obtained property or compensation and monetary damages. On June 8, 2018, defendants moved to dismiss the complaint for failure to plead demand futility and failure to state a claim. The motions are fully briefed, and argument is scheduled for March 5, 2019. Discovery is stayed pending a decision on the motions to dismiss. Because the litigation is at an early stage and motions to dismiss are pending, we are unable at this time to provide a calculation of potential damages or litigation loss that is probable or estimable. Although there can be no assurance as to the ultimate outcome, the Company believes it has meritorious defenses, will deny liability, and intends to defend this litigation vigorously. |
DEFINED BENEFIT PENSION PLANS
DEFINED BENEFIT PENSION PLANS | 12 Months Ended |
Jul. 31, 2018 | |
DEFINED BENEFIT PENSION PLANS | (12) 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, 2018, 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, 2018 and 2017, classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2018 Asset Level 1 Level 2 Level 3 Insurance contract $ 22,339 98 % $ — $ — $ 22,339 Other investments 521 2 % 521 $ 22,860 100 % $ — $ — $ 22,860 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 The aggregate change in benefit obligation and plan assets related to these plans was as follows: July 31, 2018 2017 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 27,464 $ 31,667 Service cost 398 700 Interest cost 671 573 Actuarial (gain) loss 1,655 (6,814 ) Employee contributions 93 103 Benefits and administrative expenses paid (372 ) (157 ) Adjustments (54 ) — Settlements (21 ) (279 ) Effect of curtailment — — Currency translation 15 1,671 Benefit obligation at end of year 29,849 27,464 Change in plan assets Fair value of plan assets at beginning of year 21,204 25,473 Actual return on plan assets 1,541 (5,005 ) Employee contributions 402 104 Employer contributions (withdrawals), net 92 (342 ) Settlements (21 ) (279 ) Benefits and administrative expenses paid (372 ) (157 ) Currency translation 14 1,410 Fair value of plan assets at end of year 22,860 21,204 Funded status Assets — — Current liability (13 ) (12 ) Noncurrent liability (6,976 ) (6,248 ) Net amount recognized in statement of financial position as a noncurrent asset (liability) $ (6,989 ) $ (6,260 ) The accumulated benefit obligation was approximately $27.7 million and $25.5 million at July 31, 2018 and 2017, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows: July 31, 2018 2017 (In thousands) Projected benefit obligation $ 29,849 $ 27,464 Accumulated benefit obligation $ 27,700 $ 25,531 Fair value of plan assets $ 22,860 $ 21,204 Components of net periodic pension cost were as follows: Twelve Months Ended 2018 2017 2016 (In thousands) Service cost $ 398 $ 700 $ 632 Interest costs 671 573 637 Expected return on plan assets (529 ) (457 ) (491 ) Amortization of net actuarial (gain) loss 125 201 222 Curtailment gain — — (844 ) Net periodic pension costs $ 665 $ 1,017 $ 156 The amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2019 is approximately $4.8 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 2018 2017 2016 Discount rate 2.22 % 2.47 % 1.72 % Rate of compensation increase 1.93 % 1.93 % 1.92 % Weighted-average assumptions used to determine net periodic pension cost was as follows: Twelve Months Ended 2018 2017 2016 Discount rate 2.21 % 1.69 % 1.95 % Expected long-term rate of return on plan assets 2.20 % 1.69 % 2.41 % Rate of compensation increase 1.94 % 1.91 % 1.83 % 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, 2018 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 $0.4 million in fiscal year 2019. Pension Benefit (in thousands) For the fiscal years ended July 31: 2018 163 2019 213 2020 256 2021 257 2022 307 Next 5 years 2,352 The current target allocations for plan assets are primarily insurance contracts. The market value of plan assets using Level 3 inputs is approximately $22.3 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, 2018 | |
OTHER GAINS (LOSSES), NET | (13) OTHER GAINS (LOSSES), NET The following schedule reflects the components of “Other gains (losses), net”: Twelve Months Ended 2018 2017 2016 (In thousands) Foreign currency exchange gains (losses) $ 1,055 $ 199 $ (593 ) Gain (losses), net on Trading Securities 1,876 3,128 (5,920 ) Other, net (708 ) (127 ) 756 $ 2,223 $ 3,200 $ (5,757 ) Other gains (losses), net totaled approximately $2.2 million for the fiscal year ended July 31, 2018. The balance consists primarily of $1.9 million in net gains associated with sale of publicly traded securities (“Trading Securities”), $1.1 million in net realized and unrealized foreign exchange gains, offset by $(0.6) million in losses associated with the disposal of assets at IWCO. Other gains (losses), net totaled approximately $3.2 million for the fiscal year ended July 31, 2017. The balance consists primarily of $2.2 million and $0.9 million, in net non-cash Other gains (losses), net totaled approximately $(5.8) million for the fiscal year ended July 31, 2016. The balance consists primarily of $(12.3) million and $6.4 million, in net non-cash non-cash |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Jul. 31, 2018 | |
SHARE-BASED PAYMENTS | (14) SHARE-BASED PAYMENTS Stock Option Plans During the fiscal year ended July 31, 2018, the Company had outstanding awards for stock options under two plans: the 2010 Incentive Award Plan, as amended (the “2010 Plan”) and the 2005 Non-Employee Non-Officer On December 15, 2017, under the 2010 Plan, the Board of Directors of the Company, upon the recommendation of the Special Committee and the Compensation Committee, approved 4.0 million restricted stock grants and 1.5 million market performance based restricted stock grants to non-employee 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) 11,000,000 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, 2018, 4,803,835 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, 2018, 2017 and 2016, the Company issued approximately 10,000, 11,000 and 30,000 shares, respectively, under the ESPP. Approximately 126,000 shares are available for future issuance as of July 31, 2018. 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, 2018, 2017 and 2016: Twelve Months Ended July 31, 2018 2017 2016 Cost of revenue $ 14 $ 53 $ 96 Selling, general and administrative 10,787 628 1,030 $ 10,801 $ 681 $ 1,126 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 years ended July 31, 2018 and 2017. The weighted-average grant date fair value of employee stock options granted during the fiscal years ended July 31, 2016 was $1.11, using the binomial-lattice model with the following weighted-average assumptions: Twelve Months Ended 2016 Expected volatility 55.80 % Risk-free interest rate 1.28 % Expected term (in years) 4.41 Expected dividend yield 0.00 % The volatility assumption for fiscal year 2016 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, 2018, 2017 and 2016 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, 2018 is as follows: Number of Weighted- Weighted-Average Aggregate (in thousands, except exercise price and years) Stock options outstanding, July 31, 2017 573 $ 4.36 Granted — — Exercised — — Forfeited or expired (135 ) 5.51 Stock options outstanding, July 31, 2018 438 3.99 1.91 $ — Stock options exercisable, July 31, 2018 433 $ 4.00 1.89 $ — As of July 31, 2018, unrecognized share-based compensation related to stock options was immaterial. 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, 2018, 2017 and 2016 was immaterial. As of July 31, 2018, there were 0.4 million stock options that were vested and expected to vest in the future with a weighted- average remaining contractual term of 1.9 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, 2018, 2017 and 2016 was $10.7 million, $0.5 million and $0.7 million, respectively. A summary of the activity of the Company’s nonvested stock for the fiscal year ended July 31, 2018, is as follows: Number Weighted-Average (share amounts in thousands) Nonvested stock outstanding, July 31, 2017 296 $ — Granted 7,999 1.45 Vested (7,081 ) 1.62 Forfeited (49 ) 1.62 Nonvested stock outstanding, July 31, 2018 1,165 $ 0.44 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, 2018, 2017 and 2016 was approximately $11.5 million, $0.6 million and $1.0 million, respectively. As of July 31, 2018, there was approximately $1.0 million of total unrecognized compensation cost related to nonvested stock to be recognized over a weighted-average period of 0.3 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jul. 31, 2018 | |
INCOME TAXES | (15) INCOME TAXES The components of loss from continuing operations before provision for income taxes are as follows: Twelve Months Ended 2018 2017 2016 (In thousands) Income (loss) from operations before income taxes: U.S. $ (60,574 ) $ (34,884 ) $ (69,861 ) Foreign 25,286 10,475 13,234 Total loss from operations before income taxes $ (35,288 ) $ (24,409 ) $ (56,627 ) The components of income tax expense have been recorded in the Company’s consolidated financial statements as follows: Twelve Months Ended 2018 2017 2016 (In thousands) Income tax expense (benefit) from operations (71,202 ) 2,696 5,443 Total income tax expense (benefit) $ (71,202 ) $ 2,696 $ 5,443 The components of income tax expense from operations consist of the following: Twelve Months Ended 2018 2017 2016 (In thousands) Current provision Federal $ — $ — $ — State — — — Foreign 7,592 2,298 3,090 7,592 2,298 3,090 Deferred provision: Federal (76,168 ) — — State (2,352 ) — — Foreign (274 ) 398 2,353 (78,794 ) 398 2,353 Total tax provision $ (71,202 ) $ 2,696 $ 5,443 During the year ended July 31, 2017, the Company elected to early adopt ASU No. 2015-17, non-current non-current non-current non-current July 31, July 31, (In thousands) Deferred tax assets: Accruals and reserves $ 16,070 $ 12,193 Tax basis in excess of financial basis of investments in affiliates 6,232 18,332 Tax basis in excess of financial basis for intangible and fixed assets 311 7,689 Net operating loss and capital loss carry forwards 468,129 751,435 Total gross deferred tax assets 490,742 789,649 Less: valuation allowance (438,467 ) (771,884 ) Net deferred tax assets $ 52,275 $ 17,765 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (50,141 ) $ (784 ) Convertible Debt (634 ) (2,655 ) Undistributed accumulated earnings of foreign subsidiaries — (13,150 ) Total gross deferred tax liabilities (50,775 ) (16,589 ) Net deferred tax asset $ 1,500 $ 1,176 The net change in the total valuation allowance for the fiscal year ended July 31, 2018 was a decrease of approximately $333.4 million. This decrease is primarily due to the remeasurement of the U.S. deferred tax assets and liabilities discussed below. 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, 2017 was an increase of approximately $11.0 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 On January 19, 2018, our Board adopted a Tax Benefits Preservation Plan (the “Tax Plan”) with American Stock Transfer & Trust Company, LLC, as rights agent (the “Rights Agent”). The Tax Plan is designed to preserve the Company’s ability to utilize its Tax Benefits and is similar to plans adopted by other public companies with significant Tax Benefits. The Board asked the Company’s stockholders to approve, and the stockholders did so approve, the Tax Plan at its 2017 Annual Meeting of Stockholders held on April 12, 2018 (the “2017 Meeting”). The Company had net operating loss carryforwards for federal and state tax purposes of approximately $2.1 billion and $150.6 million, respectively, as of July 31, 2018. The Company’s s ability to use its Tax Benefits would be substantially limited if the Company undergoes an “ownership change” (within the meaning of Section 382 of the Internal Revenue Code). The Tax Plan is intended to prevent an “ownership change” of the Company that would impair the Company’s ability to utilize its Tax Benefits. As part of the Tax Plan, the Board declared a dividend of one right (a “Right”) for each share of Common Stock then outstanding. The dividend was payable to holders of record as of the close of business on January 29, 2018. Any shares of Common Stock issued after January 29, 2018, will be issued together with the Rights. Each Right initially represents the right to purchase one one-thousandth of a share of newly created Series D Junior Participating Preferred Stock. On March 6, 2018, the Board, subject to approval by the Company’s stockholders, approved an amendment to the Company’s Restated Certificate of Incorporation designed to protect the tax benefits of the Company’s net operating loss carryforwards by preventing certain transfers of our securities that could result in an “ownership change” (as defined under Section 382 of the Code) (the “Protective Amendment”). The Protective Amendment was approved and adopted by the Company’s stockholders at the 2017 Meeting and was filed with the Secretary of State of the State of Delaware on April 12, 2018. 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. In December 2017, the Tax Cuts and Jobs Act, or the Tax Act (“TCJA”), was signed into law. Among other things, the Tax Act permanently lowers the corporate federal income tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, U.S. GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a provision of $280.4 million to income tax expense in continuing operations and a corresponding reduction in the valuation allowance. As a result, there was no impact to the Company’s income statement as a result of reduction in tax rates. The total provision of $280.4 million included a provision of $305.9 million to income tax expense for the Company and a benefit of $25.5 million to income tax expense for IWCO. As noted above, the net tax expense of $280.4 was offset completely by a corresponding reduction in the valuation allowance Beginning on January 1, 2018, the TCJA also requires a minimum tax on certain future earnings generated by foreign subsidiaries while providing for future tax-free The TCJA also requires a Transition Tax on any net accumulated earnings and profits as of the two required measurement dates, November 2, 2017 and December 31, 2017. As such, as of July 31, 2018, all of the Company’s accumulated earnings and profits are deemed repatriated. Therefore, there is no deferred tax liability for earnings oversees that have not been remitted. The Company will utilize NOLs to offset any Transition Tax assessed. The preliminary calculation of net accumulated earnings and profits resulted in break even, which would not result in a Transition Tax. Company will finalize the Transition Tax calculation with the filing of the fiscal year 2018 tax return. Our preliminary estimate of the TCJA and the remeasurement of our deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA, changes to certain estimates and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require further adjustments and changes in our estimates. The final determination of the TCJA and the remeasurement of our deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. As more fully described in Note 6, the Company completed the IWCO Acquisition on December 15, 2017. Going forward, the Company and IWCO will file a consolidated federal tax return. As a result of the acquisition, the Company recorded a net deferred tax liability of $78.5 million. After considering the transaction, the projected combined results, and available temporary differences from the acquired business, the Company has determined in accordance with ASC 805-740-30-3 The Company has net operating loss carryforwards for federal and state tax purposes of approximately $2.1 billion and $150.6 million, respectively, at July 31, 2018. The federal net operating losses will expire from fiscal year 2022 through 2038 and the state net operating losses will expire from fiscal year 2018 through 2038. The Company has a foreign net operating loss carryforward of approximately $74.2 million, of which $57.5 million has an indefinite carryforward period. In addition, the Company has $24.0 million of capital loss carryforwards for federal and state tax purposes. The federal and state capital losses will expire in fiscal year 2020 through fiscal year 2021. Income tax expense attributable to income from continuing operations differs from the expense computed by applying the U.S. federal income tax rate of 26.83% to income (loss) from continuing operations before income taxes as a result of the following: Twelve Months Ended July 31, 2018 2017 2016 (In thousands) Computed “expected” income tax expense (benefit) $ (9,467 ) $ (8,106 ) $ (19,368 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance (329,415 ) 10,978 22,907 Foreign dividends 7,379 2,724 4,730 Foreign tax rate differential (1,948 ) (2,386 ) (1,082 ) Federal rate change 280,438 — — Nondeductible goodwill impairment 191 — — Nondeductible expenses (15,852 ) 20 262 Foreign withholding taxes 1,961 239 762 Reversal of uncertain tax position reserves (48 ) (481 ) (2,768 ) State benefit of U.S. Loss (4,654 ) — — Other 213 (292 ) — Actual income tax expense $ (71,202 ) $ 2,696 $ 5,443 The calculation of the Company’s income 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, 2018, 2017 and 2016, the total amount of the liability for unrecognized tax benefits, including interest, related to federal, state and foreign taxes was approximately $1.6 million $0.7 million, and $1.2 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, 2014 through July 31, 2018. 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 2010 through 2017 tax years remain subject to examination in most locations while the Company’s 2006 through 2017 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, 2018 2017 2016 (In thousands) Balance as of beginning of year $ 681 $ 994 $ 3,756 Additions for current year tax positions 903 — 19 Currency translation — 18 — Reductions for lapses in statute of limitations (59 ) (331 ) (27 ) Reductions of prior year tax positions — — (2,754 ) Balance as of end of year $ 1,525 $ 681 $ 994 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, 2018, the Company has not recognized any material interest expense related to uncertain tax positions. As of July 31, 2018, 2017 and 2016, the Company had recorded liabilities for increases (decreases) in interest expense related to uncertain tax positions in the amount of $88,000, ($168,000), and $40,000 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, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | (16) 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, 2017 $ 7,522 $ (3,376 ) $ 167 $ 4,313 Foreign currency translation adjustment (1,174 ) — — (1,174 ) Net unrealized holding gain on securities — — 14 14 Pension liability adjustments — (419 ) — (419 ) Net current-period other comprehensive income (loss) (1,174 ) (419 ) 14 (1,579 ) Accumulated other comprehensive income (loss) at July 31, 2018 $ 6,348 $ (3,795 ) $ 181 $ 2,734 In the fiscal years ended July 31, 2018, the Company recorded approximately $0.1 million in taxes related to other comprehensive income. 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. |
STATEMENT OF CASH FLOWS SUPPLEM
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | 12 Months Ended |
Jul. 31, 2018 | |
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | (17) 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, 2018 2017 2016 (In thousands) Cash paid for interest $ 24,642 $ 3,783 $ 6,111 Cash paid for income taxes $ 2,567 $ 2,500 $ 3,287 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 Non-cash non-vested non-employees Non-cash |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jul. 31, 2018 | |
STOCKHOLDERS' EQUITY | (18) STOCKHOLDERS’ EQUITY Preferred Stock The Company’s Board of Directors (“the “Board”) 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. On December 15, 2017, the Company entered into a Preferred Stock Purchase Agreement (the “Purchase Agreement”) with SPH Group Holdings LLC (“SPHG Holdings”), pursuant to which the Company issued 35,000 shares of the Company’s newly created Series C Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”), to SPHG Holdings at a price of $1,000 per share, for an aggregate purchase consideration of $35.0 million (the “Preferred Stock Transaction”). The terms, rights, obligations and preferences of the Preferred Stock are set forth in a Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of the Company (the “Series C Certificate of Designations”), which has been filed with the Secretary of State of the State of Delaware. Under the Series C Certificate of Designations, each share of Preferred Stock can be converted into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at an initial conversion price equal to $1.96 per share, subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction. Holders of the Preferred Stock will also receive dividends at 6% per annum payable, at the Company’s option, in cash or Common Stock. If at any time the closing bid price of the Company’s Common Stock exceeds 170% of the conversion price for at least five consecutive trading days (subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction), the Company has the right to require each holder of Preferred Stock to convert all, or any whole number, of shares of the Preferred Stock into Common Stock. Upon the occurrence of certain triggering events such as a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, or the merger or consolidation of the Company or significant subsidiary, or the sale of substantially all of the assets or capital stock of the Company or a significant subsidiary, the holders of the Preferred Stock are entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Company to the holders of other equity or equity equivalent securities of the Company other than the Preferred Stock by reason of their ownership thereof, an amount per share in cash equal to the sum of (i) one hundred percent (100%) of the stated value per share of Preferred Stock (initially $1,000 per share) then held by them (as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Preferred Stock), plus (ii) 100% of all declared but unpaid dividends, and all accrued but unpaid dividends on each such share of Preferred Stock, in each case as the date of the triggering event. On or after December 15, 2022, each holder of Preferred Stock can also require the Company to redeem its Preferred Stock in cash at a price equal to the Liquidation Preference (as defined in Series C Certificate of Designations). Each holder of Preferred Stock has a vote equal to the number of shares of Common Stock into which its Preferred Stock would be convertible as of the record date, provided that the number of shares voted is based upon a conversion price which is no less than the greater of the book or market value of the Common Stock on the closing date of the purchase of the Preferred Stock. In addition, for so long as the Preferred Stock remains outstanding, the Company will not, directly or indirectly, and including in each case with respect to any significant subsidiary, without the affirmative vote of the holders of a majority of the Preferred Stock (i) liquidate, dissolve or wind up the Company or any significant subsidiary; (ii) consummate any transaction that would constitute or result in a Liquidation Event (as defined in the Series C Certificate of Designations); (iii) effect or consummate any Prohibited Issuance (as defined in the Series C Certificate of Designations); or (iv) create, incur, assume or suffer to exist any Indebtedness (as defined in the Series C Certificate of Designations) of any kind, other than certain existing Indebtedness of the Company and any replacement financing thereto, unless any such replacement financing be on substantially similar terms as such existing Indebtedness. The Purchase Agreement provides that the Company will use its commercially reasonable efforts to effect the piggyback registration of the Common Stock issuable on the conversion of the Preferred Stock and any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing, with the Securities and Exchange Commission in all states reasonably requested by the holder in accordance with certain enumerated conditions. The Purchase Agreement also contains other representations, warranties and covenants, customary for an issuance of Preferred Stock in a private placement of this nature. The Preferred Stock Transaction was approved and recommended to the Board by a special committee of the Board (the “Special Committee”) consisting of independent directors not affiliated with Steel Partners Holdings GP Inc. (“Steel Holdings GP”), which controls the power to vote and dispose of the securities held by SPHG Holdings and its affiliates. 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 Holdings”), an affiliate of SPHG Holdings, 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 Holdings a warrant to acquire an additional 2,000,000 shares at an exercise price of $5.00 per share (the “Warrant”). These warrants were to expire after a term of five years after issuance. On December 15, 2017, contemporaneously with the closing of the Preferred Stock Transaction, the Company entered into a Warrant Repurchase Agreement (the “Warrant Repurchase Agreement”) with Steel Holdings pursuant to which the Company repurchased the Warrant for $100. The Warrant was terminated by the Company upon repurchase. The Warrant Repurchase Agreement is more fully described in Note 19 to these Condensed Consolidated Financial Statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jul. 31, 2018 | |
FAIR VALUE MEASUREMENTS | (19) 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. We believe that the carrying value of our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. 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, 2018 and 2017, classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2018 Level 1 Level 2 Level 3 Assets: Money market funds $ 47,186 $ 47,186 $ — $ — Fair Value Measurements at Reporting Date Using (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 — — The following table presents the pension plan assets measured at fair value on a recurring basis as of July 31, 2018 and 2017, classified by fair value hierarchy: Fair Value Measurements at (In thousands) July 31, 2018 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 22,339 98 % $ — $ — $ 22,339 Other investments 521 2 % 521 $ 22,860 100 % $ — $ — $ 22,860 Fair Value Measurements at (In thousands) July 31, 2017 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 20,726 98 % $ — $ — $ 20,726 Other investments 478 2 % — — 478 $ 21,204 100 % $ — $ — $ 21,204 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, 2018 and 2017: July 31, 2018 2017 (In thousands) Fair value of plan assets at beginning of year $ 21,204 $ 25,473 Actual return on plan assets 1,541 (5,005 ) Employee contributions 402 104 Employer contributions (withdrawals), net 92 (342 ) Settlements (21 ) (279 ) Benefits and administrative expenses paid (372 ) (157 ) Currency translation 14 1,410 Fair value of plan assets at end of year $ 22,860 $ 21,204 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, customer deposits, accounts payable, funds held for clients and debt, and are reflected in the financial statements at cost. With the exception of the Notes payable and long-term debt, cost approximates fair value for these items due to their short-term nature. We believe that the carrying value of our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. Included in Trading Securities in the accompanying balance sheet are marketable equity securities. 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, 2018 July 31, 2017 Carrying Fair Carrying Amount Fair Fair Value (In thousands) Notes payable $ 64,530 $ 66,658 $ 59,758 $ 63,852 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 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, 2018 | |
SEGMENT INFORMATION | (20) SEGMENT INFORMATION The Company has five operating segments: Americas; Asia; Europe; Direct Marketing; and e-Business. e-Business. e-Business 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, long-lived asset impairment, share-based compensation and restructuring. These items are excluded because they may be considered to be of a non-operational non-cash Summarized financial information of the Company’s continuing operations by operating segment is as follows: Twelve Months Ended July 31, 2018 2017 2016 (In thousands) Net revenue: Americas $ 56,320 $ 92,324 $ 106,143 Asia 146,664 158,048 167,861 Europe 119,403 159,085 151,842 Direct Marketing 299,358 — — e-Business 23,513 27,163 33,177 $ 645,258 $ 436,620 $ 459,023 Operating income (loss): Americas $ (9,542 ) $ (10,342 ) $ (14,731 ) Asia 26,405 5,620 (855 ) Europe (10,074 ) (9,008 ) (13,825 ) Direct Marketing 10,740 — — e-Business (6,176 ) (1,185 ) (4,384 ) Total Segment operating income (loss) 11,353 (14,915 ) (33,795 ) Corporate-level activity (19,659 ) (4,846 ) (6,777 ) Total operating loss (8,306 ) (19,761 ) (40,572 ) Total other expense (26,982 ) (4,648 ) (16,055 ) Loss before income taxes $ (35,288 ) $ (24,409 ) $ (56,627 ) Net revenue and operating income associated with Direct Marketing is for the period from December 15, 2017 to July 31, 2018. The Direct Marketing operating income includes certain purchase accounting adjustments associated with the IWCO acquisition. July 31, July 31, (In thousands) Total assets: Americas $ 22,820 $ 21,876 Asia 44,322 63,819 Europe 37,223 64,639 Direct Marketing 642,820 — e-Business 15,758 20,703 Sub-total—segment assets 762,943 171,037 Corporate 64,107 110,261 $ 827,050 $ 281,298 Summarized financial information of the Company’s net revenue from external customers by group of services is as follows: Twelve Months Ended July 31, 2018 2017 2016 (In thousands) Services: Supply chain services $ 322,387 $ 409,457 $ 425,846 e-Business services 23,513 27,163 33,177 Products: Direct Marketing 299,358 — — $ 645,258 $ 436,620 $ 459,023 As of July 31, 2018 and 2017, approximately $101.8 million and $8.6 million of the Company’s long-lived assets, respectively, were located in the U.S.A. For the fiscal year ended July 31, 2018, the Company’s net revenues within U.S.A., China, Netherlands and Czech Republic were $358.3 million, $112.3 million, $59.5 million and $48.7 million, 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jul. 31, 2018 | |
RELATED PARTY TRANSACTIONS | (21) RELATED PARTY TRANSACTIONS As of February 20, 2018, SPHG Holdings and its affiliates beneficially owned approximately 52% of our outstanding capital stock. As of July 31, 2018, SPHG Holdings held $14.9 million principal amount of the Company’s 5.25% Convertible Senior Notes. SPHG Holdings has confirmed to the Company that it will not require a cash payment on the Notes when they mature and for a period of twelve months from the date of this filing. Preferred Stock Transaction and Warrant Repurchase On December 15, 2017, the Company entered into a Preferred Stock Purchase Agreement with SPHG Holdings, pursuant to which the Company issued 35,000 shares of the Company’s newly created Series C Convertible Preferred Stock, par value $0.01 per share (the Preferred Stock), to SPHG Holdings at a price of $1,000 per share, for an aggregate purchase consideration of $35.0 million (the Preferred Stock Transaction). The terms, rights, obligations and preferences of the Preferred Stock are set forth in a Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of the Company (the a Series C Certificate of Designations), which has been filed with the Secretary of State of the State of Delaware. Under the Series C Certificate of Designations, each share of Preferred Stock can be converted into shares of the our Common Stock, at an initial conversion price equal to $1.96 per share, subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction. Holders of the Preferred Stock will also receive dividends at 6% per annum payable, at the Company’s option, in cash or Common Stock. If at any time the closing bid price of the Company’s Common Stock exceeds 170% of the conversion price for at least five consecutive trading days (subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction), the Company has the right to require each holder of Preferred Stock to convert all, or any whole number, of shares of the Preferred Stock into Common Stock. The Preferred Stock Transaction was approved and recommended to the Board by a special committee of the Board (the “Special Committee”). Each member of the Special Committee was independent and not affiliated with Steel Holdings GP, which controls the power to vote and dispose of the securities held by SPHG Holdings and its affiliates. On December 15, 2017, contemporaneously with the closing of the Preferred Stock Transaction, the Company entered into a Warrant Repurchase Agreement with Steel Holdings, an affiliate of SPHG Holdings, pursuant to which the Company repurchased for $100 the warrant to acquire 2,000,000 shares of the Common Stock (the Warrant) that the Company had previously issued to Steel Holdings. The Warrant, which was to expire in 2018, was terminated by the Company upon repurchase. Management Services Agreement 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 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”), the parent of SP Corporate and an affiliate of SPHG Holdings, 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. 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 (the “Transfer Agreement”). SP Corporate and Steel Partners LLC merged with and into SPH Services, with SPH Services surviving. SPH Services has since changed its name to Steel Services Ltd. (“Steel Services”). On September 1, 2017, the Company entered into a Third Amendment to the Management Services Agreement, which 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 our behalf in connection with the performance of the services under the Management Services Agreement, including travel expenses. The Management Services Agreement provides that, under certain circumstances, the Company may be required to indemnify and hold harmless Steel Services and its affiliates and employees from any claims or liabilities by a third party in connection with activities or the rendering of services under the Management Services Agreement. Total expenses incurred related to this agreement for the twelve months ended July 31, 2018, 2017 and 2016 were $1.9 million, $2.3 million and $2.2 million, respectively. As of July 31, 2018 and 2017, amounts due to SP Corporate and Steel Services were $0.2 million and $0.3 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 two amendments thereto) and the Transfer Agreement. The Audit Committee of the Board of Directors (the “Audit Committee”) 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. On December 15, 2017, the Board, upon the recommendation of the Special Committee and the Compensation Committee, approved restricted stock grants and market performance based restricted stock grants to non-employee Mutual Securities, Inc. (“Mutual Securities”) serves as the broker and record-keeper for all the transactions associated with the Trading Securities. Mr. Howard, a director of the Company, 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, 2018 and 2017, Mutual Securities received an immaterial amount in commissions associated with these transactions. |
SELECTED QUARTERLY FINANCIAL IN
SELECTED QUARTERLY FINANCIAL INFORMATION (Unaudited) | 12 Months Ended |
Jul. 31, 2018 | |
SELECTED QUARTERLY FINANCIAL INFORMATION (Unaudited) | (22) SELECTED QUARTERLY FINANCIAL INFORMATION (Unaudited) The following table sets forth selected quarterly financial information for the fiscal years ended July 31, 2018 and 2017. The operating results for any given quarter are not necessarily indicative of results for any future period. Quarter Ended Quarter Ended Oct. 31, ‘17 Jan. 31, ‘18 Apr. 30, ‘18 Jul. 31, ‘18 Oct. 31, ‘16 Jan. 31, ‘17 Apr. 30, ‘17 Jul. 31, ‘17 (In thousands, except per share data) (In thousands, except per share data) Net revenue $ 102,522 $ 153,738 $ 193,921 $ 195,077 $ 121,327 $ 117,568 $ 97,948 $ 99,777 Cost of revenue 93,448 137,915 154,916 157,720 111,994 106,370 89,406 92,485 Gross profit 9,074 15,823 39,005 37,357 9,333 11,198 8,542 7,292 Total operating expenses 12,904 21,526 37,625 37,510 14,975 12,702 13,785 14,664 Operating income (loss) (3,830 ) (5,703 ) 1,380 (153 ) (5,642 ) (1,504 ) (5,243 ) (7,372 ) Total other income (expense) (521 ) (8,200 ) (11,198 ) (7,063 ) (2,352 ) (1,075 ) 763 (1,984 ) Income tax benefit (expense) (1,087 ) 73,521 (715 ) (517 ) (1,049 ) (723 ) (819 ) (105 ) Gains on investments in affiliates, net of tax 201 200 200 200 500 396 232 150 Net income (loss) (5,237 ) 59,818 (10,333 ) (7,533 ) (8,543 ) (2,906 ) (5,067 ) (9,311 ) Net income (loss) attributable to common stockholders $ (5,237 ) $ 59,548 $ (10,862 ) $ (8,069 ) $ (8,543 ) $ (2,906 ) $ (5,067 ) $ (9,311 ) Basic net earning (loss) per share attributable to common stockholders: $ (0.09 ) $ 1.02 $ (0.18 ) $ (0.13 ) $ (0.16 ) $ (0.05 ) $ (0.09 ) $ (0.17 ) Diluted net earning (loss) per share attributable to common stockholders: $ (0.09 ) $ 0.75 $ (0.18 ) $ (0.13 ) $ (0.16 ) $ (0.05 ) $ (0.09 ) $ (0.17 ) In connection with the preparation of our condensed consolidated financial statements for the three months ended April 30, 2018, and our remediation efforts related to the material weakness in our internal control over financial reporting related to our controls over non-routine We have corrected the condensed consolidated statements of operations for the three months ended January 31, 2018 and April 30, 2018. The impact to the condensed consolidated statements of income for the three months ended January 31, 2018 and April 30, 2018 is as follows (in thousands, except per share amounts): Three Months Ended January 31, 2018 Three Months Ended April 30, 2018 As Adjustments As As Adjustments As Net revenue $ 151,119 $ 2,619 $ 153,738 $ 188,922 $ 4,999 $ 193,921 Cost of revenue 134,169 3,746 137,915 149,917 4,999 154,916 Gross profit 16,950 (1,127 ) 15,823 39,005 — 39,005 Income tax expense (benefit) (77,664 ) 4,143 (73,521 ) 715 — 715 Net income (loss) attributable to common stockholders $ 64,830 (5,282 ) $ 59,548 $ (10,862 ) — $ (10,862 ) Basic net earning (loss) per share attributable to common stockholders: $ 1.11 $ 1.02 $ (0.18 ) $ (0.18 ) Diluted net earning (loss) per share attributable to common stockholders: $ 0.85 $ 0.75 $ (0.18 ) $ (0.18 ) |
PARENT COMPANY CONDENSED FINANC
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Jul. 31, 2018 | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | (23) PARENT COMPANY CONDENSED FINANCIAL INFORMATION Per the Cerberus Credit Facility, IWCO is permitted to make distributions to the Parent, Steel Connect, Inc., an aggregate amount not to exceed $5.0 million in any fiscal year and pay reasonable documented expenses incurred by the Parent. The Parent is entitled to receive additional cash remittances under a “U.S. Federal Income Tax Sharing Agreement.” As the remainder of the restricted net assets, which totaled approximately $53.1 million at July 31, 2018, represent a significant portion of the Company’s consolidated total assets, the Company is presenting the following parent company condensed financial information: STEEL CONNECT, INC. (Parent Only) BALANCE SHEETS (in thousands, except share and per share data) July 31, 2018 July 31, 2017 ASSETS Cash and cash equivalents $ 7,978 $ 708 Prepaid expenses and other current assets 120 85 Total current assets 8,098 793 Investments in affiliates 188,534 113,154 Other assets 87 87 Due from subsidiaries 13,579 10,945 Total assets $ 210,298 $ 124,979 LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK & STOCKHOLDERS’ EQUITY Accounts payable $ 674 $ 498 Accrued expenses 2,274 1,752 Notes payable 64,530 — Total current liabilities 67,478 2,250 Notes payable — 59,758 Total long-term liabilities — 59,758 Total liabilities 67,478 62,008 Contingently redeemable preferred stock 35,192 — Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2018; zero shares authorized, issued and outstanding shares at July 31, 2017 35,192 — Stockholders’ equity: Preferred stock, $0.01 par value per share. Authorized 4,965,000 and 5,000,000 shares at July 31, 2018 and July 31, 2017, respectively; zero issued and outstanding shares at July 31, 2018 and at July 31, 2017 — — Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 60,742,859 issued and outstanding shares at July 31, 2018; 55,555,973 issued and outstanding shares at July 31, 2017 608 556 Additional paid-in capital 7,467,855 7,457,051 Accumulated deficit (7,363,569 ) (7,398,949 ) Accumulated other comprehensive income 2,734 4,313 Total stockholders’ equity 107,628 62,971 Total liabilities, contingently redeemable preferred stock and stockholders’ equity $ 210,298 $ 124,979 STEEL CONNECT, INC. (Parent Only) STATEMENTS OF OPERATIONS (in thousands) Twelve Months Ended July 31, 2018 2017 2016 Selling, general and administrative $ 16,742 $ 4,834 $ 6,562 Total operating expenses 16,742 4,834 6,562 Operating loss (16,742 ) (4,834 ) (6,562 ) Other income (expense): Interest expense (8,427 ) (7,917 ) (10,565 ) Other income, net 6,807 — 757 Total other expense (1,620 ) (7,917 ) (9,808 ) Loss before income taxes (18,362 ) (12,751 ) (16,370 ) Equity losses of subsidiaries, net of tax (54,276 ) 14,026 44,911 Gains on investments in affiliates, net of tax (801 ) (950 ) — Net income (loss) $ 36,715 $ (25,827 ) $ (61,281 ) STEEL CONNECT, INC. (Parent Only) STATEMENTS OF CASH FLOWS (in thousands) Twelve Months Ended July 31, 2018 2017 2016 Cash flows from operating activities: Net income (loss) $ 36,715 $ (25,827 ) $ (61,281 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Amortization of deferred financing costs 388 347 439 Accretion of debt discount 4,384 3,919 4,967 Share-based compensation 10,763 533 509 Non-cash (354 ) — (757 ) Equity losses of subsidiaries, net of tax (54,276 ) 14,026 44,911 Gains on investments in affiliates and impairments (801 ) (950 ) — Changes in operating assets and liabilities, net of business acquired: Prepaid expenses and other current assets (36 ) 76 1,034 Accounts payable and accrued expenses 698 (338 ) (3,418 ) Other assets and liabilities (1,860 ) (12,926 ) 1,223 Net cash used in operating activities (4,379 ) (21,140 ) (12,373 ) Cash flows from investing activities: Intercompany advances, net (22,216 ) 19,211 20,000 Net cash provided by (used in) investing activities (22,216 ) 19,211 20,000 Cash flows from financing activities: Proceeds from issuance of preferred stock 35,000 — — Payment of preferred dividends (1,143 ) — — Purchase of the Company’s Convertible Notes — (1,763 ) (20,257 ) Proceeds from issuance of common stock 8 18 51 Repurchase of common stock — — (127 ) Net cash provided by (used in) financing activities 33,865 (1,745 ) (20,333 ) Net decrease in cash and cash equivalents 7,270 (3,674 ) (12,706 ) Cash and cash equivalents at beginning of period 708 4,382 17,088 Cash and cash equivalents at end of period $ 7,978 $ 708 $ 4,382 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jul. 31, 2018 | |
SUBSEQUENT EVENTS | (24) SUBSEQUENT EVENTS Subsequent to July 31, 2018, but prior to the date of these financial statements, the Company purchased $3.7 million in face value of the Company’s Notes in the open market. Subsequent to July 31, 2018, SPHG Holdings had confirmed to the Company that, on the Notes that it holds, it will not require a cash payment when they mature and for a period of twelve months from the date of this filing. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jul. 31, 2018 | |
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 |
Revenue Recognition | Revenue Recognition The Supply Chain business’ 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. IWCO recognizes revenue for the majority of its products upon the transfer of title and risk of ownership, which is generally upon the delivery of the product to the United States Postal Service (“USPS”). IWCO does not have contractual purchase commitments from customers. IWCO receives purchase orders for all customer transactions and prices each order based upon the customer’s most recently agreed to pricing grid/rate card. 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, 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 The Company applies the guidance of Accounting Standards Codification (“ASC”) 605-25 |
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, July 31, (In thousands) Cash and bank deposits $ 44,952 $ 24,987 Money market funds 47,186 85,683 $ 92,138 $ 110,670 |
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. We believe that the carrying value of our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. 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 $66.7 million as of July 31, 2018, 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 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 available-for-sale 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 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 for the fiscal year ended July 31, 2016. 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 We value the inventory at the lower of cost or net realizable value. Cost is determined by both moving averages and the first-in, first-out IWCO’s inventory consists primarily of raw material (paper) used to produce direct mail packages and work-in-process, “step-up” work-in-process non-cash Inventories consisted of the following: July 31, 2018 July 31, 2017 (In thousands) Raw materials $ 23,208 $ 31,071 Work-in-process 16,147 713 Finished goods 8,431 2,585 $ 47,786 $ 34,369 |
Business Combinations and Valuation of Goodwill and Other Acquired Intangible Assets | Business Combinations and Valuation of Goodwill and Other Acquired Intangible Assets We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets may include, but are not limited to, future expected cash flows, acquired technology and tradenames, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Accounting for Impairment of Long-Lived Assets, Goodwill and Other Intangible Assets | Accounting for Impairment of 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 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 its reporting units on July 31, of each fiscal year. Acquired finite-lived intangible assets are amortized over their estimated useful lives. We evaluate the recoverability of our intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. |
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 |
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 7 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, |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table reconciles earnings (loss) per share for the fiscal years ended July 31, 2018, 2017 and 2016. Twelve Months Ended July 31, 2018 2017 2016 (In thousands, except per share data) Net income (loss) $ 36,715 $ (25,827 ) $ (61,281 ) Less: Preferred dividends on redeemable preferred stock (1,335 ) — — Net income (loss) attributable to common stockholders 35,380 (25,827 ) (61,281 ) Effect of dilutive securities: 5.25% Convertible Senior Notes 7,079 — — Redeemable preferred stock 1,335 — — Net income (loss) attributable to common stockholders after assumed conversions $ 43,794 $ (25,827 ) $ (61,281 ) Weighted average common shares outstanding 59,179 55,134 51,934 Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock 22,720 — — Weighted average number of common and potential common shares 81,899 55,134 51,934 Basic net earning (loss) per share attributable to common stockholders: $ 0.60 $ (0.47 ) $ (1.18 ) Diluted net earning (loss) per share attributable to common stockholders: $ 0.53 $ (0.47 ) $ (1.18 ) Approximately 0.5 million, 14.2 million and 21.1 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, 2018, 2017 and 2016, respectively. The common stock equivalent shares excluded during the year ended July 31, 2018 were primarily excluded as the options were out-of-the-money. if-converted |
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, 2018, 2017 and 2016, the Company’s 10 largest clients accounted for approximately 44%, 70% and 71% of consolidated net revenue, respectively. No clients accounted for more than 10% of the Company’s consolidated net revenue for the fiscal year ended July 31, 2018. No clients accounted for greater than 10% of the Company’s Net Accounts Receivable balance as of July 31, 2018. 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 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 Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue The standard allows two methods of adoption: (i) retrospectively to each prior period presented (“full retrospective method”), or (ii) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). The Company will adopt the new standard using the modified retrospective method at the beginning of its first quarter of fiscal 2019. The Company and its outside consultants has substantially completed the process of evaluating the potential effects on the consolidated financial statements and establishing new accounting policies and internal controls necessary to support the requirements of the new standard. Based on the analysis to date, the Company has identified the following potential impacts: • ModusLink’s revenue primarily comes from the sale of supply chain management services to its clients. Amounts billed to customers under these arrangements include revenue attributable to the services performed as well as for materials procured on the customer’s behalf as part of its service to them. Under existing guidance, revenue was recognized for services when the services were performed and for product sales when the products were shipped or in certain cases when products were completed and title had transferred, if the client had also contracted with us for warehousing and/or logistics services for a separate fee, assuming all other applicable revenue recognition criteria were met. Under the new standard, the majority of our arrangements will consist of two distinct performance obligations (i.e., a warehousing/inventory management service and a separate kitting/packaging/assembly service), each of which will be recognized over time as services are performed using an input method based on the level of efforts expended. For the majority of the Company’s contracts under which the Company previously recognized revenue for services when the services were performed, the Company does not expect a material change in the manner and timing of revenue recognition as the input method corresponds with the transfer of value to the customer under the previous standard. However, for the limited population of contracts where the Company previously recognized revenues upon completion of all services and historically recognized revenue at a point in time (generally upon product shipment), the timing of revenue recognition will change in comparison to existing guidance as the Company’s performance enhances assets that the customer controls. The Company has estimated that the impact of this change in the manner and timing of revenue recognition will result in an estimated increase to retained earnings of approximately $1.0 million to $2.0 million and the recording of an unbilled asset in the same amount. The Company is currently refining this estimate and will record in the Company’s first quarter report on Form 10-Q. • We also recognize revenue from the sale of software in the Company’s e-Business operations. The Company has determined that it does not have any in process perpetual license arrangements at the date of adoption, as the balances at July 31, 2018 relate to maintenance renewal periods only. The Company did not identify any changes to the timing and manner of revenue recognition related to software contracts where the only performance obligation is the provision of software maintenance. • IWCO’s revenue is generated through the provision of data-driven marketing solutions, primarily through providing direct mail products to customers. Revenue recognized related to IWCO’s marketing solutions offerings, which typically consist of a single integrated performance obligation, was recognized at a point in time when the products were complete under existing guidance. Under the new standard, the majority of IWCO’s marketing solutions contracts will be recognized over time as the Company performs because the products have no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date. The Company has estimated that the impact of this change in the manner and timing of revenue recognition will result in an estimated adjustment to retained earnings of approximately $4.5 million to $6.0 million and the recording of an unbilled asset in the same amount. The Company is currently refining this estimate and will record in the Company’s first quarter report on Form 10-Q. In addition, the new standard will require incremental contract acquisition costs (such as certain sales commissions) for customer contracts to be capitalized and amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the sales commissions or other costs relate. Currently, these costs are expensed as incurred. The Company has identified certain commissions programs where it expects that incremental costs will be capitalized and recognized over a period of greater than one year. As of the date of adoption, the total commission expense that has been incurred under the commissions programs that have been identified by the Company is not material and the Company does not expect to record an adjustment for commissions at the date of adoption. The Company will be required to record cumulative effect adjustments to retained earnings (net of tax) upon adopting the new standard as of the fiscal year commencing August 1, 2018. The most significant of these adjustments will be to establish an asset and increase retained earnings related to the ModusLink supply chain management services contracts and IWCO marketing solutions contracts as noted above, given the changes to the manner and timing of revenue recognition upon adoption. The Company has not identified any other material adjustments that would need to be recorded at the time of adoption. Currently, the Company expects the cumulative effect adjustment to be within the range of $5.5 million to $8.0 million. The Company expects to finalize its estimates and record the cumulative effect adjustment for inclusion in the Company’s first quarter report on Form 10-Q. In addition, the Company has determined the adoption of the standard will result in several additional disclosures, including but not limited to additional information around performance obligations, the timing of revenue recognition, remaining performance obligations at period end, contract assets and liabilities and significant judgments made that impact the amount and timing of revenue from our contracts with customers. These additional disclosures will be included in the Company’s first quarter report on Form 10-Q. This discussion of the expected effects of the Company’s adoption of ASC 606 represents management’s best estimates of the effects of adopting ASC 606 at the time of the preparation of this Annual Report on Form 10-K. In August 2014, the FASB issued ASU No. 2014-15 205-40), In July 2015, the FASB issued ASU No. 2015-11, In February 2016, the FASB issued ASU No. 2016-02, In March 2016, the FASB issued ASU No. 2016-09, In November 2016, the FASB issued ASU No. 2016-18, In March 2017, the FASB issued ASU No. 2017-07, non-operating |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: July 31, July 31, (In thousands) Cash and bank deposits $ 44,952 $ 24,987 Money market funds 47,186 85,683 $ 92,138 $ 110,670 |
Components of Inventories | Inventories consisted of the following: July 31, 2018 July 31, 2017 (In thousands) Raw materials $ 23,208 $ 31,071 Work-in-process 16,147 713 Finished goods 8,431 2,585 $ 47,786 $ 34,369 |
Estimated Useful Lives of Property and Equipment | The estimated useful lives are as follows: Buildings 32 years Machinery & equipment 3 to 7 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 (loss) per share for the fiscal years ended July 31, 2018, 2017 and 2016. Twelve Months Ended July 31, 2018 2017 2016 (In thousands, except per share data) Net income (loss) $ 36,715 $ (25,827 ) $ (61,281 ) Less: Preferred dividends on redeemable preferred stock (1,335 ) — — Net income (loss) attributable to common stockholders 35,380 (25,827 ) (61,281 ) Effect of dilutive securities: 5.25% Convertible Senior Notes 7,079 — — Redeemable preferred stock 1,335 — — Net income (loss) attributable to common stockholders after assumed conversions $ 43,794 $ (25,827 ) $ (61,281 ) Weighted average common shares outstanding 59,179 55,134 51,934 Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock 22,720 — — Weighted average number of common and potential common shares 81,899 55,134 51,934 Basic net earning (loss) per share attributable to common stockholders: $ 0.60 $ (0.47 ) $ (1.18 ) Diluted net earning (loss) per share attributable to common stockholders: $ 0.53 $ (0.47 ) $ (1.18 ) |
ALLOWANCE FOR DOUBTFUL ACCOUN_2
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Allowance for Doubtful Accounts | The allowance for doubtful accounts consisted of the following: July 31, 2018 2017 2016 (In thousands) Balance at beginning of year $ 616 $ 489 $ 57 Provisions charged to expense 211 132 458 Accounts written off (347 ) (5 ) (26 ) $ 480 $ 616 $ 489 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Property and Equipment at Cost | Property and equipment at cost, consists of the following: July 31, 2018 2017 (In thousands) Land $ 942 $ — Buildings — 24,476 Machinery and equipment 97,149 24,504 Leasehold improvements 21,917 14,815 Software 52,082 48,536 Other 28,147 22,126 200,237 134,457 Less: Accumulated depreciation and amortization (93,605 ) (115,902 ) Property and equipment, net $ 106,632 $ 18,555 |
ACQUISITION OF IWCO DIRECT (Tab
ACQUISITION OF IWCO DIRECT (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Summary of Preliminary Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair value of assets acquired and liabilities assumed at the date of the acquisition: As Previously Adjustments As (In thousands) Accounts receivable $ 47,841 $ (433 ) $ 47,408 Inventory 27,165 5,829 32,994 Other current assets 7,427 3,574 11,001 Property and equipment 87,976 4,533 92,509 Intangible assets 210,920 2,330 213,250 Goodwill 259,085 (4,733 ) 254,352 Other assets 3,040 (300 ) 2,740 Accounts payable (31,069 ) — (31,069 ) Accrued liabilities and other current liabilities (35,790 ) (30,826 ) (66,616 ) Customer deposits (7,829 ) — (7,829 ) Deferred income taxes (79,918 ) 1,398 (78,520 ) Other liabilities (19,627 ) 18,628 (999 ) Total consideration $ 469,221 $ — $ 469,221 |
Summary of Pro Forma Information | The pro forma results were adjusted to reflect a fair value step-up to work-in-process inventory, as well as incremental depreciation and amortization based on preliminary fair value adjustments for the acquired property, plant and equipment, and intangible assets. A reduction to interest expense is also reflected in the pro forma results to reflect the more favorable terms obtained with the new Credit Facility as compared to the interest rate under the former facility carried by IWCO. The pro forma results also reflect the reversal of the income tax valuation allowance that resulted from the acquisition in fiscal year 2017, rather than fiscal year 2018: Twelve Months Ended 2018 2017 (In thousands) Net revenue $ 824,825 $ 891,373 Net income (loss) $ (17,148 ) $ 16,040 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Schedule of Estimated Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets as of July 31, 2018 is as follows (in thousands): 2019 $ 30,396 2020 27,255 2021 20,258 2022 15,334 2023 11,427 Thereafter 88,294 $ 192,964 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Summary of Restructuring Accrual by Expense Category | The following tables summarize the activity in the restructuring accrual for the fiscal years ended July 31, 2018, 2017 and 2016: Employee Contractual Total (In thousands) 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 (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 (54 ) 20 (34 ) Accrued restructuring balance at July 31, 2017 100 86 186 Restructuring charges 3 — 3 Restructuring adjustments 246 22 268 Cash paid (88 ) (108 ) (196 ) Non-cash (165 ) — (165 ) Accrued restructuring balance at July 31, 2018 $ 96 $ — $ 96 |
Summary of Net Restructuring Charges | The net restructuring charges for the fiscal years ended July 31, 2018, 2017 and 2016 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 2018 2017 2016 (In thousands) Cost of revenue $ 9 $ 563 $ 4,812 Selling, general and administrative 262 1,404 2,609 $ 271 $ 1,967 $ 7,421 |
Summary of Restructuring Accrual by Reportable Segment | The following tables summarize the restructuring accrual by operating segment for the fiscal years ended July 31, 2018, 2017 and 2016: Americas Asia Europe e-Business Consolidated (In thousands) 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 — (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 23 (40 ) (14 ) (3 ) (34 ) Accrued restructuring balance at July 31, 2017 51 — 23 112 186 Restructuring charges — — — 3 3 Restructuring adjustments 257 1 2 8 268 Cash paid (88 ) — — (108 ) (196 ) Non-cash (167 ) (1 ) (25 ) 28 (165 ) Accrued restructuring balance at July 31, 2018 $ 53 $ — $ — $ 43 $ 96 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Components of Accrued Expenses | July 31, July 31, (In thousands) Accrued taxes $ 29,804 $ 2,272 Accrued compensation 25,603 10,678 Accrued interest 1,437 1,366 Accrued audit, tax and legal 3,264 2,759 Accrued contract labor 1,932 1,632 Accrued worker’s compensation 6,126 — Accrued other 20,164 19,191 $ 88,330 $ 37,898 |
Components of Other Current Liabilities | July 31, July 31, (In thousands) Accrued pricing liabilities $ 18,882 $ 18,882 Customer postage deposits 12,638 — Other 10,509 7,259 $ 42,029 $ 26,141 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Net Carrying Value of Term Loan | July 31, July 31, (In thousands) Carrying amount of equity component (net of allocated debt issuance costs) $ 26,961 $ 26,961 Principal amount of Notes $ 67,625 $ 67,625 Unamortized debt discount (2,843 ) (7,227 ) Unamortized debt issuance costs (252 ) (640 ) Net carrying amount $ 64,530 $ 59,758 |
Summary of Interest Expense Related to Convertible Notes | Twelve Months Ended July 31, 2018 2017 2016 (In thousands) Interest expense related to contractual interest coupon $ 3,655 $ 3,651 $ 5,159 Interest expense related to accretion of the discount 4,384 3,919 4,967 Interest expense related to debt issuance costs 388 347 439 $ 8,427 $ 7,917 $ 10,565 |
Term Loan | |
Net Carrying Value of Term Loan | July 31, 2018 (In thousands) Principal amount outstanding on the Term Loan $ 390,000 Unamortized debt issuance costs (1,162 ) Net carrying value of the Term Loan $ 388,838 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Future Annual Minimum Payments | Future annual minimum payments, including restructuring related obligations as of July 31, 2018, are as follows: Operating Capital Purchase Debt Total (In thousands) For the fiscal years ended July 31: 2019 $ 17,367 $ 79 $ 37,920 $ 108,792 $ 164,158 2020 12,796 70 — 37,135 50,001 2021 9,980 59 — 36,653 46,692 2022 7,175 28 — 36,170 43,373 2023 3,802 — — 383,191 386,993 Thereafter 24,689 — — — 24,689 $ 75,809 $ 236 $ 37,920 $ 601,941 $ 715,906 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Plan Assets Measured at Fair Value on Recurring Basis Classified by Fair Value Hierarchy | The following table presents the pension plan assets measured at fair value on a recurring basis as of July 31, 2018 and 2017, classified by fair value hierarchy: Fair Value Measurements at (In thousands) July 31, 2018 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 22,339 98 % $ — $ — $ 22,339 Other investments 521 2 % 521 $ 22,860 100 % $ — $ — $ 22,860 Fair Value Measurements at (In thousands) July 31, 2017 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 20,726 98 % $ — $ — $ 20,726 Other investments 478 2 % — — 478 $ 21,204 100 % $ — $ — $ 21,204 |
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, 2018 and 2017, classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2018 Level 1 Level 2 Level 3 Assets: Money market funds $ 47,186 $ 47,186 $ — $ — Fair Value Measurements at Reporting Date Using (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 — — |
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, 2018 and 2017: July 31, 2018 2017 (In thousands) Fair value of plan assets at beginning of year $ 21,204 $ 25,473 Actual return on plan assets 1,541 (5,005 ) Employee contributions 402 104 Employer contributions (withdrawals), net 92 (342 ) Settlements (21 ) (279 ) Benefits and administrative expenses paid (372 ) (157 ) Currency translation 14 1,410 Fair value of plan assets at end of year $ 22,860 $ 21,204 |
Notes Payable not Carried at Fair Value | The following table presents the Company’s debt not carried at fair value: July 31, 2018 July 31, 2017 Carrying Fair Carrying Amount Fair Fair Value (In thousands) Notes payable $ 64,530 $ 66,658 $ 59,758 $ 63,852 Level 1 |
Pension Plan [Member] | |
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, 2018 and 2017, classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2018 Asset Level 1 Level 2 Level 3 Insurance contract $ 22,339 98 % $ — $ — $ 22,339 Other investments 521 2 % 521 $ 22,860 100 % $ — $ — $ 22,860 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 |
DEFINED BENEFIT PENSION PLANS (
DEFINED BENEFIT PENSION PLANS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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, 2018 2017 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 27,464 $ 31,667 Service cost 398 700 Interest cost 671 573 Actuarial (gain) loss 1,655 (6,814 ) Employee contributions 93 103 Benefits and administrative expenses paid (372 ) (157 ) Adjustments (54 ) — Settlements (21 ) (279 ) Effect of curtailment — — Currency translation 15 1,671 Benefit obligation at end of year 29,849 27,464 Change in plan assets Fair value of plan assets at beginning of year 21,204 25,473 Actual return on plan assets 1,541 (5,005 ) Employee contributions 402 104 Employer contributions (withdrawals), net 92 (342 ) Settlements (21 ) (279 ) Benefits and administrative expenses paid (372 ) (157 ) Currency translation 14 1,410 Fair value of plan assets at end of year 22,860 21,204 Funded status Assets — — Current liability (13 ) (12 ) Noncurrent liability (6,976 ) (6,248 ) Net amount recognized in statement of financial position as a noncurrent asset (liability) $ (6,989 ) $ (6,260 ) |
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, 2018 2017 (In thousands) Projected benefit obligation $ 29,849 $ 27,464 Accumulated benefit obligation $ 27,700 $ 25,531 Fair value of plan assets $ 22,860 $ 21,204 |
Components of Net Periodic Pension Cost | Components of net periodic pension cost were as follows: Twelve Months Ended 2018 2017 2016 (In thousands) Service cost $ 398 $ 700 $ 632 Interest costs 671 573 637 Expected return on plan assets (529 ) (457 ) (491 ) Amortization of net actuarial (gain) loss 125 201 222 Curtailment gain — — (844 ) Net periodic pension costs $ 665 $ 1,017 $ 156 |
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 2018 2017 2016 Discount rate 2.22 % 2.47 % 1.72 % Rate of compensation increase 1.93 % 1.93 % 1.92 % Weighted-average assumptions used to determine net periodic pension cost was as follows: Twelve Months Ended 2018 2017 2016 Discount rate 2.21 % 1.69 % 1.95 % Expected long-term rate of return on plan assets 2.20 % 1.69 % 2.41 % Rate of compensation increase 1.94 % 1.91 % 1.83 % |
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 163 2019 213 2020 256 2021 257 2022 307 Next 5 years 2,352 |
OTHER GAINS (LOSSES), NET (Tabl
OTHER GAINS (LOSSES), NET (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Components of Other Gains (Losses), Net | The following schedule reflects the components of “Other gains (losses), net”: Twelve Months Ended 2018 2017 2016 (In thousands) Foreign currency exchange gains (losses) $ 1,055 $ 199 $ (593 ) Gain (losses), net on Trading Securities 1,876 3,128 (5,920 ) Other, net (708 ) (127 ) 756 $ 2,223 $ 3,200 $ (5,757 ) |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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, 2018, 2017 and 2016: Twelve Months Ended July 31, 2018 2017 2016 Cost of revenue $ 14 $ 53 $ 96 Selling, general and administrative 10,787 628 1,030 $ 10,801 $ 681 $ 1,126 |
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 was $1.11, using the binomial-lattice model with the following weighted-average assumptions: Twelve Months Ended 2016 Expected volatility 55.80 % Risk-free interest rate 1.28 % Expected term (in years) 4.41 Expected dividend yield 0.00 % |
Summary of Option Activity | A summary of option activity for the fiscal year ended July 31, 2018 is as follows: Number of Weighted- Weighted-Average Aggregate (in thousands, except exercise price and years) Stock options outstanding, July 31, 2017 573 $ 4.36 Granted — — Exercised — — Forfeited or expired (135 ) 5.51 Stock options outstanding, July 31, 2018 438 3.99 1.91 $ — Stock options exercisable, July 31, 2018 433 $ 4.00 1.89 $ — |
Summary of Activity of Nonvested Stock | A summary of the activity of the Company’s nonvested stock for the fiscal year ended July 31, 2018, is as follows: Number Weighted-Average (share amounts in thousands) Nonvested stock outstanding, July 31, 2017 296 $ — Granted 7,999 1.45 Vested (7,081 ) 1.62 Forfeited (49 ) 1.62 Nonvested stock outstanding, July 31, 2018 1,165 $ 0.44 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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 2018 2017 2016 (In thousands) Income (loss) from operations before income taxes: U.S. $ (60,574 ) $ (34,884 ) $ (69,861 ) Foreign 25,286 10,475 13,234 Total loss from operations before income taxes $ (35,288 ) $ (24,409 ) $ (56,627 ) |
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 2018 2017 2016 (In thousands) Income tax expense (benefit) from operations (71,202 ) 2,696 5,443 Total income tax expense (benefit) $ (71,202 ) $ 2,696 $ 5,443 |
Components of Income Tax Expense from Operations | The components of income tax expense from operations consist of the following: Twelve Months Ended 2018 2017 2016 (In thousands) Current provision Federal $ — $ — $ — State — — — Foreign 7,592 2,298 3,090 7,592 2,298 3,090 Deferred provision: Federal (76,168 ) — — State (2,352 ) — — Foreign (274 ) 398 2,353 (78,794 ) 398 2,353 Total tax provision $ (71,202 ) $ 2,696 $ 5,443 |
Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows: July 31, July 31, (In thousands) Deferred tax assets: Accruals and reserves $ 16,070 $ 12,193 Tax basis in excess of financial basis of investments in affiliates 6,232 18,332 Tax basis in excess of financial basis for intangible and fixed assets 311 7,689 Net operating loss and capital loss carry forwards 468,129 751,435 Total gross deferred tax assets 490,742 789,649 Less: valuation allowance (438,467 ) (771,884 ) Net deferred tax assets $ 52,275 $ 17,765 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (50,141 ) $ (784 ) Convertible Debt (634 ) (2,655 ) Undistributed accumulated earnings of foreign subsidiaries — (13,150 ) Total gross deferred tax liabilities (50,775 ) (16,589 ) Net deferred tax asset $ 1,500 $ 1,176 |
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 26.83% to income (loss) from continuing operations before income taxes as a result of the following: Twelve Months Ended July 31, 2018 2017 2016 (In thousands) Computed “expected” income tax expense (benefit) $ (9,467 ) $ (8,106 ) $ (19,368 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance (329,415 ) 10,978 22,907 Foreign dividends 7,379 2,724 4,730 Foreign tax rate differential (1,948 ) (2,386 ) (1,082 ) Federal rate change 280,438 — — Nondeductible goodwill impairment 191 — — Nondeductible expenses (15,852 ) 20 262 Foreign withholding taxes 1,961 239 762 Reversal of uncertain tax position reserves (48 ) (481 ) (2,768 ) State benefit of U.S. Loss (4,654 ) — — Other 213 (292 ) — Actual income tax expense $ (71,202 ) $ 2,696 $ 5,443 |
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, 2018 2017 2016 (In thousands) Balance as of beginning of year $ 681 $ 994 $ 3,756 Additions for current year tax positions 903 — 19 Currency translation — 18 — Reductions for lapses in statute of limitations (59 ) (331 ) (27 ) Reductions of prior year tax positions — — (2,754 ) Balance as of end of year $ 1,525 $ 681 $ 994 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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, 2017 $ 7,522 $ (3,376 ) $ 167 $ 4,313 Foreign currency translation adjustment (1,174 ) — — (1,174 ) Net unrealized holding gain on securities — — 14 14 Pension liability adjustments — (419 ) — (419 ) Net current-period other comprehensive income (loss) (1,174 ) (419 ) 14 (1,579 ) Accumulated other comprehensive income (loss) at July 31, 2018 $ 6,348 $ (3,795 ) $ 181 $ 2,734 |
STATEMENT OF CASH FLOWS SUPPL_2
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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, 2018 2017 2016 (In thousands) Cash paid for interest $ 24,642 $ 3,783 $ 6,111 Cash paid for income taxes $ 2,567 $ 2,500 $ 3,287 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
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, 2018 2017 2016 (In thousands) Net revenue: Americas $ 56,320 $ 92,324 $ 106,143 Asia 146,664 158,048 167,861 Europe 119,403 159,085 151,842 Direct Marketing 299,358 — — e-Business 23,513 27,163 33,177 $ 645,258 $ 436,620 $ 459,023 Operating income (loss): Americas $ (9,542 ) $ (10,342 ) $ (14,731 ) Asia 26,405 5,620 (855 ) Europe (10,074 ) (9,008 ) (13,825 ) Direct Marketing 10,740 — — e-Business (6,176 ) (1,185 ) (4,384 ) Total Segment operating income (loss) 11,353 (14,915 ) (33,795 ) Corporate-level activity (19,659 ) (4,846 ) (6,777 ) Total operating loss (8,306 ) (19,761 ) (40,572 ) Total other expense (26,982 ) (4,648 ) (16,055 ) Loss before income taxes $ (35,288 ) $ (24,409 ) $ (56,627 ) |
Total Assets of Continuing Operations | July 31, July 31, (In thousands) Total assets: Americas $ 22,820 $ 21,876 Asia 44,322 63,819 Europe 37,223 64,639 Direct Marketing 642,820 — e-Business 15,758 20,703 Sub-total—segment assets 762,943 171,037 Corporate 64,107 110,261 $ 827,050 $ 281,298 |
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, 2018 2017 2016 (In thousands) Services: Supply chain services $ 322,387 $ 409,457 $ 425,846 e-Business services 23,513 27,163 33,177 Products: Direct Marketing 299,358 — — $ 645,258 $ 436,620 $ 459,023 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL INFORMATION (Unaudited) (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Selected Quarterly Financial Information | The following table sets forth selected quarterly financial information for the fiscal years ended July 31, 2018 and 2017. The operating results for any given quarter are not necessarily indicative of results for any future period. Quarter Ended Quarter Ended Oct. 31, ‘17 Jan. 31, ‘18 Apr. 30, ‘18 Jul. 31, ‘18 Oct. 31, ‘16 Jan. 31, ‘17 Apr. 30, ‘17 Jul. 31, ‘17 (In thousands, except per share data) (In thousands, except per share data) Net revenue $ 102,522 $ 153,738 $ 193,921 $ 195,077 $ 121,327 $ 117,568 $ 97,948 $ 99,777 Cost of revenue 93,448 137,915 154,916 157,720 111,994 106,370 89,406 92,485 Gross profit 9,074 15,823 39,005 37,357 9,333 11,198 8,542 7,292 Total operating expenses 12,904 21,526 37,625 37,510 14,975 12,702 13,785 14,664 Operating income (loss) (3,830 ) (5,703 ) 1,380 (153 ) (5,642 ) (1,504 ) (5,243 ) (7,372 ) Total other income (expense) (521 ) (8,200 ) (11,198 ) (7,063 ) (2,352 ) (1,075 ) 763 (1,984 ) Income tax benefit (expense) (1,087 ) 73,521 (715 ) (517 ) (1,049 ) (723 ) (819 ) (105 ) Gains on investments in affiliates, net of tax 201 200 200 200 500 396 232 150 Net income (loss) (5,237 ) 59,818 (10,333 ) (7,533 ) (8,543 ) (2,906 ) (5,067 ) (9,311 ) Net income (loss) attributable to common stockholders $ (5,237 ) $ 59,548 $ (10,862 ) $ (8,069 ) $ (8,543 ) $ (2,906 ) $ (5,067 ) $ (9,311 ) Basic net earning (loss) per share attributable to common stockholders: $ (0.09 ) $ 1.02 $ (0.18 ) $ (0.13 ) $ (0.16 ) $ (0.05 ) $ (0.09 ) $ (0.17 ) Diluted net earning (loss) per share attributable to common stockholders: $ (0.09 ) $ 0.75 $ (0.18 ) $ (0.13 ) $ (0.16 ) $ (0.05 ) $ (0.09 ) $ (0.17 ) |
Schedule of Impact to Consolidated Statements of Income | The impact to the condensed consolidated statements of income for the three months ended January 31, 2018 and April 30, 2018 is as follows (in thousands, except per share amounts): Three Months Ended January 31, 2018 Three Months Ended April 30, 2018 As Adjustments As As Adjustments As Net revenue $ 151,119 $ 2,619 $ 153,738 $ 188,922 $ 4,999 $ 193,921 Cost of revenue 134,169 3,746 137,915 149,917 4,999 154,916 Gross profit 16,950 (1,127 ) 15,823 39,005 — 39,005 Income tax expense (benefit) (77,664 ) 4,143 (73,521 ) 715 — 715 Net income (loss) attributable to common stockholders $ 64,830 (5,282 ) $ 59,548 $ (10,862 ) — $ (10,862 ) Basic net earning (loss) per share attributable to common stockholders: $ 1.11 $ 1.02 $ (0.18 ) $ (0.18 ) Diluted net earning (loss) per share attributable to common stockholders: $ 0.85 $ 0.75 $ (0.18 ) $ (0.18 ) |
PARENT COMPANY CONDENSED FINA_2
PARENT COMPANY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Schedule of Balance Sheet | STEEL CONNECT, INC. (Parent Only) BALANCE SHEETS (in thousands, except share and per share data) July 31, 2018 July 31, 2017 ASSETS Cash and cash equivalents $ 7,978 $ 708 Prepaid expenses and other current assets 120 85 Total current assets 8,098 793 Investments in affiliates 188,534 113,154 Other assets 87 87 Due from subsidiaries 13,579 10,945 Total assets $ 210,298 $ 124,979 LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK & STOCKHOLDERS’ EQUITY Accounts payable $ 674 $ 498 Accrued expenses 2,274 1,752 Notes payable 64,530 — Total current liabilities 67,478 2,250 Notes payable — 59,758 Total long-term liabilities — 59,758 Total liabilities 67,478 62,008 Contingently redeemable preferred stock 35,192 — Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2018; zero shares authorized, issued and outstanding shares at July 31, 2017 35,192 — Stockholders’ equity: Preferred stock, $0.01 par value per share. Authorized 4,965,000 and 5,000,000 shares at July 31, 2018 and July 31, 2017, respectively; zero issued and outstanding shares at July 31, 2018 and at July 31, 2017 — — Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 60,742,859 issued and outstanding shares at July 31, 2018; 55,555,973 issued and outstanding shares at July 31, 2017 608 556 Additional paid-in capital 7,467,855 7,457,051 Accumulated deficit (7,363,569 ) (7,398,949 ) Accumulated other comprehensive income 2,734 4,313 Total stockholders’ equity 107,628 62,971 Total liabilities, contingently redeemable preferred stock and stockholders’ equity $ 210,298 $ 124,979 |
Schedule of Statements of Operations | STEEL CONNECT, INC. (Parent Only) STATEMENTS OF OPERATIONS (in thousands) Twelve Months Ended July 31, 2018 2017 2016 Selling, general and administrative $ 16,742 $ 4,834 $ 6,562 Total operating expenses 16,742 4,834 6,562 Operating loss (16,742 ) (4,834 ) (6,562 ) Other income (expense): Interest expense (8,427 ) (7,917 ) (10,565 ) Other income, net 6,807 — 757 Total other expense (1,620 ) (7,917 ) (9,808 ) Loss before income taxes (18,362 ) (12,751 ) (16,370 ) Equity losses of subsidiaries, net of tax (54,276 ) 14,026 44,911 Gains on investments in affiliates, net of tax (801 ) (950 ) — Net income (loss) $ 36,715 $ (25,827 ) $ (61,281 ) |
Schedule of Statements of Cash Flows | STEEL CONNECT, INC. (Parent Only) STATEMENTS OF CASH FLOWS (in thousands) Twelve Months Ended July 31, 2018 2017 2016 Cash flows from operating activities: Net income (loss) $ 36,715 $ (25,827 ) $ (61,281 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Amortization of deferred financing costs 388 347 439 Accretion of debt discount 4,384 3,919 4,967 Share-based compensation 10,763 533 509 Non-cash (354 ) — (757 ) Equity losses of subsidiaries, net of tax (54,276 ) 14,026 44,911 Gains on investments in affiliates and impairments (801 ) (950 ) — Changes in operating assets and liabilities, net of business acquired: Prepaid expenses and other current assets (36 ) 76 1,034 Accounts payable and accrued expenses 698 (338 ) (3,418 ) Other assets and liabilities (1,860 ) (12,926 ) 1,223 Net cash used in operating activities (4,379 ) (21,140 ) (12,373 ) Cash flows from investing activities: Intercompany advances, net (22,216 ) 19,211 20,000 Net cash provided by (used in) investing activities (22,216 ) 19,211 20,000 Cash flows from financing activities: Proceeds from issuance of preferred stock 35,000 — — Payment of preferred dividends (1,143 ) — — Purchase of the Company’s Convertible Notes — (1,763 ) (20,257 ) Proceeds from issuance of common stock 8 18 51 Repurchase of common stock — — (127 ) Net cash provided by (used in) financing activities 33,865 (1,745 ) (20,333 ) Net decrease in cash and cash equivalents 7,270 (3,674 ) (12,706 ) Cash and cash equivalents at beginning of period 708 4,382 17,088 Cash and cash equivalents at end of period $ 7,978 $ 708 $ 4,382 |
Nature of Operations - Addition
Nature of Operations - Additional Information (Detail) | Dec. 15, 2017USD ($) | Jul. 31, 2018USD ($)SiteLanguageFacility | Jul. 31, 2017USD ($) |
Nature Of Operations [Line Items] | |||
Cash and cash equivalents and Trading Securities | $ 92,100,000 | $ 122,600,000 | |
Principal amount of notes held | 67,625,000 | 67,625,000 | |
PNC Bank Credit Facility | |||
Nature Of Operations [Line Items] | |||
Credit facility, readily available borrowing capacity | $ 9,600,000 | $ 16,000,000 | |
Cerberus Credit Facility | |||
Nature Of Operations [Line Items] | |||
Revolving credit facility | $ 25,000,000 | ||
Steel Holdings | 5.25% Convertible Senior Notes | |||
Nature Of Operations [Line Items] | |||
Debt instrument stated percentage | 5.25% | ||
Principal amount of notes held | $ 14,900,000 | ||
Moduslink | |||
Nature Of Operations [Line Items] | |||
Number of sites | Site | 20 | ||
Number of languages | Language | 21 | ||
IWCO | Cerberus Credit Facility | |||
Nature Of Operations [Line Items] | |||
Revolving credit facility | $ 25,000,000 | ||
IWCO | Cerberus Credit Facility | Maximum | |||
Nature Of Operations [Line Items] | |||
Cash distributions | $ 5,000,000 | ||
IWCO | Chanhassen MN | |||
Nature Of Operations [Line Items] | |||
Number of facilities | Facility | 3 | ||
IWCO | Little Falls MN | |||
Nature Of Operations [Line Items] | |||
Number of facilities | Facility | 1 | ||
IWCO | Warminster PA | |||
Nature Of Operations [Line Items] | |||
Number of facilities | Facility | 1 | ||
IWCO | Hamburg PA | |||
Nature Of Operations [Line Items] | |||
Number of facilities | Facility | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands, shares in Millions | 12 Months Ended | ||
Jul. 31, 2018USD ($)Customershares | Jul. 31, 2017USD ($)shares | Jul. 31, 2016USD ($)shares | |
Significant Of Accounting Policies [Line Items] | |||
Highly liquid investment period to be considered cash equivalent | 3 months | ||
Fair value of notes payable | $ 66,658 | $ 63,852 | |
Impairment charges related to investments | $ 42 | ||
Number of largest clients | Customer | 10 | ||
Work In Process Inventory | IWCO | |||
Significant Of Accounting Policies [Line Items] | |||
Fair value of assets acquired | $ 7,200 | ||
5.25% Convertible Senior 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 | |
Sales Revenue, Net | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 44.00% | 70.00% | 71.00% |
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 | 0.5 | 14.2 | 21.1 |
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 | ||
Minimum | IWCO | |||
Significant Of Accounting Policies [Line Items] | |||
Increase (decrease) in retained earnings | $ 4,500 | ||
Minimum | ModusLink Corporation | |||
Significant Of Accounting Policies [Line Items] | |||
Increase (decrease) in retained earnings | 1,000 | ||
Minimum | Iwco Direct Holdings Inc and Moduslink Corporation | |||
Significant Of Accounting Policies [Line Items] | |||
Increase (decrease) in retained earnings | $ 5,500 | ||
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 | ||
Maximum | IWCO | |||
Significant Of Accounting Policies [Line Items] | |||
Increase (decrease) in retained earnings | $ 6,000 | ||
Maximum | ModusLink Corporation | |||
Significant Of Accounting Policies [Line Items] | |||
Increase (decrease) in retained earnings | 2,000 | ||
Maximum | Iwco Direct Holdings Inc and Moduslink Corporation | |||
Significant Of Accounting Policies [Line Items] | |||
Increase (decrease) in retained earnings | $ 8,000 | ||
Maximum | Sales Revenue, Net | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Maximum | Net Accounts Receivable | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 10.00% |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Cash and Cash Equivalents [Line Items] | ||
Cash and bank deposits | $ 44,952 | $ 24,987 |
Money market funds | 47,186 | 85,683 |
Cash and cash equivalents | $ 92,138 | $ 110,670 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Inventory [Line Items] | ||
Raw materials | $ 23,208 | $ 31,071 |
Work-in-process | 16,147 | 713 |
Finished goods | 8,431 | 2,585 |
Inventories, net | $ 47,786 | $ 34,369 |
Estimated Useful Lives of Prope
Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Jul. 31, 2018 | |
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 | 7 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, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |||||||||||
Net income (loss) | $ (7,533) | $ (10,333) | $ 59,818 | $ (5,237) | $ (9,311) | $ (5,067) | $ (2,906) | $ (8,543) | $ 36,715 | $ (25,827) | $ (61,281) |
Less: Preferred dividends on redeemable preferred stock | (1,335) | ||||||||||
Net income (loss) attributable to common stockholders | $ (8,069) | $ (10,862) | $ 59,548 | $ (5,237) | $ (9,311) | $ (5,067) | $ (2,906) | $ (8,543) | 35,380 | (25,827) | (61,281) |
Effect of dilutive securities: | |||||||||||
Net income (loss) attributable to common stockholders after assumed conversions | $ 43,794 | $ (25,827) | $ (61,281) | ||||||||
Weighted average common shares outstanding | 59,179 | 55,134 | 51,934 | ||||||||
Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock | 22,720 | ||||||||||
Weighted average number of common and potential common shares | 81,899 | 55,134 | 51,934 | ||||||||
Basic net earning (loss) per share attributable to common stockholders: | $ (0.13) | $ (0.18) | $ 1.02 | $ (0.09) | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ 0.60 | $ (0.47) | $ (1.18) |
Diluted net earning (loss) per share attributable to common stockholders: | $ (0.13) | $ (0.18) | $ 0.75 | $ (0.09) | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ 0.53 | $ (0.47) | $ (1.18) |
5.25% Convertible Senior Notes | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities | $ 7,079 | ||||||||||
Contingent Convertible Preferred Stock | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities | $ 1,335 |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at beginning of year | $ 616 | $ 489 | $ 57 |
Provisions charged to expense | 211 | 132 | 458 |
Accounts written off | (347) | (5) | (26) |
Balance at end of year | $ 480 | $ 616 | $ 489 |
Allowance for Doubtful Accoun_4
Allowance for Doubtful Accounts Receivable - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amount of accounts receivable factored | $ 38 | $ 41.1 |
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, 2018 | Jul. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Land | $ 942 | |
Buildings | $ 24,476 | |
Machinery and equipment | 97,149 | 24,504 |
Leasehold improvements | 21,917 | 14,815 |
Software | 52,082 | 48,536 |
Other | 28,147 | 22,126 |
Property plant and equipment, gross | 200,237 | 134,457 |
Less: Accumulated depreciation and amortization | (93,605) | (115,902) |
Property and equipment, net | $ 106,632 | $ 18,555 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 16,791 | $ 8,206 | $ 8,119 |
Impairment of goodwill and long-lived assets | 261 | 305 | |
Proceeds associated with the sale of property and equipment | 20,748 | 187 | 1,318 |
Gain associated with the sale of property | 12,692 | ||
Kildare | |||
Property, Plant and Equipment [Line Items] | |||
Impairment of goodwill and long-lived assets | 300 | ||
Americas | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 1,100 | 1,200 | 1,500 |
Asia | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 1,400 | 1,900 | 3,200 |
Europe | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 1,300 | 1,800 | 2,600 |
e-Business | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 600 | $ 600 | $ 800 |
Direct Marketing | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 10,000 |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Investment [Line Items] | |||||||||||
Sale (purchase) of Trading Securities | $ 13,800 | $ 8,000 | |||||||||
Gains (losses) on Trading Securities | 1,876 | 3,128 | $ (5,920) | ||||||||
Sale of trading securities | 57,200 | ||||||||||
Trading securities | $ 0 | $ 11,898 | 0 | 11,898 | |||||||
(Gains) losses on investment on affiliates, net of tax | $ 200 | $ 200 | $ 200 | $ 201 | $ 150 | $ 232 | $ 396 | $ 500 | $ 800 | 1,300 | 800 |
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% | |||||||||
Cash | |||||||||||
Investment [Line Items] | |||||||||||
Gains (losses) on Trading Securities | $ 4,600 | 900 | 6,400 | ||||||||
Non Cash | |||||||||||
Investment [Line Items] | |||||||||||
Gains (losses) on Trading Securities | $ (2,700) | $ 2,200 | $ (12,300) | ||||||||
Available For Sale Securities | Affiliates | Maximum | |||||||||||
Investment [Line Items] | |||||||||||
Ownership interest on investment, percent | 20.00% |
Acquisition of IWCO Direct - Ad
Acquisition of IWCO Direct - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 15, 2017 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Business Acquisition [Line Items] | ||||||||||||
Payments to acquire business, net of cash acquired | $ 469,221 | |||||||||||
Goodwill | $ 254,352 | 254,352 | ||||||||||
Net revenue | $ 193,921 | $ 153,738 | 645,258 | $ 436,620 | $ 459,023 | |||||||
Operating income | $ (153) | $ 1,380 | $ (5,703) | $ (3,830) | $ (7,372) | $ (5,243) | $ (1,504) | $ (5,642) | (8,306) | (19,761) | (40,572) | |
Loss before income taxes | (35,288) | $ (24,409) | $ (56,627) | |||||||||
IWCO | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments to acquire business, net of cash acquired | $ 469,200 | |||||||||||
Proceeds from term loan under financing agreement | 393,000 | |||||||||||
Receivable from escrow for working capital claims | 2,500 | |||||||||||
Transaction price included one-time transaction incentive awards | 3,500 | |||||||||||
Transaction costs | 1,500 | |||||||||||
Intangible assets | 213,250 | |||||||||||
Goodwill | 254,352 | |||||||||||
Net revenue | 299,400 | |||||||||||
Operating income | 10,700 | |||||||||||
Loss before income taxes | $ 11,400 | |||||||||||
Trademarks and Trade Names | IWCO | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Intangible assets | $ 20,500 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 3 years | |||||||||||
Customer Relationships | IWCO | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Intangible assets | $ 192,700 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 15 years |
Summary of Preliminary Fair Val
Summary of Preliminary Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Dec. 15, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 254,352 | |
IWCO | ||
Business Acquisition [Line Items] | ||
Accounts receivable | $ 47,408 | |
Inventory | 32,994 | |
Other current assets | 11,001 | |
Property and equipment | 92,509 | |
Intangible assets | 213,250 | |
Goodwill | 254,352 | |
Other assets | 2,740 | |
Accounts payable | (31,069) | |
Accrued liabilities and other current liabilities | (66,616) | |
Customer deposits | (7,829) | |
Deferred income taxes | (78,520) | |
Other liabilities | (999) | |
Total consideration | 469,221 | |
Previously Reported | IWCO | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 47,841 | |
Inventory | 27,165 | |
Other current assets | 7,427 | |
Property and equipment | 87,976 | |
Intangible assets | 210,920 | |
Goodwill | 259,085 | |
Other assets | 3,040 | |
Accounts payable | (31,069) | |
Accrued liabilities and other current liabilities | (35,790) | |
Customer deposits | (7,829) | |
Deferred income taxes | (79,918) | |
Other liabilities | (19,627) | |
Total consideration | 469,221 | |
Adjustments | IWCO | ||
Business Acquisition [Line Items] | ||
Accounts receivable | (433) | |
Inventory | 5,829 | |
Other current assets | 3,574 | |
Property and equipment | 4,533 | |
Intangible assets | 2,330 | |
Goodwill | (4,733) | |
Other assets | (300) | |
Accrued liabilities and other current liabilities | (30,826) | |
Deferred income taxes | 1,398 | |
Other liabilities | $ 18,628 |
Summary of Pro Forma Informatio
Summary of Pro Forma Information (Detail) - IWCO - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Net revenue | $ 824,825 | $ 891,373 |
Net income (loss) | $ (17,148) | $ 16,040 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) $ in Thousands | Jul. 31, 2018USD ($) |
Goodwill [Line Items] | |
Goodwill | $ 254,352 |
Intangible assets | 192,964 |
Direct Marketing | |
Goodwill [Line Items] | |
Goodwill | 254,400 |
Customer Relationships | |
Goodwill [Line Items] | |
Intangible assets | $ 176,700 |
Estimated useful life | 15 years |
Trademarks and Trade Names | |
Goodwill [Line Items] | |
Intangible assets | $ 16,200 |
Estimated useful life | 3 years |
Schedule of Estimated Future Am
Schedule of Estimated Future Amortization Expense of Intangible Assets (Detail) $ in Thousands | Jul. 31, 2018USD ($) |
Intangible Assets And Goodwill [Line Items] | |
2,019 | $ 30,396 |
2,020 | 27,255 |
2,021 | 20,258 |
2,022 | 15,334 |
2,023 | 11,427 |
Thereafter | 88,294 |
Total | $ 192,964 |
Summary of Restructuring Accrua
Summary of Restructuring Accrual by Expense Category (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | $ 186 | $ 3,029 | $ 1,528 |
Restructuring charges | 3 | 2,292 | 7,561 |
Restructuring adjustments | 268 | (325) | (140) |
Cash paid | (196) | (4,776) | (5,885) |
Non-cash adjustments | (165) | (34) | (35) |
Accrued restructuring, ending balance | 96 | 186 | 3,029 |
Employee Related Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 100 | 2,074 | 1,437 |
Restructuring charges | 3 | 1,853 | 6,025 |
Restructuring adjustments | 246 | (416) | (108) |
Cash paid | (88) | (3,357) | (5,244) |
Non-cash adjustments | (165) | (54) | (36) |
Accrued restructuring, ending balance | 96 | 100 | 2,074 |
Contractual Obligations | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 86 | 955 | 91 |
Restructuring charges | 439 | 1,536 | |
Restructuring adjustments | 22 | 91 | (32) |
Cash paid | $ (108) | (1,419) | (641) |
Non-cash adjustments | 20 | 1 | |
Accrued restructuring, ending balance | $ 86 | $ 955 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($)Employee | Jul. 31, 2016USD ($)Employee | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | $ 271 | $ 1,967 | $ 7,421 |
Restructuring charges | 3 | 2,292 | 7,561 |
Restructuring charge related to workforce reduction | 1,500 | 5,900 | |
Restructuring charge related to facility closed | $ 500 | $ 1,500 | |
Number of workforce reduction | Employee | 78 | 228 | |
Employee Related Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 3 | $ 1,853 | $ 6,025 |
Americas | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 500 | $ 1,885 | |
Americas | Employee Related Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 300 |
Summary of Net Restructuring Ch
Summary of Net Restructuring Charges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | $ 271 | $ 1,967 | $ 7,421 |
Cost of revenue | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | 9 | 563 | 4,812 |
Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, net | $ 262 | $ 1,404 | $ 2,609 |
Summary of Restructuring Accr_2
Summary of Restructuring Accrual by Reportable Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | $ 186 | $ 3,029 | $ 1,528 |
Restructuring charges | 3 | 2,292 | 7,561 |
Restructuring adjustments | 268 | (325) | (140) |
Cash paid | (196) | (4,776) | (5,885) |
Non-cash adjustments | (165) | (34) | (35) |
Accrued restructuring, ending balance | 96 | 186 | 3,029 |
Americas | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 51 | 862 | 235 |
Restructuring charges | 500 | 1,885 | |
Restructuring adjustments | 257 | (162) | |
Cash paid | (88) | (1,172) | (1,258) |
Non-cash adjustments | (167) | 23 | |
Accrued restructuring, ending balance | 53 | 51 | 862 |
Asia | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 894 | 253 | |
Restructuring charges | 972 | 2,293 | |
Restructuring adjustments | 1 | (154) | (46) |
Cash paid | (1,672) | (1,563) | |
Non-cash adjustments | (1) | (40) | (43) |
Accrued restructuring, ending balance | 894 | ||
Europe | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 23 | 398 | 1,026 |
Restructuring charges | 698 | 2,353 | |
Restructuring adjustments | 2 | (75) | (94) |
Cash paid | (984) | (2,895) | |
Non-cash adjustments | (25) | (14) | 8 |
Accrued restructuring, ending balance | 23 | 398 | |
e-Business | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring, beginning balance | 112 | 875 | 14 |
Restructuring charges | 3 | 122 | 1,030 |
Restructuring adjustments | 8 | 66 | |
Cash paid | (108) | (948) | (169) |
Non-cash adjustments | 28 | (3) | |
Accrued restructuring, ending balance | $ 43 | $ 112 | $ 875 |
Components of Accrued Expenses
Components of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Accrued Expenses [Line Items] | ||
Accrued taxes | $ 29,804 | $ 2,272 |
Accrued compensation | 25,603 | 10,678 |
Accrued interest | 1,437 | 1,366 |
Accrued audit, tax and legal | 3,264 | 2,759 |
Accrued contract labor | 1,932 | 1,632 |
Accrued worker's compensation | 6,126 | |
Accrued other | 20,164 | 19,191 |
Accrued expenses | $ 88,330 | $ 37,898 |
Components of Other Current Lia
Components of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Other Current Liabilities [Line Items] | ||
Accrued pricing liabilities | $ 18,882 | $ 18,882 |
Customer postage deposits | 12,638 | |
Other | 10,509 | 7,259 |
Other current liabilities | $ 42,029 | $ 26,141 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Accrued Expenses and Other Current Liabilities [Line Items] | ||
Accrued pricing liabilities | $ 18,882 | $ 18,882 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Dec. 15, 2017USD ($) | Jun. 30, 2014USD ($) | Mar. 18, 2014USD ($) | Jul. 31, 2018USD ($)d$ / shares | Jul. 31, 2017USD ($) | Jul. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||||
Debt instrument issued | $ 67,625,000 | $ 67,625,000 | ||||
Debt instrument issuance costs | 252,000 | 640,000 | ||||
Purchase of the Company's Convertible Notes | 1,763,000 | $ 20,257,000 | ||||
Notes payable, Fair Value | 66,658,000 | 63,852,000 | ||||
Debt instrument, carrying amount | $ 64,530,000 | 59,758,000 | ||||
Convertible debt, remaining discount amortization period | 7 months | |||||
Debt instrument, interest expense | $ 4,384,000 | 3,919,000 | 4,967,000 | |||
Term loan facility | $ 393,000,000 | |||||
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 | ||||
Cerberus Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, term | 5 years | |||||
Outstanding indebtedness under the Credit Facility | 0 | |||||
Term loan facility | $ 393,000,000 | |||||
Revolving credit facility | $ 25,000,000 | |||||
Line of credit facility, interest rate description | Borrowings under the Cerberus Credit Facility bear interest, at the Borrower's option, at a Reference Rate plus 3.75% or a LIBOR Rate plus 6.5%, each as defined the Financing Agreement. | |||||
Aggregate amount of each consecutive quarterly scheduled principal installment | $ 1,500,000 | |||||
Excess cash flow payment percentage | 25.00% | 50.00% | ||||
Leverage ratio | 3.50% | |||||
London Interbank Offered Rate (LIBOR) | Cerberus Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, percentage points added to the reference rate | 6.50% | |||||
Base Rate | Cerberus Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, percentage points added to the reference rate | 3.75% | |||||
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 | 8,427,000 | $ 7,917,000 | $ 10,565,000 | |||
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 | |||||
Term Loan | Cerberus Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument issued | 390,000,000 | |||||
Current and long-term net | $ 388,838,000 |
Net Carrying Value of the Notes
Net Carrying Value of the Notes (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Debt Instrument [Line Items] | ||
Carrying amount of equity component (net of allocated debt issuance costs) | $ 26,961 | $ 26,961 |
Principal amount of Notes | 67,625 | 67,625 |
Unamortized debt discount | (2,843) | (7,227) |
Unamortized debt issuance costs | (252) | (640) |
Net carrying amount | $ 64,530 | $ 59,758 |
Summary of Interest Expense Rel
Summary of Interest Expense Related to Convertible Notes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Interest Expense, Debt [Line Items] | |||
Debt instrument, interest expense | $ 4,384 | $ 3,919 | $ 4,967 |
5.25% Convertible Senior Notes Due 2019 | |||
Interest Expense, Debt [Line Items] | |||
Debt instrument, interest expense | 8,427 | 7,917 | 10,565 |
5.25% Convertible Senior Notes Due 2019 | Coupon Interest | |||
Interest Expense, Debt [Line Items] | |||
Debt instrument, interest expense | 3,655 | 3,651 | 5,159 |
5.25% Convertible Senior Notes Due 2019 | Accretion of Debt Discount | |||
Interest Expense, Debt [Line Items] | |||
Debt instrument, interest expense | 4,384 | 3,919 | 4,967 |
5.25% Convertible Senior Notes Due 2019 | Amortization of Debt Issue Cost | |||
Interest Expense, Debt [Line Items] | |||
Debt instrument, interest expense | $ 388 | $ 347 | $ 439 |
Net Carrying Value of Term Loan
Net Carrying Value of Term Loan (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Debt Instrument [Line Items] | ||
Principal amount outstanding on the Term Loan | $ 67,625 | $ 67,625 |
Term Loan | Cerberus Credit Facility | ||
Debt Instrument [Line Items] | ||
Principal amount outstanding on the Term Loan | 390,000 | |
Unamortized debt issuance costs | (1,162) | |
Net carrying value of the Term Loan | $ 388,838 |
Future Annual Minimum Payments
Future Annual Minimum Payments (Detail) $ in Thousands | Jul. 31, 2018USD ($) |
Other Commitments [Line Items] | |
2,019 | $ 164,158 |
2,020 | 50,001 |
2,021 | 46,692 |
2,022 | 43,373 |
2,023 | 386,993 |
Thereafter | 24,689 |
Future Minimum Payments Due, Total | 715,906 |
Operating Leases | |
Other Commitments [Line Items] | |
2,019 | 17,367 |
2,020 | 12,796 |
2,021 | 9,980 |
2,022 | 7,175 |
2,023 | 3,802 |
Thereafter | 24,689 |
Future Minimum Payments Due, Total | 75,809 |
Capital Lease Obligations | |
Other Commitments [Line Items] | |
2,019 | 79 |
2,020 | 70 |
2,021 | 59 |
2,022 | 28 |
Future Minimum Payments Due, Total | 236 |
Purchase Obligation | |
Other Commitments [Line Items] | |
2,019 | 37,920 |
Future Minimum Payments Due, Total | 37,920 |
Debt Principal & Interest | |
Other Commitments [Line Items] | |
2,019 | 108,792 |
2,020 | 37,135 |
2,021 | 36,653 |
2,022 | 36,170 |
2,023 | 383,191 |
Future Minimum Payments Due, Total | $ 601,941 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Dec. 15, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Commitments and Contingencies [Line Items] | ||||
Total rent and equipment lease expense charged to continuing operations | $ 19,200,000 | $ 15,600,000 | $ 17,300,000 | |
Proceeds from issuance of preferred stock | 35,000,000 | |||
Purchase Agreement | SPHG Holdings | Series C Convertible Preferred Stock | ||||
Commitments and Contingencies [Line Items] | ||||
Proceeds from issuance of preferred stock | $ 35,000,000 | |||
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, 2019USD ($) | Jul. 31, 2018USD ($)Program | Jul. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Proceeds from the termination of defined benefit pension plan | $ 905 | ||
Accumulated benefit obligation | $ 27,700 | 25,500 | |
Amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2019 | 4,800 | ||
Market value of plan assets using Level 3 inputs | $ 22,300 | ||
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 | $ 400 |
Schedule of Defined Benefit Pla
Schedule of Defined Benefit Plan Assets Fair Value Measurements (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 100.00% | 100.00% | |
Defined benefit plan, fair value of plan assets | $ 22,860 | $ 21,204 | $ 25,473 |
Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 98.00% | 98.00% | |
Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 2.00% | 2.00% | |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 22,860 | $ 21,204 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 22,860 | 21,204 | |
Fair Value, Measurements, Recurring | Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 22,339 | 20,726 | |
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 | 22,339 | 20,726 | |
Fair Value, Measurements, Recurring | Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 521 | 478 | |
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 | $ 521 | $ 478 |
Aggregate Change in Benefit Obl
Aggregate Change in Benefit Obligation and Plan Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Change in benefit obligation | |||
Benefit obligation at beginning of year | $ 27,464 | $ 31,667 | |
Service cost | 398 | 700 | $ 632 |
Interest cost | 671 | 573 | 637 |
Actuarial (gain) loss | 1,655 | (6,814) | |
Employee contributions | 93 | 103 | |
Benefits and administrative expenses paid | (372) | (157) | |
Adjustments | (54) | ||
Settlements | (21) | (279) | |
Effect of curtailment | 0 | 0 | |
Currency translation | 15 | 1,671 | |
Benefit obligation at end of year | 29,849 | 27,464 | 31,667 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 21,204 | 25,473 | |
Actual return on plan assets | 1,541 | (5,005) | |
Employee contributions | 402 | 104 | |
Employer contributions (withdrawals), net | 92 | (342) | |
Settlements | (21) | (279) | |
Benefits and administrative expenses paid | (372) | (157) | |
Currency translation | 14 | 1,410 | |
Fair value of plan assets at end of year | 22,860 | 21,204 | $ 25,473 |
Assets | 0 | 0 | |
Current liability | (13) | (12) | |
Noncurrent liability | (6,976) | (6,248) | |
Net amount recognized in statement of financial position as a noncurrent asset (liability) | $ (6,989) | $ (6,260) |
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, 2018 | Jul. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 29,849 | $ 27,464 |
Accumulated benefit obligation | 27,700 | 25,531 |
Fair value of plan assets | $ 22,860 | $ 21,204 |
Components of Net Periodic Pens
Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 398 | $ 700 | $ 632 |
Interest costs | 671 | 573 | 637 |
Expected return on plan assets | (529) | (457) | (491) |
Amortization of net actuarial (gain) loss | 125 | 201 | 222 |
Curtailment gain | (844) | ||
Net periodic pension costs | $ 665 | $ 1,017 | $ 156 |
Weighted Average Assumptions Us
Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.22% | 2.47% | 1.72% |
Rate of compensation increase | 1.93% | 1.93% | 1.92% |
Weighted-Average Assumptions Us
Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost (Detail) | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.21% | 1.69% | 1.95% |
Expected long-term rate of return on plan assets | 2.20% | 1.69% | 2.41% |
Rate of compensation increase | 1.94% | 1.91% | 1.83% |
Summary of Expected Benefit Pay
Summary of Expected Benefit Payments from Plans through Fiscal 2026 (Detail) $ in Thousands | Jul. 31, 2018USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | $ 163 |
2,019 | 213 |
2,020 | 256 |
2,021 | 257 |
2,022 | 307 |
Next 5 years | $ 2,352 |
Components of Other Gains (Loss
Components of Other Gains (Losses), Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Component Of Other Expense Income Nonoperating [Line Items] | |||
Foreign currency exchange gains (losses) | $ 1,055 | $ 199 | $ (593) |
Gain (losses), net on Trading Securities | 1,876 | 3,128 | (5,920) |
Other, net | (708) | (127) | 756 |
Other gains (losses), net | $ 2,223 | $ 3,200 | $ (5,757) |
Other Gains (Losses), Net - Add
Other Gains (Losses), Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Component Of Other Expense Income Nonoperating [Line Items] | |||
Other gains (losses), net | $ 2,223 | $ 3,200 | $ (5,757) |
Sale of marketable securities | 1,900 | ||
Net realized and unrealized foreign currency exchange gain (losses) | 1,100 | 200 | (600) |
Offset gain loss | (600) | ||
Gains (losses) in trading securities | 1,876 | 3,128 | (5,920) |
Non Cash | |||
Component Of Other Expense Income Nonoperating [Line Items] | |||
Gains (losses) in trading securities | (2,700) | 2,200 | (12,300) |
Gain on purchase of Notes | 800 | ||
Cash | |||
Component Of Other Expense Income Nonoperating [Line Items] | |||
Gains (losses) in trading securities | $ 4,600 | $ 900 | $ 6,400 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Dec. 15, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | Dec. 08, 2010 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable rate of options granted | 25.00% | ||||
2010 Plan number of shares pursuant to stock options granted | 0 | 0 | |||
Weighted-average grant date fair value of employee stock options granted | $ 1.11 | ||||
Stock options vested and expected to vest | 400,000 | ||||
Weighted-average remaining contractual term | 1 year 10 months 24 days | ||||
Non vested stock compensation expense | $ 10.7 | $ 0.5 | $ 0.7 | ||
Grant date fair value of nonvested stock | $ 11.5 | $ 0.6 | $ 1 | ||
Unrecognized compensation cost related to nonvested stock | $ 1 | ||||
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 | 11,000,000 | ||||
2010 Plan additional shares of common stock | 2,922,258 | ||||
Common Stock shares available for future issuance | 4,803,835 | ||||
ESPP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock shares available for future issuance | 126,000 | ||||
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 | 10,000 | 11,000 | 30,000 | ||
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 24 days | ||||
Stock Option | 2005 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual terms, share options granted | 10 years | ||||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average period of cost expected to be expensed | 3 months 18 days | ||||
Restricted stock | Director | 2010 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock award granted | 4,000,000 | ||||
Restricted stock award vested | 4,000,000 | ||||
Market Performance Based Restricted Stock | Director | 2010 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock award granted | 1,500,000 | ||||
Restricted stock award vested | 1,000,000 | ||||
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, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 10,801 | $ 681 | $ 1,126 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 14 | 53 | 96 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 10,787 | $ 628 | $ 1,030 |
Weighted-Average Grant Date Fai
Weighted-Average Grant Date Fair Value of Employee Stock Options Granted (Detail) | 12 Months Ended |
Jul. 31, 2016 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |
Expected volatility | 55.80% |
Risk-free interest rate | 1.28% |
Expected term (in years) | 4 years 4 months 28 days |
Expected dividend yield | 0.00% |
Summary of Option Activity (Det
Summary of Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Number of Shares | ||
Stock options outstanding, July 31, 2017 | 573 | |
Granted | 0 | 0 |
Exercised | 0 | |
Forfeited or expired | (135) | |
Stock options outstanding, July 31, 2018 | 438 | 573 |
Stock options exercisable, July 31, 2018 | 433 | |
Weighted-Average Exercise Price | ||
Stock options outstanding, July 31, 2017 | $ 4.36 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited or expired | 5.51 | |
Stock options outstanding, July 31, 2018 | 3.99 | $ 4.36 |
Stock options exercisable, July 31, 2018 | $ 4 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Stock options outstanding, July 31, 2018 | 1 year 10 months 28 days | |
Stock options exercisable, July 31, 2018 | 1 year 10 months 20 days | |
Aggregate Intrinsic Value | ||
Stock options outstanding, July 31, 2018 | $ 0 | |
Stock options exercisable, July 31, 2018 | $ 0 |
Summary of Activity of Nonveste
Summary of Activity of Nonvested Stock (Detail) shares in Thousands | 12 Months Ended |
Jul. 31, 2018$ / sharesshares | |
Number of Shares | |
Nonvested stock outstanding, July 31, 2017 | 296 |
Granted | 7,999 |
Vested | (7,081) |
Forfeited | (49) |
Nonvested stock outstanding, July 31, 2018 | 1,165 |
Weighted-Average Grant Date Fair Value | |
Granted | $ / shares | $ 1.45 |
Vested | $ / shares | 1.62 |
Forfeited | $ / shares | 1.62 |
Nonvested stock outstanding, July 31, 2018 | $ / shares | $ 0.44 |
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, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income (loss) from operations before income taxes: | |||
U.S. | $ (60,574) | $ (34,884) | $ (69,861) |
Foreign | 25,286 | 10,475 | 13,234 |
Loss before income taxes | $ (35,288) | $ (24,409) | $ (56,627) |
Components of Income Tax Expens
Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Tax Expense Benefit [Line Items] | |||||||||||
Income tax expense (benefit) from operations | $ 517 | $ 715 | $ (73,521) | $ 1,087 | $ 105 | $ 819 | $ 723 | $ 1,049 | $ (71,202) | $ 2,696 | $ 5,443 |
Total income tax expense (benefit) | $ (71,202) | $ 2,696 | $ 5,443 |
Components of Income Tax Expe_2
Components of Income Tax Expense from Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Current provision | |||||||||||
Federal | $ 0 | $ 0 | $ 0 | ||||||||
State | 0 | 0 | 0 | ||||||||
Foreign | 7,592 | 2,298 | 3,090 | ||||||||
Current Income Tax Expense (Benefit), Total | 7,592 | 2,298 | 3,090 | ||||||||
Deferred provision: | |||||||||||
Federal | (76,168) | ||||||||||
State | (2,352) | ||||||||||
Foreign | (274) | 398 | 2,353 | ||||||||
Deferred Income Tax Expense (Benefit), Total | (78,794) | 398 | 2,353 | ||||||||
Total tax provision | $ 517 | $ 715 | $ (73,521) | $ 1,087 | $ 105 | $ 819 | $ 723 | $ 1,049 | $ (71,202) | $ 2,696 | $ 5,443 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Jul. 31, 2018USD ($)Right | Jul. 31, 2017USD ($) | Jul. 31, 2016USD ($) | |
Income Taxes [Line Items] | ||||
Deferred tax assets, non-current | $ 1,600,000 | $ 1,900,000 | ||
Deferred tax liability, non-current | 100,000 | 700,000 | ||
Change in valuation allowance | $ 333,400,000 | 11,000,000 | ||
Stockholder owning ownership on corporation's securities percentage | 5.00% | |||
Stockholder owning ownership on corporation's securities rolling period | 3 years | |||
Statutory federal income tax rate | 35.00% | 21.00% | ||
Provision for income tax expense (benefit) | $ 280,400,000 | |||
Accumulated foreign earnings provisional income tax expense | 0 | |||
Reduction in the valuation allowance | 280,400,000 | |||
Net operating loss carryforwards for federal tax | 2,100,000,000 | |||
Net operating loss carryforwards for state tax | 150,600,000 | |||
Foreign net operating loss carryforward | $ 74,200,000 | |||
U.S. federal income tax rate | 26.83% | |||
Unrecognized tax benefits, including interest, related to federal, state and foreign taxes | $ 1,600,000 | 700,000 | $ 1,200,000 | |
Interest expense related to uncertain tax positions | 0 | |||
Increase(decrease) in liabilities for interest expense related to uncertain tax positions | 88,000 | $ (168,000) | $ 40,000 | |
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 | Jan. 19, 2018 | |||
Dividend declared, number of right for each share of Common Stock outstanding | Right | 1 | |||
Dividend record date | Jan. 29, 2018 | |||
Dividend declared, right to purchase of shares | The right to purchase one one-thousandth of a share of newly created Series D Junior Participating Preferred Stock | |||
Protective Amendment | Maximum | Handy & Harman | ||||
Income Taxes [Line Items] | ||||
Percentage of common shares outstanding permitted for acquired by HNH and its affiliates | 45.00% | |||
Parent Company | ||||
Income Taxes [Line Items] | ||||
Provision for income tax expense (benefit) | $ 305,900,000 | |||
IWCO | ||||
Income Taxes [Line Items] | ||||
Provision for income tax expense (benefit) | (25,500,000) | |||
Deferred tax liability | 78,500,000 | |||
Indefinite Carryforward | ||||
Income Taxes [Line Items] | ||||
Foreign net operating loss carryforward with indefinite period | $ 57,500,000 | |||
Federal | Internal Revenue Service (IRS) | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2022 | |||
Capital losses expiration year | 2,020 | |||
Tax examinations tax period | 2,014 | |||
Federal | Internal Revenue Service (IRS) | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2038 | |||
Capital losses expiration year | 2,021 | |||
Tax examinations tax period | 2,018 | |||
State | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2018 | |||
Capital losses expiration year | 2,020 | |||
Tax examinations tax period | 2,014 | |||
State | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards, expiration date | Jul. 31, 2038 | |||
Capital losses expiration year | 2,021 | |||
Tax examinations tax period | 2,018 | |||
Foreign | Europe Income Tax Authority | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,010 | |||
Foreign | Europe Income Tax Authority | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,017 | |||
Foreign | Asia Income Tax Authority | Earliest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,006 | |||
Foreign | Asia Income Tax Authority | Latest Tax Year | ||||
Income Taxes [Line Items] | ||||
Tax examinations tax period | 2,017 | |||
Federal and State | ||||
Income Taxes [Line Items] | ||||
Net capital loss carryforwards | $ 24,000,000 |
Components of Deferred Tax Asse
Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Deferred tax assets: | ||
Accruals and reserves | $ 16,070 | $ 12,193 |
Tax basis in excess of financial basis of investments in affiliates | 6,232 | 18,332 |
Tax basis in excess of financial basis for intangible and fixed assets | 311 | 7,689 |
Net operating loss and capital loss carry forwards | 468,129 | 751,435 |
Total gross deferred tax assets | 490,742 | 789,649 |
Less: valuation allowance | (438,467) | (771,884) |
Net deferred tax assets | 52,275 | 17,765 |
Deferred tax liabilities: | ||
Financial basis in excess of tax basis for intangible and fixed assets | (50,141) | (784) |
Convertible Debt | (634) | (2,655) |
Undistributed accumulated earnings of foreign subsidiaries | (13,150) | |
Total gross deferred tax liabilities | (50,775) | (16,589) |
Net deferred tax asset | $ 1,500 | $ 1,176 |
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, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Taxes [Line Items] | |||||||||||
Computed "expected" income tax expense (benefit) | $ (9,467) | $ (8,106) | $ (19,368) | ||||||||
Increase (decrease) in income tax expense resulting from: | |||||||||||
Change in valuation allowance | (329,415) | 10,978 | 22,907 | ||||||||
Foreign dividends | 7,379 | 2,724 | 4,730 | ||||||||
Foreign tax rate differential | (1,948) | (2,386) | (1,082) | ||||||||
Federal rate change | 280,438 | ||||||||||
Nondeductible goodwill impairment | 191 | ||||||||||
Nondeductible expenses | (15,852) | 20 | 262 | ||||||||
Foreign withholding taxes | 1,961 | 239 | 762 | ||||||||
Reversal of uncertain tax position reserves | (48) | (481) | (2,768) | ||||||||
State benefit of U.S. Loss | (4,654) | ||||||||||
Other | 213 | (292) | |||||||||
Actual income tax expense | $ 517 | $ 715 | $ (73,521) | $ 1,087 | $ 105 | $ 819 | $ 723 | $ 1,049 | $ (71,202) | $ 2,696 | $ 5,443 |
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, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Balance as of beginning of year | $ 681 | $ 994 | $ 3,756 |
Additions for current year tax positions | 903 | 19 | |
Currency translation | 18 | ||
Reductions for lapses in statute of limitations | (59) | (331) | (27) |
Reductions of prior year tax positions | (2,754) | ||
Balance as of end of year | $ 1,525 | $ 681 | $ 994 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income, Net of Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | $ 62,971 | $ 85,940 | $ 144,601 |
Foreign currency translation adjustment | (1,174) | 1,391 | (1,539) |
Net unrealized holding gain on securities | 14 | 73 | 48 |
Pension liability adjustments | (419) | 830 | |
Other comprehensive income (loss) | (1,579) | 2,294 | (1,491) |
Balance | 107,628 | 62,971 | 85,940 |
Foreign currency items | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | 7,522 | ||
Foreign currency translation adjustment | (1,174) | ||
Other comprehensive income (loss) | (1,174) | ||
Balance | 6,348 | 7,522 | |
Pension items | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | (3,376) | ||
Pension liability adjustments | (419) | ||
Other comprehensive income (loss) | (419) | ||
Balance | (3,795) | (3,376) | |
Unrealized gains (losses) on Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | 167 | ||
Net unrealized holding gain on securities | 14 | ||
Other comprehensive income (loss) | 14 | ||
Balance | 181 | 167 | |
Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | 4,313 | 2,019 | 3,510 |
Other comprehensive income (loss) | (1,579) | 2,294 | (1,491) |
Balance | $ 2,734 | $ 4,313 | $ 2,019 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), tax | $ 0.1 | $ 0.3 |
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, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Schedule Of Supplemental Cash Flow [Line Items] | |||
Cash paid for interest | $ 24,642 | $ 3,783 | $ 6,111 |
Cash paid for income taxes | $ 2,567 | $ 2,500 | $ 3,287 |
Statement of Cash Flows Suppl_3
Statement of Cash Flows Supplemental Information - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Cash Flow Supplemental Disclosures [Line Items] | |||
Issuance of nonvested common stock | 6.7 | 0.3 | 0.2 |
Issuance of nonvested common stock, value | $ 11,500 | $ 500 | $ 600 |
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 | 2.7 | ||
Stock issued during period upon conversion of convertible debt, value | $ 3,100 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) $ / shares in Units, $ in Thousands | Dec. 15, 2017USD ($)TradingDay$ / sharesshares | Mar. 12, 2013USD ($)$ / sharesshares | Jul. 31, 2018USD ($)$ / sharesshares | Jul. 31, 2017USD ($)$ / sharesshares | Jul. 31, 2016USD ($) |
Equity [Line Items] | |||||
Preferred stock, shares issued | shares | 0 | 0 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Price per share | $ 4 | ||||
Proceeds from issuance of preferred stock | $ | $ 35,000 | ||||
Common stock par value | $ 0.01 | $ 0.01 | |||
Issuance of common stock | shares | 7,500,000 | ||||
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 | $ 8 | $ 18 | $ 51 | |
Issuance of warrants to acquire additional shares, shares | shares | 2,000,000 | 2,000,000 | |||
Issuance of warrants to acquire additional shares, exercise price | $ 5 | ||||
Warrants expiration term | 5 years | ||||
Series C Convertible Preferred Stock | |||||
Equity [Line Items] | |||||
Common stock par value | $ 0.01 | ||||
Convertible preferred stock conversion price per share | $ 1.96 | ||||
Preferred stock, dividend rate, percentage | 6.00% | ||||
Percentage threshold closing sale price of common stock higher than conversion price | 170.00% | ||||
Series C Convertible Preferred Stock | Minimum | |||||
Equity [Line Items] | |||||
Trading days | TradingDay | 5 | ||||
Liquidation Basis of Accounting [Member] | Series C Convertible Preferred Stock | |||||
Equity [Line Items] | |||||
Preferred stock liquidation preference percentage per share | The holders of the Preferred Stock are entitled to receive, prior and in preference to any distribution of any of the assets or funds of the company to the holders of other equity or equity equivalent securities of the Company other than the Preferred Stock by reason of their ownership thereof, an amount per share in cash equal to the sum of (i) one hundred percent (100%) of the stated value per share of Preferred Stock (initially $1,000 per share) then held by them (as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Preferred Stock), plus (ii) 100% of all declared but unpaid dividends, and all accrued but unpaid dividends on each such share of Preferred Stock, in each case as the date of the triggering event. | ||||
Repurchase Agreements | Warrant | Steel Holdings | |||||
Equity [Line Items] | |||||
Repurchase price of warrant | $ 100 | ||||
Purchase Agreement | SPHG Holdings | Series C Convertible Preferred Stock | |||||
Equity [Line Items] | |||||
Preferred stock, shares issued | shares | 35,000 | ||||
Preferred stock, par value | $ 0.01 | ||||
Price per share | $ 1,000 | ||||
Proceeds from issuance of preferred stock | $ | $ 35,000 |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
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% | |
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, 2018 | Jul. 31, 2017 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | $ 47,186 | $ 85,683 |
Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 11,898 | |
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 | $ 47,186 | 85,683 |
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 |
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, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 100.00% | 100.00% | |
Defined benefit plan, fair value of plan assets | $ 22,860 | $ 21,204 | $ 25,473 |
Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 98.00% | 98.00% | |
Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, asset allocation percentage | 2.00% | 2.00% | |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 22,860 | $ 21,204 | |
Fair Value, Measurements, Recurring | Insurance Contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 22,339 | 20,726 | |
Fair Value, Measurements, Recurring | Other Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 521 | 478 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 22,860 | 21,204 | |
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 | 22,339 | 20,726 | |
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 | $ 521 | $ 478 |
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, 2018 | Jul. 31, 2017 | |
Fair value of plan assets at beginning of year | $ 21,204 | $ 25,473 |
Actual return on plan assets | 1,541 | (5,005) |
Employee contributions | 402 | 104 |
Employer contributions (withdrawals), net | 92 | (342) |
Settlements | (21) | (279) |
Benefits and administrative expenses paid | (372) | (157) |
Currency translation | 14 | 1,410 |
Fair value of plan assets at end of year | $ 22,860 | $ 21,204 |
Notes Payable not Carried at Fa
Notes Payable not Carried at Fair Value (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable | $ 64,530 | $ 59,758 |
Notes payable, Fair Value | $ 66,658 | $ 63,852 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Apr. 30, 2018USD ($) | Jan. 31, 2018USD ($) | Jul. 31, 2018USD ($)Segment | Jul. 31, 2017USD ($) | Jul. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of operating segments | Segment | 5 | ||||
Number of reportable segments | Segment | 5 | ||||
Total assets | $ 827,050 | $ 281,298 | |||
Net revenue | $ 193,921 | $ 153,738 | 645,258 | 436,620 | $ 459,023 |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 101,800 | 8,600 | |||
Net revenue | 358,300 | 95,100 | 110,900 | ||
China | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 112,300 | 128,300 | 140,200 | ||
Netherlands | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 59,500 | 70,800 | 68,100 | ||
Czech Republic | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | $ 48,700 | $ 79,800 | $ 75,700 |
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, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 193,921 | $ 153,738 | $ 645,258 | $ 436,620 | $ 459,023 | ||||||
Operating income (loss) | $ (153) | 1,380 | (5,703) | $ (3,830) | $ (7,372) | $ (5,243) | $ (1,504) | $ (5,642) | (8,306) | (19,761) | (40,572) |
Total other income (expense) | $ (7,063) | $ (11,198) | $ (8,200) | $ (521) | $ (1,984) | $ 763 | $ (1,075) | $ (2,352) | (26,982) | (4,648) | (16,055) |
Loss before income taxes | (35,288) | (24,409) | (56,627) | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income (loss) | 11,353 | (14,915) | (33,795) | ||||||||
Operating Segments | Americas | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 56,320 | 92,324 | 106,143 | ||||||||
Operating income (loss) | (9,542) | (10,342) | (14,731) | ||||||||
Operating Segments | Asia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 146,664 | 158,048 | 167,861 | ||||||||
Operating income (loss) | 26,405 | 5,620 | (855) | ||||||||
Operating Segments | Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 119,403 | 159,085 | 151,842 | ||||||||
Operating income (loss) | (10,074) | (9,008) | (13,825) | ||||||||
Operating Segments | Direct Marketing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 299,358 | ||||||||||
Operating income (loss) | 10,740 | ||||||||||
Operating Segments | e-Business | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 23,513 | 27,163 | 33,177 | ||||||||
Operating income (loss) | (6,176) | (1,185) | (4,384) | ||||||||
Corporate-level activity | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income (loss) | $ (19,659) | $ (4,846) | $ (6,777) |
Total Assets of Continuing Oper
Total Assets of Continuing Operations (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 827,050 | $ 281,298 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 762,943 | 171,037 |
Operating Segments | Americas | ||
Segment Reporting Information [Line Items] | ||
Total assets | 22,820 | 21,876 |
Operating Segments | Asia | ||
Segment Reporting Information [Line Items] | ||
Total assets | 44,322 | 63,819 |
Operating Segments | Europe | ||
Segment Reporting Information [Line Items] | ||
Total assets | 37,223 | 64,639 |
Operating Segments | Direct Marketing | ||
Segment Reporting Information [Line Items] | ||
Total assets | 642,820 | |
Operating Segments | e-Business | ||
Segment Reporting Information [Line Items] | ||
Total assets | 15,758 | 20,703 |
Corporate-level activity | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 64,107 | $ 110,261 |
Summarized Financial Informat_2
Summarized Financial Information of Net Revenue from External Customers by Group of Services (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Apr. 30, 2018 | Jan. 31, 2018 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | $ 193,921 | $ 153,738 | $ 645,258 | $ 436,620 | $ 459,023 |
Supply Chain Services | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 322,387 | 409,457 | 425,846 | ||
e-Business | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 23,513 | $ 27,163 | $ 33,177 | ||
Direct Marketing | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | $ 299,358 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | Dec. 15, 2017USD ($)TradingDay$ / sharesshares | Sep. 01, 2017USD ($) | Jun. 30, 2015 | Dec. 24, 2014 | Mar. 12, 2013$ / sharesshares | Jul. 31, 2018USD ($)$ / sharesshares | Jul. 31, 2017USD ($)$ / sharesshares | Jul. 31, 2016USD ($) | Feb. 20, 2018 |
Related Party Transaction [Line Items] | |||||||||
Principal amount convertible senior notes held of | $ 67,625,000 | $ 67,625,000 | |||||||
Preferred stock, shares issued | shares | 0 | 0 | |||||||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||||||
Price per share | $ / shares | $ 4 | ||||||||
Proceeds from issuance of preferred stock | $ 35,000,000 | ||||||||
Issuance of warrants to acquire additional shares, shares | shares | 2,000,000 | 2,000,000 | |||||||
Minimum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage in capital stock | 20.00% | ||||||||
Series C Convertible Preferred Stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Convertible preferred stock conversion price per share | $ / shares | $ 1.96 | ||||||||
Preferred stock, dividend rate, percentage | 6.00% | ||||||||
Percentage threshold closing sale price of common stock higher than conversion price | 170.00% | ||||||||
Series C Convertible Preferred Stock | Minimum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Trading days | TradingDay | 5 | ||||||||
Steel Holdings | 5.25% Convertible Senior Notes | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage in capital stock | 52.00% | ||||||||
Debt instrument stated percentage | 5.25% | ||||||||
Principal amount convertible senior notes held of | $ 14,900,000 | ||||||||
Steel Holdings | Repurchase Agreements | Warrant | |||||||||
Related Party Transaction [Line Items] | |||||||||
Repurchase price of warrant | $ / shares | $ 100 | ||||||||
Purchase Agreement | SPHG Holdings | Series C Convertible Preferred Stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Preferred stock, shares issued | shares | 35,000 | ||||||||
Preferred stock, par value | $ / shares | $ 0.01 | ||||||||
Price per share | $ / shares | $ 1,000 | ||||||||
Proceeds from issuance of preferred stock | $ 35,000,000 | ||||||||
Steel Services Ltd. | Management Services Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Fixed monthly fee to be paid in consideration of services | $ 95,641 | $ 175,000 | |||||||
Total expenses incurred related to Management Services Agreement and Transfer Agreement | 1,900,000 | 2,300,000 | $ 2,200,000 | ||||||
SP Corporate Services Llc and Steel Services Limited | Management Services Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Amount due to related parties | $ 200,000 | $ 300,000 | |||||||
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 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Quarterly Financial Information [Line Items] | |||||||||||
Net revenue | $ 195,077 | $ 193,921 | $ 153,738 | $ 102,522 | $ 99,777 | $ 97,948 | $ 117,568 | $ 121,327 | |||
Cost of revenue | 157,720 | 154,916 | 137,915 | 93,448 | 92,485 | 89,406 | 106,370 | 111,994 | $ 543,999 | $ 400,255 | $ 434,265 |
Gross profit | 37,357 | 39,005 | 15,823 | 9,074 | 7,292 | 8,542 | 11,198 | 9,333 | 101,259 | 36,365 | 24,758 |
Total operating expenses | 37,510 | 37,625 | 21,526 | 12,904 | 14,664 | 13,785 | 12,702 | 14,975 | 109,565 | 56,126 | 65,330 |
Operating income (loss) | (153) | 1,380 | (5,703) | (3,830) | (7,372) | (5,243) | (1,504) | (5,642) | (8,306) | (19,761) | (40,572) |
Total other income (expense) | (7,063) | (11,198) | (8,200) | (521) | (1,984) | 763 | (1,075) | (2,352) | (26,982) | (4,648) | (16,055) |
Income tax benefit (expense) | (517) | (715) | 73,521 | (1,087) | (105) | (819) | (723) | (1,049) | 71,202 | (2,696) | (5,443) |
Gains on investments in affiliates, net of tax | 200 | 200 | 200 | 201 | 150 | 232 | 396 | 500 | 800 | 1,300 | 800 |
Net income (loss) | (7,533) | (10,333) | 59,818 | (5,237) | (9,311) | (5,067) | (2,906) | (8,543) | 36,715 | (25,827) | (61,281) |
Net income (loss) attributable to common stockholders | $ (8,069) | $ (10,862) | $ 59,548 | $ (5,237) | $ (9,311) | $ (5,067) | $ (2,906) | $ (8,543) | $ 35,380 | $ (25,827) | $ (61,281) |
Basic net earning (loss) per share attributable to common stockholders: | $ (0.13) | $ (0.18) | $ 1.02 | $ (0.09) | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ 0.60 | $ (0.47) | $ (1.18) |
Diluted net earning (loss) per share attributable to common stockholders: | $ (0.13) | $ (0.18) | $ 0.75 | $ (0.09) | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ 0.53 | $ (0.47) | $ (1.18) |
Selected Quarterly Financial _4
Selected Quarterly Financial Information - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Quarterly Financial Information [Line Items] | ||||||||||||
Income tax expense (benefit) | $ 517 | $ 715 | $ (73,521) | $ 1,087 | $ 105 | $ 819 | $ 723 | $ 1,049 | $ (71,202) | $ 2,696 | $ 5,443 | |
Net revenue | 193,921 | 153,738 | 645,258 | 436,620 | 459,023 | |||||||
Cost of revenue | $ 157,720 | 154,916 | 137,915 | $ 93,448 | $ 92,485 | $ 89,406 | $ 106,370 | $ 111,994 | $ 543,999 | $ 400,255 | $ 434,265 | |
Adjustments | ||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||
Income tax expense (benefit) | $ 4,100 | 4,143 | ||||||||||
Net revenue | 4,999 | 2,619 | ||||||||||
Cost of revenue | 4,999 | 3,746 | ||||||||||
Adjustments | Operating Segments | ||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||
Net revenue | $ 2,200 | |||||||||||
Cost of revenue | $ 5,000 |
Schedule of Impact to Consolida
Schedule of Impact to Consolidated Statements of Income (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Quarterly Financial Information [Line Items] | ||||||||||||
Net revenue | $ 193,921 | $ 153,738 | $ 645,258 | $ 436,620 | $ 459,023 | |||||||
Cost of revenue | $ 157,720 | 154,916 | 137,915 | $ 93,448 | $ 92,485 | $ 89,406 | $ 106,370 | $ 111,994 | 543,999 | 400,255 | 434,265 | |
Gross profit | 37,357 | 39,005 | 15,823 | 9,074 | 7,292 | 8,542 | 11,198 | 9,333 | 101,259 | 36,365 | 24,758 | |
Income tax expense (benefit) | 517 | 715 | (73,521) | 1,087 | 105 | 819 | 723 | 1,049 | (71,202) | 2,696 | 5,443 | |
Net income (loss) attributable to common stockholders | $ (8,069) | $ (10,862) | $ 59,548 | $ (5,237) | $ (9,311) | $ (5,067) | $ (2,906) | $ (8,543) | $ 35,380 | $ (25,827) | $ (61,281) | |
Basic net earning (loss) per share attributable to common stockholders: | $ (0.13) | $ (0.18) | $ 1.02 | $ (0.09) | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ 0.60 | $ (0.47) | $ (1.18) | |
Diluted net earning (loss) per share attributable to common stockholders: | $ (0.13) | $ (0.18) | $ 0.75 | $ (0.09) | $ (0.17) | $ (0.09) | $ (0.05) | $ (0.16) | $ 0.53 | $ (0.47) | $ (1.18) | |
Previously Reported | ||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||
Net revenue | $ 188,922 | $ 151,119 | ||||||||||
Cost of revenue | 149,917 | 134,169 | ||||||||||
Gross profit | 39,005 | 16,950 | ||||||||||
Income tax expense (benefit) | 715 | (77,664) | ||||||||||
Net income (loss) attributable to common stockholders | $ (10,862) | $ 64,830 | ||||||||||
Basic net earning (loss) per share attributable to common stockholders: | $ (0.18) | $ 1.11 | ||||||||||
Diluted net earning (loss) per share attributable to common stockholders: | $ (0.18) | $ 0.85 | ||||||||||
Adjustments | ||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||
Net revenue | $ 4,999 | $ 2,619 | ||||||||||
Cost of revenue | $ 4,999 | 3,746 | ||||||||||
Gross profit | (1,127) | |||||||||||
Income tax expense (benefit) | $ 4,100 | 4,143 | ||||||||||
Net income (loss) attributable to common stockholders | $ (5,282) |
Parent Company Condensed Fina_3
Parent Company Condensed Financial Information - Additional Information (Detail) - IWCO - Cerberus Credit Facility | Jul. 31, 2018USD ($) |
Supplemental Financial Information [Line Items] | |
Restricted cash | $ 53,100,000 |
Maximum | |
Supplemental Financial Information [Line Items] | |
Cash distributions | $ 5,000,000 |
Schedule of Balance Sheet (Deta
Schedule of Balance Sheet (Detail) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 92,138 | $ 110,670 | ||
Prepaid expenses and other current assets | 13,415 | 6,005 | ||
Total current assets | 264,281 | 257,846 | ||
Other assets | 8,821 | 4,897 | ||
Total assets | 827,050 | 281,298 | ||
LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK & STOCKHOLDERS' EQUITY | ||||
Accounts payable | 78,212 | 71,476 | ||
Accrued expenses | 88,330 | 37,898 | ||
Notes payable | 64,530 | |||
Total current liabilities | 290,612 | 149,155 | ||
Notes payable | 64,530 | 59,758 | ||
Total long-term liabilities | 393,618 | 69,172 | ||
Total liabilities | 684,230 | 218,327 | ||
Contingently redeemable preferred stock | 35,192 | |||
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2018; zero shares authorized, issued and outstanding shares at July 31, 2017 | 35,192 | |||
Stockholders' equity: | ||||
Preferred stock, $0.01 par value per share. Authorized 4,965,000 and 5,000,000 shares at July 31, 2018 and July 31, 2017, respectively; zero issued and outstanding shares at July 31, 2018 and at July 31, 2017 | ||||
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 60,742,859 issued and outstanding shares at July 31, 2018; 55,555,973 issued and outstanding shares at July 31, 2017 | 608 | 556 | ||
Additional paid-in capital | 7,467,855 | 7,457,051 | ||
Accumulated deficit | (7,363,569) | (7,398,949) | ||
Accumulated other comprehensive income | 2,734 | 4,313 | ||
Total stockholders' equity | 107,628 | 62,971 | $ 85,940 | $ 144,601 |
Total liabilities, contingently redeemable preferred stock and stockholders' equity | 827,050 | 281,298 | ||
Parent Company | ||||
ASSETS | ||||
Cash and cash equivalents | 7,978 | 708 | ||
Prepaid expenses and other current assets | 120 | 85 | ||
Total current assets | 8,098 | 793 | ||
Investments in affiliates | 188,534 | 113,154 | ||
Other assets | 87 | 87 | ||
Due from subsidiaries | 13,579 | 10,945 | ||
Total assets | 210,298 | 124,979 | ||
LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK & STOCKHOLDERS' EQUITY | ||||
Accounts payable | 674 | 498 | ||
Accrued expenses | 2,274 | 1,752 | ||
Notes payable | 64,530 | |||
Total current liabilities | 67,478 | 2,250 | ||
Notes payable | 59,758 | |||
Total long-term liabilities | 59,758 | |||
Total liabilities | 67,478 | 62,008 | ||
Contingently redeemable preferred stock | 35,192 | |||
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2018; zero shares authorized, issued and outstanding shares at July 31, 2017 | 35,192 | |||
Stockholders' equity: | ||||
Preferred stock, $0.01 par value per share. Authorized 4,965,000 and 5,000,000 shares at July 31, 2018 and July 31, 2017, respectively; zero issued and outstanding shares at July 31, 2018 and at July 31, 2017 | ||||
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 60,742,859 issued and outstanding shares at July 31, 2018; 55,555,973 issued and outstanding shares at July 31, 2017 | 608 | 556 | ||
Additional paid-in capital | 7,467,855 | 7,457,051 | ||
Accumulated deficit | (7,363,569) | (7,398,949) | ||
Accumulated other comprehensive income | 2,734 | 4,313 | ||
Total stockholders' equity | 107,628 | 62,971 | ||
Total liabilities, contingently redeemable preferred stock and stockholders' equity | $ 210,298 | $ 124,979 |
Schedule of Balance Sheet (Pare
Schedule of Balance Sheet (Parenthetical) (Detail) - $ / shares | Jul. 31, 2018 | Jul. 31, 2017 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized | 4,965,000 | 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 | 60,742,859 | 55,555,973 |
Common stock, shares outstanding | 60,742,859 | 55,555,973 |
Contingent Convertible Preferred Stock | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized | 35,000 | 0 |
Preferred stock, shares issued | 35,000 | 0 |
Preferred stock, shares outstanding | 35,000 | 0 |
Parent Company | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized | 4,965,000 | 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 | 60,742,859 | 55,555,973 |
Common stock, shares outstanding | 60,742,859 | 55,555,973 |
Parent Company | Contingent Convertible Preferred Stock | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized | 35,000 | 0 |
Preferred stock, shares issued | 35,000 | 0 |
Preferred stock, shares outstanding | 35,000 | 0 |
Schedule of Statements of Opera
Schedule of Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||
Selling, general and administrative | $ 101,701 | $ 54,159 | $ 57,604 | ||||||||
Total operating expenses | $ 37,510 | $ 37,625 | $ 21,526 | $ 12,904 | $ 14,664 | $ 13,785 | $ 12,702 | $ 14,975 | 109,565 | 56,126 | 65,330 |
Operating loss | (153) | 1,380 | (5,703) | (3,830) | (7,372) | (5,243) | (1,504) | (5,642) | (8,306) | (19,761) | (40,572) |
Other income (expense): | |||||||||||
Interest expense | (29,884) | (8,247) | (10,924) | ||||||||
Other income , net | 2,223 | 3,200 | (5,757) | ||||||||
Total other expense | (7,063) | (11,198) | (8,200) | (521) | (1,984) | 763 | (1,075) | (2,352) | (26,982) | (4,648) | (16,055) |
Loss before income taxes | (35,288) | (24,409) | (56,627) | ||||||||
Income tax benefit | 517 | 715 | (73,521) | 1,087 | 105 | 819 | 723 | 1,049 | (71,202) | 2,696 | 5,443 |
Gains on investments in affiliates, net of tax | (801) | (1,278) | (789) | ||||||||
Net income (loss) | $ (7,533) | $ (10,333) | $ 59,818 | $ (5,237) | $ (9,311) | $ (5,067) | $ (2,906) | $ (8,543) | 36,715 | (25,827) | (61,281) |
Parent Company | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Selling, general and administrative | 16,742 | 4,834 | 6,562 | ||||||||
Total operating expenses | 16,742 | 4,834 | 6,562 | ||||||||
Operating loss | (16,742) | (4,834) | (6,562) | ||||||||
Other income (expense): | |||||||||||
Interest expense | (8,427) | (7,917) | (10,565) | ||||||||
Other income , net | 6,807 | 757 | |||||||||
Total other expense | (1,620) | (7,917) | (9,808) | ||||||||
Loss before income taxes | (18,362) | (12,751) | (16,370) | ||||||||
Income tax benefit | 0 | 0 | 0 | ||||||||
Equity losses of subsidiaries, net of tax | (54,276) | 14,026 | 44,911 | ||||||||
Gains on investments in affiliates, net of tax | (801) | (950) | |||||||||
Net income (loss) | $ 36,715 | $ (25,827) | $ (61,281) |
Schedule of Statements of Cash
Schedule of Statements of Cash Flows (Detail) - USD ($) $ in Thousands | Mar. 12, 2013 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Cash flows from operating activities: | ||||
Net income (loss) | $ (36,715) | $ 25,827 | $ 61,281 | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Amortization of deferred financing costs | 1,072 | 566 | 733 | |
Accretion of debt discount | 4,384 | 3,919 | 4,967 | |
Share-based compensation | 10,801 | 681 | 1,126 | |
Gains on investments in affiliates and impairments | (801) | (1,278) | (747) | |
Changes in operating assets and liabilities, net of business acquired: | ||||
Prepaid expenses and other current assets | 6,563 | 1,572 | 10,763 | |
Accounts payable and accrued expenses | (39,945) | (45,314) | (4,245) | |
Other assets and liabilities | (6,267) | (971) | (13,589) | |
Net cash provided by (used in) operating activities | 11,768 | (24,445) | (19,788) | |
Cash flows from investing activities: | ||||
Net cash provided by (used in) investing activities | (452,320) | 5,638 | 52,236 | |
Cash flows from financing activities: | ||||
Proceeds from issuance of preferred stock | 35,000 | |||
Payment of preferred dividends | (1,143) | |||
Purchase of the Company's Convertible Notes | (1,763) | (20,257) | ||
Proceeds from issuance of common stock | $ 27,700 | 8 | 18 | 51 |
Repurchase of common stock | (127) | |||
Net cash provided by (used in) financing activities | 421,879 | (1,916) | (20,561) | |
Net decrease in cash and cash equivalents | (18,532) | (20,120) | 11,359 | |
Cash and cash equivalents at beginning of period | 110,670 | 130,790 | 119,431 | |
Cash and cash equivalents at end of period | 92,138 | 110,670 | 130,790 | |
Parent Company | ||||
Cash flows from operating activities: | ||||
Net income (loss) | 36,715 | (25,827) | (61,281) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Amortization of deferred financing costs | 388 | 347 | 439 | |
Accretion of debt discount | 4,384 | 3,919 | 4,967 | |
Share-based compensation | 10,763 | 533 | 509 | |
Non-cash (gains) losses, net | (354) | (757) | ||
Equity losses of subsidiaries, net of tax | (54,276) | 14,026 | 44,911 | |
Gains on investments in affiliates and impairments | (801) | (950) | ||
Changes in operating assets and liabilities, net of business acquired: | ||||
Prepaid expenses and other current assets | (36) | 76 | 1,034 | |
Accounts payable and accrued expenses | 698 | (338) | (3,418) | |
Other assets and liabilities | (1,860) | (12,926) | 1,223 | |
Net cash provided by (used in) operating activities | (4,379) | (21,140) | (12,373) | |
Cash flows from investing activities: | ||||
Intercompany advances, net | (22,216) | 19,211 | 20,000 | |
Net cash provided by (used in) investing activities | (22,216) | 19,211 | 20,000 | |
Cash flows from financing activities: | ||||
Proceeds from issuance of preferred stock | 35,000 | |||
Payment of preferred dividends | (1,143) | |||
Purchase of the Company's Convertible Notes | (1,763) | (20,257) | ||
Proceeds from issuance of common stock | 8 | 18 | 51 | |
Repurchase of common stock | (127) | |||
Net cash provided by (used in) financing activities | 33,865 | (1,745) | (20,333) | |
Net decrease in cash and cash equivalents | 7,270 | (3,674) | (12,706) | |
Cash and cash equivalents at beginning of period | 708 | 4,382 | 17,088 | |
Cash and cash equivalents at end of period | $ 7,978 | $ 708 | $ 4,382 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ in Millions | 12 Months Ended |
Jul. 31, 2018USD ($) | |
Subsequent Event [Line Items] | |
Purchase of securities | $ 3.7 |