Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Oct. 01, 2019 | Jan. 31, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jul. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | STEEL CONNECT, INC. | ||
Entity Central Index Key | 0000914712 | ||
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 | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 61,805,856 | ||
Entity Public Float | $ 61,746,026 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 32,548 | $ 92,138 |
Accounts receivable, trade, net of allowance for doubtful accounts of $1,804 and $480 at July 31, 2019 and July 31, 2018, respectively | 112,141 | 99,254 |
Inventories, net | 23,674 | 47,786 |
Funds held for clients | 13,516 | 11,688 |
Prepaid expenses and other current assets | 31,445 | 13,415 |
Total current assets | 213,324 | 264,281 |
Property and equipment, net | 91,268 | 106,632 |
Goodwill | 257,128 | 254,352 |
Other intangible assets, net | 162,518 | 192,964 |
Other assets | 7,325 | 8,821 |
Total assets | 731,563 | 827,050 |
LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 85,898 | 78,212 |
Accrued expenses | 112,658 | 88,426 |
Funds held for clients | 13,516 | 11,688 |
Current portion of long-term debt | 5,732 | 5,727 |
Other current liabilities | 39,046 | 42,029 |
Convertible Notes payable | 0 | 50,274 |
Total current liabilities | 256,850 | 276,356 |
Convertible Notes payable | 7,432 | 14,256 |
Long-term debt, excluding current portion | 368,505 | 383,111 |
Other long-term liabilities | 10,898 | 10,507 |
Total long-term liabilities | 386,835 | 407,874 |
Total liabilities | 643,685 | 684,230 |
Commitments and contingencies (Note 8) | ||
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2019 and 2018 | 35,186 | 35,192 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at July 31, 2019 and July 31, 2018; zero shares issued and outstanding at July 31, 2019 and July 31, 2018 | 0 | 0 |
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 61,805,856 issued and outstanding shares at July 31, 2019; 60,742,859 issued and outstanding shares at July 31, 2018 | 618 | 608 |
Additional paid-in capital | 7,477,327 | 7,467,855 |
Accumulated deficit | (7,426,287) | (7,363,569) |
Accumulated other comprehensive income | 1,034 | 2,734 |
Total stockholders' equity | 52,692 | 107,628 |
Total liabilities, contingently redeemable preferred stock and stockholders' equity | $ 731,563 | $ 827,050 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Accounts receivable, trade, allowance for doubtful accounts | $ 1,804 | $ 480 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in share) | 4,965,000 | 4,965,000 |
Preferred stock, shares issued (in share) | 0 | 0 |
Preferred stock, shares outstanding (in share) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares Authorized (in share) | 1,400,000,000 | 1,400,000,000 |
Common stock, shares issued (in share) | 61,805,856 | 60,742,859 |
Common stock, shares outstanding (in share) | 61,805,856 | 60,742,859 |
Contingent Convertible Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in share) | 35,000 | 35,000 |
Preferred stock, shares issued (in share) | 35,000 | 35,000 |
Preferred stock, shares outstanding (in share) | 35,000 | 35,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Net revenue: | ||
Total net revenue | $ 819,830 | $ 645,258 |
Cost of revenue | 670,100 | 543,999 |
Gross profit | 149,730 | 101,259 |
Operating expenses: | ||
Selling, general and administrative | 144,078 | 101,972 |
Amortization of intangible assets | 30,446 | 20,285 |
(Gain) loss on sale of property | 485 | (12,692) |
Total operating expenses | 175,009 | 109,565 |
Operating loss | (25,279) | (8,306) |
Other income (expense): | ||
Interest income | 528 | 679 |
Interest expense | (41,951) | (29,884) |
Other gains, net | 4,603 | 2,223 |
Total other expense | (36,820) | (26,982) |
Loss before income taxes | (62,099) | (35,288) |
Income tax expense (benefit) | 4,670 | (71,202) |
Gains on investments in affiliates, net of tax | (42) | (801) |
Net income (loss) | (66,727) | 36,715 |
Less: Preferred dividends on redeemable preferred stock | (2,129) | (1,335) |
Net income (loss) attributable to common stockholders | $ (68,856) | $ 35,380 |
Basic net earnings (loss) per share attributable to common stockholders (in usd per share) | $ (1.13) | $ 0.60 |
Diluted net earnings (loss) per share attributable to common stockholders (in usd per share) | $ (1.13) | $ 0.53 |
Weighted average common shares used in: | ||
Basic earnings (loss) per share (in shares) | 61,180 | 59,179 |
Diluted earnings (loss) per share (in shares) | 61,180 | 81,899 |
Services | ||
Net revenue: | ||
Total net revenue | $ 332,928 | $ 345,900 |
Products | ||
Net revenue: | ||
Total net revenue | $ 486,902 | $ 299,358 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (66,727) | $ 36,715 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | (1,331) | (1,174) |
Net unrealized holding gain (loss) securities, net of tax | (85) | 14 |
Pension liability adjustments, net of tax | (284) | (419) |
Other comprehensive loss | (1,700) | (1,579) |
Comprehensive income (loss) | $ (68,427) | $ 35,136 |
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, 2017 | $ 62,971 | $ 556 | $ 7,457,051 | $ (7,398,949) | $ 4,313 |
Balance, shares at Jul. 31, 2017 | 55,555,973 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
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 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | $ (66,727) | (66,727) | |||
Effect of adoption of accounting standards | 6,138 | 6,138 | |||
Equity portion of convertible note | 8,200 | 8,200 | |||
Preferred dividends | (2,129) | (2,129) | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises | 15 | 15 | |||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises, shares | 17,454 | ||||
Restricted stock grants | 0 | $ 10 | (10) | ||
Restricted stock grants, shares | 1,045,543 | ||||
Share-based compensation | 1,267 | 1,267 | |||
Other comprehensive items | (1,700) | (1,700) | |||
Balance at Jul. 31, 2019 | $ 52,692 | $ 618 | $ 7,477,327 | $ (7,426,287) | $ 1,034 |
Balance, shares at Jul. 31, 2019 | 61,805,856 | 61,805,856 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (66,727) | $ 36,715 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 22,058 | 16,791 |
Amortization of intangible assets | 30,446 | 20,285 |
Amortization of deferred financing costs | 771 | 1,072 |
Accretion of debt discount | 3,433 | 4,384 |
Impairment of long-lived assets | 3,015 | (91) |
Share-based compensation | 1,267 | 10,801 |
Other gains, net | (4,603) | (15,266) |
Gains on investments in affiliates | (42) | (801) |
Changes in operating assets and liabilities, net of business acquired: | ||
Accounts receivable, net | (14,090) | 29,735 |
Inventories, net | 2,482 | 19,971 |
Prepaid expenses and other current assets | 5,519 | 4,797 |
Accounts payable and accrued expenses | 36,486 | (39,945) |
Refundable and accrued income taxes, net | (3,045) | 6,524 |
Deferred tax assets and liabilities | 1,563 | (78,794) |
Other assets and liabilities | 2,316 | (6,176) |
Net cash provided by operating activities | 20,849 | 10,002 |
Cash flows from investing activities: | ||
Payments to acquire business | 0 | (469,221) |
Additions to property and equipment | (14,539) | (18,423) |
Proceeds from the disposition of property and equipment | 19 | 20,748 |
Proceeds from the sale of Trading Securities | 0 | 13,775 |
Proceeds from investments in affiliates | 42 | 801 |
Net cash used in investing activities | (14,478) | (452,320) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 0 | 393,000 |
Proceeds from issuance of preferred stock | 0 | 35,000 |
Proceeds from issuance of Convertible Note | 14,940 | 0 |
Proceeds from revolving line of credit, net | 6,000 | 0 |
Payments on maturity of Convertible Notes | (63,925) | 0 |
Payment of long-term debt | (14,879) | (3,000) |
Payment of deferred financing costs | 0 | (1,334) |
Payment of preferred dividends | (2,129) | (1,143) |
Purchase of the Company's Convertible Notes | (3,700) | 0 |
Repayments on capital lease obligations | (134) | (652) |
Proceeds from issuance of common stock | 15 | 8 |
Net cash provided by (used in) financing activities | (63,812) | 421,879 |
Net effect of exchange rate changes on cash and cash equivalents | (321) | 141 |
Net decrease in cash, cash equivalents and restricted cash | (57,762) | (20,298) |
Cash, cash equivalents and restricted cash, beginning of period | 103,826 | 124,124 |
Cash, cash equivalents and restricted cash, end of period | $ 46,064 | $ 103,826 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Steel Connect, Inc. (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. 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. 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 7, the securitization of trade receivables not currently in the Credit Agreement and the revolving credit facility and cash, if any, provided by operating activities. The Company’s estimate as to how long it expects its existing cash to be able to continue to fund its operations is based on assumptions that may prove to be inaccurate, and it could require capital resources sooner than currently expected, which the Company believes it will have access to. At July 31, 2019 and 2018 , the Company had cash and cash equivalents and Trading Securities of $32.5 million and $92.1 million , respectively. As July 31, 2019 , the Company had a deficiency in working capital which was primarily driven by the Company's $6.0 million outstanding on the revolving credit facility, accrued pricing liabilities which the Company believes will not require a cash outlay in the next twelve months and the additional liabilities assumed because of the acquisition of IWCO Direct during December 2017 (the "IWCO Acquisition"). At July 31, 2019 , the Company had a readily available borrowing capacity under its PNC Bank Credit Facility of $13.8 million . The term of the PNC Bank Credit Facility expires on December 31, 2019. At July 31, 2019 , IWCO had a readily available borrowing capacity under its revolving facility of $19.0 million . The Company believes it will generate sufficient cash to meet its debt covenants under its credit facilities to which certain of its subsidiaries are a party and that it will be able to obtain cash through its current credit facilities, through securitization of certain trade receivables and a new facility, if needed. The Company's 5.25% Convertible Senior Notes matured on March 1, 2019, with a balance due of $65.6 million , including interest to the March 1, 2019 maturity date. Included in the balance due were notes held by SPH Group Holdings LLC ("SPHG Holdings") in the principal amount of $14.9 million . The total $65.6 million balance due was paid in full by the Company from available cash on-hand, including the $14.9 million from the proceeds of the 7.50% Convertible Senior Note entered into on February 28, 2019. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain significant accounting policies described below. Principles of Consolidation The accompanying consolidated financial statements of the Company include the results of its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company accounts for investments in businesses in which it owns between 20% and 50% of the voting interest using the equity method, if the Company has the ability to exercise significant influence over the investee company. All other investments in privately held businesses over which the Company does not have the ability to exercise significant influence, or for which there is not a readily determinable market value, are accounted for under the cost method of accounting. Use of Estimates The preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, allowance for doubtful accounts, inventories, fair value of its trading and available-for-sale securities, intangible assets, income taxes, valuation of long-lived assets, impairments, contingencies, restructuring charges, litigation, pension obligations and the fair value of stock options and share bonus awards granted under the Company's stock based compensation plans. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. Revenue Recognition On August 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of August 1, 2018. Results for reporting periods beginning after August 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605. The Company recognizes revenue from its contracts with customers primarily from the sale of supply chain management services and marketing solutions offerings. Revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For ModusLink's supply chain management services arrangements and IWCO's marketing solutions offerings, the goods and services are considered to be transferred over time as they are performed. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. ModusLink's revenue primarily comes from the sale of supply chain management services to its clients. Under the new standard, the majority of these arrangements consist of two distinct performance obligations (i.e. a warehousing and inventory management service and a separate kitting, packaging and assembly service), each of which is recognized over time as services are performed using an input method based on the level of efforts expended. A significant portion of ModusLink's revenue from these arrangements continues to be recognized over time as the services are performed based on an input method of efforts expended which corresponds with the transfer of value to the customer. 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 new standard accelerates the recognition of revenue as the Company's performance enhances assets that the customer controls and therefore revenue is recognized over time based on an input method of efforts expended which corresponds with the transfer of value to the customer. Revenue from the sale of perpetual licenses sold in ModusLink's e-Business operations is now recognized at a point in time upon execution of the relevant license agreement and when delivery has taken place. Revenue recognized related to the majority of IWCO's marketing solutions offerings, which typically consist of a single integrated performance obligation, is now recognized over time as the Company performs because the products have no alternative use to the Company. In accordance with Topic 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services, and excludes any sales incentives or taxes collected from customers which are subsequently remitted to government authorities. Supply chain management services. 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. The majority of these arrangements consist of two distinct performance obligations (i.e. warehousing/inventory management service and a separate kitting/packaging/assembly service), revenue related to each of which is recognized over time as services are performed using an input method based on the level of efforts expended. Marketing solutions offerings. IWCO's revenue is generated through the provision of data-driven marketing solutions, primarily through providing direct mail products to customers. Revenue related to the majority of IWCO's marketing solutions contracts, which typically consist of a single integrated performance obligation, is recognized over time as the Company performs because the products have no alternative use to the Company. Other. Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, and fees for professional services. Revenue related to these arrangements is recognized on a straight-line basis over the term of the agreement or over the term of the agreement in proportion to the costs incurred in satisfying the obligations under the contract. Significant Judgments The Company's contracts with customers may include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For arrangements with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company generally determines standalone selling prices based on the prices charged to customers and uses a range of amounts to estimate standalone selling prices when we sell each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative standalone selling prices of the various products and services. The Company typically has more than one range of standalone selling prices for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the type of customer and geographic region in determining the range of standalone selling prices. The Company may provide credits or incentives to customers, which are accounted for as variable consideration when estimating the transaction price of the contract and amounts of revenue to recognize. The amount of variable consideration to include in the transaction price is estimated at contract inception using either the estimated value method or the most likely amount method based on the nature of the variable consideration. These estimates are updated at the end of each reporting period as additional information becomes available and revenue is recognized only to the extent that it is probable that a significant reversal of any amounts of variable consideration included in the transaction price will not occur. Contract Balances Timing of revenue recognition may differ from timing of invoicing to customers. The Company records contract assets and liabilities related to its contracts with customers as follows: • Accounts receivable when revenue is recognized prior to receipt of cash payments and if the right to such amounts is unconditional and solely based on the passage of time. • Contract asset when the Company recognizes revenue based on efforts expended but the right to such amount is conditional upon satisfaction of another performance obligation. Contract assets are primarily comprised of fees related to marketing solutions offerings and supply chain management services. The Company notes that its contract assets are all short-term in nature and are included in prepaid expenses and other current assets in the Company's consolidated balance sheets. • Deferred revenue when cash payments are received or due in advance of performance. Deferred revenue is primarily comprised of fees related to supply chain management services, cloud-based software subscriptions and software maintenance and support service contracts, which are generally billed in advance. Deferred revenue also includes other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The deferred revenue balance is classified as a component of other current liabilities and other long-term liabilities on the Company's consolidated balance sheets. 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. The allowance for doubtful accounts consisted of the following: July 31, July 31, (In thousands) Balance at beginning of year $ 480 $ 616 Provisions charged to expense 1,418 211 Accounts written off (94 ) (347 ) $ 1,804 $ 480 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 $ 32,183 $ 44,952 Money market funds 365 47,186 $ 32,548 $ 92,138 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 was estimated using quoted market prices. 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 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 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 methods. We continuously monitor inventory balances and record inventory provisions for any excess of the cost of the inventory over its estimated net realizable value. We also monitor inventory balances for obsolescence and excess quantities as compared to projected demands. Our inventory methodology is based on assumptions about average shelf life of inventory, forecasted volumes, forecasted selling prices, contractual provisions with our clients, write-down history of inventory and market conditions. While such assumptions may change from period to period, in determining the net realizable value of our inventories, we use the best information available as of the balance sheet date. If actual market conditions are less favorable than those projected, or we experience a higher incidence of inventory obsolescence because of rapidly changing technology and client requirements, additional inventory provisions may be required. Once established, write-downs of inventory are considered permanent adjustments to the cost basis of inventory and cannot be reversed due to subsequent increases in demand forecasts. IWCO's inventory consists primarily of raw material (paper) used to produce direct mail packages and work-in-process, finished goods are generally not a significant element of the inventory as they are generally mailed after the production and sorting process. With the acquisition of IWCO, the Company recorded a fair value "step-up" to work-in-process inventory of $7.2 million which was recognized as a non-cash charge to cost of revenues during the fiscal year 2018. Inventories consisted of the following: July 31, July 31, (In thousands) Raw materials $ 21,322 $ 23,208 Work-in-process 587 16,147 Finished goods 1,765 8,431 $ 23,674 $ 47,786 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." The Company's policy is to perform its annual impairment testing for its business units during the fourth quarter 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. 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, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. In accordance with the Company's accounting policy, interest and penalties related to uncertain tax positions is included in the "income tax expense" line of the Consolidated Statements of Operations. See Note 13, "Income Taxes," for additional information. Earnings (Loss) Per Share The following table reconciles earnings (loss) per share for the fiscal years ended July 31, 2019 and 2018 . Twelve Months Ended 2019 2018 (In thousands, except per share data) Net income (loss) $ (66,727 ) $ 36,715 Less: Preferred dividends on redeemable preferred stock (2,129 ) (1,335 ) Net income (loss) attributable to common stockholders (68,856 ) 35,380 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 $ (68,856 ) $ 43,794 Weighted average common shares outstanding 61,180 59,179 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 61,180 81,899 Basic net earnings (loss) per share attributable to common stockholders: $ (1.13 ) $ 0.60 Diluted net earnings (loss) per share attributable to common stockholders: $ (1.13 ) $ 0.53 Approximately 20.9 million and 0.5 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, 2019 and 2018 , respectively. The common stock equivalent shares excluded during the fiscal year ended July 31, 2019 and 2018 were primarily excluded as their effect would be anti-dilutive. The common stock equivalent shares excluded during the year ended July 31, 2018 were primarily excluded as the options were out-of-the-money. Approximately 2.6 million common shares outstanding associated with the Convertible Note, using the if-converted method, were excluded from the denominator in the calculation of diluted earnings (loss) per share for the fiscal years ended July 31, 2019 . Approximately 17.9 million common shares outstanding associated with the Contingently redeemable preferred stock, using the if-converted method, were excluded from the denominator in the calculation of diluted earnings (loss) per share for the fiscal year ended July 31, 2019 . 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. In accordance with ASU 2016-09, the Company has elected to true up for forfeitures as they occur. 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 years ended July 31, 2019 and 2018 , the Company's 10 largest clients accounted for approximately 49% and 44% of consolidated net revenue, respectively. One client, associated with the Supply Chain segment, accounted for 11% of the Company's consolidated net revenue for the fiscal year ended July 31, 2019 . No other clients accounted for greater than 10% of the Company's consolidated net revenue for the fiscal year ended July 31, 2019 . No clients accounted for greater than 10% of the Company's consolidated net revenue for the fiscal year ended July 31, 2018 . A computing market client accounted for approximately 13% of the Company's Net Accounts Receivable balance as of July 31, 2019 . No other clients accounted for greater than 10% of the Company's Net Accounts Receivable balance as of July 31, 2019 . No clients accounted for greater than 10% of the Company's Net Accounts Receivable balance as of July 31, 2018 . 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 from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. On August 1, 2018, the Company adopted this guidance and all the related amendments using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient ASC 606-10-65-1-(f)-4, which did not have a material effect on the Company's assessment of the cumulative effect adjustment upon adoption. The Company recognized the cumulative effect of initially applying the new standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is effective for public companies for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all entities. The Company will adopt the provisions of this guidance on August 1, 2019. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which clarified various aspects of the guidance under ASU 2016-02. Originally, entities were required to adopt ASU 2016-02 using a modified retrospective approach, which required prior periods to be presented under this new standard with certain practical expedients available. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment at cost, consists of the following: July 31, 2019 2018 (In thousands) Land $ 942 $ 942 Machinery and equipment 99,961 97,149 Leasehold improvements 23,711 21,917 Software 52,961 52,082 Other 24,230 28,147 201,805 200,237 Less: Accumulated depreciation and amortization (110,537 ) (93,605 ) Property and equipment, net $ 91,268 $ 106,632 An immaterial amount of assets are under capital leases are included in the amounts above. During the fiscal year ended July 31, 2019 , the Company determined that the fair value of a long-lived asset group in the Supply Chain segment, derived from forecasted cash flows, did not exceed its carrying value. As such, the Company recorded an impairment of long-lived assets of $3.0 million as a component of cost of revenues. The Company recorded depreciation expense of $22.1 million and $16.8 million for the fiscal years ended July 31, 2019 and 2018 , respectively. Depreciation expense within the Supply Chain and Direct Marketing segments was $5.6 million , and $16.4 million , respectively, for the year ended July 31, 2019 . Depreciation expense within the Supply Chain and Direct Marketing segments was $6.8 million and $10.0 million , respectively, for the year ended July 31, 2018 . Amortization of assets recorded under capital leases is included in the depreciation expense amounts. 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. |
ACQUISITION OF IWCO DIRECT
ACQUISITION OF IWCO DIRECT | 12 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITION OF IWCO DIRECT | 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, 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 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 transaction incentive awards of $3.5 million paid to executives upon closing that were related to pre-existing management arrangements and were included as an element of the purchase price. In connection with the acquisition, the Company paid transaction costs of $1.5 million at acquisition which was recorded as a component of selling, general and administrative expense. Goodwill related to the acquisition of IWCO is not deductible for tax purposes. The following table summarizes the fair value of assets acquired and liabilities assumed at the date of the acquisition: As Originally Reported Adjustments As Revised (In thousands) Accounts receivable $ 47,841 $ (433 ) $ 47,408 Inventories 27,165 5,829 32,994 Other current assets 7,427 3,197 10,624 Property and equipment 87,976 477 88,453 Intangible assets 210,920 2,330 213,250 Goodwill 259,085 (1,957 ) 257,128 Other assets 3,040 — 3,040 Accounts payable (31,069 ) — (31,069 ) Accrued liabilities and other current liabilities (35,790 ) (30,368 ) (66,158 ) Customer deposits (7,829 ) — (7,829 ) Deferred income taxes (79,918 ) 2,755 (77,163 ) Other long-term liabilities (19,627 ) 18,170 (1,457 ) 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 fair value estimate of trademarks and tradenames was prepared utilizing a relief from royalties method of valuation, while the 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 years 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. The Company recognized $257.1 million of goodwill which arose primarily from the synergies in its business and the assembled workforce of IWCO. 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, 2017, 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 fair value adjustments for the acquired property 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 July 31, 2018 Net revenue $ 824,825 Net loss $ (17,148 ) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The Company's goodwill of $257.1 million as of July 31, 2019 relates to the Company's Direct Marketing reporting unit. For the fiscal year 2019, the Company performed a quantitative assessment of goodwill. The assessment was based on a combination of income and market approaches to estimate the fair value of the reporting unit, which indicated that the fair value of this reporting unit exceeded its carrying value by greater than 25.0% . Significant assumptions used in the discounted cash flow analysis included expected future earnings and cash flows, which are based on management's current expectations, as well as the related risk-adjusted discount rate used to estimate fair value. At July 31, 2019 , the goodwill related to the Direct Marketing business unit, and associated intangible assets, are at risk of future impairment if the fair value of this reporting unit, and its associated assets, decrease in value due to further declines in market conditions or customer demand. Other intangible assets, net, as of July 31, 2019 , include trademarks and tradenames with a gross balance of $20.5 million and carrying balance of $9.4 million , and customer relationships with a gross balance of $192.7 million and carrying balance of $153.1 million . The trademarks and tradenames intangible asset are being amortized on a straight line basis over a 3 years 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, 2019 is as follows (in thousands): 2020 $ 27,255 2021 20,258 2022 15,334 2023 11,427 2024 9,371 Thereafter 78,873 $ 162,518 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Jul. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 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 $ 59,057 $ 29,804 Accrued compensation 22,584 25,603 Accrued interest 467 1,437 Accrued audit, tax and legal 3,148 3,264 Accrued contract labor 1,650 1,932 Accrued worker's compensation 4,549 6,126 Accrued other 21,203 20,260 $ 112,658 $ 88,426 July 31, July 31, (In thousands) Accrued pricing liabilities $ 14,309 $ 18,882 Customer postage deposits 11,816 12,638 Revolving credit facility 6,000 — Other 6,921 10,509 $ 39,046 $ 42,029 During the twelve months ended July 31, 2019 , the Company recorded adjustments totaling $32.1 million related to certain tax related liabilities, which reflected the Company's revised estimate for such exposures. As of July 31, 2019 and 2018 , the Company had accrued pricing liabilities of approximately $14.3 million and $18.9 million , respectively. During the fiscal year ended July 31, 2019 , the Company concluded that certain accrued pricing liabilities have been extinguished. The amounts derecognized and recorded in other income were $4.6 million for the fiscal year ended July 31, 2019 . As previously reported by the Company, several principal adjustments were made to its historic financial statements for periods ending on or before January 31, 2012, the most significant of which related to the treatment of vendor rebates in its pricing policies. Where the retention of a rebate or a mark-up was determined to have been inconsistent with a client contract, the Company concluded that these amounts were not properly recorded as revenue. Accordingly, revenue was reduced by an equivalent amount for the period that the rebate was estimated to have been affected. A corresponding liability for the same amount was recorded in that period (referred to as accrued pricing liabilities). The Company believes that it may not ultimately be required to pay all or any of the accrued pricing liabilities based upon the expiration of statutes of limitations, and due in part to the nature of the interactions with its clients. The remaining accrued pricing liabilities at July 31, 2019 will be derecognized when there is sufficient information for the Company to conclude that such liabilities are not subject to escheatment and have been extinguished, which may occur through payment, legal release, or other legal or factual determination. The Company has not provided for any provision for interest and or penalties related to escheatment as it has concluded that such is not probable to occur and any potential interest and penalties cannot be reasonably estimated. |
DEBT
DEBT | 12 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Our debt consists of the following: July 31, 2019 July 31, 2018 (In thousands) Short-term debt Cerberus revolving credit facility $ 6,000 $ — Current portion of long-term debt 5,732 5,727 5.25% Convertible Senior Notes Payable — 50,274 11,732 56,001 Long-term debt 5.25% Convertible Senior Notes Payable — 14,256 7.50% Convertible Senior Note 7,432 — Long-term debt, net of current portion 368,505 383,111 375,937 397,367 Total debt $ 387,669 $ 453,368 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"). As of July 31, 2018 , the net carrying value of the Notes was $64.5 million . The Notes matured on March 1, 2019, with a balance due of $65.6 million , including interest to the March 1, 2019 maturity date. Included in the balance due were notes held by SPHG Holdings in the principal amount of $14.9 million . The total $65.6 million balance due was paid in full by the Company from available cash on-hand, including the $14.9 million from the proceeds of the 7.50% Convertible Senior Note entered into on February 28, 2019, as described below. Twelve Months Ended 2019 2018 (In thousands) Interest expense related to contractual interest coupon $ 1,932 $ 3,655 Interest expense related to accretion of the discount 2,741 4,384 Interest expense related to debt issuance costs 243 388 $ 4,916 $ 8,427 During the year ended July 31, 2019 and 2018 , the Company recognized interest expense of $4.9 million and $8.4 million associated with the Notes, respectively. The effective interest rate on the Notes, including amortization of debt issuance costs and accretion of the discount, was 13.9% . PNC Bank Credit Facility On June 30, 2014, two direct and wholly owned subsidiaries of the Company (the "Borrowers") and certain subsidiaries of the Borrowers acting as guarantors (the "Guarantors"), entered into a Revolving Credit and Security Agreement (the "Credit Agreement"), as borrowers and guarantors, with PNC Bank, National Association ("PNC Bank"), as a Lender and as agent for the Lenders ("Agent"). The Credit Agreement had a five ( 5 ) year term which was to expire on June 30, 2019 . On April 30, 2019, the Borrowers and Guarantors entered into a Second Amendment to Revolving Credit and Security Agreement (the "Second Amendment") by and among the Borrowers, the Guarantors, the financial institutions named as parties thereto from time to time as lenders (collectively, the "Lenders") and PNC Bank as Agent. The Second Amendment amends the Credit Agreement in order to, among other things, (i) reduce the aggregate Revolving Commitment Amounts (as defined in the Credit Agreement) of the Lenders and the related Maximum Revolving Advance Amount (as defined in the Credit Agreement) available to Borrowers under the Credit Agreement, from $50.0 million to $25.0 million, and (ii) to extend the maturity of the term under the Credit Agreement by six (6) months from June 30, 2019 to December 31, 2019. The maximum credit commitment of $25.0 million is available for letters of credit (with a sublimit of $5.0 million ). The actual maximum credit available under the Credit Agreement varies from time to time and is determined by calculating the applicable borrowing base, which is based upon applicable percentages of the values of eligible accounts receivable and eligible inventory minus reserves determined by the Agent (including other reserves that the Agent may establish from time to time in its permitted discretion), all as specified in the Credit Agreement. Generally, borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the Borrowers' option, either (a) LIBOR (adjusted to reflect any required bank reserves) for an interest period equal to one, two or three months (as selected by the Borrowers) plus a margin of 2.25% per annum or (b) a base rate determined by reference to the highest of (1) the base commercial lending rate publicly announced from time to time by PNC Bank, (2) the sum of the Federal Funds Open Rate in effect on such day plus one half of one percent ( 0.5% ) per annum, or (3) the LIBOR rate (adjusted to reflect any required bank reserves) in effect on such day plus 1.00% per annum. In addition to paying interest on outstanding principal under the Credit Agreement, the Borrowers are required to pay a commitment fee, in respect of the unutilized commitments thereunder, of 0.25% per annum, paid quarterly in arrears. The Borrowers are also required to pay a customary letter of credit fee equal to the applicable margin on revolving credit LIBOR loans and fronting fees. The Credit Agreement contains certain customary affirmative covenants (including periodic reporting obligations) and events of default, including upon a change of control. During the year ended July 31, 2019 , the Company did not meet the criteria that would cause its financial covenants to be applicable. At July 31, 2019 , the Company had a readily available borrowing capacity under the Credit Agreement of $13.8 million . As of July 31, 2019 and 2018 , 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 a $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 basis for such calendar year. During the twelve months ended July 31, 2019 , the Company made $8.9 million in excess cash flow payments. 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. At July 31, 2019 , IWCO had a readily available borrowing capacity under its Revolving Facility of $19.0 million . As of July 31, 2019 , the Company had $6.0 million outstanding on the Revolving Facility. As of July 31, 2018 , the Company did not have an outstanding balance on the Revolving Facility. As of July 31, 2019 and 2018 , the principal amount outstanding on the Term Loan was $375.1 million and $390.0 million , respectively. As of July 31, 2019 and 2018 , the current and long-term net carrying value of the Term Loan was $374.2 million and $388.8 million , respectively. July 31, 2019 July 31, 2018 (In thousands) Principal amount outstanding on the Term Loan $ 375,125 $ 390,000 Unamortized debt issuance costs (888 ) (1,162 ) Net carrying value of the Term Loan $ 374,237 $ 388,838 7.50% Convertible Senior Note On February 28, 2019, the Company entered into that certain 7.50% Convertible Senior Note Due 2024 Purchase Agreement (the "SPHG Note Purchase Agreement") with SPHG Holdings, whereby SPHG Holdings agreed to loan the Company $14.9 million in exchange for a 7.50% Convertible Senior Note (the "SPHG Note") in the amount of $14.9 million , due 2024, issued to SPHG Holdings (the "SPHG Note Transaction"). The SPHG Note bears interest at the rate of 7.50% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2019. The SPHG Note will mature on March 1, 2024 (the "SPHG Note Maturity Date"), unless earlier repurchased by the Company or converted by the holder in accordance with their terms prior to such maturity date. The Company has the right to prepay the SPHG Note at any time, upon 10 days' prior written notice, in whole or in part, without penalty or premium, at a price equal to 100% of the then outstanding principal amount of the SPHG Note plus accrued and unpaid interest. The SPHG Note is an unsecured and unsubordinated obligation of the Company, and will rank equal in right of payment with the Company's other unsecured and unsubordinated indebtedness, but will be effectively subordinated in right of payment to any existing and future secured indebtedness and liabilities to the extent of the value of the collateral securing those obligations, and structurally subordinated to the indebtedness and other liabilities of the Company's subsidiaries. The SPHG Note contains other customary terms and conditions, including customary events of default. At its election, the Company may pay some or all of the interest due on each interest payment date by increasing the principal amount of the SPHG Note in the amount of such interest due or any portion thereof (such payment of interest by increasing the principal amount of the SPHG Note referred to as ("PIK Interest"), with the remaining portion of the interest due on such interest payment date (or, at the Company's election, the entire amount of interest then due) to be paid in cash by the Company. Following an increase in the principal amount of the SPHG Note as a result of a payment of PIK Interest, the SPHG Note will bear interest on such increased principal amount from and after the date of such payment of PIK Interest. SPHG has the right to require the Company to repurchase the SPHG Note upon the occurrence of certain fundamental changes, subject to certain conditions, at a repurchase price equal to 100% of the principal amount of the SPHG Note plus accrued and unpaid interest. The Company will have the right to elect to cause the mandatory conversion of the SPHG Note in whole, and not in part, at any time on or after March 6, 2022, subject to certain conditions including that the stock price of the Company exceeds a certain threshold. SPHG has the right, at its option, prior to the close of business on the business day immediately preceding the SPHG Note maturity date, to convert the SPHG Note or a portion thereof that is $1,000 or an integral multiple thereof, into shares of common stock (if the Company has not received a required stockholder approval) or cash, shares of common stock or a combination of cash and shares of common stock, as applicable (if the Company has received a required stockholder approval), at an initial conversion rate of 421.2655 shares of common stock, which is equivalent to an initial conversion price of approximately $2.37 per share (subject to adjustment as provided in the SPHG Note) per $1,000 principal amount of the SPHG Note (the "Conversion Rate"), subject to, and in accordance with, the settlement provisions of SPHG Note. For any conversion of the SPHG Note, if the Company is required to obtain and has not received approval from its stockholders in accordance with NASDAQ Stock Market Rule 5635 to issue 20% or more of the total shares of common stock outstanding upon conversion (including upon any mandatory conversion) of the SPHG Note prior to the relevant conversion date (or, if earlier, the 45th Scheduled trading day immediately preceding the SPHG Note Maturity Date), the Company shall deliver to the converting holder, in respect of each $1,000 principal amount of the SPHG Note being converted, a number of shares of common stock determined by reference to the Conversion Rate, together with a cash payment, if applicable, in lieu of delivering any fractional share of common stock based on the volume weighted average price (VWAP) of its common stock on the relevant conversion date, on the third Business Day immediately following the relevant conversion date. The Company's Board of Directors (the "Board") established a special committee (the "Special Committee"), consisting solely of independent directors not affiliated with SPHG Holdings, to review and consider a financing transaction including a transaction with SPHG. The terms and conditions of the SPHG Note Transaction were determined by the Special Committee to be fair and in the best interests of the Company, and the Special Committee recommended that the Board approve the SPHG Note Transaction and the transactions contemplated thereby. The Board approved such transactions. Warren G. Lichtenstein, our Interim Chief Executive Officer and the Executive Chairman of our Board, is also the Executive Chairman of Steel Partners Holdings GP Inc. ("Steel Holdings GP"), the manager of SPHG Holdings. Jack L. Howard and William T. Fejes, Jr., directors of the Company, are also affiliated with Steel Holdings GP. Glen Kassan, a director and our Vice Chairman of the Board and former Chief Administrative Officer, is also affiliated with Steel Holdings GP. The Company then assessed the features of the SPHG Note and determined that the conversion features should not be bifurcated as a derivative liability, but should be accounted for under the cash conversion subsections of ASC 470. The Company has valued the debt using similar nonconvertible debt as of the original issuance date of the SPHG Note and bifurcated the conversion option associated with the SPHG Note from the host debt instrument and recorded the conversion option of $8.2 million in stockholders' equity. The initial value of the equity component, which reflected the equity conversion feature, was equal to the initial debt discount. The resulting debt discount on the SPHG Note is being accreted to interest expense at the effective interest rate over the estimated life of the SPHG Note. The equity component is included in the additional paid-in capital portion of stockholders' equity on the Company's consolidated balance sheet. In addition, the debt issuance costs were not material. As of July 31, 2019 , the if-converted value of the SPHG Note did not exceed the principal value of the SPHG Note. As of July 31, 2019 , the remaining period over which the unamortized discount will be amortized is 55 months. As of July 31, 2019 , the net carrying value of the SPHG Note was $7.4 million . July 31, 2019 (In thousands) Carrying amount of equity component $ 8,200 Principal amount of Note $ 14,940 Unamortized debt discount (7,508 ) Net carrying amount $ 7,432 During the twelve months ended July 31, 2019 , the Company recognized interest expense associated with the SPHG Note of $1.2 million . Twelve Months Ended July 31, 2019 (In thousands) Interest expense related to contractual interest coupon $ 473 Interest expense related to accretion of the discount 692 $ 1,165 The effective interest rate on the SPHG Note, including accretion of the discount, is 18.47% . The SPHG Note bears interest at 7.50% . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company leases facilities and certain machinery and equipment under various non-cancelable operating leases and executory contracts expiring through December 2021. Certain non-cancelable leases are classified as capital leases and the leased assets are included in property and equipment, at cost. Future annual minimum payments as of July 31, 2019 , are as follows: Operating Leases Capital Lease Obligations Purchase Obligations Debt Principal & Interest Total (In thousands) For the fiscal years ended July 31: 2020 $ 16,534 $ 147 $ 26,800 $ 7,121 $ 50,602 2021 11,755 136 — 7,121 19,012 2022 8,082 104 — 7,121 15,307 2023 4,899 37 — 364,245 369,181 2024 3,544 — — 15,593 19,137 Thereafter 19,895 — — — 19,895 $ 64,709 $ 424 $ 26,800 $ 401,201 $ 493,134 Total rent and equipment lease expense charged to continuing operations was $19.0 million and $19.2 million for the fiscal years ended July 31, 2019 and 2018 , 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, 2019 , 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., 2018-277 (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 Convertible 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 Annual Meeting of Stockholders 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. On June 28, 2019, the Court denied most of the motion to dismiss allowing the matter to proceed. Discovery is proceeding. 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, continues to deny liability, and intends to defend this litigation vigorously. |
DEFINED BENEFIT PENSION PLANS
DEFINED BENEFIT PENSION PLANS | 12 Months Ended |
Jul. 31, 2019 | |
Retirement Benefits [Abstract] | |
DEFINED BENEFIT PENSION PLANS | DEFINED BENEFIT PENSION PLANS As of July 31, 2019 , 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, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 26,651 98 % $ — $ — $ 26,651 Other investments 616 2 % — — 616 $ 27,267 100 % $ — $ — $ 27,267 Fair Value Measurements at Reporting Date Using (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 The aggregate change in benefit obligation and plan assets related to these plans was as follows: July 31, 2019 2018 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 29,849 $ 27,464 Service cost 365 398 Interest cost 633 671 Actuarial loss 5,125 1,655 Employee contributions 72 93 Benefits and administrative expenses paid (197 ) (372 ) Adjustments (20 ) (54 ) Settlements — (21 ) Currency translation (1,289 ) 15 Benefit obligation at end of year 34,538 29,849 Change in plan assets Fair value of plan assets at beginning of year 22,860 21,204 Actual return on plan assets 5,136 1,541 Employer contributions, net 422 402 Employee contributions 73 92 Settlements (19 ) (21 ) Benefits and administrative expenses paid (197 ) (372 ) Currency translation (1,008 ) 14 Fair value of plan assets at end of year 27,267 22,860 Funded status Current liability (13 ) (13 ) Noncurrent liability (7,259 ) (6,976 ) Net amount recognized in statement of financial position as a noncurrent liability $ (7,272 ) $ (6,989 ) The accumulated benefit obligation was approximately $32.4 million and $27.7 million at July 31, 2019 and 2018 , respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows: July 31, 2019 2018 (In thousands) Projected benefit obligation $ 34,538 $ 29,849 Accumulated benefit obligation $ 32,361 $ 27,700 Fair value of plan assets $ 27,267 $ 22,860 Components of net periodic pension cost were as follows: Twelve months ended 2019 2018 (In thousands) Service cost $ 365 $ 398 Interest costs 633 671 Expected return on plan assets (492 ) (529 ) Amortization of net actuarial loss 127 125 Net periodic pension costs $ 633 $ 665 The amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2020 is approximately $4.9 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 2019 2018 Discount rate 1.48 % 2.22 % Rate of compensation increase 1.97 % 1.93 % Weighted-average assumptions used to determine net periodic pension cost was as follows: Twelve months ended 2019 2018 Discount rate 1.46 % 2.21 % Expected long-term rate of return on plan assets 1.45 % 2.20 % Rate of compensation increase 1.92 % 1.94 % 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, 2019 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 2024. 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 2020. Pension Benefit Payments (in thousands) For the fiscal year ended July 31: 2020 205 2021 247 2022 245 2023 294 2024 444 Next 5 years 2,436 The current target allocations for plan assets are primarily insurance contracts. The market value of plan assets using Level 3 inputs is approximately $27.3 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. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On August 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of August 1, 2018. Results for reporting periods beginning after August 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605. The Company recognizes revenue from its contracts with customers primarily from the sale of supply chain management services and marketing solutions offerings. Revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For ModusLink's supply chain management services arrangements and IWCO's marketing solutions offerings, the goods and services are considered to be transferred over time as they are performed. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. ModusLink's revenue primarily comes from the sale of supply chain management services to its clients. Under the new standard, the majority of these arrangements consist of two distinct performance obligations (i.e. a warehousing and inventory management service and a separate kitting, packaging and assembly service), each of which is recognized over time as services are performed using an input method based on the level of efforts expended. A significant portion of ModusLink's revenue from these arrangements continues to be recognized over time as the services are performed based on an input method of efforts expended which corresponds with the transfer of value to the customer. 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 new standard accelerates the recognition of revenue as the Company's performance enhances assets that the customer controls and therefore revenue is recognized over time based on an input method of efforts expended which corresponds with the transfer of value to the customer. Revenue from the sale of perpetual licenses sold in ModusLink's e-Business operations is now recognized at a point in time upon execution of the relevant license agreement and when delivery has taken place. Revenue recognized related to the majority of IWCO's marketing solutions offerings, which typically consist of a single integrated performance obligation, is now recognized over time as the Company performs because the products have no alternative use to the Company. Revenue Recognition In accordance with Topic 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services, and excludes any sales incentives or taxes collected from customers which are subsequently remitted to government authorities. Disaggregation of Revenue The following table presents the Company's revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel. The table also includes a reconciliation of the disaggregated revenue with the reportable segments. Twelve Months Ended July 31, 2019 Supply Chain Direct Marketing Consolidated Total (In thousands) Major Goods/Service Lines Supply chain management services $ 331,022 $ — $ 331,022 Marketing solutions offerings — 486,902 486,902 Other 1,906 — 1,906 $ 332,928 $ 486,902 $ 819,830 Timing of Revenue Recognition Goods transferred over time $ — $ 486,902 $ 486,902 Services transferred over time 332,928 — 332,928 $ 332,928 $ 486,902 $ 819,830 Total Revenue Revenue from contracts with customers $ 332,928 $ 486,902 $ 819,830 $ 332,928 $ 486,902 $ 819,830 Over the fiscal year ended July 31, 2019 , the Company had no revenue recognized at a point in time. Prior period amounts have not been adjusted under the modified retrospective method. Supply chain management services. 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. The majority of these arrangements consist of two distinct performance obligations (i.e. warehousing/inventory management service and a separate kitting/packaging/assembly service), revenue related to each of which is recognized over time as services are performed using an input method based on the level of efforts expended. Marketing solutions offerings. IWCO's revenue is generated through the provision of data-driven marketing solutions, primarily through providing direct mail products to customers. Revenue related to the majority of IWCO's marketing solutions contracts, which typically consist of a single integrated performance obligation, is recognized over time as the Company performs because the products have no alternative use to the Company. Other. Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, and fees for professional services. Revenue related to these arrangements is recognized on a straight-line basis over the term of the agreement or over the term of the agreement in proportion to the costs incurred in satisfying the obligations under the contract. Significant Judgments The Company's contracts with customers may include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For arrangements with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company generally determines standalone selling prices based on the prices charged to customers and uses a range of amounts to estimate standalone selling prices when we sell each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative standalone selling prices of the various products and services. The Company typically has more than one range of standalone selling prices for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the type of customer and geographic region in determining the range of standalone selling prices. The Company may provide credits or incentives to customers, which are accounted for as variable consideration when estimating the transaction price of the contract and amounts of revenue to recognize. The amount of variable consideration to include in the transaction price is estimated at contract inception using either the estimated value method or the most likely amount method based on the nature of the variable consideration. These estimates are updated at the end of each reporting period as additional information becomes available and revenue is recognized only to the extent that it is probable that a significant reversal of any amounts of variable consideration included in the transaction price will not occur. Practical Expedients and Exemptions The Company has elected to make the following accounting policy elections through the adoption of the following practical expedients: Right to Invoice Where applicable, the Company will recognize revenue from a contract with a customer in an amount that corresponds directly with the value to the customer of the Company's performance completed to date and the amount to which the entity has a right to invoice. Sales and Other Similar Taxes The Company will exclude sales taxes and similar taxes from the measurement of transaction price and will ensure that it complies with the disclosure requirements of ASC 235-10-50-1 through 50-6. Significant Financing Component The Company will not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Cost to Obtain a Contract The Company will recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less and there are no renewal periods on which the Company does not pay commissions that are not commensurate with those originally paid. Promised Goods or Services that are Immaterial in the Context of a Contract The Company has elected to assess promised goods or services as performance obligations that are deemed to be immaterial in the context of a contract. As such, the Company will not aggregate and assess immaterial items at the entity level. That is, when determining whether a good or service is immaterial in the context of a contract, the assessment will be made based on the application of ASC 606 at the contract level. Contract Balances Timing of revenue recognition may differ from timing of invoicing to customers. The Company records contract assets and liabilities related to its contracts with customers as follows: • Accounts receivable when revenue is recognized prior to receipt of cash payments and if the right to such amounts is unconditional and solely based on the passage of time. • Contract asset when the Company recognizes revenue based on efforts expended but the right to such amount is conditional upon satisfaction of another performance obligation. Contract assets are primarily comprised of fees related to marketing solutions offerings and supply chain management services. The Company notes that its contract assets are all short-term in nature and are included in prepaid expenses and other current assets in the Company's consolidated balance sheets. • Deferred revenue when cash payments are received or due in advance of performance. Deferred revenue is primarily comprised of fees related to supply chain management services, cloud-based software subscriptions and software maintenance and support service contracts, which are generally billed in advance. Deferred revenue also includes other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The deferred revenue balance is classified as a component of other current liabilities and other long-term liabilities on the Company's consolidated balance sheets. The opening balance of contract assets was $24.0 million as of August 1, 2018. As of July 31, 2019 , the contract asset balance was $21.5 million , which is recorded as a component of prepaid expenses and other current assets. Contract assets are classified as accounts receivable, trade, upon billing to the customer where such amounts become unconditional. The opening balance of current deferred revenue and long-term deferred revenue was $3.7 million and $0.2 million , respectively, as of August 1, 2018. As of July 31, 2019 , current deferred revenue and long-term deferred revenue was $2.9 million and $0.1 million , respectively. Changes in deferred revenue during the twelve months ended July 31, 2019 , were as follows (in thousands): Twelve Months Ended July 31, 2019 Balance at beginning of period $ 3,858 Deferral of revenue 4,624 Recognition of deferred amounts upon satisfaction of performance obligation (5,453 ) Balance at end of period $ 3,029 We expect to recognize approximately $2.9 million of the unearned amount over the twelve months ended July 31, 2020 and the remaining $0.1 million beyond July 31, 2020. Assets Recognized from the Costs to Obtain a Contract with a Customer Prior to the adoption of Topic 606, the Company expensed incremental costs to obtain a contract, which represented commissions, as the liability was incurred. In accordance with Topic 606, the Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the period over which such costs would be amortized is greater than one year. The Company has determined that certain commissions programs meet the requirements to be capitalized. However, as of August 1, 2018, the total commission expense that had been incurred under the commissions programs identified was not material and therefore, the Company determined that no amounts were required to be capitalized at the date of adoption. For the twelve months ended July 31, 2019 , the total commission expense that had been incurred under the commissions programs identified was not material and the Company determined that no amounts were required to be capitalized at July 31, 2019 . The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. The cumulative effect of the changes made to the Company's consolidated August 1, 2018 balance sheet for the adoption of Topic 606 were as follows (in thousands): Balance Sheet July 31, 2018 Adjustments Due to ASU 2014-09 August 1, 2018 Assets Inventories, net $ 47,786 $ (21,233 ) $ 26,553 Prepaid expenses and other current assets 13,415 24,041 37,456 Total current assets 264,281 2,808 267,089 Total assets $ 827,050 $ 2,808 $ 829,858 Liabilities Other current liabilities $ 42,029 $ (3,330 ) $ 38,699 Total current liabilities 276,356 (3,330 ) 273,026 Total liabilities 684,230 (3,330 ) 680,900 Stockholders' equity Accumulated deficit (7,363,569 ) 6,138 (7,357,431 ) Total stockholders' equity 107,628 6,138 113,766 Total liabilities, contingently redeemable preferred stock and stockholders' equity $ 827,050 $ 2,808 $ 829,858 The Company reduced opening accumulated deficit by $6.1 million as of August 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact attributable to the acceleration of revenue related to ModusLink's supply chain management services arrangements and IWCO's marketing solutions offerings where the Company previously recognized revenues upon completion of all services and historically recognized revenue at a point in time (generally upon product shipment or when the products were complete). The adoption of ASC 606 primarily resulted in an acceleration of revenue as of August 1, 2018, which in turn generated additional deferred tax liabilities that ultimately reduced the Company's net deferred tax asset position. As the Company fully reserves its net deferred tax assets in the jurisdictions impacted by the adoption of Topic 606, this impact was offset by a corresponding reduction to the valuation allowance. In accordance with the requirements of the new standard, the disclosure of the impact of the adoption on the Company's consolidated balance sheet and statement of operations was as follows (in thousands, except per share amounts): Balance Sheet: July 31, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Assets Inventories, net $ 23,674 $ 45,853 $ (22,179 ) Prepaid expenses and other current assets 31,445 9,973 21,472 Total current assets 213,324 214,031 (707 ) Total assets $ 731,563 $ 732,270 $ (707 ) Liabilities Other current liabilities $ 39,046 $ 46,641 $ (7,595 ) Total current liabilities 256,850 264,445 (7,595 ) Total liabilities 643,685 651,280 (7,595 ) Stockholders' equity Accumulated deficit (7,426,287 ) (7,433,175 ) 6,888 Total stockholders' equity 52,692 45,804 6,888 Total liabilities, contingently redeemable preferred stock and stockholders' equity $ 731,563 $ 732,270 $ (707 ) Statement of Operations: Twelve months ended July 31, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Net revenue $ 819,830 $ 818,134 $ 1,696 Cost of revenue 670,100 669,154 946 Gross profit 149,730 148,980 750 Loss before income taxes (62,099 ) (62,849 ) 750 Net loss (66,727 ) (67,477 ) 750 Net loss attributable to common stockholders $ (68,856 ) $ (69,606 ) $ 750 Basic and diluted net loss per share attributable to common stockholders: $ (1.13 ) $ (1.14 ) $ 0.01 The impact to revenues for the twelve month period ended July 31, 2019 was an increase of $1.7 million as a result of applying Topic 606 primarily related to the acceleration of revenue related to IWCO's marketing solutions arrangements for certain contracts with customers that under Topic 606 are being recognized over time based on an input method of efforts expended which depicts the transfer of value to the customer. |
OTHER GAINS (LOSSES), NET
OTHER GAINS (LOSSES), NET | 12 Months Ended |
Jul. 31, 2019 | |
Other Income and Expenses [Abstract] | |
OTHER GAINS (LOSSES), NET | OTHER GAINS (LOSSES), NET The following schedule reflects the components of "Other gains (losses), net": Twelve Months Ended 2019 2018 (In thousands) Foreign currency exchange gains, net $ 337 $ 1,055 Derecognition of accrued pricing liabilities 4,573 — Gain, net on Trading Securities — 1,876 Other, net (307 ) (708 ) $ 4,603 $ 2,223 Other gains, net totaled approximately $4.6 million for the fiscal year ended July 31, 2019 . During the fiscal year ended July 31, 2019 , the Company recorded gains of $4.6 million from the derecognition of accrued pricing liabilities, as discussed in Note 6. The balance consists primarily of $0.3 million in net realized and unrealized foreign exchange gains, offset by $(0.3) million in other losses, net. Other gains, 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 the sale of publicly traded securities and $1.1 million in net realized and unrealized foreign exchange gains, offset by other gain and losses. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED PAYMENTS | SHARE-BASED PAYMENTS Stock Option Plans During the fiscal year ended July 31, 2019 , 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 Director Plan (the "2005 Plan"). Historically, the Company has had the 2004 Stock Incentive Plan (the "2004 Plan"), the 2002 Non-Officer Employee Stock Incentive Plan (the "2002 Plan"), and the 2000 Stock Incentive Plan (the "2000 Plan"). Options granted under the 2010 Plan are generally exercisable as to 25% of the shares underlying the options beginning one year after the date of grant, with the options being exercisable as to the remaining shares in equal monthly installments over the next three years . The Company may also grant awards other than stock options under the 2010 Plan. Options granted under the 2005 Plan are exercisable in equal monthly installments over three years , and have a term of ten years . As of December 2010, no additional grants may be issued under this plan. Stock options granted under all other plans have contractual terms of seven years . 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 directors of the Company. The 4.0 million restricted stock vested immediately on the grant date. The 1.5 million market performance based restricted stock grants do not expire and vest upon the attainment of target stock price hurdles. As of July 31, 2019 , 1.0 million of the market performance based restricted stock grants had met the target stock price hurdles. 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, 2019 , 4,498,546 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, 2019 and 2018 , the Company issued approximately 17,000 and 10,000 shares, respectively, under the ESPP. Approximately 109,000 shares are available for future issuance as of July 31, 2019 . 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, 2019 and 2018 : Twelve Months Ended July 31, 2019 2018 Cost of revenue $ — $ 14 Selling, general and administrative 1,267 10,787 $ 1,267 $ 10,801 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, 2019 and 2018 . As share-based compensation expense recognized in the Consolidated Statements of Operations for the fiscal years ended July 31, 2019 and 2018 is based on awards ultimately expected to vest. In accordance with ASU 2016-09, the Company has elected to true up for forfeitures as they occur. Stock Options A summary of option activity for the fiscal year ended July 31, 2019 is as follows: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands, except exercise price and years) Stock options outstanding, July 31, 2018 438 $ 3.99 Granted — — Exercised — — Forfeited or expired (113 ) 3.74 Stock options outstanding, July 31, 2019 325 4.07 1.12 $ — Stock options exercisable, July 31, 2019 325 $ 4.07 1.12 $ — As of July 31, 2019 , unrecognized share-based compensation related to stock options was immaterial. As of July 31, 2019 , there were 0.3 million stock options that were vested and expected to vest in the future with a weighted- average remaining contractual term of 1.1 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, 2019 and 2018 was $1.2 million and $10.7 million , respectively. A summary of the activity of the Company's nonvested stock for the fiscal year ended July 31, 2019 , is as follows: Number of Shares Weighted-Average Grant Date Fair Value (share amounts in thousands) Nonvested stock outstanding, July 31, 2018 1,165 $ 0.44 Granted 405 1.73 Vested (1,165 ) 0.44 Forfeited — — Nonvested stock outstanding, July 31, 2019 405 $ 1.73 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, 2019 and 2018 was approximately $0.5 million and $11.5 million , respectively. As of July 31, 2019 , there was approximately $0.3 million of total unrecognized compensation cost related to nonvested stock to be recognized over a weighted-average period of 0.4 years . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of loss from continuing operations before provision for income taxes are as follows: Twelve Months Ended 2019 2018 (In thousands) Income (loss) from operations before income taxes: U.S. $ (68,959 ) $ (60,574 ) Foreign 6,860 25,286 Total loss from operations before income taxes $ (62,099 ) $ (35,288 ) The components of income tax expense have been recorded in the Company's consolidated financial statements as follows: Twelve Months Ended 2019 2018 (In thousands) Income tax expense (benefit) from operations $ 4,670 $ (71,202 ) Total income tax expense (benefit) $ 4,670 $ (71,202 ) The components of income tax expense from operations consist of the following: Twelve Months Ended 2019 2018 (In thousands) Current provision Federal $ — $ — State 288 — Foreign 1,525 7,592 1,813 7,592 Deferred provision: Federal 1,563 (76,168 ) State 753 (2,352 ) Foreign 541 (274 ) 2,857 (78,794 ) Total tax provision $ 4,670 $ (71,202 ) During the year ended July 31, 2017 , the Company elected to early adopt ASU No. 2015-17, which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This guidance allows for adoption on either a prospective or retrospective basis. As of July 31, 2019 , the Company recorded a non-current deferred tax asset of $1.0 million and a non-current deferred tax liability of $0.1 million in Other Assets, and Other Long-term Liabilities, respectively. As of July 31, 2018 , the Company recorded a non-current deferred tax asset of $1.6 million and a non-current deferred tax liability of $0.1 million in Other Assets and Other Long-term Liabilities, respectively. The components of deferred tax assets and liabilities are as follows: July 31, July 31, (In thousands) Deferred tax assets: Accruals and reserves $ 21,297 $ 16,070 Tax basis in excess of financial basis of investments in affiliates 6,534 6,232 Tax basis in excess of financial basis for intangible and fixed assets 187 311 Net operating loss and capital loss carry forwards 469,735 468,129 Total gross deferred tax assets 497,753 490,742 Less: valuation allowance (451,189 ) (438,467 ) Net deferred tax assets $ 46,564 $ 52,275 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (43,885 ) $ (50,141 ) Convertible Debt (1,761 ) (634 ) Total gross deferred tax liabilities (45,646 ) (50,775 ) Net deferred tax asset $ 918 $ 1,500 The net change in the total valuation allowance for the fiscal year ended July 31, 2019 was an increase of approximately $12.7 million . This increase is primarily due to the U.S. valuation allowance. 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, 2018 was a decrease of approximately $333.4 million . The Company has certain deferred tax benefits, including those generated by net operating losses and certain other tax attributes (collectively, the "Tax Benefits"). The Company's ability to use these Tax Benefits could be substantially limited if it were to experience an "ownership change," as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). In general, an ownership change would occur if there is a greater than 50-percentage point change in ownership of securities by stockholders owning (or deemed to own under Section 382 of the Code) five percent or more of a corporation's securities over a rolling three year period. 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 repatriation of such earnings through a 100% dividends-received deduction. Other provisions of the TCJA for the Company in FY2019 include updated regulations under Section 163j as well as Global Intangible Low Taxed Income ("GILTI") as well as Base Erosion Anti-Abuse Tax ("BEAT") provisions. The Company's interest expense deduction under 163j will be limited for tax purposes based on calculation of 30% of its EBITDA on a tax basis. The Company has estimated its fiscal year 2019 GILTI inclusion based on its current year foreign activity. The foreign entities have minor E&P adjustments that will be factored in as part of the tax return filing. These amounts are not material and will not have a significant impact on the overall tax provision or disclosure. Due to the net operating losses available in the U.S., the Company is not entitled to a Section 250 deduction which is why the total income amount has been recorded as the GILTI inclusion. The Company has made an accounting policy election, as allowed by the SEC and FASB, to recognize the impact of GILTI within the period incurred. Therefore, no U.S. deferred taxes are provided in GILTI inclusions of future foreign subsidiary earnings. 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 final calculation of net accumulated earnings and profits resulted in an accumulated deficit, and therefore did not result in a Transition Tax. This calculation was finalized with the filing of the fiscal year 2018 tax return. In December 2017, the SEC staff issued Staff Accounting Bulletin, or SAB, No. 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for income tax effects of the TCJA. As of December 31, 2018, the Company finalized its accounting for the TCJA and no measurement adjustments were recorded. As more fully described in Note 4, 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 $77.0 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 that its valuation allowance in the same amount of IWCO's full deferred tax liability may be released and the benefit be recognized in income. The Company has net operating loss carryforwards for federal and state tax purposes of approximately $2.1 billion and $160.0 million , respectively, at July 31, 2019 . 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 2039 . The Company has a foreign net operating loss carryforward of approximately $72.6 million , of which $56.7 million has an indefinite carryforward period. In addition, the Company has $19.4 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 21.0% to income (loss) from continuing operations before income taxes as a result of the following: Twelve Months Ended July 31, 2019 2018 (In thousands) Computed "expected" income tax expense (benefit) $ (13,041 ) $ (9,467 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance 16,158 (329,415 ) Foreign dividends — 7,379 Foreign tax rate differential (593 ) (1,948 ) Federal rate change — 280,438 Nondeductible goodwill impairment — 191 Nondeductible expenses 2,484 (15,852 ) Foreign withholding taxes 336 1,961 Addition (reversal) of uncertain tax position reserves 645 (48 ) State benefit of U.S. Loss — (4,654 ) State income taxes, net of federal benefit 113 — Other (1,432 ) 213 Actual income tax expense $ 4,670 $ (71,202 ) 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, 2019 and 2018 , the total amount of the liability for unrecognized tax benefits, including interest, related to federal, state and foreign taxes was approximately $2.4 million and $1.6 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, 2015 through July 31, 2019 . 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 2011 through 2018 tax years remain subject to examination in most locations while the Company's 2007 through 2018 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, 2019 2018 (In thousands) Balance as of beginning of year $ 1,525 $ 681 Additions for current year tax positions 704 903 Currency translation (22 ) — Reductions for lapses in statute of limitations — (59 ) Balance as of end of year $ 2,207 $ 1,525 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, 2019 , the Company has not recognized any material interest expense related to uncertain tax positions. As of July 31, 2019 and 2018 , the Company had recorded liabilities for increases in interest expense related to uncertain tax positions in the amount of $0.2 million and $0.1 million , 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, 2019 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive income, net of income taxes, are as follows: Foreign currency items Pension items Unrealized gains (losses) on securities Total (In thousands) Accumulated other comprehensive income (loss) at July 31, 2018 $ 6,348 $ (3,795 ) $ 181 $ 2,734 Foreign currency translation adjustment (1,331 ) — — (1,331 ) Net unrealized holding loss on securities — — (85 ) (85 ) Pension liability adjustments — (284 ) — (284 ) Net current-period other comprehensive loss (1,331 ) (284 ) (85 ) (1,700 ) Accumulated other comprehensive income (loss) at July 31, 2019 $ 5,017 $ (4,079 ) $ 96 $ 1,034 In the fiscal years ended July 31, 2019 and 2018 , the Company recorded approximately $0.1 million and $0.1 million , respectively, in taxes related to other comprehensive income. |
STATEMENT OF CASH FLOWS SUPPLEM
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | 12 Months Ended |
Jul. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION The amount of cash, cash equivalents and restricted cash as of July 31, 2019 and 2018 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2019 2018 (In thousands) Cash and cash equivalents $ 32,548 $ 92,138 Funds held for clients 13,516 11,688 Cash, cash equivalents and restricted cash $ 46,064 $ 103,826 Cash used for operating activities reflect cash payments for interest and income taxes as follows: Years Ended July 31, 2019 2018 (In thousands) Cash paid for interest $ 38,525 $ 24,642 Cash paid for income taxes $ 5,451 $ 2,567 Cash paid for taxes can be higher than income tax expense as shown on the Company's consolidated statements of operations due to prepayments made in certain jurisdictions as well as to the timing of required payments in relation to recorded expense, which can cross fiscal years. Non-cash Activities Non-cash financing activities during the fiscal years ended July 31, 2019 and 2018 included the issuance of approximately 0.4 million and 6.7 million shares, respectively, of non-vested common stock, valued at approximately $0.7 million and $11.5 million , respectively, to certain employees and non-employees of the Company. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Preferred Stock The Company's 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 Board 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 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 SEC 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 the Special Committee of the Board consisting of independent directors not affiliated with 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 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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, restricted cash, 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 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, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Level 1 Level 2 Level 3 Assets: Money market funds $ 365 $ 365 $ — $ — 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 $ — $ — The following table presents the pension plan assets measured at fair value on a recurring basis as of July 31, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 26,651 98 % $ — $ — $ 26,651 Other investments 616 2 % — — 616 $ 27,267 100 % $ — $ — $ 27,267 Fair Value Measurements at Reporting Date Using (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 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, 2019 and 2018 : July 31, 2019 2018 (In thousands) Fair value of plan assets at beginning of year $ 22,860 $ 21,204 Actual return on plan assets 5,136 1,541 Employer contributions, net 422 402 Employee contributions 73 92 Settlements (19 ) (21 ) Benefits and administrative expenses paid (197 ) (372 ) Currency translation (1,008 ) 14 Fair value of plan assets at end of year $ 27,267 $ 22,860 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, restricted cash and debt, and are reflected in the financial statements at cost. With the exception of the SPHG Note, 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 the liability component of the SPHG Note and our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. 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 Notes payable which were not carried at fair value: July 31, 2018 Carrying Amount Fair Value Fair Value Hierarchy (In thousands) Notes payable $ 64,530 $ 66,658 Level 1 The fair value of the Company's Notes payable represented the value at which its lenders could trade its debt within the financial markets, and did 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 were traded and their fair values were based upon traded prices as of the reporting date. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION During the twelve months ended July 31, 2019, the Company changed the determination of its operating segments. The Company has two operating segments: Supply Chain and Direct Marketing. This change was made to be consistent with the information provided to the Company's chief operating decision-maker ("CODM") for purposes of making decisions about allocating resources and assessing performance and quantitative thresholds. The Company has determined that it has two reportable segments: Supply Chain and Direct Marketing. The July 31, 2018 financial information has been restated to reflect these changes on a comparable basis. The Company also has Corporate-level activity, which consists primarily of costs associated with certain corporate administrative functions such as legal, finance, share-based compensation and acquisition costs which are not allocated to the Company's reportable segments. The Corporate-level balance sheet information includes cash and cash equivalents, Notes payables and other assets and liabilities which are not identifiable to the operations of the Company's operating segments. All significant intra-segment amounts have been eliminated. Management evaluates segment performance based on segment net revenue, operating income (loss) and "adjusted operating income (loss)", which is defined as the operating income (loss) excluding net charges related to depreciation, amortization of intangible assets, long-lived asset impairment, share-based compensation and restructuring. These items are excluded because they may be considered to be of a non-operational or non-cash nature. Historically, the Company has recorded significant impairment and restructuring charges and therefore management uses adjusted operating income (loss) to assist in evaluating the performance of the Company's core operations. Summarized financial information of the Company's continuing operations by operating segment is as follows: Twelve Months Ended July 31, 2019 2018 (In thousands) Net revenue: Supply Chain $ 332,928 $ 345,900 Direct Marketing 486,902 299,358 $ 819,830 $ 645,258 Operating income (loss): Supply Chain $ (3,822 ) $ 613 Direct Marketing (9,154 ) 10,740 Total segment operating income (loss) (12,976 ) 11,353 Corporate-level activity (12,303 ) (19,659 ) Total operating loss (25,279 ) (8,306 ) Total other expense (36,820 ) (26,982 ) Loss before income taxes $ (62,099 ) $ (35,288 ) For the twelve months ended July 31, 2018 , net revenue and operating income associated with Direct Marketing is for the period from December 15, 2017 to July 31, 2018 . For this period, the Direct Marketing operating income includes certain purchase accounting adjustments associated with the IWCO acquisition. July 31, July 31, (In thousands) Total assets: Supply Chain $ 112,712 $ 120,123 Direct Marketing 600,390 642,820 Sub-total—segment assets 713,102 762,943 Corporate 18,461 64,107 $ 731,563 $ 827,050 Summarized financial information of the Company's net revenue from external customers by group of services is as follows: Twelve Months Ended 2019 2018 (In thousands) Services: Supply Chain $ 332,928 $ 345,900 Products: Direct Marketing 486,902 299,358 $ 819,830 $ 645,258 As of July 31, 2019 and 2018 , approximately $86.3 million and $101.8 million of the Company's long-lived assets, respectively, were located in the U.S. For the fiscal year ended July 31, 2019 , the Company's net revenues within U.S., China, Netherlands and Czech Republic were $557.2 million , $142.4 million , $51.4 million and $4.7 million , respectively. For the fiscal year ended July 31, 2018 , the Company's net revenues within U.S., China, Netherlands and Czech Republic were $358.3 million , $112.3 million , $59.5 million and $48.7 million , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jul. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As of June 21, 2019, SPHG Holdings and its affiliates, including Steel Partners Holdings L.P. ("Steel Holdings"), Handy & Harman, Ltd. ("HNH"), Steel Partners, Ltd. ("SPL"), beneficially owned approximately 56.3% of our outstanding capital stock, including shares of Series C Convertible Preferred Stock, par value $0.01 per share that vote on an as-converted basis together with our Common Stock. Warren G. Lichtenstein, our Interim Chief Executive Officer and the Executive Chairman of our Board, is also the Executive Chairman of Steel Holdings GP. Glen Kassan, our Vice Chairman of the Board and former Chief Administrative Officer, is an employee of Steel Services Ltd. ("Steel Services"). Jack L. Howard, the President and a director of Steel Holdings GP, was appointed to the Board upon the closing of the Preferred Stock Transaction described below. William T. Fejes, the Chief Operating Officer of Steel Holdings, was appointed to the Board upon the closing of the Preferred Stock Transaction described below. SPHG Note Transaction On February 28, 2019, the Company entered into that certain the SPHG Note Purchase Agreement with SPHG Holdings, whereby SPHG Holdings agreed to loan the Company $14.9 million in exchange for a 7.50% Convertible Senior Note due 2024. As of July 31, 2018, SPHG held $14.9 million principal amount of the Company's 5.25% Convertible Senior Notes. The Notes matured on March 1, 2019, with a balance due of $65.6 million , including interest to the March 1, 2019 maturity date. The total $65.6 million balance due was paid in full by the Company from available cash on-hand and $14.9 million from the proceeds of the SPHG Note Transaction. See Note 7, "Debt." 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, to SPHG Holdings at a price of $1,000 per share, for an aggregate purchase consideration of $35.0 million . 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, which has been filed with the Secretary of State of the State of Delaware. 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 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 (the "2015 Management Services Agreement"). SP Corporate is an indirect wholly owned subsidiary of Steel Holdings and is a related party. Pursuant to this agreement, SP Corporate provided the Company and its subsidiaries with the services of certain employees, including certain executive officers, and other corporate services. On June 14, 2019, the Company entered into a new agreement (the "2019 Management Services Agreement") with Steel Services, an indirect wholly owned subsidiary of Steel Holdings. The 2019 Management Services Agreement was effective as of June 1, 2019. The 2019 Management Services Agreement supersedes all prior agreements between the Company and Steel Services, including the 2015 Management Services Agreement. Total expenses incurred related to the 2015 Management Services Agreement and the 2019 Management Services Agreement for the twelve months ended July 31, 2019 and 2018 were $1.8 million and $1.9 million , respectively. As of July 31, 2019 and 2018 , amounts due to SP Corporate and Steel Services were $0.5 million and $0.2 million , respectively. 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 directors Messrs. Howard, Fejes and Lichtenstein, the Executive Chairman of the Board, in each case effective upon the closing of the IWCO Acquisition (the "Grant Date"). Messrs, Howard and Lichtenstein are affiliated with Steel Holdings GP, which is a wholly-owned subsidiary of Steel Holdings. Mr. Fejes is currently affiliated with Steel Services, an indirect wholly owned subsidiary of Steel Holdings. These awards were measured based on the fair market value on the Grant Date. Air Travel During twelve months ended July 31, 2018, the Company reimbursed SP General Service, LLC., a wholly owned subsidiary of SPL, for air travel in the amount of $0.5 million , which was primarily related to the acquisition of IWCO and its integration. |
PARENT COMPANY CONDENSED FINANC
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Jul. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | 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 $9.6 million at July 31, 2019 , 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, July 31, ASSETS Cash and cash equivalents $ 4,083 $ 7,978 Prepaid expenses and other current assets 227 120 Total current assets 4,310 8,098 Investments in affiliates 96,940 188,534 Other assets 337 87 Due from subsidiaries — 13,579 Total assets $ 101,587 $ 210,298 LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK & STOCKHOLDERS' EQUITY Accounts payable $ 1,253 $ 674 Accrued expenses 2,364 2,274 Convertible Notes payable — 50,274 Total current liabilities 3,617 53,222 Convertible Notes payable 7,432 14,256 Due to subsidiaries 2,660 — Total long-term liabilities 10,092 14,256 Total liabilities 13,709 67,478 Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2019 and 2018 35,186 35,192 Stockholders' equity: Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at July 31, 2019 and July 31, 2018; zero shares issued and outstanding at July 31, 2019 and 2018 — — Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 61,805,856 issued and outstanding shares at July 31, 2019; 60,742,859 issued and outstanding shares at July 31, 2018 618 608 Additional paid-in capital 7,477,327 7,467,855 Accumulated deficit (7,426,287 ) (7,363,569 ) Accumulated other comprehensive income 1,034 2,734 Total stockholders' equity 52,692 107,628 Total liabilities, contingently redeemable preferred stock and stockholders' equity $ 101,587 $ 210,298 STEEL CONNECT, INC. (Parent Only) STATEMENTS OF OPERATIONS (in thousands) Twelve Months Ended July 31, 2019 2018 Selling, general and administrative $ 12,303 $ 16,742 Total operating expenses 12,303 16,742 Operating loss (12,303 ) (16,742 ) Other income (expense): Interest expense (6,081 ) (8,427 ) Other income (expense), net (306 ) 6,807 Total other expense (6,387 ) (1,620 ) Loss before income taxes (18,690 ) (18,362 ) Equity (gains) losses of subsidiaries, net of tax 48,079 (54,276 ) Gains on investments in affiliates, net of tax (42 ) (801 ) Net income (loss) $ (66,727 ) $ 36,715 STEEL CONNECT, INC. (Parent Only) STATEMENTS OF CASH FLOWS (in thousands) Twelve Months Ended 2019 2018 Cash flows from operating activities: Net income (loss) $ (66,727 ) $ 36,715 Adjustments to reconcile net income (loss) to net cash used in operating activities: Amortization of deferred financing costs 243 388 Accretion of debt discount 3,433 4,384 Share-based compensation 1,267 10,763 Non-cash (gains) losses, net 7 (354 ) Equity (gains) losses of subsidiaries, net of tax 48,079 (54,276 ) Gains on investments in affiliates and impairments (42 ) (801 ) Changes in operating assets and liabilities, net of business acquired: Prepaid expenses and other current assets (107 ) (36 ) Accounts payable and accrued expenses 669 698 Other assets and liabilities (250 ) (1,860 ) Net cash used in operating activities (13,428 ) (4,379 ) Cash flows from investing activities: Intercompany advances, net 64,332 (22,216 ) Net cash provided by (used in) investing activities 64,332 (22,216 ) Cash flows from financing activities: Proceeds from issuance of preferred stock — 35,000 Proceeds from issuance of Convertible Note 14,940 — Payments on maturity of Convertible Notes (63,925 ) — Payment of preferred dividends (2,129 ) (1,143 ) Purchase of the Company's Convertible Notes (3,700 ) — Proceeds from issuance of common stock 15 8 Net cash provided by (used in) financing activities (54,799 ) 33,865 Net increase (decrease) in cash and cash equivalents (3,895 ) 7,270 Cash and cash equivalents at beginning of period 7,978 708 Cash and cash equivalents at end of period $ 4,083 $ 7,978 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements of the Company include the results of its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company accounts for investments in businesses in which it owns between 20% and 50% of the voting interest using the equity method, if the Company has the ability to exercise significant influence over the investee company. All other investments in privately held businesses over which the Company does not have the ability to exercise significant influence, or for which there is not a readily determinable market value, are accounted for under the cost method of accounting. |
Use of Estimates | Use of Estimates The preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, allowance for doubtful accounts, inventories, fair value of its trading and available-for-sale securities, intangible assets, income taxes, valuation of long-lived assets, impairments, contingencies, restructuring charges, litigation, pension obligations and the fair value of stock options and share bonus awards granted under the Company's stock based compensation plans. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. |
Revenue Recognition | Revenue Recognition On August 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of August 1, 2018. Results for reporting periods beginning after August 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605. The Company recognizes revenue from its contracts with customers primarily from the sale of supply chain management services and marketing solutions offerings. Revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For ModusLink's supply chain management services arrangements and IWCO's marketing solutions offerings, the goods and services are considered to be transferred over time as they are performed. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. ModusLink's revenue primarily comes from the sale of supply chain management services to its clients. Under the new standard, the majority of these arrangements consist of two distinct performance obligations (i.e. a warehousing and inventory management service and a separate kitting, packaging and assembly service), each of which is recognized over time as services are performed using an input method based on the level of efforts expended. A significant portion of ModusLink's revenue from these arrangements continues to be recognized over time as the services are performed based on an input method of efforts expended which corresponds with the transfer of value to the customer. 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 new standard accelerates the recognition of revenue as the Company's performance enhances assets that the customer controls and therefore revenue is recognized over time based on an input method of efforts expended which corresponds with the transfer of value to the customer. Revenue from the sale of perpetual licenses sold in ModusLink's e-Business operations is now recognized at a point in time upon execution of the relevant license agreement and when delivery has taken place. Revenue recognized related to the majority of IWCO's marketing solutions offerings, which typically consist of a single integrated performance obligation, is now recognized over time as the Company performs because the products have no alternative use to the Company. In accordance with Topic 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services, and excludes any sales incentives or taxes collected from customers which are subsequently remitted to government authorities. Supply chain management services. 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. The majority of these arrangements consist of two distinct performance obligations (i.e. warehousing/inventory management service and a separate kitting/packaging/assembly service), revenue related to each of which is recognized over time as services are performed using an input method based on the level of efforts expended. Marketing solutions offerings. IWCO's revenue is generated through the provision of data-driven marketing solutions, primarily through providing direct mail products to customers. Revenue related to the majority of IWCO's marketing solutions contracts, which typically consist of a single integrated performance obligation, is recognized over time as the Company performs because the products have no alternative use to the Company. Other. Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, and fees for professional services. Revenue related to these arrangements is recognized on a straight-line basis over the term of the agreement or over the term of the agreement in proportion to the costs incurred in satisfying the obligations under the contract. Significant Judgments The Company's contracts with customers may include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For arrangements with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company generally determines standalone selling prices based on the prices charged to customers and uses a range of amounts to estimate standalone selling prices when we sell each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative standalone selling prices of the various products and services. The Company typically has more than one range of standalone selling prices for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the type of customer and geographic region in determining the range of standalone selling prices. The Company may provide credits or incentives to customers, which are accounted for as variable consideration when estimating the transaction price of the contract and amounts of revenue to recognize. The amount of variable consideration to include in the transaction price is estimated at contract inception using either the estimated value method or the most likely amount method based on the nature of the variable consideration. These estimates are updated at the end of each reporting period as additional information becomes available and revenue is recognized only to the extent that it is probable that a significant reversal of any amounts of variable consideration included in the transaction price will not occur. Contract Balances Timing of revenue recognition may differ from timing of invoicing to customers. The Company records contract assets and liabilities related to its contracts with customers as follows: • Accounts receivable when revenue is recognized prior to receipt of cash payments and if the right to such amounts is unconditional and solely based on the passage of time. • Contract asset when the Company recognizes revenue based on efforts expended but the right to such amount is conditional upon satisfaction of another performance obligation. Contract assets are primarily comprised of fees related to marketing solutions offerings and supply chain management services. The Company notes that its contract assets are all short-term in nature and are included in prepaid expenses and other current assets in the Company's consolidated balance sheets. • Deferred revenue when cash payments are received or due in advance of performance. Deferred revenue is primarily comprised of fees related to supply chain management services, cloud-based software subscriptions and software maintenance and support service contracts, which are generally billed in advance. Deferred revenue also includes other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The deferred revenue balance is classified as a component of other current liabilities and other long-term liabilities on the Company's consolidated balance sheets. |
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. |
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 was estimated using quoted market prices. 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 |
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 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 methods. We continuously monitor inventory balances and record inventory provisions for any excess of the cost of the inventory over its estimated net realizable value. We also monitor inventory balances for obsolescence and excess quantities as compared to projected demands. Our inventory methodology is based on assumptions about average shelf life of inventory, forecasted volumes, forecasted selling prices, contractual provisions with our clients, write-down history of inventory and market conditions. While such assumptions may change from period to period, in determining the net realizable value of our inventories, we use the best information available as of the balance sheet date. If actual market conditions are less favorable than those projected, or we experience a higher incidence of inventory obsolescence because of rapidly changing technology and client requirements, additional inventory provisions may be required. Once established, write-downs of inventory are considered permanent adjustments to the cost basis of inventory and cannot be reversed due to subsequent increases in demand forecasts. IWCO's inventory consists primarily of raw material (paper) used to produce direct mail packages and work-in-process, finished goods are generally not a significant element of the inventory as they are generally mailed after the production and sorting process. |
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." The Company's policy is to perform its annual impairment testing for its business units during the fourth quarter 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. |
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, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. In accordance with the Company's accounting policy, interest and penalties related to uncertain tax positions is included in the "income tax expense" line of the Consolidated Statements of Operations. See Note 13, "Income Taxes," for additional information. |
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. In accordance with ASU 2016-09, the Company has elected to true up for forfeitures as they occur. 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 | 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 from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. On August 1, 2018, the Company adopted this guidance and all the related amendments using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient ASC 606-10-65-1-(f)-4, which did not have a material effect on the Company's assessment of the cumulative effect adjustment upon adoption. The Company recognized the cumulative effect of initially applying the new standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is effective for public companies for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all entities. The Company will adopt the provisions of this guidance on August 1, 2019. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which clarified various aspects of the guidance under ASU 2016-02. Originally, entities were required to adopt ASU 2016-02 using a modified retrospective approach, which required prior periods to be presented under this new standard with certain practical expedients available. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The Company will elect to utilize the transition package of practical expedients permitted within the new standard, which among other things, allows the Company to carryforward the historical lease classification. The Company will make an accounting policy election that will keep leases with an initial term of 12 months or less off the Company's Consolidated Balance Sheets and will result in recognizing those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The Company expects adoption of the new standard will result in the recording of additional net lease assets and lease liabilities of approximately $53.7 million and $55.3 million , respectively, as of August 1, 2019. Adoption of the standard will not materially impact the Company's Consolidated Statements of Operations or Consolidated Statements of Cash Flows. In January 2017 the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. The revised guidance eliminates Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment loss will instead be measured at the amount by which a reporting unit's carry amount exceeds its fair value, not to exceed the carrying amount of goodwill. The Company has elected to early adopt this standard as of July 31, 2019. Its adoption did not have an impact on the Company's consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715), which requires that the service cost component of net periodic pension and postretirement benefit cost be presented in the same line item as other employee compensation costs, while the other components be presented separately as non-operating income (expense). This ASU became effective beginning in the first quarter of fiscal year 2019. The adoption of the guidance did not have a material impact on the Company's consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). This standard provides an option to reclassify stranded tax effects within accumulated other comprehensive income (loss) to retained earnings due to the U.S. federal corporate income tax rate change in the Tax Cuts and Jobs Act of 2017. This standard was effective for interim and annual reporting periods beginning after December 15, 2018. We did not exercise the option to make this reclassification. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances, which is similar to what is required today for SEC Registrants. This ASU was effective for the Company beginning in the first quarter of fiscal year 2019. The Company's Consolidated Statements of Cash Flows reflect its adoption. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This new standard was created to simplify the accounting for share-based payments to nonemployees. This standard provides guidance on how to account for share-based payment transactions with nonemployees in which a grantor acquires goods or services to be used or consumed in the grantor's own operations by issuing share-based payment awards. The amendments in ASU 2018-07 are effective for the Company's 2020 fiscal year. The Company is currently evaluating the potential impact of this new guidance. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements. The amendments in ASU 2018- 13 are effective for the Company's 2021 fiscal year, except that the standard permits an entity to early adopt any removed or modified disclosures upon issuance of ASU No. 2018-13 and delay adoption of the additional disclosures until the effective date. Because ASU 2018-13 affects disclosure only, the Company does not expect that the full adoption of this standard will have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension and other post-retirement plans. The amendments in ASU 2018-14 are effective for the Company's 2022 fiscal year. Because ASU 2018-14 affects disclosure only, the Company does not expect that the adoption of this standard will have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The amendments in ASU 2018-15 are effective for the Company's 2021 fiscal year. The Company is currently evaluating the potential impact of this new guidance. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The allowance for doubtful accounts consisted of the following: July 31, July 31, (In thousands) Balance at beginning of year $ 480 $ 616 Provisions charged to expense 1,418 211 Accounts written off (94 ) (347 ) $ 1,804 $ 480 |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: July 31, July 31, (In thousands) Cash and bank deposits $ 32,183 $ 44,952 Money market funds 365 47,186 $ 32,548 $ 92,138 The amount of cash, cash equivalents and restricted cash as of July 31, 2019 and 2018 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2019 2018 (In thousands) Cash and cash equivalents $ 32,548 $ 92,138 Funds held for clients 13,516 11,688 Cash, cash equivalents and restricted cash $ 46,064 $ 103,826 |
Components of Inventories | Inventories consisted of the following: July 31, July 31, (In thousands) Raw materials $ 21,322 $ 23,208 Work-in-process 587 16,147 Finished goods 1,765 8,431 $ 23,674 $ 47,786 |
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, 2019 and 2018 . Twelve Months Ended 2019 2018 (In thousands, except per share data) Net income (loss) $ (66,727 ) $ 36,715 Less: Preferred dividends on redeemable preferred stock (2,129 ) (1,335 ) Net income (loss) attributable to common stockholders (68,856 ) 35,380 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 $ (68,856 ) $ 43,794 Weighted average common shares outstanding 61,180 59,179 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 61,180 81,899 Basic net earnings (loss) per share attributable to common stockholders: $ (1.13 ) $ 0.60 Diluted net earnings (loss) per share attributable to common stockholders: $ (1.13 ) $ 0.53 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment at Cost | Property and equipment at cost, consists of the following: July 31, 2019 2018 (In thousands) Land $ 942 $ 942 Machinery and equipment 99,961 97,149 Leasehold improvements 23,711 21,917 Software 52,961 52,082 Other 24,230 28,147 201,805 200,237 Less: Accumulated depreciation and amortization (110,537 ) (93,605 ) Property and equipment, net $ 91,268 $ 106,632 |
ACQUISITION OF IWCO DIRECT (Tab
ACQUISITION OF IWCO DIRECT (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Summary of Preliminary Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed at the date of the acquisition: As Originally Reported Adjustments As Revised (In thousands) Accounts receivable $ 47,841 $ (433 ) $ 47,408 Inventories 27,165 5,829 32,994 Other current assets 7,427 3,197 10,624 Property and equipment 87,976 477 88,453 Intangible assets 210,920 2,330 213,250 Goodwill 259,085 (1,957 ) 257,128 Other assets 3,040 — 3,040 Accounts payable (31,069 ) — (31,069 ) Accrued liabilities and other current liabilities (35,790 ) (30,368 ) (66,158 ) Customer deposits (7,829 ) — (7,829 ) Deferred income taxes (79,918 ) 2,755 (77,163 ) Other long-term liabilities (19,627 ) 18,170 (1,457 ) 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 fair value adjustments for the acquired property 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 July 31, 2018 Net revenue $ 824,825 Net loss $ (17,148 ) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Estimated Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets as of July 31, 2019 is as follows (in thousands): 2020 $ 27,255 2021 20,258 2022 15,334 2023 11,427 2024 9,371 Thereafter 78,873 $ 162,518 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expenses | The following schedules reflect the components of "Accrued expenses" and "Other Current Liabilities": July 31, July 31, (In thousands) Accrued taxes $ 59,057 $ 29,804 Accrued compensation 22,584 25,603 Accrued interest 467 1,437 Accrued audit, tax and legal 3,148 3,264 Accrued contract labor 1,650 1,932 Accrued worker's compensation 4,549 6,126 Accrued other 21,203 20,260 $ 112,658 $ 88,426 |
Components of Other Current Liabilities | July 31, July 31, (In thousands) Accrued pricing liabilities $ 14,309 $ 18,882 Customer postage deposits 11,816 12,638 Revolving credit facility 6,000 — Other 6,921 10,509 $ 39,046 $ 42,029 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt | July 31, 2019 July 31, 2018 (In thousands) Principal amount outstanding on the Term Loan $ 375,125 $ 390,000 Unamortized debt issuance costs (888 ) (1,162 ) Net carrying value of the Term Loan $ 374,237 $ 388,838 Our debt consists of the following: July 31, 2019 July 31, 2018 (In thousands) Short-term debt Cerberus revolving credit facility $ 6,000 $ — Current portion of long-term debt 5,732 5,727 5.25% Convertible Senior Notes Payable — 50,274 11,732 56,001 Long-term debt 5.25% Convertible Senior Notes Payable — 14,256 7.50% Convertible Senior Note 7,432 — Long-term debt, net of current portion 368,505 383,111 375,937 397,367 Total debt $ 387,669 $ 453,368 As of July 31, 2019 , the net carrying value of the SPHG Note was $7.4 million . July 31, 2019 (In thousands) Carrying amount of equity component $ 8,200 Principal amount of Note $ 14,940 Unamortized debt discount (7,508 ) Net carrying amount $ 7,432 |
Summary of Interest Expense Related to Convertible Notes | Twelve Months Ended 2019 2018 (In thousands) Interest expense related to contractual interest coupon $ 1,932 $ 3,655 Interest expense related to accretion of the discount 2,741 4,384 Interest expense related to debt issuance costs 243 388 $ 4,916 $ 8,427 Twelve Months Ended July 31, 2019 (In thousands) Interest expense related to contractual interest coupon $ 473 Interest expense related to accretion of the discount 692 $ 1,165 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Annual Minimum Payments | Future annual minimum payments as of July 31, 2019 , are as follows: Operating Leases Capital Lease Obligations Purchase Obligations Debt Principal & Interest Total (In thousands) For the fiscal years ended July 31: 2020 $ 16,534 $ 147 $ 26,800 $ 7,121 $ 50,602 2021 11,755 136 — 7,121 19,012 2022 8,082 104 — 7,121 15,307 2023 4,899 37 — 364,245 369,181 2024 3,544 — — 15,593 19,137 Thereafter 19,895 — — — 19,895 $ 64,709 $ 424 $ 26,800 $ 401,201 $ 493,134 |
DEFINED BENEFIT PENSION PLANS (
DEFINED BENEFIT PENSION PLANS (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Retirement Benefits [Abstract] | |
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, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 26,651 98 % $ — $ — $ 26,651 Other investments 616 2 % — — 616 $ 27,267 100 % $ — $ — $ 27,267 Fair Value Measurements at Reporting Date Using (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 The following table presents the pension plan assets measured at fair value on a recurring basis as of July 31, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 26,651 98 % $ — $ — $ 26,651 Other investments 616 2 % — — 616 $ 27,267 100 % $ — $ — $ 27,267 Fair Value Measurements at Reporting Date Using (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 |
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, 2019 2018 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 29,849 $ 27,464 Service cost 365 398 Interest cost 633 671 Actuarial loss 5,125 1,655 Employee contributions 72 93 Benefits and administrative expenses paid (197 ) (372 ) Adjustments (20 ) (54 ) Settlements — (21 ) Currency translation (1,289 ) 15 Benefit obligation at end of year 34,538 29,849 Change in plan assets Fair value of plan assets at beginning of year 22,860 21,204 Actual return on plan assets 5,136 1,541 Employer contributions, net 422 402 Employee contributions 73 92 Settlements (19 ) (21 ) Benefits and administrative expenses paid (197 ) (372 ) Currency translation (1,008 ) 14 Fair value of plan assets at end of year 27,267 22,860 Funded status Current liability (13 ) (13 ) Noncurrent liability (7,259 ) (6,976 ) Net amount recognized in statement of financial position as a noncurrent liability $ (7,272 ) $ (6,989 ) |
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, 2019 2018 (In thousands) Projected benefit obligation $ 34,538 $ 29,849 Accumulated benefit obligation $ 32,361 $ 27,700 Fair value of plan assets $ 27,267 $ 22,860 |
Components of Net Periodic Pension Cost | Components of net periodic pension cost were as follows: Twelve months ended 2019 2018 (In thousands) Service cost $ 365 $ 398 Interest costs 633 671 Expected return on plan assets (492 ) (529 ) Amortization of net actuarial loss 127 125 Net periodic pension costs $ 633 $ 665 |
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 2019 2018 Discount rate 1.48 % 2.22 % Rate of compensation increase 1.97 % 1.93 % Weighted-average assumptions used to determine net periodic pension cost was as follows: Twelve months ended 2019 2018 Discount rate 1.46 % 2.21 % Expected long-term rate of return on plan assets 1.45 % 2.20 % Rate of compensation increase 1.92 % 1.94 % |
Summary of Expected Benefit Payments from the Plans through Fiscal 2026 | The following table summarizes expected benefit payments from the plans through fiscal year 2024. 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 2020. Pension Benefit Payments (in thousands) For the fiscal year ended July 31: 2020 205 2021 247 2022 245 2023 294 2024 444 Next 5 years 2,436 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of reconciliation of the disaggregated revenue | The following table presents the Company's revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel. The table also includes a reconciliation of the disaggregated revenue with the reportable segments. Twelve Months Ended July 31, 2019 Supply Chain Direct Marketing Consolidated Total (In thousands) Major Goods/Service Lines Supply chain management services $ 331,022 $ — $ 331,022 Marketing solutions offerings — 486,902 486,902 Other 1,906 — 1,906 $ 332,928 $ 486,902 $ 819,830 Timing of Revenue Recognition Goods transferred over time $ — $ 486,902 $ 486,902 Services transferred over time 332,928 — 332,928 $ 332,928 $ 486,902 $ 819,830 Total Revenue Revenue from contracts with customers $ 332,928 $ 486,902 $ 819,830 $ 332,928 $ 486,902 $ 819,830 |
Summary of changes in deferred revenue | Changes in deferred revenue during the twelve months ended July 31, 2019 , were as follows (in thousands): Twelve Months Ended July 31, 2019 Balance at beginning of period $ 3,858 Deferral of revenue 4,624 Recognition of deferred amounts upon satisfaction of performance obligation (5,453 ) Balance at end of period $ 3,029 |
Cumulative effect of the changes to consolidated balance sheet for the adoption of topic 606 | The cumulative effect of the changes made to the Company's consolidated August 1, 2018 balance sheet for the adoption of Topic 606 were as follows (in thousands): Balance Sheet July 31, 2018 Adjustments Due to ASU 2014-09 August 1, 2018 Assets Inventories, net $ 47,786 $ (21,233 ) $ 26,553 Prepaid expenses and other current assets 13,415 24,041 37,456 Total current assets 264,281 2,808 267,089 Total assets $ 827,050 $ 2,808 $ 829,858 Liabilities Other current liabilities $ 42,029 $ (3,330 ) $ 38,699 Total current liabilities 276,356 (3,330 ) 273,026 Total liabilities 684,230 (3,330 ) 680,900 Stockholders' equity Accumulated deficit (7,363,569 ) 6,138 (7,357,431 ) Total stockholders' equity 107,628 6,138 113,766 Total liabilities, contingently redeemable preferred stock and stockholders' equity $ 827,050 $ 2,808 $ 829,858 |
Impact of the adoption on consolidated balance sheet and statement of operations | In accordance with the requirements of the new standard, the disclosure of the impact of the adoption on the Company's consolidated balance sheet and statement of operations was as follows (in thousands, except per share amounts): Balance Sheet: July 31, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Assets Inventories, net $ 23,674 $ 45,853 $ (22,179 ) Prepaid expenses and other current assets 31,445 9,973 21,472 Total current assets 213,324 214,031 (707 ) Total assets $ 731,563 $ 732,270 $ (707 ) Liabilities Other current liabilities $ 39,046 $ 46,641 $ (7,595 ) Total current liabilities 256,850 264,445 (7,595 ) Total liabilities 643,685 651,280 (7,595 ) Stockholders' equity Accumulated deficit (7,426,287 ) (7,433,175 ) 6,888 Total stockholders' equity 52,692 45,804 6,888 Total liabilities, contingently redeemable preferred stock and stockholders' equity $ 731,563 $ 732,270 $ (707 ) Statement of Operations: Twelve months ended July 31, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/(Lower) Net revenue $ 819,830 $ 818,134 $ 1,696 Cost of revenue 670,100 669,154 946 Gross profit 149,730 148,980 750 Loss before income taxes (62,099 ) (62,849 ) 750 Net loss (66,727 ) (67,477 ) 750 Net loss attributable to common stockholders $ (68,856 ) $ (69,606 ) $ 750 Basic and diluted net loss per share attributable to common stockholders: $ (1.13 ) $ (1.14 ) $ 0.01 |
OTHER GAINS (LOSSES), NET (Tabl
OTHER GAINS (LOSSES), NET (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Components of Other Gains (Losses), Net | The following schedule reflects the components of "Other gains (losses), net": Twelve Months Ended 2019 2018 (In thousands) Foreign currency exchange gains, net $ 337 $ 1,055 Derecognition of accrued pricing liabilities 4,573 — Gain, net on Trading Securities — 1,876 Other, net (307 ) (708 ) $ 4,603 $ 2,223 |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
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, 2019 and 2018 : Twelve Months Ended July 31, 2019 2018 Cost of revenue $ — $ 14 Selling, general and administrative 1,267 10,787 $ 1,267 $ 10,801 |
Summary of Option Activity | A summary of option activity for the fiscal year ended July 31, 2019 is as follows: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands, except exercise price and years) Stock options outstanding, July 31, 2018 438 $ 3.99 Granted — — Exercised — — Forfeited or expired (113 ) 3.74 Stock options outstanding, July 31, 2019 325 4.07 1.12 $ — Stock options exercisable, July 31, 2019 325 $ 4.07 1.12 $ — |
Summary of Activity of Nonvested Stock | A summary of the activity of the Company's nonvested stock for the fiscal year ended July 31, 2019 , is as follows: Number of Shares Weighted-Average Grant Date Fair Value (share amounts in thousands) Nonvested stock outstanding, July 31, 2018 1,165 $ 0.44 Granted 405 1.73 Vested (1,165 ) 0.44 Forfeited — — Nonvested stock outstanding, July 31, 2019 405 $ 1.73 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
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 2019 2018 (In thousands) Income (loss) from operations before income taxes: U.S. $ (68,959 ) $ (60,574 ) Foreign 6,860 25,286 Total loss from operations before income taxes $ (62,099 ) $ (35,288 ) |
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 2019 2018 (In thousands) Income tax expense (benefit) from operations $ 4,670 $ (71,202 ) Total income tax expense (benefit) $ 4,670 $ (71,202 ) |
Components of Income Tax Expense from Operations | The components of income tax expense from operations consist of the following: Twelve Months Ended 2019 2018 (In thousands) Current provision Federal $ — $ — State 288 — Foreign 1,525 7,592 1,813 7,592 Deferred provision: Federal 1,563 (76,168 ) State 753 (2,352 ) Foreign 541 (274 ) 2,857 (78,794 ) Total tax provision $ 4,670 $ (71,202 ) |
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 $ 21,297 $ 16,070 Tax basis in excess of financial basis of investments in affiliates 6,534 6,232 Tax basis in excess of financial basis for intangible and fixed assets 187 311 Net operating loss and capital loss carry forwards 469,735 468,129 Total gross deferred tax assets 497,753 490,742 Less: valuation allowance (451,189 ) (438,467 ) Net deferred tax assets $ 46,564 $ 52,275 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (43,885 ) $ (50,141 ) Convertible Debt (1,761 ) (634 ) Total gross deferred tax liabilities (45,646 ) (50,775 ) Net deferred tax asset $ 918 $ 1,500 |
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 21.0% to income (loss) from continuing operations before income taxes as a result of the following: Twelve Months Ended July 31, 2019 2018 (In thousands) Computed "expected" income tax expense (benefit) $ (13,041 ) $ (9,467 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance 16,158 (329,415 ) Foreign dividends — 7,379 Foreign tax rate differential (593 ) (1,948 ) Federal rate change — 280,438 Nondeductible goodwill impairment — 191 Nondeductible expenses 2,484 (15,852 ) Foreign withholding taxes 336 1,961 Addition (reversal) of uncertain tax position reserves 645 (48 ) State benefit of U.S. Loss — (4,654 ) State income taxes, net of federal benefit 113 — Other (1,432 ) 213 Actual income tax expense $ 4,670 $ (71,202 ) |
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, 2019 2018 (In thousands) Balance as of beginning of year $ 1,525 $ 681 Additions for current year tax positions 704 903 Currency translation (22 ) — Reductions for lapses in statute of limitations — (59 ) Balance as of end of year $ 2,207 $ 1,525 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income, Net of Income Taxes | The components of accumulated other comprehensive income, net of income taxes, are as follows: Foreign currency items Pension items Unrealized gains (losses) on securities Total (In thousands) Accumulated other comprehensive income (loss) at July 31, 2018 $ 6,348 $ (3,795 ) $ 181 $ 2,734 Foreign currency translation adjustment (1,331 ) — — (1,331 ) Net unrealized holding loss on securities — — (85 ) (85 ) Pension liability adjustments — (284 ) — (284 ) Net current-period other comprehensive loss (1,331 ) (284 ) (85 ) (1,700 ) Accumulated other comprehensive income (loss) at July 31, 2019 $ 5,017 $ (4,079 ) $ 96 $ 1,034 |
STATEMENT OF CASH FLOWS SUPPL_2
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: July 31, July 31, (In thousands) Cash and bank deposits $ 32,183 $ 44,952 Money market funds 365 47,186 $ 32,548 $ 92,138 The amount of cash, cash equivalents and restricted cash as of July 31, 2019 and 2018 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2019 2018 (In thousands) Cash and cash equivalents $ 32,548 $ 92,138 Funds held for clients 13,516 11,688 Cash, cash equivalents and restricted cash $ 46,064 $ 103,826 |
Schedule of Restrictions on Cash and Cash Equivalents | The amount of cash, cash equivalents and restricted cash as of July 31, 2019 and 2018 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2019 2018 (In thousands) Cash and cash equivalents $ 32,548 $ 92,138 Funds held for clients 13,516 11,688 Cash, cash equivalents and restricted cash $ 46,064 $ 103,826 |
Schedule of Cash Flow, Supplemental Disclosure | Cash used for operating activities reflect cash payments for interest and income taxes as follows: Years Ended July 31, 2019 2018 (In thousands) Cash paid for interest $ 38,525 $ 24,642 Cash paid for income taxes $ 5,451 $ 2,567 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
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, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Level 1 Level 2 Level 3 Assets: Money market funds $ 365 $ 365 $ — $ — 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 $ — $ — |
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, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 26,651 98 % $ — $ — $ 26,651 Other investments 616 2 % — — 616 $ 27,267 100 % $ — $ — $ 27,267 Fair Value Measurements at Reporting Date Using (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 The following table presents the pension plan assets measured at fair value on a recurring basis as of July 31, 2019 and 2018 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 26,651 98 % $ — $ — $ 26,651 Other investments 616 2 % — — 616 $ 27,267 100 % $ — $ — $ 27,267 Fair Value Measurements at Reporting Date Using (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 |
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, 2019 and 2018 : July 31, 2019 2018 (In thousands) Fair value of plan assets at beginning of year $ 22,860 $ 21,204 Actual return on plan assets 5,136 1,541 Employer contributions, net 422 402 Employee contributions 73 92 Settlements (19 ) (21 ) Benefits and administrative expenses paid (197 ) (372 ) Currency translation (1,008 ) 14 Fair value of plan assets at end of year $ 27,267 $ 22,860 |
Notes Payable not Carried at Fair Value | The following table presents the Company's Notes payable which were not carried at fair value: July 31, 2018 Carrying Amount Fair Value Fair Value Hierarchy (In thousands) Notes payable $ 64,530 $ 66,658 Level 1 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
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, 2019 2018 (In thousands) Net revenue: Supply Chain $ 332,928 $ 345,900 Direct Marketing 486,902 299,358 $ 819,830 $ 645,258 Operating income (loss): Supply Chain $ (3,822 ) $ 613 Direct Marketing (9,154 ) 10,740 Total segment operating income (loss) (12,976 ) 11,353 Corporate-level activity (12,303 ) (19,659 ) Total operating loss (25,279 ) (8,306 ) Total other expense (36,820 ) (26,982 ) Loss before income taxes $ (62,099 ) $ (35,288 ) |
Total Assets of Continuing Operations | July 31, July 31, (In thousands) Total assets: Supply Chain $ 112,712 $ 120,123 Direct Marketing 600,390 642,820 Sub-total—segment assets 713,102 762,943 Corporate 18,461 64,107 $ 731,563 $ 827,050 |
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 2019 2018 (In thousands) Services: Supply Chain $ 332,928 $ 345,900 Products: Direct Marketing 486,902 299,358 $ 819,830 $ 645,258 |
PARENT COMPANY CONDENSED FINA_2
PARENT COMPANY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Balance Sheet | STEEL CONNECT, INC. (Parent Only) BALANCE SHEETS (in thousands, except share and per share data) July 31, July 31, ASSETS Cash and cash equivalents $ 4,083 $ 7,978 Prepaid expenses and other current assets 227 120 Total current assets 4,310 8,098 Investments in affiliates 96,940 188,534 Other assets 337 87 Due from subsidiaries — 13,579 Total assets $ 101,587 $ 210,298 LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK & STOCKHOLDERS' EQUITY Accounts payable $ 1,253 $ 674 Accrued expenses 2,364 2,274 Convertible Notes payable — 50,274 Total current liabilities 3,617 53,222 Convertible Notes payable 7,432 14,256 Due to subsidiaries 2,660 — Total long-term liabilities 10,092 14,256 Total liabilities 13,709 67,478 Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2019 and 2018 35,186 35,192 Stockholders' equity: Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at July 31, 2019 and July 31, 2018; zero shares issued and outstanding at July 31, 2019 and 2018 — — Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 61,805,856 issued and outstanding shares at July 31, 2019; 60,742,859 issued and outstanding shares at July 31, 2018 618 608 Additional paid-in capital 7,477,327 7,467,855 Accumulated deficit (7,426,287 ) (7,363,569 ) Accumulated other comprehensive income 1,034 2,734 Total stockholders' equity 52,692 107,628 Total liabilities, contingently redeemable preferred stock and stockholders' equity $ 101,587 $ 210,298 |
Schedule of Statements of Operations | STEEL CONNECT, INC. (Parent Only) STATEMENTS OF OPERATIONS (in thousands) Twelve Months Ended July 31, 2019 2018 Selling, general and administrative $ 12,303 $ 16,742 Total operating expenses 12,303 16,742 Operating loss (12,303 ) (16,742 ) Other income (expense): Interest expense (6,081 ) (8,427 ) Other income (expense), net (306 ) 6,807 Total other expense (6,387 ) (1,620 ) Loss before income taxes (18,690 ) (18,362 ) Equity (gains) losses of subsidiaries, net of tax 48,079 (54,276 ) Gains on investments in affiliates, net of tax (42 ) (801 ) Net income (loss) $ (66,727 ) $ 36,715 |
Schedule of Statements of Cash Flows | STEEL CONNECT, INC. (Parent Only) STATEMENTS OF CASH FLOWS (in thousands) Twelve Months Ended 2019 2018 Cash flows from operating activities: Net income (loss) $ (66,727 ) $ 36,715 Adjustments to reconcile net income (loss) to net cash used in operating activities: Amortization of deferred financing costs 243 388 Accretion of debt discount 3,433 4,384 Share-based compensation 1,267 10,763 Non-cash (gains) losses, net 7 (354 ) Equity (gains) losses of subsidiaries, net of tax 48,079 (54,276 ) Gains on investments in affiliates and impairments (42 ) (801 ) Changes in operating assets and liabilities, net of business acquired: Prepaid expenses and other current assets (107 ) (36 ) Accounts payable and accrued expenses 669 698 Other assets and liabilities (250 ) (1,860 ) Net cash used in operating activities (13,428 ) (4,379 ) Cash flows from investing activities: Intercompany advances, net 64,332 (22,216 ) Net cash provided by (used in) investing activities 64,332 (22,216 ) Cash flows from financing activities: Proceeds from issuance of preferred stock — 35,000 Proceeds from issuance of Convertible Note 14,940 — Payments on maturity of Convertible Notes (63,925 ) — Payment of preferred dividends (2,129 ) (1,143 ) Purchase of the Company's Convertible Notes (3,700 ) — Proceeds from issuance of common stock 15 8 Net cash provided by (used in) financing activities (54,799 ) 33,865 Net increase (decrease) in cash and cash equivalents (3,895 ) 7,270 Cash and cash equivalents at beginning of period 7,978 708 Cash and cash equivalents at end of period $ 4,083 $ 7,978 |
NATURE OF OPERATIONS - Addition
NATURE OF OPERATIONS - Additional Information (Detail) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 | Mar. 01, 2019 | Feb. 28, 2019 | Jul. 31, 2018 | Jun. 30, 2014 |
Nature Of Operations [Line Items] | ||||||
Cash and cash equivalents | $ 32,548,000 | $ 92,138,000 | ||||
Revolving credit facility | 6,000,000 | 0 | ||||
Debt instrument stated percentage | 5.25% | |||||
Convertible notes payable | $ 65,600,000 | $ 65,600,000 | 64,500,000 | |||
Convertible senior notes | 0 | 50,274,000 | ||||
PNC Bank Credit Facility | ||||||
Nature Of Operations [Line Items] | ||||||
Credit facility, readily available borrowing capacity | 13,800,000 | |||||
Line of credit facility, maximum credit commitment | $ 25,000,000 | $ 50,000,000 | ||||
Line of Credit | Cerberus Credit Facility | ||||||
Nature Of Operations [Line Items] | ||||||
Revolving credit facility | 6,000,000 | $ 0 | ||||
Line of credit facility, maximum credit commitment | $ 19,000,000 | |||||
SPHG Holdings | Convertible Senior Unsecured Note | ||||||
Nature Of Operations [Line Items] | ||||||
Debt instrument stated percentage | 7.50% | 7.50% | ||||
Convertible senior notes | $ 14,900,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 480 | $ 616 |
Provisions charged to expense | 1,418 | 211 |
Accounts written off | (94) | (347) |
Ending balance | $ 1,804 | $ 480 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Aug. 01, 2019 | |
Significant Of Accounting Policies [Line Items] | |||
Highly liquid investment period to be considered cash equivalent | 3 months | ||
Work In Process Inventory | IWCO | |||
Significant Of Accounting Policies [Line Items] | |||
Fair value of assets acquired | $ 7.2 | ||
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 | 17.9 | 2.6 | |
Ten Largest Clients | Sales Revenue, Net | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 49.00% | 44.00% | |
Computing Market Client | Net Accounts Receivable | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 13.00% | ||
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 | 20.9 | 0.5 | |
Minimum | |||
Significant Of Accounting Policies [Line Items] | |||
Highly liquid investment period to be considered short term investments | 3 months | ||
Maximum | |||
Significant Of Accounting Policies [Line Items] | |||
Highly liquid investment period to be considered short term investments | 12 months | ||
Supply Chain | One Customer | Sales Revenue, Net | Customer Concentration Risk | |||
Significant Of Accounting Policies [Line Items] | |||
Concentration risk percentage | 11.00% | ||
Accounting Standards Update 2016-02 | Pro Forma | |||
Significant Of Accounting Policies [Line Items] | |||
ROU asset | $ 53.7 | ||
Lease liability | $ 55.3 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Accounting Policies [Abstract] | ||
Cash and bank deposits | $ 32,183 | $ 44,952 |
Money market funds | 365 | 47,186 |
Cash and cash equivalents | $ 32,548 | $ 92,138 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Components of Inventories (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 |
Accounting Policies [Abstract] | |||
Raw materials | $ 21,322 | $ 23,208 | |
Work-in-process | 587 | 16,147 | |
Finished goods | 1,765 | 8,431 | |
Inventories, net | $ 23,674 | $ 26,553 | $ 47,786 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Jul. 31, 2019 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 32 years |
Automobiles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Minimum | Machinery & equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Minimum | Furniture & fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Minimum | Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Maximum | Machinery & equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 7 years |
Maximum | Furniture & fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 7 years |
Maximum | Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 8 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Mar. 01, 2019 | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |||
Net income (loss) | $ (66,727) | $ 36,715 | |
Less: Preferred dividends on redeemable preferred stock | (2,129) | (1,335) | |
Net income (loss) attributable to common stockholders | (68,856) | 35,380 | |
Effect of dilutive securities: | |||
Net income (loss) attributable to common stockholders after assumed conversions | $ (68,856) | $ 43,794 | |
Weighted average common shares outstanding (in shares) | 61,180 | 59,179 | |
Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock (in shares) | 0 | 22,720 | |
Weighted average number of common and potential common shares (in shares) | 61,180 | 81,899 | |
Basic net earnings (loss) per share attributable to common stockholders (in usd per share) | $ (1.13) | $ 0.60 | |
Diluted net earnings (loss) per share attributable to common stockholders (in usd per share) | $ (1.13) | $ 0.53 | |
Debt instrument stated percentage | 5.25% | ||
5.25% Convertible Senior Notes | |||
Effect of dilutive securities: | |||
Dilutive securities | $ 0 | $ 7,079 | |
Redeemable preferred stock | |||
Effect of dilutive securities: | |||
Dilutive securities | $ 0 | $ 1,335 | |
Convertible Senior Notes | |||
Effect of dilutive securities: | |||
Debt instrument stated percentage | 5.25% |
PROPERTY AND EQUIPMENT - At Cos
PROPERTY AND EQUIPMENT - At Cost (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 942 | $ 942 |
Machinery and equipment | 99,961 | 97,149 |
Leasehold improvements | 23,711 | 21,917 |
Software | 52,961 | 52,082 |
Other | 24,230 | 28,147 |
Property plant and equipment, gross | 201,805 | 200,237 |
Less: Accumulated depreciation and amortization | (110,537) | (93,605) |
Property and equipment, net | $ 91,268 | $ 106,632 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 22,058 | $ 16,791 |
Proceeds associated with the sale of property and equipment | 19 | 20,748 |
Gain associated with the sale of property | (485) | 12,692 |
Supply Chain | ||
Property, Plant and Equipment [Line Items] | ||
Impairment of long-lived assets | 3,000 | |
Depreciation expense | 5,600 | 6,800 |
Direct Marketing | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 16,400 | $ 10,000 |
ACQUISITION OF IWCO DIRECT - Ad
ACQUISITION OF IWCO DIRECT - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 15, 2017 | Jul. 31, 2019 | Jul. 31, 2018 |
Business Acquisition [Line Items] | |||
Payments to acquire business, net of cash acquired | $ 0 | $ 469,221 | |
Goodwill | 257,128 | 254,352 | |
Operating income | (25,279) | (8,306) | |
Loss before income taxes | $ (62,099) | (35,288) | |
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 | 257,128 | ||
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 |
ACQUISITION OF IWCO DIRECT - Su
ACQUISITION OF IWCO DIRECT - Summary of Preliminary Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 | Dec. 15, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 257,128 | $ 254,352 | |
IWCO | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 47,408 | ||
Inventories | 32,994 | ||
Other current assets | 10,624 | ||
Property and equipment | 88,453 | ||
Intangible assets | 213,250 | ||
Goodwill | 257,128 | ||
Other assets | 3,040 | ||
Accounts payable | (31,069) | ||
Accrued liabilities and other current liabilities | (66,158) | ||
Customer deposits | (7,829) | ||
Deferred income taxes | (77,163) | ||
Other long-term liabilities | (1,457) | ||
Total consideration | 469,221 | ||
As Originally Reported | IWCO | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 47,841 | ||
Inventories | 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 long-term liabilities | (19,627) | ||
Total consideration | 469,221 | ||
Adjustments | IWCO | |||
Business Acquisition [Line Items] | |||
Accounts receivable | (433) | ||
Inventories | 5,829 | ||
Other current assets | 3,197 | ||
Property and equipment | 477 | ||
Intangible assets | 2,330 | ||
Goodwill | (1,957) | ||
Other assets | 0 | ||
Accounts payable | 0 | ||
Accrued liabilities and other current liabilities | (30,368) | ||
Customer deposits | 0 | ||
Deferred income taxes | 2,755 | ||
Other long-term liabilities | 18,170 | ||
Total consideration | $ 0 |
ACQUISITION OF IWCO DIRECT - _2
ACQUISITION OF IWCO DIRECT - Summary of Pro Forma Information (Detail) - IWCO $ in Thousands | 12 Months Ended |
Jul. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Net revenue | $ 824,825 |
Net loss | $ (17,148) |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Goodwill [Line Items] | ||
Goodwill | $ 257,128 | $ 254,352 |
Intangible assets, carrying value | 162,518 | |
Customer Relationships | ||
Goodwill [Line Items] | ||
Intangible assets, gross | 192,700 | |
Intangible assets, carrying value | $ 153,100 | |
Estimated useful life (years) | 15 years | |
Trademarks and Trade Names | ||
Goodwill [Line Items] | ||
Intangible assets, gross | $ 20,500 | |
Intangible assets, carrying value | $ 9,400 | |
Estimated useful life (years) | 3 years | |
Direct Marketing | ||
Goodwill [Line Items] | ||
Goodwill | $ 257,100 | |
Reporting unit, percentage of fair value in excess of carrying amount | 25.00% |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense of Intangible Assets (Detail) $ in Thousands | Jul. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 27,255 |
2021 | 20,258 |
2022 | 15,334 |
2023 | 11,427 |
2024 | 9,371 |
Thereafter | 78,873 |
Total | $ 162,518 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued taxes | $ 59,057 | $ 29,804 |
Accrued compensation | 22,584 | 25,603 |
Accrued interest | 467 | 1,437 |
Accrued audit, tax and legal | 3,148 | 3,264 |
Accrued contract labor | 1,650 | 1,932 |
Accrued worker's compensation | 4,549 | 6,126 |
Accrued other | 21,203 | 20,260 |
Accrued expenses | $ 112,658 | $ 88,426 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accrued pricing liabilities | $ 14,309 | $ 18,882 | |
Customer postage deposits | 11,816 | 12,638 | |
Revolving credit facility | 6,000 | 0 | |
Other | 6,921 | 10,509 | |
Other current liabilities | $ 39,046 | $ 38,699 | $ 42,029 |
ACCRUED EXPENSES AND OTHER CU_5
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Change in Accounting Estimate [Line Items] | ||
Accrued taxes | $ 59,057 | $ 29,804 |
Accrued pricing liabilities | 14,309 | 18,882 |
Derecognition of accrued pricing liabilities | 4,573 | $ 0 |
Adjustment of Tax Related Liabilities | ||
Change in Accounting Estimate [Line Items] | ||
Accrued taxes | $ 32,100 |
DEBT - Summary of Debt (Details
DEBT - Summary of Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Mar. 01, 2019 | Jul. 31, 2018 |
Debt Instrument [Line Items] | |||
Cerberus revolving credit facility | $ 6,000 | $ 0 | |
Current portion of long-term debt | 5,732 | 5,727 | |
5.25% Convertible Senior Notes Payable | 0 | 50,274 | |
Short-term debt | 11,732 | 56,001 | |
Convertible Senior Note | 7,432 | 14,256 | |
Long-term debt, excluding current portion | 368,505 | 383,111 | |
Long-term debt | 375,937 | 397,367 | |
Total debt | 387,669 | 453,368 | |
Debt instrument stated percentage | 5.25% | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Cerberus revolving credit facility | 6,000 | 0 | |
5.25% Convertible Senior Notes Payable | |||
Debt Instrument [Line Items] | |||
5.25% Convertible Senior Notes Payable | 0 | 50,274 | |
Convertible Senior Note | $ 0 | 14,256 | |
Debt instrument stated percentage | 5.25% | ||
7.50% Convertible Senior Note | |||
Debt Instrument [Line Items] | |||
Convertible Senior Note | $ 7,432 | $ 0 | |
Debt instrument stated percentage | 7.50% |
DEBT - 5.25% Convertible Senior
DEBT - 5.25% Convertible Senior Note (Details) - USD ($) | 12 Months Ended | ||||
Jul. 31, 2019 | Jul. 31, 2018 | Mar. 01, 2019 | Feb. 28, 2019 | Mar. 18, 2014 | |
Debt Instrument [Line Items] | |||||
Debt instrument stated percentage | 5.25% | ||||
Convertible notes payable | $ 64,500,000 | $ 65,600,000 | $ 65,600,000 | ||
Convertible Notes payable | $ 0 | 50,274,000 | |||
Debt instrument, interest rate, effective percentage | 18.47% | ||||
5.25% Convertible Senior Notes Due 2019 | |||||
Debt Instrument [Line Items] | |||||
Principal amount of notes held | $ 100,000,000 | ||||
Debt instrument stated percentage | 5.25% | ||||
Debt instrument, interest expense | $ 4,916,000 | $ 8,427,000 | |||
Debt instrument, interest rate, effective percentage | 13.90% | ||||
SPHG Holdings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest expense | $ 1,165,000 | ||||
SPHG Holdings | Convertible Senior Unsecured Note | |||||
Debt Instrument [Line Items] | |||||
Principal amount of notes held | $ 14,900,000 | ||||
Debt instrument stated percentage | 7.50% | 7.50% | |||
Convertible Notes payable | $ 14,900,000 |
DEBT - Summary of Interest Expe
DEBT - Summary of Interest Expense Related to Convertible Notes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
5.25% Convertible Senior Notes Due 2019 | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | $ 4,916 | $ 8,427 |
5.25% Convertible Senior Notes Due 2019 | Interest expense related to contractual interest coupon | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | 1,932 | 3,655 |
5.25% Convertible Senior Notes Due 2019 | Interest expense related to accretion of the discount | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | 2,741 | 4,384 |
5.25% Convertible Senior Notes Due 2019 | Interest expense related to debt issuance costs | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | 243 | $ 388 |
SPHG Holdings | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | 1,165 | |
SPHG Holdings | Interest expense related to contractual interest coupon | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | 473 | |
SPHG Holdings | Interest expense related to accretion of the discount | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | $ 692 |
DEBT - Net Carrying Value of Te
DEBT - Net Carrying Value of Term Loan (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Debt Instrument [Line Items] | ||
Total debt | $ 387,669 | $ 453,368 |
Term Loan | Cerberus Credit Facility | ||
Debt Instrument [Line Items] | ||
Principal amount outstanding on the Term Loan | 375,125 | 390,000 |
Unamortized debt discount | (888) | (1,162) |
Total debt | $ 374,237 | $ 388,838 |
DEBT - PNC Bank and Cerberus Cr
DEBT - PNC Bank and Cerberus Credit Facility (Details) - USD ($) | Apr. 30, 2019 | Dec. 15, 2017 | Jun. 30, 2014 | Jul. 31, 2019 | Jul. 31, 2018 |
Debt Instrument [Line Items] | |||||
Proceeds from long-term debt | $ 0 | $ 393,000,000 | |||
Aggregate amount of each consecutive quarterly scheduled principal installment | $ 1,500,000 | ||||
Excess cash flow payments | 8,900,000 | ||||
Revolving credit facility | 6,000,000 | 0 | |||
Current and long-term net | 387,669,000 | 453,368,000 | |||
PNC Bank Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, term | 5 years | ||||
Line of credit facility, maximum credit commitment | $ 25,000,000 | $ 50,000,000 | |||
Line of credit facility, unutilized commitment fee percentage | 0.25% | ||||
Credit facility, readily available borrowing capacity | 13,800,000 | ||||
Long-term line of credit | $ 0 | $ 0 | |||
PNC Bank Credit Facility | Letter of Credit Sublimit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum credit commitment | $ 5,000,000 | ||||
PNC Bank Credit Facility | Scenario 1 | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 2.25% | ||||
PNC Bank Credit Facility | Scenario 2 | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 1.00% | ||||
PNC Bank Credit Facility | Scenario 2 | Federal Funds Open Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 0.50% | ||||
Cerberus Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, term | 5 years | ||||
Proceeds from long-term debt | $ 393,000,000 | ||||
Revolving credit facility | $ 25,000,000 | ||||
Excess cash flow payment percentage | 50.00% | ||||
Leverage ratio | 3.50% | ||||
Cerberus Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 6.50% | ||||
Cerberus Credit Facility | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage points added to the reference rate | 3.75% | ||||
Cerberus Credit Facility | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum credit commitment | $ 19,000,000 | ||||
Revolving credit facility | 6,000,000 | $ 0 | |||
Cerberus Credit Facility | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount outstanding on the Term Loan | 375,125,000 | 390,000,000 | |||
Current and long-term net | $ 374,237,000 | $ 388,838,000 | |||
Rate Applicable When Leverage Ratio is Below 3.50 | Cerberus Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Excess cash flow payment percentage | 25.00% |
DEBT - 7.5% Convertible Note (D
DEBT - 7.5% Convertible Note (Details) | Feb. 28, 2019USD ($)$ / shares | Jul. 31, 2019USD ($) | Mar. 01, 2019 | Jul. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||||
Debt instrument stated percentage | 5.25% | |||
Debt instrument, redemption price percentage | 100.00% | |||
Carrying amount of equity component (net of allocated debt issuance costs) | $ 8,200,000 | |||
Long-term Debt | $ 375,937,000 | $ 397,367,000 | ||
SPHG Holdings | ||||
Debt Instrument [Line Items] | ||||
Conversion ratio (shares) | 0.4212655 | |||
Initial Conversion price (usd per share) | $ / shares | $ 2.37 | |||
SPHG Holdings | Convertible Senior Unsecured Note | ||||
Debt Instrument [Line Items] | ||||
Debt instrument stated percentage | 7.50% | 7.50% | ||
Debt instrument issued | $ 14,900,000 | |||
SPHG Holdings | Convertible Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Debt instrument issued | $ 14,940,000 | |||
Long-term Debt | $ 7,432,000 |
DEBT - Net Carrying Value of th
DEBT - Net Carrying Value of the Notes (Detail) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Debt Instrument [Line Items] | ||
Carrying amount of equity component (net of allocated debt issuance costs) | $ 8,200,000 | |
Long-term debt | 375,937,000 | $ 397,367,000 |
SPHG Holdings | Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Principal amount of Notes | 14,940,000 | |
Unamortized debt discount | (7,508,000) | |
Long-term debt | $ 7,432,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Future Annual Minimum Payments (Detail) $ in Thousands | Jul. 31, 2019USD ($) |
Other Commitments [Line Items] | |
2020 | $ 50,602 |
2021 | 19,012 |
2022 | 15,307 |
2023 | 369,181 |
2024 | 19,137 |
Thereafter | 19,895 |
Future Minimum Payments Due, Total | 493,134 |
Operating Leases | |
Other Commitments [Line Items] | |
2020 | 16,534 |
2021 | 11,755 |
2022 | 8,082 |
2023 | 4,899 |
2024 | 3,544 |
Thereafter | 19,895 |
Future Minimum Payments Due, Total | 64,709 |
Capital Lease Obligations | |
Other Commitments [Line Items] | |
2020 | 147 |
2021 | 136 |
2022 | 104 |
2023 | 37 |
2024 | 0 |
Thereafter | 0 |
Future Minimum Payments Due, Total | 424 |
Purchase Obligations | |
Other Commitments [Line Items] | |
2020 | 26,800 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Future Minimum Payments Due, Total | 26,800 |
Debt Principal & Interest | |
Other Commitments [Line Items] | |
2020 | 7,121 |
2021 | 7,121 |
2022 | 7,121 |
2023 | 364,245 |
2024 | 15,593 |
Thereafter | 0 |
Future Minimum Payments Due, Total | $ 401,201 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) - USD ($) | Dec. 15, 2017 | Jul. 31, 2019 | Jul. 31, 2018 |
Commitments and Contingencies [Line Items] | |||
Total rent and equipment lease expense charged to continuing operations | $ 19,000,000 | $ 19,200,000 | |
Proceeds from issuance of preferred stock | 0 | $ 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 Millions | 12 Months Ended | ||
Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($)pension_plan | Jul. 31, 2018USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | $ 32.4 | $ 27.7 | |
Amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2019 | 4.9 | ||
Market value of plan assets using Level 3 inputs | $ 27.3 | ||
Cumulative gains and losses in excess of the greater of the pension benefit obligation | 10.00% | ||
Scenario, Forecast | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum required contributions to the plans | $ 0.4 | ||
Netherlands | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of pension plans | pension_plan | 2 | ||
Unfunded Defined Benefit Pension Plans | Japan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of pension plans | pension_plan | 1 |
DEFINED BENEFIT PENSION PLANS_2
DEFINED BENEFIT PENSION PLANS - Schedule of Defined Benefit Plan Assets Fair Value Measurements (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 100.00% | 100.00% | |
Defined benefit plan, fair value of plan assets | $ 27,267 | $ 22,860 | $ 21,204 |
Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 98.00% | 98.00% | |
Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 2.00% | 2.00% | |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 100.00% | ||
Defined benefit plan, fair value of plan assets | $ 27,267 | $ 22,860 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 27,267 | 22,860 | |
Fair Value, Measurements, Recurring | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 98.00% | ||
Defined benefit plan, fair value of plan assets | $ 26,651 | 22,339 | |
Fair Value, Measurements, Recurring | Insurance contract | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Insurance contract | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Insurance contract | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 26,651 | 22,339 | |
Fair Value, Measurements, Recurring | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 2.00% | ||
Defined benefit plan, fair value of plan assets | $ 616 | 521 | |
Fair Value, Measurements, Recurring | Other investments | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Other investments | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Other investments | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 616 | $ 521 |
DEFINED BENEFIT PENSION PLANS_3
DEFINED BENEFIT PENSION PLANS - Aggregate Change in Benefit Obligation and Plan Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Change in benefit obligation | ||
Benefit obligation at beginning of year | $ 29,849 | $ 27,464 |
Service cost | 365 | 398 |
Interest cost | 633 | 671 |
Actuarial loss | 5,125 | 1,655 |
Employee contributions | 72 | 93 |
Benefits and administrative expenses paid | (197) | (372) |
Adjustments | (20) | (54) |
Settlements | 0 | (21) |
Currency translation | (1,289) | 15 |
Benefit obligation at end of year | 34,538 | 29,849 |
Change in plan assets | ||
Fair value of plan assets at beginning of year | 22,860 | 21,204 |
Actual return on plan assets | 5,136 | 1,541 |
Employer contributions, net | 422 | 402 |
Employee contributions | 73 | 92 |
Settlements | (19) | (21) |
Benefits and administrative expenses paid | (197) | (372) |
Currency translation | (1,008) | 14 |
Fair value of plan assets at end of year | 27,267 | 22,860 |
Funded status | ||
Current liability | (13) | (13) |
Noncurrent liability | (7,259) | (6,976) |
Net amount recognized in statement of financial position as a noncurrent liability | $ (7,272) | $ (6,989) |
DEFINED BENEFIT PENSION PLANS_4
DEFINED BENEFIT PENSION PLANS - Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 34,538 | $ 29,849 |
Accumulated benefit obligation | 32,361 | 27,700 |
Fair value of plan assets | $ 27,267 | $ 22,860 |
DEFINED BENEFIT PENSION PLANS_5
DEFINED BENEFIT PENSION PLANS - Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Service cost | $ 365 | $ 398 |
Interest costs | 633 | 671 |
Expected return on plan assets | (492) | (529) |
Amortization of net actuarial loss | 127 | 125 |
Net periodic pension costs | $ 633 | $ 665 |
DEFINED BENEFIT PENSION PLANS_6
DEFINED BENEFIT PENSION PLANS - Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) | Jul. 31, 2019 | Jul. 31, 2018 |
Retirement Benefits [Abstract] | ||
Discount rate | 1.48% | 2.22% |
Rate of compensation increase | 1.97% | 1.93% |
DEFINED BENEFIT PENSION PLANS_7
DEFINED BENEFIT PENSION PLANS - Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost (Detail) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Discount rate | 1.46% | 2.21% |
Expected long-term rate of return on plan assets | 1.45% | 2.20% |
Rate of compensation increase | 1.92% | 1.94% |
DEFINED BENEFIT PENSION PLANS_8
DEFINED BENEFIT PENSION PLANS - Summary of Expected Benefit Payments from Plans (Detail) $ in Thousands | Jul. 31, 2019USD ($) |
Retirement Benefits [Abstract] | |
2020 | $ 205 |
2021 | 247 |
2022 | 245 |
2023 | 294 |
2024 | 444 |
Next 5 years | $ 2,436 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregated Revenue (Detail) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 819,830,000 | $ 645,258,000 |
Transferred at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | |
Supply chain management services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 331,022,000 | |
Marketing solutions offerings | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 486,902,000 | |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 1,906,000 | |
Products | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 486,902,000 | 299,358,000 |
Products | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 486,902,000 | |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 332,928,000 | $ 345,900,000 |
Services | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 332,928,000 | |
Supply Chain | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 332,928,000 | |
Supply Chain | Supply chain management services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 331,022,000 | |
Supply Chain | Marketing solutions offerings | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | |
Supply Chain | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 1,906,000 | |
Supply Chain | Products | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | |
Supply Chain | Services | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 332,928,000 | |
Direct Marketing | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 486,902,000 | |
Direct Marketing | Supply chain management services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | |
Direct Marketing | Marketing solutions offerings | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 486,902,000 | |
Direct Marketing | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | |
Direct Marketing | Products | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 486,902,000 | |
Direct Marketing | Services | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 0 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Aug. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract assets | $ 21,500 | $ 24,000 | |
Deferred revenue current | 2,900 | 3,700 | |
Deferred revenue long-term | 100 | 200 | |
Accumulated deficit | (7,426,287) | (7,363,569) | $ (7,357,431) |
Total net revenue | 819,830 | $ 645,258 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accumulated deficit | 6,888 | $ 6,138 | |
Total net revenue | $ 1,696 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Changes in Deferred Revenue (Detail) $ in Thousands | 12 Months Ended |
Jul. 31, 2019USD ($) | |
Change in Deferred Revenue | |
Balance at beginning of period | $ 3,858 |
Deferral of revenue | 4,624 |
Recognition of deferred amounts upon satisfaction of performance obligation | (5,453) |
Balance at end of period | $ 3,029 |
REVENUE RECOGNITION - Performan
REVENUE RECOGNITION - Performance Obligations (Details) $ in Millions | Jul. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-08-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unearned revenue | $ 2.9 |
Unearned revenue, timing of satisfaction | 12 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-08-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unearned revenue | $ 0.1 |
Unearned revenue, timing of satisfaction |
REVENUE RECOGNITION - Cumulativ
REVENUE RECOGNITION - Cumulative Effect of the Changes to Consolidated Balance Sheet for the Adoption of Topic 606 (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 | Jul. 31, 2017 |
Assets | ||||
Inventories, net | $ 23,674 | $ 26,553 | $ 47,786 | |
Prepaid expenses and other current assets | 31,445 | 37,456 | 13,415 | |
Total current assets | 213,324 | 267,089 | 264,281 | |
Total assets | 731,563 | 829,858 | 827,050 | |
Liabilities | ||||
Other current liabilities | 39,046 | 38,699 | 42,029 | |
Total current liabilities | 256,850 | 273,026 | 276,356 | |
Total liabilities | 643,685 | 680,900 | 684,230 | |
Stockholders' equity | ||||
Accumulated deficit | (7,426,287) | (7,357,431) | (7,363,569) | |
Total stockholders’ equity | 52,692 | 113,766 | 107,628 | $ 62,971 |
Total liabilities, contingently redeemable preferred stock and stockholders’ equity | 731,563 | 829,858 | 827,050 | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
Assets | ||||
Inventories, net | 45,853 | 47,786 | ||
Prepaid expenses and other current assets | 9,973 | 13,415 | ||
Total current assets | 214,031 | 264,281 | ||
Total assets | 732,270 | 827,050 | ||
Liabilities | ||||
Other current liabilities | 46,641 | 42,029 | ||
Total current liabilities | 264,445 | 276,356 | ||
Total liabilities | 651,280 | 684,230 | ||
Stockholders' equity | ||||
Accumulated deficit | (7,433,175) | (7,363,569) | ||
Total stockholders’ equity | 45,804 | 107,628 | ||
Total liabilities, contingently redeemable preferred stock and stockholders’ equity | 732,270 | $ 827,050 | ||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
Assets | ||||
Inventories, net | (22,179) | (21,233) | ||
Prepaid expenses and other current assets | 21,472 | 24,041 | ||
Total current assets | (707) | 2,808 | ||
Total assets | (707) | 2,808 | ||
Liabilities | ||||
Other current liabilities | (7,595) | (3,330) | ||
Total current liabilities | (7,595) | (3,330) | ||
Total liabilities | (7,595) | (3,330) | ||
Stockholders' equity | ||||
Accumulated deficit | 6,888 | 6,138 | ||
Total stockholders’ equity | 6,888 | 6,138 | ||
Total liabilities, contingently redeemable preferred stock and stockholders’ equity | $ (707) | $ 2,808 |
REVENUE RECOGNITION - Impact of
REVENUE RECOGNITION - Impact of the Adoption on Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 | Jul. 31, 2017 |
ASSETS | ||||
Inventories, net | $ 23,674 | $ 26,553 | $ 47,786 | |
Prepaid expenses and other current assets | 31,445 | 37,456 | 13,415 | |
Total current assets | 213,324 | 267,089 | 264,281 | |
Total assets | 731,563 | 829,858 | 827,050 | |
Liabilities | ||||
Other current liabilities | 39,046 | 38,699 | 42,029 | |
Total current liabilities | 256,850 | 273,026 | 276,356 | |
Total liabilities | 643,685 | 680,900 | 684,230 | |
Stockholders' equity | ||||
Accumulated deficit | (7,426,287) | (7,357,431) | (7,363,569) | |
Total stockholders’ equity | 52,692 | 113,766 | 107,628 | $ 62,971 |
Total liabilities, contingently redeemable preferred stock and stockholders’ equity | 731,563 | 829,858 | 827,050 | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
ASSETS | ||||
Inventories, net | 45,853 | 47,786 | ||
Prepaid expenses and other current assets | 9,973 | 13,415 | ||
Total current assets | 214,031 | 264,281 | ||
Total assets | 732,270 | 827,050 | ||
Liabilities | ||||
Other current liabilities | 46,641 | 42,029 | ||
Total current liabilities | 264,445 | 276,356 | ||
Total liabilities | 651,280 | 684,230 | ||
Stockholders' equity | ||||
Accumulated deficit | (7,433,175) | (7,363,569) | ||
Total stockholders’ equity | 45,804 | 107,628 | ||
Total liabilities, contingently redeemable preferred stock and stockholders’ equity | 732,270 | $ 827,050 | ||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
ASSETS | ||||
Inventories, net | (22,179) | (21,233) | ||
Prepaid expenses and other current assets | 21,472 | 24,041 | ||
Total current assets | (707) | 2,808 | ||
Total assets | (707) | 2,808 | ||
Liabilities | ||||
Other current liabilities | (7,595) | (3,330) | ||
Total current liabilities | (7,595) | (3,330) | ||
Total liabilities | (7,595) | (3,330) | ||
Stockholders' equity | ||||
Accumulated deficit | 6,888 | 6,138 | ||
Total stockholders’ equity | 6,888 | 6,138 | ||
Total liabilities, contingently redeemable preferred stock and stockholders’ equity | $ (707) | $ 2,808 |
REVENUE RECOGNITION - Impact _2
REVENUE RECOGNITION - Impact of the Adoption on Consolidated Statement of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total net revenue | $ 819,830 | $ 645,258 |
Cost of revenue | 670,100 | 543,999 |
Gross profit | 149,730 | 101,259 |
Loss before income taxes | (62,099) | (35,288) |
Net loss | (66,727) | 36,715 |
Net loss attributable to common stockholders | $ (68,856) | $ 35,380 |
Basic and diluted net loss per share attributable to common stockholders (usd per share) | $ (1.13) | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total net revenue | $ 818,134 | |
Cost of revenue | 669,154 | |
Gross profit | 148,980 | |
Loss before income taxes | (62,849) | |
Net loss | (67,477) | |
Net loss attributable to common stockholders | $ (69,606) | |
Basic and diluted net loss per share attributable to common stockholders (usd per share) | $ (1.14) | |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total net revenue | $ 1,696 | |
Cost of revenue | 946 | |
Gross profit | 750 | |
Loss before income taxes | 750 | |
Net loss | 750 | |
Net loss attributable to common stockholders | $ 750 | |
Basic and diluted net loss per share attributable to common stockholders (usd per share) | $ 0.01 |
OTHER GAINS (LOSSES) , NET - Co
OTHER GAINS (LOSSES) , NET - Components of Other Gains (Losses), Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Other Income and Expenses [Abstract] | ||
Foreign currency exchange gains, net | $ 337 | $ 1,055 |
Derecognition of accrued pricing liabilities | 4,573 | 0 |
Gain, net on Trading Securities | 0 | 1,876 |
Other, net | (307) | (708) |
Other gains (losses), net | $ 4,603 | $ 2,223 |
OTHER GAINS (LOSSES) , NET - Ad
OTHER GAINS (LOSSES) , NET - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Component Of Other Expense Income Nonoperating [Line Items] | ||
Other gains, net | $ 4,603 | $ 2,223 |
Derecognition of accrued pricing liabilities | 4,573 | 0 |
Net realized and unrealized foreign currency exchange gain (losses) | 300 | 1,100 |
Other, net | (307) | (708) |
Gains (losses) in trading securities | $ 0 | 1,876 |
Non Cash | ||
Component Of Other Expense Income Nonoperating [Line Items] | ||
Gains (losses) in trading securities | $ 1,900 |
SHARE-BASED PAYMENTS - Addition
SHARE-BASED PAYMENTS - Additional Information (Detail) $ in Millions | Dec. 15, 2017shares | Jul. 31, 2019USD ($)planshares | Jul. 31, 2018USD ($)shares | Dec. 08, 2010shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of plans | plan | 2 | |||
Exercisable rate of options granted (in percentage) | 25.00% | |||
2010 Plan number of shares pursuant to stock options granted (in shares) | 0 | 0 | ||
Stock options vested and expected to vest (in shares) | 300,000 | |||
Weighted-average remaining contractual term (in years) | 1 year 1 month 5 days | |||
Non vested stock compensation expense | $ | $ 1.2 | $ 10.7 | ||
Grant date fair value of nonvested stock | $ | 0.5 | $ 11.5 | ||
Unrecognized compensation cost related to nonvested stock | $ | $ 0.3 | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common Stock shares available for future issuance (in shares) | 109,000 | |||
Number of shares pursuant to stock options granted (in shares) | 600,000 | |||
Common stock purchase price as a percentage of market value (in percentage) | 85.00% | |||
Shares issued under plan (in shares) | 17,000 | 10,000 | ||
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual terms, share options granted (in years) | 7 years | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period of cost expected to be expensed (in years) | 4 months 18 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercisable terms (in years) | 1 year | |||
Term of restriction period (in years) | 1 year | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercisable terms (in years) | 3 years | |||
Term of restriction period (in years) | 5 years | |||
2005 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercisable terms (in years) | 3 years | |||
2005 Plan | Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual terms, share options granted (in years) | 10 years | |||
2010 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
2010 Plan number of shares pursuant to stock options granted (in shares) | 11,000,000 | |||
2010 Plan additional shares of common stock (in shares) | 2,922,258 | |||
Common Stock shares available for future issuance (in shares) | 4,498,546 | |||
2010 Plan | Restricted Stock | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock award granted (in shares) | 4,000,000 | |||
Restricted stock award vested (in shares) | 4,000,000 | |||
2010 Plan | Market Performance Based Restricted Stock | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock award granted (in shares) | 1,500,000 | |||
Restricted stock award vested (in shares) | 1,000,000 |
SHARE-BASED PAYMENTS - Summary
SHARE-BASED PAYMENTS - 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, 2019 | Jul. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,267 | $ 10,801 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 0 | 14 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,267 | $ 10,787 |
SHARE-BASED PAYMENTS - Summar_2
SHARE-BASED PAYMENTS - Summary of Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Number of Shares | ||
Stock options outstanding, July 31, 2018 (in shares) | 438,000 | |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | 0 | |
Forfeited or expired (in shares) | (113,000) | |
Stock options outstanding, July 31, 2019 (in shares) | 325,000 | 438,000 |
Stock options exercisable, July 31, 2019 (in shares) | 325,000 | |
Weighted- Average Exercise Price | ||
Stock options outstanding, July 31, 2018 (in usd per shares) | $ 3.99 | |
Granted (in usd per shares) | 0 | |
Exercised (in usd per shares) | 0 | |
Forfeited or expired (in usd per shares) | 3.74 | |
Stock options outstanding, July 31, 2019 (in usd per shares) | 4.07 | $ 3.99 |
Stock options exercisable, July 31, 2019 (in usd per shares) | $ 4.07 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Stock options outstanding, July 31, 2019 | 1 year 1 month 13 days | |
Stock options exercisable, July 31, 2019 | 1 year 1 month 13 days | |
Aggregate Intrinsic Value | ||
Stock options outstanding, July 31, 2019 | $ 0 | |
Stock options exercisable, July 31, 2019 | $ 0 |
SHARE-BASED PAYMENTS - Summar_3
SHARE-BASED PAYMENTS - Summary of Activity of Nonvested Stock (Detail) shares in Thousands | 12 Months Ended |
Jul. 31, 2019$ / sharesshares | |
Number of Shares | |
Nonvested stock outstanding, July 31, 2018 (in shares) | shares | 1,165 |
Granted (in shares) | shares | 405 |
Vested (in shares) | shares | (1,165) |
Forfeited (in shares) | shares | 0 |
Nonvested stock outstanding, July 31, 2019 (in shares) | shares | 405 |
Weighted-Average Grant Date Fair Value | |
Nonvested stock outstanding, July 31, 2018 (in usd per shares) | $ / shares | $ 0.44 |
Granted (in usd per shares) | $ / shares | 1.73 |
Vested (in usd per shares) | $ / shares | 0.44 |
Forfeited (in usd per shares) | $ / shares | 0 |
Nonvested stock outstanding, July 31, 2019 (in usd per shares) | $ / shares | $ 1.73 |
INCOME TAXES - Components of Lo
INCOME TAXES - Components of Loss from Continuing Operations before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
U.S. | $ (68,959) | $ (60,574) |
Foreign | 6,860 | 25,286 |
Loss before income taxes | $ (62,099) | $ (35,288) |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) from operations | $ 4,670 | $ (71,202) |
Total income tax expense (benefit) | $ 4,670 | $ (71,202) |
INCOME TAXES - Components of _2
INCOME TAXES - Components of Income Tax Expense from Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Current provision | ||
Federal | $ 0 | $ 0 |
State | 288 | 0 |
Foreign | 1,525 | 7,592 |
Current provision | 1,813 | 7,592 |
Deferred provision: | ||
Federal | 1,563 | (76,168) |
State | 753 | (2,352) |
Foreign | 541 | (274) |
Deferred provision | 2,857 | (78,794) |
Total tax provision | $ 4,670 | $ (71,202) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) | Jan. 01, 2018 | Dec. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Dec. 15, 2017 |
Income Taxes [Line Items] | |||||
Net deferred tax assets | $ 46,564,000 | $ 52,275,000 | |||
Change in valuation allowance | 12,700,000 | (333,400,000) | |||
Statutory federal income tax rate | 21.00% | 35.00% | |||
Reduction in the valuation allowance | $ 280,400,000 | ||||
Interest expense related to uncertain tax positions | 0 | ||||
Provision for income tax expense (benefit) | 280,400,000 | ||||
Unrecognized tax benefits, including interest, related to federal, state and foreign taxes | 2,400,000 | 1,600,000 | |||
Increase(decrease) in liabilities for interest expense related to uncertain tax positions | 200,000 | 100,000 | |||
Expected any unrecognized tax benefits to reverse in the next twelve months | 0 | ||||
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 | $ 77,000,000 | ||||
Federal | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards | 2,100,000,000 | ||||
State | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards | 160,000,000 | ||||
Foreign | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards | 72,600,000 | ||||
Foreign net operating loss carryforward with indefinite period | 56,700,000 | ||||
Federal and State | |||||
Income Taxes [Line Items] | |||||
Net capital loss carryforwards | 19,400,000 | ||||
Other Assets | |||||
Income Taxes [Line Items] | |||||
Net deferred tax assets | 1,000,000 | 1,600,000 | |||
Other Long -term Liabilities | |||||
Income Taxes [Line Items] | |||||
Deferred tax liability | $ 100,000 | $ 100,000 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Deferred tax assets: | ||
Accruals and reserves | $ 21,297 | $ 16,070 |
Tax basis in excess of financial basis of investments in affiliates | 6,534 | 6,232 |
Tax basis in excess of financial basis for intangible and fixed assets | 187 | 311 |
Net operating loss and capital loss carry forwards | 469,735 | 468,129 |
Total gross deferred tax assets | 497,753 | 490,742 |
Less: valuation allowance | (451,189) | (438,467) |
Net deferred tax assets | 46,564 | 52,275 |
Deferred tax liabilities: | ||
Financial basis in excess of tax basis for intangible and fixed assets | (43,885) | (50,141) |
Convertible Debt | (1,761) | (634) |
Total gross deferred tax liabilities | (45,646) | (50,775) |
Net deferred tax asset | $ 918 | $ 1,500 |
INCOME TAXES - Difference of In
INCOME TAXES - Difference of Income Tax Expense Attributable to Income from Continuing Operations and Expense Computed using U.S. Federal Income Tax (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Computed expected income tax expense (benefit) | $ (13,041) | $ (9,467) |
Increase (decrease) in income tax expense resulting from: | ||
Change in valuation allowance | 16,158 | (329,415) |
Foreign dividends | 0 | 7,379 |
Foreign tax rate differential | (593) | (1,948) |
Federal rate change | 0 | 280,438 |
Nondeductible goodwill impairment | 0 | 191 |
Nondeductible expenses | 2,484 | (15,852) |
Foreign withholding taxes | 336 | 1,961 |
Addition (reversal) of uncertain tax position reserves | 645 | (48) |
State benefit of U.S. Loss | 0 | (4,654) |
State income taxes, net of federal benefit | 113 | 0 |
Other | (1,432) | 213 |
Total tax provision | $ 4,670 | $ (71,202) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance as of beginning of year | $ 1,525 | $ 681 |
Additions for current year tax positions | 704 | 903 |
Currency translation | (22) | 0 |
Reductions for lapses in statute of limitations | 0 | (59) |
Balance as of end of year | $ 2,207 | $ 1,525 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME - Accumulated Other Comprehensive Income, Net of Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | $ 107,628 | $ 62,971 |
Foreign currency translation adjustment | (1,331) | (1,174) |
Net unrealized holding loss on securities | (85) | 14 |
Pension liability adjustments | (284) | (419) |
Other comprehensive loss | (1,700) | (1,579) |
Balance | 52,692 | 107,628 |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | 2,734 | 4,313 |
Foreign currency translation adjustment | (1,331) | |
Net unrealized holding loss on securities | (85) | |
Pension liability adjustments | (284) | |
Other comprehensive loss | (1,700) | (1,579) |
Balance | 1,034 | 2,734 |
Foreign currency items | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | 6,348 | |
Foreign currency translation adjustment | (1,331) | |
Net unrealized holding loss on securities | 0 | |
Pension liability adjustments | 0 | |
Other comprehensive loss | (1,331) | |
Balance | 5,017 | 6,348 |
Pension items | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | (3,795) | |
Foreign currency translation adjustment | 0 | |
Net unrealized holding loss on securities | 0 | |
Pension liability adjustments | (284) | |
Other comprehensive loss | (284) | |
Balance | (4,079) | (3,795) |
Unrealized gains (losses) on securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | 181 | |
Foreign currency translation adjustment | 0 | |
Net unrealized holding loss on securities | (85) | |
Pension liability adjustments | 0 | |
Other comprehensive loss | (85) | |
Balance | $ 96 | $ 181 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Equity [Abstract] | ||
Other comprehensive income (loss), tax | $ 0.1 | $ 0.1 |
STATEMENT OF CASH FLOWS SUPPL_3
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION - Reconciliation of Cash (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Supplemental Cash Flow Elements [Abstract] | |||
Cash and cash equivalents | $ 32,548 | $ 92,138 | |
Funds held for clients | 13,516 | 11,688 | |
Cash, cash equivalents and restricted cash | $ 46,064 | $ 103,826 | $ 124,124 |
STATEMENT OF CASH FLOWS SUPPL_4
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION - Cash Used for Operating Activities Reflect Cash Payments for Interest and Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 38,525 | $ 24,642 |
Cash paid for income taxes | $ 5,451 | $ 2,567 |
STATEMENT OF CASH FLOWS SUPPL_5
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Issuance of nonvested common stock ( in shares) | 0.4 | 6.7 |
Issuance of nonvested common stock, value | $ 0.7 | $ 11.5 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Detail) $ / shares in Units, $ in Thousands | Dec. 15, 2017USD ($)d$ / sharesshares | Mar. 12, 2013USD ($)$ / sharesshares | Jul. 31, 2019USD ($)$ / sharesshares | Jul. 31, 2018USD ($)$ / sharesshares |
Equity [Line Items] | ||||
Preferred stock, shares issued (in share) | shares | 0 | 0 | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||
Price per share (usd per share) | $ 4 | |||
Proceeds from issuance of preferred stock | $ | $ 0 | $ 35,000 | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||
Percentage of declared dividends | 100.00% | |||
Issuance of common stock (in shares) | 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 | $ 15 | $ 8 | |
Issuance of warrants to acquire additional shares (in shares) | shares | 2,000,000 | 2,000,000 | ||
Issuance of warrants to acquire additional shares, exercise price (usd per share) | $ 5 | |||
Warrants expiration term | 5 years | |||
Series C Convertible Preferred Stock | ||||
Equity [Line Items] | ||||
Common stock, par value (in usd per share) | $ 0.01 | |||
Convertible preferred stock conversion price per share (usd 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 | d | 5 | |||
Purchase Agreement | SPHG Holdings | Series C Convertible Preferred Stock | ||||
Equity [Line Items] | ||||
Preferred stock, shares issued (in share) | shares | 35,000 | |||
Preferred stock, par value (in usd per share) | $ 0.01 | |||
Price per share (usd per share) | $ 1,000 | |||
Proceeds from issuance of preferred stock | $ | $ 35,000 | |||
Percentage of stated value | 100.00% | |||
Repurchase Agreements | Warrant | Steel Holdings | ||||
Equity [Line Items] | ||||
Repurchase price of warrant (per share) | $ 100 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Assets Measured at Fair Value on Recurring Basis and Classified by Fair Value Hierarchy (Detail) - Fair Value, Measurements, Recurring - Money market funds - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | $ 365 | $ 47,186 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 365 | 47,186 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Plan
FAIR VALUE MEASUREMENTS - Plan Assets Measured at Fair Value on Recurring Basis Classified by Fair Value Hierarchy (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 27,267 | $ 22,860 | $ 21,204 |
Asset Allocations | 100.00% | 100.00% | |
Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 98.00% | 98.00% | |
Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 2.00% | 2.00% | |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 27,267 | $ 22,860 | |
Asset Allocations | 100.00% | ||
Fair Value, Measurements, Recurring | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 26,651 | 22,339 | |
Asset Allocations | 98.00% | ||
Fair Value, Measurements, Recurring | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 616 | 521 | |
Asset Allocations | 2.00% | ||
Fair Value, Measurements, Recurring | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 27,267 | 22,860 | |
Fair Value, Measurements, Recurring | Level 3 | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 26,651 | 22,339 | |
Fair Value, Measurements, Recurring | Level 3 | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 616 | $ 521 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Changes in Fair Value of Pension Plan Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Change in plan assets | ||
Fair value of plan assets at beginning of year | $ 22,860 | $ 21,204 |
Actual return on plan assets | 5,136 | 1,541 |
Employer contributions, net | 422 | 402 |
Employee contributions | 73 | 92 |
Settlements | (19) | (21) |
Benefits and administrative expenses paid | (197) | (372) |
Currency translation | (1,008) | 14 |
Fair value of plan assets at end of year | $ 27,267 | $ 22,860 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Plan assets, actual allocation, percentage | 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 |
FAIR VALUE MEASUREMENTS - Notes
FAIR VALUE MEASUREMENTS - Notes Payable not Carried at Fair Value (Detail) $ in Thousands | Jul. 31, 2018USD ($) |
Fair Value Disclosures [Abstract] | |
Note payable | $ 64,530 |
Notes payable, Fair Value | $ 66,658 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019USD ($)segment | Jul. 31, 2018USD ($) | Aug. 01, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 2 | ||
Number of reportable segments | segment | 2 | ||
Total assets | $ 731,563 | $ 827,050 | $ 829,858 |
Total net revenue | 819,830 | 645,258 | |
U.S | |||
Segment Reporting Information [Line Items] | |||
Total assets | 86,300 | 101,800 | |
Total net revenue | 557,200 | 358,300 | |
China | |||
Segment Reporting Information [Line Items] | |||
Total net revenue | 142,400 | 112,300 | |
Netherlands | |||
Segment Reporting Information [Line Items] | |||
Total net revenue | 51,400 | 59,500 | |
Czech Republic | |||
Segment Reporting Information [Line Items] | |||
Total net revenue | $ 4,700 | $ 48,700 |
SEGMENT INFORMATION - Summarize
SEGMENT INFORMATION - Summarized Financial Information of Continuing Operations by Operating Segment and Corporate-Level Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 819,830 | $ 645,258 |
Operating income (loss) | (25,279) | (8,306) |
Total other income (expense) | (36,820) | (26,982) |
Loss before income taxes | (62,099) | (35,288) |
Supply Chain | ||
Segment Reporting Information [Line Items] | ||
Revenues | 332,928 | |
Direct Marketing | ||
Segment Reporting Information [Line Items] | ||
Revenues | 486,902 | |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | (12,976) | 11,353 |
Operating Segments | Supply Chain | ||
Segment Reporting Information [Line Items] | ||
Revenues | 332,928 | 345,900 |
Operating income (loss) | (3,822) | 613 |
Operating Segments | Direct Marketing | ||
Segment Reporting Information [Line Items] | ||
Revenues | 486,902 | 299,358 |
Operating income (loss) | (9,154) | 10,740 |
Corporate-level activity | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | $ (12,303) | $ (19,659) |
SEGMENT INFORMATION - Total Ass
SEGMENT INFORMATION - Total Assets of Continuing Operations (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 |
Segment Reporting Information [Line Items] | |||
Total assets | $ 731,563 | $ 829,858 | $ 827,050 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 713,102 | 762,943 | |
Operating Segments | Supply Chain | |||
Segment Reporting Information [Line Items] | |||
Total assets | 112,712 | 120,123 | |
Operating Segments | Direct Marketing | |||
Segment Reporting Information [Line Items] | |||
Total assets | 600,390 | 642,820 | |
Corporate-level activity | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 18,461 | $ 64,107 |
SEGMENT INFORMATION - Summari_2
SEGMENT INFORMATION - Summarized Financial Information of Net Revenue from External Customers by Group of Services (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 819,830 | $ 645,258 |
Supply Chain | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 332,928 | 345,900 |
Direct Marketing | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 486,902 | $ 299,358 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 01, 2019 | Dec. 15, 2017 | Mar. 12, 2013 | Jul. 31, 2019 | Jul. 31, 2018 | Feb. 28, 2019 | Dec. 04, 2018 |
Related Party Transaction [Line Items] | |||||||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | |||||
Convertible Notes payable | $ 0 | $ 50,274 | |||||
Debt instrument stated percentage | 5.25% | ||||||
Convertible notes payable | $ 65,600 | $ 64,500 | $ 65,600 | ||||
Preferred stock, shares issued (in share) | 0 | 0 | |||||
Price per share (usd per share) | $ 4 | ||||||
Proceeds from issuance of preferred stock | $ 0 | $ 35,000 | |||||
Issuance of warrants to acquire additional shares (in shares) | 2,000,000 | 2,000,000 | |||||
Steel Holdings | 5.25% Convertible Senior Notes | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage in capital stock | 56.30% | ||||||
Preferred stock, par value (in usd per share) | $ 0.01 | ||||||
SPHG Holdings | Convertible Senior Unsecured Note | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible Notes payable | $ 14,900 | ||||||
Debt instrument stated percentage | 7.50% | 7.50% | |||||
Purchase Agreement | SPHG Holdings | Series C Convertible Preferred Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Preferred stock, par value (in usd per share) | $ 0.01 | ||||||
Preferred stock, shares issued (in share) | 35,000 | ||||||
Price per share (usd per share) | $ 1,000 | ||||||
Proceeds from issuance of preferred stock | $ 35,000 | ||||||
SPHG Holdings | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of Debt | 65,600 | ||||||
Convertible notes payable | $ 14,900 | 14,900 | |||||
SPHG Holdings | Convertible Senior Unsecured Note | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible Notes payable | $ 14,900 | ||||||
Debt instrument stated percentage | 5.25% | 7.50% | |||||
Steel Services Ltd | Management Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Total expenses incurred related to Management Services Agreement and Transfer Agreement | $ 1,800 | 1,900 | |||||
SP Corporate Services Llc and Steel Services Limited | Management Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Amount due to related parties | $ 500 | 200 | |||||
SPHG Holdings | IWCO | Affiliated Entity [Member] | Reimbursement of Air Travel | |||||||
Related Party Transaction [Line Items] | |||||||
Air travel costs reimbursed | $ 500 | ||||||
Repurchase Agreements | Warrant | Steel Holdings | |||||||
Related Party Transaction [Line Items] | |||||||
Repurchase price of warrant (per share) | $ 100 |
PARENT COMPANY CONDENSED FINA_3
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - Additional Information (Detail) - IWCO - Cerberus Credit Facility | Jul. 31, 2019USD ($) |
Supplemental Financial Information [Line Items] | |
Funds held for clients | $ 9,600,000 |
Maximum | |
Supplemental Financial Information [Line Items] | |
Cash distributions | $ 5,000,000 |
PARENT COMPANY CONDENSED FINA_4
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - Schedule of Balance Sheet (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 | Jul. 31, 2017 |
ASSETS | ||||
Cash and cash equivalents | $ 32,548 | $ 92,138 | ||
Prepaid expenses and other current assets | 31,445 | $ 37,456 | 13,415 | |
Total current assets | 213,324 | 267,089 | 264,281 | |
Other assets | 7,325 | 8,821 | ||
Total assets | 731,563 | 829,858 | 827,050 | |
LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||
Accounts payable | 85,898 | 78,212 | ||
Accrued expenses | 112,658 | 88,426 | ||
Convertible Notes payable | 0 | 50,274 | ||
Total current liabilities | 256,850 | 273,026 | 276,356 | |
Convertible Notes payable | 7,432 | 14,256 | ||
Total long-term liabilities | 386,835 | 407,874 | ||
Total liabilities | 643,685 | 680,900 | 684,230 | |
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2019 and 2018 | 35,186 | 35,192 | ||
Stockholders' equity: | ||||
Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at July 31, 2019 and July 31, 2018; zero shares issued and outstanding at July 31, 2019 and July 31, 2018 | 0 | 0 | ||
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 61,805,856 issued and outstanding shares at July 31, 2019; 60,742,859 issued and outstanding shares at July 31, 2018 | 618 | 608 | ||
Additional paid-in capital | 7,477,327 | 7,467,855 | ||
Accumulated deficit | (7,426,287) | (7,357,431) | (7,363,569) | |
Accumulated other comprehensive income | 1,034 | 2,734 | ||
Total stockholders' equity | 52,692 | 113,766 | 107,628 | $ 62,971 |
Total liabilities, contingently redeemable preferred stock and stockholders' equity | 731,563 | $ 829,858 | 827,050 | |
Parent Company | ||||
ASSETS | ||||
Cash and cash equivalents | 4,083 | 7,978 | ||
Prepaid expenses and other current assets | 227 | 120 | ||
Total current assets | 4,310 | 8,098 | ||
Investments in affiliates | 96,940 | 188,534 | ||
Other assets | 337 | 87 | ||
Due from subsidiaries | 0 | 13,579 | ||
Total assets | 101,587 | 210,298 | ||
LIABILITIES, CONTINGENTLY REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||
Accounts payable | 1,253 | 674 | ||
Accrued expenses | 2,364 | 2,274 | ||
Convertible Notes payable | 0 | 50,274 | ||
Total current liabilities | 3,617 | 53,222 | ||
Convertible Notes payable | 7,432 | 14,256 | ||
Due to subsidiaries | 2,660 | |||
Total long-term liabilities | 10,092 | 14,256 | ||
Total liabilities | 13,709 | 67,478 | ||
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2019 and 2018 | 35,186 | 35,192 | ||
Stockholders' equity: | ||||
Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at July 31, 2019 and July 31, 2018; zero shares issued and outstanding at July 31, 2019 and July 31, 2018 | 0 | 0 | ||
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 61,805,856 issued and outstanding shares at July 31, 2019; 60,742,859 issued and outstanding shares at July 31, 2018 | 618 | 608 | ||
Additional paid-in capital | 7,477,327 | 7,467,855 | ||
Accumulated deficit | (7,426,287) | (7,363,569) | ||
Accumulated other comprehensive income | 1,034 | 2,734 | ||
Total stockholders' equity | 52,692 | 107,628 | ||
Total liabilities, contingently redeemable preferred stock and stockholders' equity | $ 101,587 | $ 210,298 |
PARENT COMPANY CONDENSED FINA_5
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - Schedule of Balance Sheet -Additional Information (Detail) - $ / shares | Jul. 31, 2019 | Jul. 31, 2018 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in share) | 4,965,000 | 4,965,000 |
Preferred stock, shares issued (in share) | 0 | 0 |
Preferred stock, shares outstanding (in share) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares Authorized (in share) | 1,400,000,000 | 1,400,000,000 |
Common stock, shares issued (in share) | 61,805,856 | 60,742,859 |
Common stock, shares outstanding (in share) | 61,805,856 | 60,742,859 |
Redeemable preferred stock | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in share) | 35,000 | 35,000 |
Preferred stock, shares issued (in share) | 35,000 | 35,000 |
Preferred stock, shares outstanding (in share) | 35,000 | 35,000 |
Parent Company | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in share) | 4,965,000 | 4,965,000 |
Preferred stock, shares issued (in share) | 0 | 0 |
Preferred stock, shares outstanding (in share) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares Authorized (in share) | 1,400,000,000 | 1,400,000,000 |
Common stock, shares issued (in share) | 61,805,856 | 60,742,859 |
Common stock, shares outstanding (in share) | 61,805,856 | 60,742,859 |
Parent Company | Redeemable preferred stock | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in share) | 35,000 | 35,000 |
Preferred stock, shares issued (in share) | 35,000 | 35,000 |
Preferred stock, shares outstanding (in share) | 35,000 | 35,000 |
PARENT COMPANY CONDENSED FINA_6
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - Schedule of Statements of Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Condensed Income Statements, Captions [Line Items] | ||
Selling, general and administrative | $ 144,078 | $ 101,972 |
Total operating expenses | 175,009 | 109,565 |
Operating loss | (25,279) | (8,306) |
Other income (expense): | ||
Interest expense | (41,951) | (29,884) |
Other income (expense), net | 4,603 | 2,223 |
Total other expense | (36,820) | (26,982) |
Loss before income taxes | (62,099) | (35,288) |
Gains on investments in affiliates, net of tax | (42) | (801) |
Net income (loss) | (66,727) | 36,715 |
Parent Company | ||
Condensed Income Statements, Captions [Line Items] | ||
Selling, general and administrative | 12,303 | 16,742 |
Total operating expenses | 12,303 | 16,742 |
Operating loss | (12,303) | (16,742) |
Other income (expense): | ||
Interest expense | (6,081) | (8,427) |
Other income (expense), net | (306) | 6,807 |
Total other expense | (6,387) | (1,620) |
Loss before income taxes | (18,690) | (18,362) |
Equity (gains) losses of subsidiaries, net of tax | 48,079 | (54,276) |
Gains on investments in affiliates, net of tax | (42) | (801) |
Net income (loss) | $ (66,727) | $ 36,715 |
PARENT COMPANY CONDENSED FINA_7
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - Schedule of Statements of Cash Flows (Detail) - USD ($) $ in Thousands | Mar. 12, 2013 | Jul. 31, 2019 | Jul. 31, 2018 |
Cash flows from operating activities: | |||
Net income (loss) | $ (66,727) | $ 36,715 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Amortization of deferred financing costs | 771 | 1,072 | |
Share-based compensation | 1,267 | 10,801 | |
Gains on investments in affiliates and impairments | (42) | (801) | |
Changes in operating assets and liabilities, net of business acquired: | |||
Prepaid expenses and other current assets | 5,519 | 4,797 | |
Other assets and liabilities | 2,316 | (6,176) | |
Net cash provided by operating activities | 20,849 | 10,002 | |
Cash flows from investing activities: | |||
Net cash used in investing activities | (14,478) | (452,320) | |
Cash flows from financing activities: | |||
Proceeds from issuance of preferred stock | 0 | 35,000 | |
Proceeds from issuance of Convertible Note | 14,940 | 0 | |
Payments on maturity of Convertible Notes | (63,925) | 0 | |
Payment of preferred dividends | (2,129) | (1,143) | |
Purchase of the Company's Convertible Notes | (3,700) | 0 | |
Proceeds from issuance of common stock | $ 27,700 | 15 | 8 |
Net cash provided by (used in) financing activities | (63,812) | 421,879 | |
Net decrease in cash, cash equivalents and restricted cash | (57,762) | (20,298) | |
Cash, cash equivalents and restricted cash, beginning of period | 103,826 | 124,124 | |
Cash, cash equivalents and restricted cash, end of period | 46,064 | 103,826 | |
Parent Company | |||
Cash flows from operating activities: | |||
Net income (loss) | (66,727) | 36,715 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Amortization of deferred financing costs | 243 | 388 | |
Accretion of debt discount | 3,433 | 4,384 | |
Share-based compensation | 1,267 | 10,763 | |
Non-cash (gains) losses, net | 7 | (354) | |
Equity (gains) losses of subsidiaries, net of tax | 48,079 | (54,276) | |
Gains on investments in affiliates and impairments | (42) | (801) | |
Changes in operating assets and liabilities, net of business acquired: | |||
Prepaid expenses and other current assets | (107) | (36) | |
Accounts payable and accrued expenses | 669 | 698 | |
Other assets and liabilities | (250) | (1,860) | |
Net cash provided by operating activities | (13,428) | (4,379) | |
Cash flows from investing activities: | |||
Intercompany advances, net | 64,332 | (22,216) | |
Net cash used in investing activities | 64,332 | (22,216) | |
Cash flows from financing activities: | |||
Proceeds from issuance of preferred stock | 0 | 35,000 | |
Proceeds from issuance of Convertible Note | 14,940 | 0 | |
Payments on maturity of Convertible Notes | (63,925) | 0 | |
Payment of preferred dividends | (2,129) | (1,143) | |
Purchase of the Company's Convertible Notes | (3,700) | 0 | |
Proceeds from issuance of common stock | 15 | 8 | |
Net cash provided by (used in) financing activities | (54,799) | 33,865 | |
Net decrease in cash, cash equivalents and restricted cash | (3,895) | 7,270 | |
Cash, cash equivalents and restricted cash, beginning of period | 7,978 | 708 | |
Cash, cash equivalents and restricted cash, end of period | $ 4,083 | $ 7,978 |