Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2020 | Sep. 01, 2020 | Jan. 31, 2020 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jul. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
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 Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 62,755,024 | ||
Entity Public Float | $ 51.9 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 75,887 | $ 32,548 |
Accounts receivable, trade, net of allowance for doubtful accounts of $134 and $1,804 at July 31, 2020 and 2019, respectively | 93,072 | 112,141 |
Inventories, net | 15,354 | 23,674 |
Funds held for clients | 18,755 | 13,516 |
Prepaid expenses and other current assets | 20,475 | 31,445 |
Total current assets | 223,543 | 213,324 |
Property and equipment, net | 79,678 | 91,268 |
Goodwill | 257,128 | 257,128 |
Other intangible assets, net | 135,263 | 162,518 |
Operating right-of-use assets | 56,140 | |
Other assets | 7,420 | 7,325 |
Total assets | 759,172 | 731,563 |
Current liabilities: | ||
Accounts payable | 70,002 | 85,898 |
Accrued expenses | 111,380 | 112,658 |
Funds held for clients | 18,755 | 13,516 |
Current portion of long-term debt | 5,527 | 5,732 |
Current lease obligations | 14,318 | 127 |
Other current liabilities | 29,950 | 38,919 |
Total current liabilities | 249,932 | 256,850 |
Convertible note payable | 8,054 | 7,432 |
Long-term debt, excluding current portion | 365,468 | 368,505 |
Long-term lease obligations | 43,211 | |
Other long-term liabilities | 8,509 | 10,898 |
Total long-term liabilities | 425,242 | 386,835 |
Total liabilities | 675,174 | 643,685 |
Commitments and contingencies (Note 9) | ||
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at July 31, 2020 and 2019 | 35,180 | 35,186 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at July 31, 2020 and 2019; zero shares issued and outstanding at July 31, 2020 and 2019 | 0 | 0 |
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 62,787,919 issued and outstanding shares at July 31, 2020; 61,805,856 issued and outstanding shares at July 31, 2019 | 628 | 618 |
Additional paid-in capital | 7,478,047 | 7,477,327 |
Accumulated deficit | (7,433,700) | (7,426,287) |
Accumulated other comprehensive income | 3,843 | 1,034 |
Total stockholders' equity | 48,818 | 52,692 |
Total liabilities, contingently redeemable preferred stock and stockholders' equity | $ 759,172 | $ 731,563 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Accounts receivable, trade, allowance for doubtful accounts | $ 134 | $ 1,804 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in shares) | 4,965,000 | 4,965,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares Authorized (in shares) | 1,400,000,000 | 1,400,000,000 |
Common stock, shares outstanding (in shares) | 60,742,859 | |
Common stock, shares issued (in shares) | 62,787,919 | 60,742,859 |
Contingent Convertible Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares Authorized (in shares) | 35,000 | 35,000 |
Preferred stock, shares issued (in shares) | 35,000 | 35,000 |
Preferred stock, shares outstanding (in shares) | 35,000 | 35,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Net revenue: | ||
Total net revenue | $ 782,813 | $ 819,830 |
Cost of revenue: | ||
Cost of revenue | 619,854 | 670,100 |
Gross profit | 162,959 | 149,730 |
Operating expenses: | ||
Selling, general and administrative | 103,261 | 144,078 |
Amortization of intangible assets | 27,255 | 30,446 |
Loss on sale of property | 0 | 485 |
Total operating expenses | 130,516 | 175,009 |
Operating income (loss) | 32,443 | (25,279) |
Other income (expense): | ||
Interest income | 61 | 528 |
Interest expense | (33,969) | (41,951) |
Other gains, net | 2,098 | 4,603 |
Total other expense | (31,810) | (36,820) |
Income (loss) before income taxes | 633 | (62,099) |
Income tax expense | 5,917 | 4,670 |
Gains on investments in affiliates, net of tax | 0 | (42) |
Net loss | (5,284) | (66,727) |
Less: Preferred dividends on redeemable preferred stock | (2,129) | (2,129) |
Net loss attributable to common stockholders | $ (7,413) | $ (68,856) |
Basic net loss per share attributable to common stockholders (in usd per share) | $ (0.12) | $ (1.13) |
Diluted net loss per share attributable to common stockholders (in usd per share) | $ (0.12) | $ (1.13) |
Weighted average common shares used in: | ||
Basic loss per share (in shares) | 61,644 | 61,180 |
Diluted loss per share (in shares) | 61,644 | 61,180 |
Products | ||
Net revenue: | ||
Total net revenue | $ 444,360 | $ 486,902 |
Cost of revenue: | ||
Cost of revenue | 345,173 | 372,683 |
Services | ||
Net revenue: | ||
Total net revenue | 338,453 | 332,928 |
Cost of revenue: | ||
Cost of revenue | $ 274,681 | $ 297,417 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (5,284) | $ (66,727) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | 8 | (1,331) |
Net loss on securities, net of tax | (96) | (85) |
Pension liability adjustments, net of tax | 2,897 | (284) |
Other comprehensive income (loss) | 2,809 | (1,700) |
Comprehensive loss | $ (2,475) | $ (68,427) |
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 | Cumulative Effect, Period of Adoption, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Accumulated Deficit |
Balance at Jul. 31, 2018 | $ 107,628 | $ 608 | $ 7,467,855 | $ (7,363,569) | $ 2,734 | $ 6,138 | $ 6,138 |
Balance (in shares) at Jul. 31, 2018 | 60,742,859 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (66,727) | (66,727) | |||||
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 | 15 | 15 | |||||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises (in shares) | 17,454 | ||||||
Restricted stock grants | $ 10 | (10) | |||||
Restricted stock grants (in 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 (in shares) at Jul. 31, 2019 | 60,742,859 | 61,805,856 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (5,284) | (5,284) | |||||
Preferred dividends | (2,129) | (2,129) | |||||
Issuance of common stock pursuant to employee stock purchase plan | 10 | 10 | |||||
Issuance of common stock pursuant to employee stock purchase plan and stock option exercises (in shares) | 21,540 | ||||||
Restricted stock grants, net of forfeitures | $ 10 | (10) | |||||
Restricted stock grants, net of forfeitures (in shares) | 960,523 | ||||||
Share-based compensation | 720 | 720 | |||||
Other comprehensive items | 2,809 | 2,809 | |||||
Balance at Jul. 31, 2020 | $ 48,818 | $ 628 | $ 7,478,047 | $ (7,433,700) | $ 3,843 | ||
Balance (in shares) at Jul. 31, 2020 | 62,787,919 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (5,284) | $ (66,727) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 23,075 | 22,058 |
Amortization of intangible assets | 27,255 | 30,446 |
Amortization of deferred financing costs | 435 | 771 |
Accretion of debt discount | 622 | 3,433 |
Impairment of long-lived assets | 0 | 3,015 |
Share-based compensation | 720 | 1,267 |
Other gains, net | (2,098) | (4,603) |
Gains on investments in affiliates | 0 | (42) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 20,305 | (14,090) |
Inventories, net | 8,510 | 2,482 |
Prepaid expenses and other current assets | 12,396 | 5,519 |
Accounts payable and accrued expenses | (17,464) | 36,486 |
Refundable and accrued income taxes, net | (630) | (1,482) |
Other assets and liabilities | 3,782 | 2,316 |
Net cash provided by operating activities | 71,624 | 20,849 |
Cash flows from investing activities: | ||
Additions to property and equipment | (12,070) | (14,539) |
Proceeds from the disposition of property and equipment | 21 | 19 |
Proceeds from the sale of available-for-sale securities | 163 | 0 |
Proceeds from investments in affiliates | 0 | 42 |
Net cash used in investing activities | (11,886) | (14,478) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible note | 0 | 14,940 |
Proceeds from the Cerberus revolving facility | 19,000 | 10,000 |
Payments on the Cerberus revolving facility | (25,000) | (4,000) |
Payments on maturity of convertible notes | 0 | (63,925) |
Payments of long-term debt | (3,154) | (14,879) |
Payments of debt financing and amendment costs | (914) | 0 |
Payments of preferred dividends | (2,135) | (2,129) |
Purchases of the Company's convertible notes | 0 | (3,700) |
Repayments on capital lease obligations | (100) | |
Repayments on capital lease obligations | (134) | |
Proceeds from issuance of common stock | 19 | 15 |
Net cash used in financing activities | (12,284) | (63,812) |
Net effect of exchange rate changes on cash and cash equivalents | 1,124 | (321) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 48,578 | (57,762) |
Cash, cash equivalents and restricted cash, beginning of period | 46,064 | 103,826 |
Cash, cash equivalents and restricted cash, end of period | $ 94,642 | $ 46,064 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Jul. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Steel Connect, Inc., together with its consolidated subsidiaries (the "Company"), operates through its wholly-owned subsidiaries, IWCO Direct Holdings, Inc. ("IWCO Direct" or "IWCO") and ModusLink Corporation ("ModusLink" or "Supply Chain"). 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. 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. Historically, the Company has financed its operations and met its capital requirements primarily through funds generated from operations, the sale of its 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, ModusLink's credit agreement with MidCap Financial Trust ("MidCap"), IWCO's revolving credit facility and cash, if any, provided by operating activities. The Company's expectations regarding its ability to use its existing cash to continue funding its operations are based on assumptions that may prove to be inaccurate, and the Company may require capital resources sooner than currently expected. While the Company believes it will be able to access this additional liquidity based on existing information, the assumptions underlying this belief may also later prove to be inaccurate. As of July 31, 2020 and 2019 , the Company had cash and cash equivalents of $75.9 million and $32.5 million , respectively. As of July 31, 2020 , the Company had a working capital deficit of $26.4 million , which includes accrued pricing liabilities and certain tax related liabilities which the Company believes will not require a cash outlay in the next twelve months. As of July 31, 2020 , ModusLink had a readily available borrowing capacity under its revolving credit facility of $4.4 million . As of July 31, 2020 , IWCO had a readily available borrowing capacity under its revolving facility of $25.0 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 and future credit facilities, if needed. Impact of COVID-19 In March 2020, the World Health Organization categorized the novel Coronavirus ("COVID-19") as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The spread of the outbreak has caused significant disruptions in the U.S. and global economies, and economists expect the impact will be significant during the next year. The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The Company continues to evaluate the global risks and the slowdown in business activity related to COVID-19, including the potential impacts on its employees, customers, suppliers and financial results. For the fiscal year 2020, COVID-19 required temporary closures of certain of ModusLink's facilities. Additionally, although IWCO operated as an essential business, it had reduced operating levels and labor shifts due to lower sales volume. As of the filing of this Form 10-K, all of the Company's facilities were open and able to operate at normal capacities. Additionally, to help mitigate the financial impact of the COVID-19 pandemic, the Company initiated cost reduction actions, including the waiver of board fees, hiring freezes, staffing and force reductions, Company-wide salary reductions, bonus payment deferrals and temporary 401(k) match suspension. The Company continues its focus on cash management and liquidity, which includes elimination of discretionary spending, aggressive working capital management, strict approvals for capital expenditures and borrowing from its revolving credit facilities, if needed, as a precautionary measure to preserve financial flexibility. The Company will evaluate further actions if circumstances warrant. Currently, the Company anticipates that the impact of the rapid deterioration of the U.S and global economies will most likely continue and have an adverse impact on the Company's business. However, as the situation surrounding COVID-19 remains fluid, it is difficult to predict the duration of the pandemic and the impact on the Company's business, operations, financial condition and cash flows. The severity of the impact on the Company's business beyond fiscal year 2020 will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, the extent and severity of the impact on the Company's customers and suppliers, the continued disruption to the demand for our businesses' products and services, and the impact of the global business and economic environment on liquidity and the availability of capital, all of which are uncertain and cannot be predicted. The Company's future results of operations and liquidity could also be adversely impacted by delays in payments of outstanding receivables beyond normal payment terms, supply chain disruptions, and uncertain demand, and the effect of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by its customers. There is also no certainty that federal, state or local regulations regarding safety measures to address the spread of COVID-19 will not adversely impact the Company's operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jul. 31, 2020 | |
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. During the three months ended October 31, 2019, the Company recorded a $6.4 million adjustment to correct an out-of-period misstatement related to the Company's estimate for certain tax related liabilities. Had this correction been recorded for the fiscal year ended July 31, 2019, the Company's selling, general and administrative expenses and net loss for that period would have been reduced to $137.7 million and $60.3 million , respectively. The Company's accrued expenses as of July 31, 2019 would have been reduced to $106.3 million . Use of Estimates The preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") 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: (1) revenue recognition; (2) valuation allowances for trade and other receivables and inventories; (3) the valuation of goodwill, other intangible assets and long-lived assets; (4) contingencies, including litigation reserves; (5) restructuring charges and related severance expenses; (6) litigation reserves; (7) pension obligations, (8) going concern assumptions, and (9) accrued pricing and tax related liabilities. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. Revenue Recognition The Company recognizes revenue from its contracts with customers primarily from the sale of marketing solutions offerings and supply chain management services. 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 IWCO's marketing solutions offerings and ModusLink's supply chain management services arrangements, 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. 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. 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. Other Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, fees for professional services and fees for the sale of perpetual software licenses in ModusLink's e-Business operations. Except for perpetual software licenses, 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. Revenue from the sale of perpetual licenses is recognized at a point in time upon execution of the relevant license agreement and when delivery has taken place. 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 assets 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's 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, current economic conditions, whether any amounts are currently past due and the length of time accounts may be past due. 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 $ 1,804 $ 480 Provisions charged to expense 111 1,418 Accounts written off (1,781 ) (94 ) $ 134 $ 1,804 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 equivalents consist of highly liquid investments with an original maturity of three months or less at the time of purchase. 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 $ 70,770 $ 32,183 Money market funds 5,117 365 $ 75,887 $ 32,548 Fair Value Measurement The Company measures certain assets and liabilities at fair value (see Note 19 - "Fair Value Measurements"). Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values of assets and liabilities are determined based on a three-level measurement input hierarchy. Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Level 2 inputs are other than quoted market prices that are observable, either directly or indirectly, for an asset or liability. Level 2 inputs can include quoted prices in active markets for similar assets or liabilities, quoted prices in a market that is not active for identical assets or liabilities, or other inputs that can be corroborated by observable market data. Level 3 inputs are unobservable for the asset or liability when there is little, if any, market activity for the asset or liability. Level 3 inputs are based on the best information available and may include data developed by the Company. 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 clients' 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. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined by both moving averages and the first-in, first-out methods. 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 IWCO's inventory as they are generally mailed after the production and sorting process. A provision for excess or obsolete inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns and future sales expectations. Business Combinations and Valuation of Goodwill and Other Acquired Intangible Assets When the Company acquires a business, it allocates the purchase price to the assets acquired, liabilities assumed and any noncontrolling interests based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Significant judgment may be used to determine these fair values, including the use of appraisals, discounted cash flow models, market value for similar purchases or other methods applicable to the circumstances. The assumptions and judgments made by the Company when recording business combinations will have an impact on reported results of operations in the future. During the measurement period, which is not to exceed one year from the acquisition date, the Company 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 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. 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. The Company evaluates recoverability generally 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 recover 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 carrying value of goodwill is not amortized, but is tested for impairment annually as of June 30, and, additionally on an interim basis, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The accounting standards for goodwill allow for the assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company does not utilize a qualitative assessment approach, then the quantitative goodwill impairment test is utilized to identify potential impairments. The Company identifies any potential impairment by comparing the carrying value of a reporting unit to its fair value. The Company typically determines the fair value of its reporting units using a discounted cash flow valuation approach. If a potential impairment is identified, the Company will determine the amount of goodwill impairment by comparing the fair value of a reporting unit with its carrying amount. To the extent the carrying value of a reporting unit exceeds its fair value, a goodwill impairment charge is recognized. The annual and interim impairment tests in the fiscal year ended July 31, 2020 did no t result in impairments to goodwill. Acquired finite-lived intangible assets are amortized over their estimated useful lives. The Company evaluates 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. Property and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Depreciation and amortization is computed by applying the straight-line method to 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: Category Useful Lives Buildings 32 years Machinery and equipment 3 to 7 years Furniture and fixtures 5 to 7 years Automobiles 5 years Software 3 to 8 years Leasehold improvements Shorter of the lease term or the estimated useful life of the asset Leases As discussed below, the Company adopted Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) and related ASUs at the beginning of fiscal year 2020. The Company leases office space, warehouse facilities, equipment and automobiles under operating leases. These leases may also include rent escalation clauses or lease incentives in the form of construction allowances and rent reduction. In determining the lease term used in the lease right-of-use ("ROU") asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease ROU asset and lease liability. The Company is typically required to make fixed minimum rent payments, variable rent payments primarily based on performance, or a combination thereof, directly related to its ROU asset. The Company is also often required, by the lease, to pay for certain other costs including real estate taxes, insurance, common area maintenance fees and/or certain other costs, which may be fixed or variable, depending upon the terms of the respective lease agreement. To the extent these payments are fixed, the Company has included them in calculating the lease ROU assets and lease liabilities. The Company calculates lease ROU assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date. When discount rates implicit in leases cannot be readily determined, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term and are not recognized on the consolidated balance sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. Income Taxes Income taxes are accounted for 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. Deferred tax assets are 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. Income tax accounting standards prescribe: (1) a minimum recognition threshold that an income tax benefit arising from an uncertain income tax position taken, or expected to be taken, on an income tax return is required to meet before being recognized in the financial statements and (2) the measurement of the income tax benefits recognized from such positions. The Company's accounting policy is to classify uncertain income tax positions that are not expected to be resolved in one year as non-current income tax liabilities and to classify potential interest and penalties on uncertain income tax positions as elements of the provision for income taxes in its financial statements. See Note 14 - "Income Taxes," for additional information. Pension Plans The Company sponsors defined benefit pension plans covering certain of its employees in the Netherlands and Japan. In accordance with accounting standards for employee pension benefits, the Company recognizes on a plan-by-plan basis the unfunded status of its pension and post-retirement benefit plans in the consolidated financial statements and measures its pension plan assets and benefit obligations as of July 31. The obligation for the Company's pension plans and the related annual costs of employee benefits are calculated based on several long-term assumptions, including discount rates and expected mortality for employee benefit liabilities, rates of return on plan assets and expected annual rates for salary increases for employee participants. Share-Based Compensation Plans All share-based payment awards to employees and directors are measured based upon their fair values and expensed over the period during with the employee or director is required to provide service in exchange for the award (the vesting period). The Company accounts for forfeitures in the period in which they occur. Deferred Debt Issue Costs Costs to issue debt are capitalized and deferred when incurred and subsequently amortized to interest expense over the term of the related debt using the effective interest rate method. Deferred debt issuance costs are presented in the Company's consolidated balance sheets as a direct deduction from the carrying amount of the associated debt liability. Major Clients and Concentration of Credit Risk For the fiscal years ended July 31, 2020 and 2019 , the Company's 10 largest clients accounted for approximately 57% and 49% of consolidated net revenue, respectively. One Supply Chain client accounted for 17% of the Company's consolidated net revenue for the fiscal year ended July 31, 2020 . No other clients accounted for greater than 10% of the Company's consolidated net revenue for the fiscal year ended July 31, 2020 . 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 . Two computing market clients, individually, accounted for approximately 11% of the Company's net accounts receivable balance as of July 31, 2020 . No other clients accounted for greater than 10% of the Company's net accounts receivable balance as of July 31, 2020 . No clients accounted for greater than 10% of the Company's net accounts receivable balance as of July 31, 2019 . 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. Adoption of New Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842) , which supersedes the previous guidance for lease accounting, Leases (Topic 840). The ASU requires lessees to recognize leases on their balance sheets (through ROU assets and lease liabilities). The Company adopted the provisions of the ASU on August 1, 2019, using the modified retrospective approach and the option presented under ASU 2018-11, Leases (Topic 842) Targeted Improvements , to transition only active leases as of the August 1, 2019 adoption date, with a cumulative effect adjustment recorded as of that date. All comparative periods prior to August 1, 2019 retain the financial reporting and disclosure requirements of ASC 840. The Company elected to utilize the transition package of practical expedients permitted under ASC 842, which, among other things, allowed the Company to carry forward the historical lease classification. Additionally, the Company made an accounting policy election to exempt short-term leases (with an initial term of 12 months or less) from the provisions of ASC 842, which resulted in recognition of the related lease payments on a straight-line basis over the lease term, consistent with prior treatment under ASC 840. The Company did not elect the "hindsight" practical expedient when determining the lease terms under ASC 842. Adoption of ASC 842 resulted in the recording of ROU operating lease assets and corresponding operating lease liabilities of $51.1 million and $53.1 million , respectively, as of August 1, 2019. The difference between the ROU assets and the lease liabilities represents the existing deferred rent balance (under ASC 840), which was reduced to zero, net of prepaids, upon adoption of ASC 842 on August 1, 2019. The adoption of ASC 842 did not materially impact the Company's net earnings and had no impact on its cash flows. The Company's current lease arrangements expire through 2030. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This standard was created to simplify the accounting for share-based payments to nonemployees and provides guidance on how to account for share-based payment awards issued in transactions in which a grantor acquires goods or services to be used or consumed in the grantor's own operations. The amendments in ASU 2018-07 are effective for the Company's 2020 fiscal year. The adoption of the accounting standard did not have a material impact on the Company's financial statements. Accounting Standards Issued and Not Yet Implemented In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Loses on Financial Instruments , an accounting standard update that requires measurement and recognition of expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal year 2024 on a modified retrospective basis which requires a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements. 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 fiscal year 2021, except that the standard permits an entity to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until the effective date. 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 2018-14, 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 fiscal year 2021. 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 first quarter of fiscal year 2021. The Company is currently evaluating the potential impact of this new guidance. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The new guidance is effective for the Company's first quarter of fiscal year 2022. The Company does not expect that the adoption of this new guidance will have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which is intended to provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate, known as LIBOR, or by another reference rate expected to be discontinued. This optional guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jul. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories, net consisted of the following: July 31, July 31, (In thousands) Raw materials $ 14,216 $ 21,322 Work-in-process 253 587 Finished goods 885 1,765 $ 15,354 $ 23,674 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jul. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment at cost, consists of the following: July 31, 2020 2019 (In thousands) Land $ 942 $ 942 Machinery and equipment 112,407 99,961 Leasehold improvements 24,659 23,711 Software 53,715 52,961 Other 20,138 24,230 211,861 201,805 Less: accumulated depreciation and amortization (132,183 ) (110,537 ) Property and equipment, net $ 79,678 $ 91,268 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jul. 31, 2020 | |
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, 2020 relates to the Company's Direct Marketing reporting unit, which is the only reporting unit in the Direct Marketing reportable segment. The Company has not previously recognized any impairment losses for this reporting unit. Other intangible assets, net, as of July 31, 2020 , include trademarks and tradenames, and customer relationships. The trademarks and tradenames intangible assets are being amortized on a straight-line basis and the customer relationship intangible assets are being amortized on a double-declining basis over their estimated useful lives. At least annually, the remaining useful lives are evaluated. The table below presents information for the Company's identifiable intangible assets that are subject to amortization: July 31, 2020 July 31, 2019 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in years) (In thousands) Customer Relationships 15 $ 192,730 $ 60,032 $ 132,698 $ 192,730 $ 39,617 $ 153,113 Trademarks and Trade Names 3 20,520 17,955 2,565 20,520 11,115 9,405 Total $ 213,250 $ 77,987 $ 135,263 $ 213,250 $ 50,732 $ 162,518 As of April 30, 2020, the Company reviewed its goodwill and other intangible assets for indicators of impairment as a result of the impact of the COVID-19 pandemic, and as a result, the Company believes that indicators of impairment were present for all these asset classes due to a general deterioration in macroeconomic conditions, reduced cash flow projections and a significant decline in the Company's market capitalization. The Company performed a quantitative impairment test of goodwill. The Company calculated the fair value of the Direct Marketing reporting unit using a discounted cash flow ("DCF") valuation approach, which indicated the fair value of the reporting unit exceeded its carrying value by greater than $30.0 million , and therefore, as of April 30, 2020 , there was no goodwill impairment. The DCF calculation was dependent on estimates for future sales, operating income, depreciation and amortization, income tax payments, working capital changes and capital expenditures, as well as expected long-term growth rates for cash flows. All of these factors are affected by economic conditions related to the industries in which the Company and its customers operate, as well as in conditions in the global capital markets. The discount rates utilized in the DCF valuation are based upon our weighted average cost of capital, which takes into account the relative weights of each component of capital structure (equity and debt) and represents the expected cost of new capital adjusted as appropriate to consider the risk inherent in future cash flows of the reporting unit. The Company performed a qualitative assessment of whether it was more likely than not that its other intangibles assets were impaired as of April 30, 2020. The Company reviewed its previous forecasts and assumptions based on the Company's current projections, that are subject to various risks and uncertainties, including forecasted revenues, expenses and cash flows, including the duration and extent of impact to our businesses from the COVID-19 pandemic. Based upon that assessment, the Company concluded it was not more likely than not that the other intangible assets were impaired as of April 30, 2020. In the Company's latest annual goodwill impairment test that occurred as of June 30, 2020, the Company elected to perform a qualitative assessment of whether it was more likely than not that goodwill was impaired, and the test determined that goodwill was not impaired. However, as a result of the COVID-19 pandemic, it is possible in future periods that further declines in market conditions, customer demand or other potential changes in operations may increase the risk that goodwill and other intangible assets may become impaired. The table below presents amortization expense recorded by the Company for its identifiable intangible assets. Fiscal Year Ended July 31, 2020 2019 (In thousands) Customer relationships $ 20,415 $ 23,606 Trademarks and trade names 6,840 6,840 Total $ 27,255 $ 30,446 The estimated future amortization expense of intangible assets as of July 31, 2020 is as follows (in thousands): For the Fiscal Years Ended July 31, 2021 $ 20,258 2022 15,334 2023 11,427 2024 9,371 2025 9,371 Thereafter 69,502 $ 135,263 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Jul. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following tables reflect the components of "Accrued expenses" and "Other current liabilities": July 31, July 31, Accrued Expenses (In thousands) Accrued taxes $ 60,744 $ 59,057 Accrued compensation 25,439 22,584 Accrued interest 476 467 Accrued audit, tax and legal 3,399 3,148 Accrued contract labor 981 1,650 Accrued worker's compensation 3,949 4,549 Accrued other 16,392 21,203 $ 111,380 $ 112,658 July 31, July 31, Other Current Liabilities (In thousands) Accrued pricing liabilities $ 13,499 $ 14,309 Customer postage deposits 8,551 11,816 Revolving credit facility — 6,000 Other 7,900 6,794 $ 29,950 $ 38,919 During the fiscal year 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. During the three months ended October 31, 2019, the Company recorded a $6.4 million adjustment to correct an out-of-period misstatement related to the Company's estimate for certain tax related liabilities. As of July 31, 2020 and 2019 , the Company had accrued pricing liabilities of approximately $13.5 million and $14.3 million , respectively. During the fiscal years ended July 31, 2020 and 2019 , the Company concluded that certain accrued pricing liabilities had been extinguished, and the Company derecognized and recorded in other gains, net $0.8 million and $4.6 million , respectively. 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, 2020 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, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below: July 31, 2020 July 31, 2019 (In thousands) Secured Cerberus Term Loan due December 15, 2022 $ 371,972 $ 375,125 Unsecured 7.50% Convertible Senior Note due March 1, 2024 14,940 14,940 Credit Facilities Cerberus Bank Credit Facility — 6,000 MidCap Credit Facility — — Less: unamortized discounts and issuance costs (7,863 ) (8,396 ) Total debt, net 379,049 387,669 Less: current portion of debt, net (5,527 ) (5,732 ) Total long-term debt, net $ 373,522 $ 381,937 5.25% Convertible Senior Notes Payable On March 18, 2014, the Company entered into an indenture (the "Indenture") with Wells Fargo Bank, National Association, as trustee, relating to the Company's issuance of $100 million of 5.25% Convertible Senior Notes (the "Notes"). The Notes 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, as described below. Fiscal Year Ended (In thousands) Interest expense related to contractual interest coupon $ 1,932 Interest expense related to accretion of the discount 2,741 Interest expense related to debt issuance costs 243 $ 4,916 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 amended 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. On December 31, 2019, the Credit Agreement was terminated in accordance with the terms thereof, and all outstanding amounts thereunder were repaid. MidCap Credit Facility On December 31, 2019, ModusLink, as borrower, and certain of its subsidiaries as guarantors (the "MidCap Guarantors"), entered into a revolving credit and security agreement (the "MidCap Credit Agreement"), with MidCap, as lender and as agent. The MidCap Credit Agreement, which has a three year term, provides for a maximum credit commitment of $12.5 million and a sublimit of $5.0 million for letters of credit. The actual maximum credit available under the MidCap 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 (a) eligible accounts receivable; plus (b) the least of (i) the orderly liquidation value of eligible inventory, (ii) the value of eligible inventory based on first-in-first-out cost or market cost and other adjustments, and (iii) $4.5 million ; minus (c) reserves; all as specified in the MidCap Credit Agreement. Amounts borrowed under the MidCap Credit Agreement are due and payable, together with all unpaid interest, fees and other obligations, on December 31, 2022. Generally, borrowings under the MidCap Credit Agreement bear interest at a rate per annum equal to the LIBOR Rate (as defined in the MidCap Credit Agreement), which is subject to adjustment by MidCap, plus a margin of 4% per annum. In addition to paying interest on outstanding principal under the MidCap Credit Agreement, ModusLink is required to pay an unused line fee of 0.50% per annum. ModusLink is also required to pay a customary letter of credit fee equal to the applicable margin on loans bearing interest at the LIBOR Rate. Obligations under the MidCap Credit Agreement are guaranteed by the MidCap Guarantors, and the MidCap Credit Agreement is secured by security interests in substantially all of the assets of ModusLink and the MidCap Guarantors, including a pledge of all of the equity interests of each subsidiary of ModusLink that is a domestic entity (subject to certain limited exceptions). Steel Connect, Inc. is not a borrower or a guarantor under the MidCap Credit Agreement. The MidCap Credit Agreement includes certain representations and warranties of ModusLink, as well as events of default and certain affirmative and negative covenants that are customary for credit agreements of this type. These covenants include restrictions on borrowings, investments and dispositions by ModusLink, as well as limitations on ModusLink's ability to make certain distributions and to enter into transactions with affiliates. The MidCap Credit Agreement requires compliance with certain financial covenants providing for the maintenance of a minimum fixed charge coverage ratio, all as more fully described in the MidCap Credit Agreement. Upon the occurrence and during the continuation of an event of default under the MidCap Credit Agreement, MidCap may, among other things, declare all obligations under the MidCap Credit Agreement immediately due and payable and increase the interest rate at which loans and other obligations under the MidCap Credit Agreement bear interest. At July 31, 2020 , the Company had a readily available borrowing capacity under its MidCap Credit Facility of $4.4 million . At July 31, 2020 , the Company did no t have any balance outstanding on the MidCap Credit Facility. Cerberus Credit Facility On December 15, 2017, the Company entered into a Financing Agreement (the "Financing Agreement"), by and among the Company, 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. Steel Connect, Inc. is not a borrower or a guarantor 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 Company's acquisition of IWCO (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. On March 30, 2020, IWCO entered into Amendment No. 2 to the Financing Agreement ("Amendment No. 2"). Amendment No. 2 amends the Financing Agreement to permit Borrower to defer approximately $3.0 million in principal payments, due between March 31, 2020 and June 30, 2020 , until loan maturity and to forgo the payment of approximately $4.3 million in principal payments pursuant to the excess cash flow sweep in the Financing Agreement. In addition, while Amendment No. 2 limits the total amount Borrower may distribute to the Company for management fees and tax sharing to $5.0 million during the calendar year ending December 31, 2020, Amendment No. 2 also amends the calculation of the excess cash flow defined in the Financing Agreement, for the same period, to eliminate any adverse impact to Borrower from the distribution limit or from the deferral of principal payments. Borrower is required to continue to make all interest payments. In addition, Amendment No. 2 amends the liquidity requirement from $15.0 million to $14.5 million . 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. During the three months ended April 30, 2020, the Company borrowed on the remaining availability under the Revolving Facility as part of a comprehensive precautionary approach to increase the Company's cash position and maximize its financial flexibility in light of the current volatility in the global markets resulting from the COVID-19 pandemic. The full amount was repaid prior to July 31, 2020 . At July 31, 2020 , IWCO had a readily available borrowing capacity under its Revolving Facility of $25.0 million . As of July 31, 2020 , the Company had no balance outstanding on the Revolving Facility. As of July 31, 2019 , the Company had $6.0 million outstanding on the Revolving Facility. As of July 31, 2020 and 2019 , the principal amount outstanding on the Term Loan was $372.0 million and $375.1 million , respectively. As of July 31, 2020 and 2019 , the current and long-term net carrying value of the Term Loan was $371.0 million and $374.2 million , respectively. July 31, 2020 July 31, 2019 (In thousands) Principal amount outstanding on the Term Loan $ 371,972 $ 375,125 Unamortized debt issuance costs (977 ) (888 ) Net carrying value of the Term Loan $ 370,995 $ 374,237 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 its 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 Holdings 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 Holdings 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 the 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 Holdings. 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 is a director of the Company and also affiliated with Steel Holdings GP. William T. Fejes, Jr. was formerly a director of the Company and was 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 and is currently an employee of Steel Services Ltd. ("Steel Services"). The Company 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 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 term 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 sheets. The debt issuance costs were not material. As of July 31, 2020 , the if-converted value of the SPHG Note did not exceed the principal value of the SPHG Note. As of July 31, 2020 , the remaining period over which the unamortized discount will be amortized is 44 months . The table below presents the net carrying value of the SPHG Note: July 31, 2020 July 31, 2019 (In thousands) Carrying amount of equity component $ 8,200 $ 8,200 Principal amount of note $ 14,940 $ 14,940 Unamortized debt discount (6,886 ) (7,508 ) Net carrying amount $ 8,054 $ 7,432 During the fiscal years ended July 31, 2020 and 2019 , the Company recognized interest expense associated with the SPHG Note as follows: Fiscal Year Ended 2020 2019 (In thousands) Interest expense related to contractual interest coupon $ 1,142 $ 473 Interest expense related to accretion of the discount 622 692 $ 1,764 $ 1,165 The effective interest rate on the SPHG Note, including accretion of the discount, is 27.8% . |
LEASES
LEASES | 12 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating and finance leases for office space, office equipment, warehouse space and automobiles. The leases have remaining terms of up to 11 years, some of which include options to purchase, extend or terminate the leases, and management has assessed such terms when determining the lease term for accounting purposes. The Company's current lease arrangements expire through 2030 . The Company's leases do not include any residual value guarantees, and therefore none were considered in the calculation of the operating ROU and operating lease liability balances. The Company has leases that contain variable payments, most commonly in the form of common area maintenance charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the operating ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. For leases with terms greater than 12 months, the Company records the related operating ROU assets and operating lease liabilities at the present value of lease payments over the lease terms. For leases with an initial term of 12 months or less (with purchase options or extension options that are not reasonably certain to be exercised), the Company does not record them on the balance sheet, but instead recognizes lease expense on a straight-line basis over the terms of the leases. Lease Expense The components of the Company's lease expense are presented below: Fiscal Year Ended (In thousands) Operating lease cost $ 16,722 Short-term lease expense 2,358 Variable lease cost 68 Amortization of finance lease assets 38 Interest on finance lease liabilities 11 $ 19,197 Lease Commitments The Company's future minimum lease payments required under operating and finance leases that have commenced as of July 31, 2020 were as follows: Operating Leases Finance Leases (In thousands) 2021 $ 16,059 $ 76 2022 13,039 76 2023 7,904 38 2024 5,579 — 2025 5,410 — Thereafter 18,329 — Total lease payments 66,320 190 Less: imputed interest 8,972 9 Present value of lease payments 57,348 181 Less: current lease obligations 14,207 111 Long-term lease obligations $ 43,141 $ 70 In order to calculate the operating ROU asset and operating lease liability for a lease, ASC 842 requires that a lessee apply a discount rate equal to the rate implicit in the lease whenever that rate is readily determinable. The Company's lease agreements do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors. Therefore, the Company's determines an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value. Additional Lease Information Additional information related to the Company's leases as of July 31, 2020 was as follows: Weighted average remaining lease term: Operating leases 6.1 years Finance leases 2.4 years Weighted average discount rate: Operating leases 4.4% Finance leases 3.8% Supplemental Cash Flow Information Supplemental cash flow information related to the Company's leases during the fiscal year ended July 31, 2020 was as follows (in thousands): Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 15,885 Operating cash flows from finance leases $ 9 Financing cash flows from finance leases $ 100 |
LEASES | LEASES The Company has operating and finance leases for office space, office equipment, warehouse space and automobiles. The leases have remaining terms of up to 11 years, some of which include options to purchase, extend or terminate the leases, and management has assessed such terms when determining the lease term for accounting purposes. The Company's current lease arrangements expire through 2030 . The Company's leases do not include any residual value guarantees, and therefore none were considered in the calculation of the operating ROU and operating lease liability balances. The Company has leases that contain variable payments, most commonly in the form of common area maintenance charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the operating ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. For leases with terms greater than 12 months, the Company records the related operating ROU assets and operating lease liabilities at the present value of lease payments over the lease terms. For leases with an initial term of 12 months or less (with purchase options or extension options that are not reasonably certain to be exercised), the Company does not record them on the balance sheet, but instead recognizes lease expense on a straight-line basis over the terms of the leases. Lease Expense The components of the Company's lease expense are presented below: Fiscal Year Ended (In thousands) Operating lease cost $ 16,722 Short-term lease expense 2,358 Variable lease cost 68 Amortization of finance lease assets 38 Interest on finance lease liabilities 11 $ 19,197 Lease Commitments The Company's future minimum lease payments required under operating and finance leases that have commenced as of July 31, 2020 were as follows: Operating Leases Finance Leases (In thousands) 2021 $ 16,059 $ 76 2022 13,039 76 2023 7,904 38 2024 5,579 — 2025 5,410 — Thereafter 18,329 — Total lease payments 66,320 190 Less: imputed interest 8,972 9 Present value of lease payments 57,348 181 Less: current lease obligations 14,207 111 Long-term lease obligations $ 43,141 $ 70 In order to calculate the operating ROU asset and operating lease liability for a lease, ASC 842 requires that a lessee apply a discount rate equal to the rate implicit in the lease whenever that rate is readily determinable. The Company's lease agreements do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors. Therefore, the Company's determines an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value. Additional Lease Information Additional information related to the Company's leases as of July 31, 2020 was as follows: Weighted average remaining lease term: Operating leases 6.1 years Finance leases 2.4 years Weighted average discount rate: Operating leases 4.4% Finance leases 3.8% Supplemental Cash Flow Information Supplemental cash flow information related to the Company's leases during the fiscal year ended July 31, 2020 was as follows (in thousands): Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 15,885 Operating cash flows from finance leases $ 9 Financing cash flows from finance leases $ 100 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jul. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES 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, Warren Lichtenstein, Glen Kassan, William T. Fejes, Jack L. Howard, Jeffrey J. Fenton, Philip E. Lengyel and Jeffrey S. Wald; and stockholders Steel Holdings L.P. ("Steel Holdings"), Steel Partners, Ltd. ("SPL"), SPHG Holdings, Handy & Harman Ltd. ("HNH") and WHX CS Corp. (collectively, the "Steel Parties") in connection with the acquisition of $35.0 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, the "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 Company's 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. As of July 31, 2020 Messrs. Fejes and Lengyel were no longer members of the Board. 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. On September 6, 2019, all defendants except the Company answered the complaint, denying any liability and asserting affirmative defenses. The same day, the Company as nominal defendant filed an answer submitting to the court's jurisdiction for an adjudication of the purported claims asserted in the complaint. Discovery is proceeding. We are unable at this time to provide a calculation of a potential financial effect on the Company that is probable or estimable. |
DEFINED BENEFIT PENSION PLANS
DEFINED BENEFIT PENSION PLANS | 12 Months Ended |
Jul. 31, 2020 | |
Retirement Benefits [Abstract] | |
DEFINED BENEFIT PENSION PLANS | DEFINED BENEFIT PENSION PLANS The Company sponsors 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. During the year ended July 31, 2020, the Netherlands defined benefit plan was amended so active participants no longer accrued benefits as of January 1, 2020 which resulted in a pre-tax curtailment gain of $2.4 million recognized in accumulated other comprehensive income (loss). The plan assets are primarily related to the two defined benefit plans associated with the Company's Netherlands facility and consist 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, 2020 and 2019 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2020 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 28,388 98 % $ 28,388 Other investments 662 2 % — — 662 $ 29,050 100 % $ — $ — $ 29,050 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 The following table summarizes the changes in benefit obligation, plan assets and funded status for these plans: July 31, 2020 2019 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 34,538 $ 29,849 Service cost 185 365 Interest cost 543 633 Actuarial (gain) loss (691 ) 5,125 Employee contributions 28 72 Benefits and administrative expenses paid (212 ) (197 ) Adjustments — (20 ) Effect of curtailment (2,390 ) — Currency translation 1,926 (1,289 ) Benefit obligation at end of year $ 33,927 $ 34,538 Change in plan assets Fair value of plan assets at beginning of year $ 27,267 $ 22,860 Actual return on plan assets 476 5,136 Employer contributions, net (39 ) 422 Employee contributions 28 73 Settlements — (19 ) Benefits and administrative expenses paid (212 ) (197 ) Currency translation 1,530 (1,008 ) Fair value of plan assets at end of year $ 29,050 $ 27,267 Funded status Current liabilities $ (31 ) $ (13 ) Noncurrent liabilities (4,846 ) (7,259 ) Net amounts recognized on the consolidated balance sheet $ (4,877 ) $ (7,272 ) Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows: July 31, 2020 2019 (In thousands) Projected benefit obligation $ 33,927 $ 34,538 Accumulated benefit obligation $ 33,927 $ 32,361 Fair value of plan assets $ 29,050 $ 27,267 The following table summarizes the components of net periodic pension cost: Fiscal Year Ended 2020 2019 (In thousands) Service cost $ 185 $ 365 Interest costs 543 633 Expected return on plan assets (458 ) (492 ) Amortization of net actuarial loss 74 127 Curtailment gain (143 ) — Net periodic pension costs $ 201 $ 633 The amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2021 is approximately $2.1 million related to amortization of a net actuarial loss and prior service cost. Assumptions The table below summarizes the weighted average assumptions used to determine benefit obligations: Fiscal Year Ended 2020 2019 Discount rate 1.48 % 1.48 % Rate of compensation increase 1.96 % 1.97 % The table below summarizes weighted average assumptions used to determine net periodic pension cost: Fiscal Year Ended 2020 2019 Discount rate 1.39 % 1.46 % Expected long-term rate of return on plan assets 1.37 % 1.45 % Rate of compensation increase 1.77 % 1.92 % 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 of July 31, 2020 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 2025. Actual benefit payments may differ from expected benefit payments. The minimum employer required contributions to the plans are expected to be approximately $0.3 million in fiscal year 2021 . Pension Benefit Payments (In thousands) For the fiscal year ending July 31: 2021 247 2022 258 2023 309 2024 472 2025 396 Next 5 years 2,811 The current target allocations for plan assets are primarily insurance contracts. 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 lifetime of all inactive participants. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Jul. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregation of Revenue The following table presents the Company's revenues from customers with contracts disaggregated by major good or service line and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments. Fiscal Year Ended Fiscal Year Ended Direct Marketing Supply Chain Consolidated Total Direct Marketing Supply Chain Consolidated Total (In thousands) (In thousands) Major Goods/Service Lines Marketing solutions offerings $ 444,360 $ — $ 444,360 $ 486,902 $ — $ 486,902 Supply chain management services — 336,491 336,491 — 331,022 331,022 Other — 1,962 1,962 — 1,906 1,906 $ 444,360 $ 338,453 $ 782,813 $ 486,902 $ 332,928 $ 819,830 Timing of Revenue Recognition Products transferred over time $ 444,360 $ — $ 444,360 $ 486,902 $ — $ 486,902 Services transferred over time — 338,453 338,453 — 332,928 332,928 $ 444,360 $ 338,453 $ 782,813 $ 486,902 $ 332,928 $ 819,830 The table below presents information for the Company's contract balances: July 31, July 31, (In thousands) Accounts receivable, trade, net $ 93,072 $ 112,141 Contract assets $ 13,016 $ 21,473 Deferred revenue - current $ 2,860 $ 2,967 Deferred revenue - long-term 85 62 Total deferred revenue $ 2,945 $ 3,029 Remaining Performance Obligations Remaining performance obligations are comprised of deferred revenue. Changes in deferred revenue during the fiscal year ended July 31, 2020 were as follows: Fiscal year ended July 31, 2020 (In thousands) Balance at beginning of period $ 3,029 Deferral of revenue 4,310 Recognition of deferred amounts upon satisfaction of performance obligation (4,394 ) Balance at end of period $ 2,945 We expect to recognize approximately $2.9 million of the deferred revenue over the next twelve months and the remaining $0.1 million beyond that time period. |
OTHER GAINS, NET
OTHER GAINS, NET | 12 Months Ended |
Jul. 31, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER GAINS, NET | OTHER GAINS, NET The following schedule reflects the components of "Other gains (losses), net": Fiscal Year Ended 2020 2019 (In thousands) Foreign currency exchange gains, net $ 890 $ 337 Derecognition of accrued pricing liabilities 810 4,573 Other, net 398 (307 ) $ 2,098 $ 4,603 Other gains, net totaled approximately $2.1 million for the fiscal year ended July 31, 2020 . During the fiscal year ended July 31, 2020 , the Company recorded gains of $0.8 million from the derecognition of accrued pricing liabilities, as discussed in Note 6 - "Accrued Expenses and Other Current Liabilities." The balance also consists of $0.9 million in net realized and unrealized foreign exchange gains, as well as $0.4 million in other gains, net. Other gains, net totaled approximately $4.6 million for the fiscal year ended July 31, 2019 . The balance consists primarily of gains of $4.6 million from the derecognition of accrued pricing liabilities and $0.3 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, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED PAYMENTS | SHARE-BASED PAYMENTS Share-Based Compensation Plans The Company has adopted share-based compensation plans in order to provide incentives to directors, officers, employees and other individuals providing services to or on behalf of the Company and its subsidiaries. On June 12, 2020, the Company's Board of Directors adopted, subject to stockholder approval, the Steel Connect, Inc. 2020 Stock Incentive Compensation Plan ("2020 Incentive Plan"), and on July 23, 2020, the 2020 Incentive Plan was approved. The 2020 Incentive Plan provides that the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and other cash based-awards. The 2020 Incentive Plan replaces 2010 Incentive Award Plan, as amended (the "2010 Incentive Plan"). The Company also has a 2005 Non-Employee Director Plan (the "2005 Director Plan"). As of July 23, 2020, no additional grants may be issued under the 2010 Incentive Plan. Any awards that are outstanding under the 2010 Incentive Plan continue to be subject to the terms and conditions of such plan. Under the 2020 Incentive Plan, the Company may grant up to 4,945,000 shares of common stock of the Company in addition to (i) 3,668,143 shares of common stock previously available for issuance under the 2010 Incentive Plan and (ii) up to 1,060,523 shares of common stock subject to outstanding awards under the 2010 Incentive Plan, which are forfeited or lapse unexercised or are settled in cash and are not issued under the prior plan for any reason, which may be issued under the 2020 Incentive Plan. As of July 31, 2020 , 8,646,038 shares were available for future issuance under the 2020 Incentive Plan. During the fiscal year ended July 31, 2020, the Company awarded stock-based compensation under the 2010 Incentive Plan and 2005 Director Plan. On December 15, 2017, under the 2010 Incentive Plan, the Board, upon the recommendation of the Special Committee and the Company's 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, 2020 , 1.0 million of the market performance based restricted stock grants had met the target stock price hurdles and 50 thousand were forfeited. The Board 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 Securities and Exchange Commission ("SEC") regulations and applicable Delaware law. The following table summarizes share-based compensation expense for the fiscal years ended July 31, 2020 and 2019 : Fiscal Year Ended 2020 2019 (In thousands) Cost of revenue $ — $ — Selling, general and administrative 720 1,267 $ 720 $ 1,267 Stock Options A summary of option activity for the fiscal year ended July 31, 2020 is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) (In thousands, except exercise price and years) Stock options outstanding, July 31, 2019 325 $ 4.07 Granted — — Exercised — — Forfeited or expired (130 ) 3.38 Stock options outstanding, July 31, 2020 195 4.54 0.45 Stock options exercisable, July 31, 2020 195 $ 4.54 0.45 As of July 31, 2020 , there was no unrecognized share-based compensation related to stock options. The aggregate intrinsic value of the outstanding 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, 2020 and 2019 was $0.7 million and $1.2 million , respectively. A summary of the activity of the Company's nonvested stock for the fiscal year ended July 31, 2020 , is as follows: Number of Shares Weighted Average Grant Date Fair Value (Share amounts in thousands) Nonvested stock outstanding, July 31, 2019 905 $ 1.60 Granted 1,060 0.80 Vested (438 ) 1.72 Forfeited (133 ) 1.47 Nonvested stock outstanding, July 31, 2020 1,394 $ 0.97 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, 2020 and 2019 was approximately $0.8 million and $0.5 million , respectively. As of July 31, 2020 , there was approximately $0.5 million of total unrecognized compensation cost related to nonvested stock to be recognized over a weighted average period of 1.2 years . 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, 2020 and 2019 , the Company issued approximately 22,000 and 17,000 shares, respectively, under the ESPP. Approximately 87,000 shares are available for future issuance as of July 31, 2020 . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of income (loss) before provision for income taxes are as follows: Fiscal Year Ended 2020 2019 (In thousands) Income (loss) from operations before income taxes: U.S. $ (9,168 ) $ (68,959 ) Foreign 9,801 6,860 Total income (loss) from operations before income taxes $ 633 $ (62,099 ) The components of income tax expense have been recorded in the Company's consolidated financial statements as follows: Fiscal Year Ended 2020 2019 (In thousands) Income tax expense from operations $ 5,917 $ 4,670 Total income tax expense $ 5,917 $ 4,670 The components of income tax expense from operations consist of the following: Fiscal Year Ended 2020 2019 (In thousands) Current provision: Federal $ — $ — State 430 288 Foreign 3,283 1,525 3,713 1,813 Deferred provision: Federal 91 1,563 State 1,452 753 Foreign 661 541 2,204 2,857 Total tax provision $ 5,917 $ 4,670 As of July 31, 2020 , the Company recorded a non-current deferred tax asset of $0.3 million and a non-current deferred tax liability of $0.8 million in "Other Assets" and "Other Long-term Liabilities," respectively. 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. The components of deferred tax assets and liabilities are as follows: July 31, July 31, (In thousands) Deferred tax assets: Accruals and reserves $ 8,563 $ 21,297 Tax basis in excess of financial basis of investments in affiliates — 6,534 Tax basis in excess of financial basis for intangible and fixed assets 225 187 Net operating loss and capital loss carry forwards 468,132 469,735 Total gross deferred tax assets 476,920 497,753 Less: valuation allowance (452,969 ) (451,189 ) Net deferred tax assets $ 23,951 $ 46,564 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (22,889 ) $ (43,885 ) Convertible debt (1,595 ) (1,761 ) Total gross deferred tax liabilities (24,484 ) (45,646 ) Net deferred tax asset $ (533 ) $ 918 The net change in the total valuation allowance for the fiscal year ended July 31, 2020 was an increase of approximately $1.8 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, 2019 was a decrease of approximately $12.7 million . The Company has certain deferred tax benefits, including those generated by net operating losses and certain other tax attributes (collectively, the "Tax Benefits"). The Company's ability to use these Tax Benefits could be substantially limited if it were to experience an "ownership change," as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). In general, an ownership change would occur if there is a greater than 50-percentage point change in ownership of securities by stockholders owning (or deemed to own under Section 382 of the Code) five percent or more of a corporation's securities over a rolling three year period. On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security ("CARES") Act into law which is intended to respond to the COVID-19 pandemic and its impact on the economy, public health, state and local governments, individuals and businesses. The CARES Act contains numerous tax provisions including temporary changes to the future limitations on interest deductions related to section 163j. As of July 31, 2020 , the Company has elected to defer the employer-paid portion of social security taxes, which is expected to provide the Company with approximately $5.3 million of additional liquidity during the current calendar year, with 50% of the deferral due December 31, 2021 and the remaining 50% due December 31, 2022. The Company does not expect the provisions of the CARES Act to have a significant impact on the income tax provision, income tax payable or deferred income tax positions of the Company. The CARES Act temporarily amended section 163j through fiscal year 2021 and increased the taxable income limitation to be 50% of the Company's net income (loss) excluding net charges related to interest income, interest expense, income tax expense, depreciation and amortization of intangible assets ("EBITDA"), on a tax basis. The limitation was previously 30% of EBITDA on a tax basis. The Company has estimated its fiscal year 2020 global intangible low-taxed income ("GILTI") inclusion based on its current year foreign activity. The foreign entities have minor earnings and profit 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 Company has net operating loss carryforwards for federal and state tax purposes of approximately $2.1 billion and $117.0 million , respectively, at July 31, 2020 . The federal net operating losses will expire from fiscal year 2022 through 2038 and the state net operating losses will expire from fiscal year 2019 through 2039 . The Company has a foreign net operating loss carryforward of approximately $70.9 million , of which $56.6 million has an indefinite carryforward period. In addition, the Company has $48.5 million of capital loss carryforwards for federal and state tax purposes. The federal and state capital losses will expire in fiscal year 2021 through 2024 . 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: Fiscal Year Ended 2020 2019 (In thousands) Computed "expected" income tax expense (benefit) $ 160 $ (13,041 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance 2,227 16,158 Foreign tax rate differential (23 ) (593 ) Nondeductible expenses 3,010 2,484 Foreign withholding taxes 553 336 Addition of uncertain tax position reserves 498 645 State benefit of U.S. loss (624 ) — State income taxes, net of federal benefit 133 113 Other (17 ) (1,432 ) Actual income tax expense $ 5,917 $ 4,670 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, 2020 and 2019 , the total amount of the liability for unrecognized tax benefits, including interest, related to federal, state and foreign taxes was approximately $2.8 million and $2.4 million , respectively. To the extent the unrecognized tax benefits are recognized, the entire amount would impact income tax expense. The Company expects that there will be a $0.2 million reduction of the unrecognized tax benefits in the next twelve months related to the U.S. state income tax exposure as a result of a lapse in the applicable statute of limitations. 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, 2016 through July 31, 2020 . 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 2012 through 2019 tax years remain subject to examination in most locations while the Company's 2008 through 2019 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: Fiscal Year Ended 2020 2019 (In thousands) Balance as of beginning of year $ 2,207 $ 1,525 Additions for current year tax positions 667 704 Currency translation 2 (22 ) Reductions for lapses in statute of limitations (416 ) — Balance as of end of year $ 2,460 $ 2,207 In accordance with the Company's accounting policy, interest related to income taxes is included in the provision for income taxes line of the consolidated statements of operations. For the fiscal years ended July 31, 2020 and 2019, the Company has not recognized any material interest expense related to uncertain tax positions. As of July 31, 2020 and 2019 , the Company had recorded liabilities for increases in interest expense related to uncertain tax positions in the amount of $0.1 million and $0.2 million , respectively. The Company expects $0.2 million of unrecognized tax benefits and related interest will reverse in the next twelve months. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Earnings (Loss) Per Share The following table reconciles loss per share for the fiscal years ended July 31, 2020 and 2019 . Fiscal Year Ended 2020 2019 (In thousands, except per share data) Net loss $ (5,284 ) $ (66,727 ) Less: Preferred dividends on redeemable preferred stock (2,129 ) (2,129 ) Net loss attributable to common stockholders (7,413 ) (68,856 ) Effect of dilutive securities: 7.50% Convertible Senior Note — — Redeemable preferred stock — — Net loss attributable to common stockholders after assumed conversions $ (7,413 ) $ (68,856 ) Weighted average common shares outstanding 61,644 61,180 Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock — — Weighted average number of common and potential common shares 61,644 61,180 Basic and diluted net loss per share attributable to common stockholders $ (0.12 ) $ (1.13 ) Approximately 24.4 million and 20.9 million common stock equivalent shares relating to the effects of outstanding stock options, restricted stock, the SPHG Note and redeemable preferred stock were excluded from the denominator in the calculation of diluted earnings per share for the fiscal years ended July 31, 2020 and 2019 , respectively. The common stock equivalent shares excluded during the fiscal years ended July 31, 2020 and 2019 were primarily excluded as their effect would be anti-dilutive. The common stock equivalent shares excluded during the years ended July 31, 2020 and 2019 were primarily excluded as the options were out-of-the-money. Approximately 6.3 million and 2.6 million common shares outstanding associated with the SPHG 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, 2020 and 2019 , respectively. 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 both the fiscal years ended July 31, 2020 and 2019 . |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Jul. 31, 2020 | |
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, 2019 $ 5,017 $ (4,079 ) $ 96 $ 1,034 Foreign currency translation adjustment 8 — — 8 Net unrealized holding loss on securities — — (96 ) (96 ) Pension liability adjustments — 2,897 — 2,897 Net current-period other comprehensive income (loss) 8 2,897 (96 ) 2,809 Accumulated other comprehensive income (loss) at July 31, 2020 $ 5,025 $ (1,182 ) $ — $ 3,843 In both the fiscal years ended July 31, 2020 and 2019 , the Company recorded approximately $0.1 million in taxes related to other comprehensive income (loss). |
STATEMENT OF CASH FLOWS SUPPLEM
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | 12 Months Ended |
Jul. 31, 2020 | |
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, 2020 and 2019 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2020 2019 (In thousands) Cash and cash equivalents $ 75,887 $ 32,548 Funds held for clients 18,755 13,516 Cash, cash equivalents and restricted cash $ 94,642 $ 46,064 Cash used for operating activities reflect cash payments for interest and income taxes as follows: Fiscal Year Ended 2020 2019 (In thousands) Cash paid for interest $ 32,799 $ 38,525 Cash paid for income taxes $ 4,991 $ 5,451 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, 2020 and 2019 included the issuance of approximately 1.0 million and 0.4 million shares, respectively, of non-vested common stock, valued at approximately $1.0 million and $0.7 million , respectively, to certain employees and non-employees of the Company. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jul. 31, 2020 | |
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 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 dividend, stock split, stock combination, reclassification 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 is 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 the manner reasonably requested by the holder and the qualification of the securities in all states reasonably requested by the holder, in each case, 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 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 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, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS 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, 2020 and 2019 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2020 Level 1 Level 2 Level 3 Money market funds $ 5,117 $ 5,117 $ — $ — Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Level 1 Level 2 Level 3 Money market funds $ 365 $ 365 $ — $ — 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 and long-term debt, cost approximates fair value for these items due to their short-term nature. The Company believes 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has determined that its reportable segments are the same as its two operating segments: Direct Marketing and Supply Chain. 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, the SPHG Note 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: Fiscal Year Ended 2020 2019 (In thousands) Net revenue: Direct Marketing $ 444,360 $ 486,902 Supply Chain 338,453 332,928 $ 782,813 $ 819,830 Operating income (loss): Direct Marketing $ 12,940 $ (9,154 ) Supply Chain 27,952 (3,822 ) Total segment operating income (loss) 40,892 (12,976 ) Corporate-level activity (8,449 ) (12,303 ) Total operating income (loss) 32,443 (25,279 ) Total other expense (31,810 ) (36,820 ) Income (loss) before income taxes $ 633 $ (62,099 ) July 31, July 31, (In thousands) Total assets: Direct Marketing $ 584,477 $ 600,390 Supply Chain 138,773 112,712 Sub-total—segment assets 723,250 713,102 Corporate 35,922 18,461 $ 759,172 $ 731,563 Summarized financial information of the Company's net revenue from external customers by group of services is as follows: Fiscal Year Ended 2020 2019 (In thousands) Products: Direct Marketing $ 444,360 $ 486,902 Services: Supply Chain 338,453 332,928 $ 782,813 $ 819,830 As of July 31, 2020 and 2019 , approximately $79.7 million and $91.3 million of the Company's long-lived assets, respectively, were located in the U.S. Capital expenditures within the Direct Marketing and Supply Chain segments were $10.2 million and $1.9 million , respectively, for the fiscal year ended July 31, 2020 . Capital expenditures within the Direct Marketing and Supply Chain segments were $10.4 million and $4.1 million , respectively, for the fiscal year ended July 31, 2019 . Depreciation expense within the Direct Marketing and Supply Chain segments was $19.0 million and $4.1 million , respectively, for the fiscal year ended July 31, 2020 . Depreciation expense within the Direct Marketing and Supply Chain segments was $16.4 million and $5.6 million , respectively, for the fiscal year ended July 31, 2019 . For the fiscal years ended July 31, 2020 and 2019 , the Company recorded amortization expense associated with the Direct Marketing segment of $27.3 million and $30.4 million , respectively. Summarized financial information of the Company's net revenue by geographic location is as follows: Fiscal Year Ended 2020 2019 (In thousands) United States $ 524,249 $ 557,813 China 126,611 142,661 Netherlands 41,983 51,447 Other 89,970 67,909 $ 782,813 $ 819,830 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jul. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As of July 31, 2020 , SPHG Holdings and its affiliates, including Steel Holdings, HNH and SPL, beneficially owned approximately 48.8% of our outstanding capital stock, including the if-converted value of the SPHG Note and shares of Series C Convertible Preferred Stock 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. Jack L. Howard, the President and a director of Steel Holdings GP, is also a director. SPHG Note Transaction On February 28, 2019, the Company entered into that certain 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, 2020 and 2019 , SPHG Holdings held $14.9 million principal amount of the Company's 7.50% Convertible Senior Note. As of July 31, 2020 and 2019 , the net carrying value of the SPHG Note was $8.1 million and $7.4 million , respectively. During the fiscal years ended July 31, 2020 and 2019 , the Company recognized interest expense of $1.8 million and $1.2 million , respectively, associated with the SPHG Note. Preferred Stock Transaction 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. During both the fiscal years ended July 31, 2020 and 2019 , the Company paid dividends of $2.1 million associated with the Series C Convertible Preferred Stock. 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, and its successor, Steel Services, 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 fiscal year ended July 31, 2020 and 2019 totaled $3.4 million and $1.8 million , respectively. As of July 31, 2020 and 2019 , amounts due to Steel Services were $0.8 million and $0.5 million , respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jul. 31, 2020 | |
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 United States of America ("U.S. GAAP") 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: (1) revenue recognition; (2) valuation allowances for trade and other receivables and inventories; (3) the valuation of goodwill, other intangible assets and long-lived assets; (4) contingencies, including litigation reserves; (5) restructuring charges and related severance expenses; (6) litigation reserves; (7) pension obligations, (8) going concern assumptions, and (9) accrued pricing and tax related liabilities. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from its contracts with customers primarily from the sale of marketing solutions offerings and supply chain management services. 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 IWCO's marketing solutions offerings and ModusLink's supply chain management services arrangements, 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. 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. 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. Other Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, fees for professional services and fees for the sale of perpetual software licenses in ModusLink's e-Business operations. Except for perpetual software licenses, 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. Revenue from the sale of perpetual licenses is recognized at a point in time upon execution of the relevant license agreement and when delivery has taken place. 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 assets 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's 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, current economic conditions, whether any amounts are currently past due and the length of time accounts may be past due. 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 Cash equivalents consist of highly liquid investments with an original maturity of three months or less at the time of purchase. Investments with maturities greater than three months to twelve months at the time of purchase are considered short-term investments. |
Fair Value Measurement | Fair Value Measurement The Company measures certain assets and liabilities at fair value (see Note 19 - "Fair Value Measurements"). Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values of assets and liabilities are determined based on a three-level measurement input hierarchy. Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Level 2 inputs are other than quoted market prices that are observable, either directly or indirectly, for an asset or liability. Level 2 inputs can include quoted prices in active markets for similar assets or liabilities, quoted prices in a market that is not active for identical assets or liabilities, or other inputs that can be corroborated by observable market data. Level 3 inputs are unobservable for the asset or liability when there is little, if any, market activity for the asset or liability. Level 3 inputs are based on the best information available and may include data developed by the Company. |
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 clients' 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. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined by both moving averages and the first-in, first-out methods. 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 IWCO's inventory as they are generally mailed after the production and sorting process. A provision for excess or obsolete inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns and future sales expectations. |
Business Combinations and Valuation of Goodwill and Other Acquired Intangible Assets | Business Combinations and Valuation of Goodwill and Other Acquired Intangible Assets When the Company acquires a business, it allocates the purchase price to the assets acquired, liabilities assumed and any noncontrolling interests based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Significant judgment may be used to determine these fair values, including the use of appraisals, discounted cash flow models, market value for similar purchases or other methods applicable to the circumstances. The assumptions and judgments made by the Company when recording business combinations will have an impact on reported results of operations in the future. During the measurement period, which is not to exceed one year from the acquisition date, the Company 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 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. 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. The Company evaluates recoverability generally 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 recover 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 carrying value of goodwill is not amortized, but is tested for impairment annually as of June 30, and, additionally on an interim basis, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The accounting standards for goodwill allow for the assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company does not utilize a qualitative assessment approach, then the quantitative goodwill impairment test is utilized to identify potential impairments. The Company identifies any potential impairment by comparing the carrying value of a reporting unit to its fair value. The Company typically determines the fair value of its reporting units using a discounted cash flow valuation approach. If a potential impairment is identified, the Company will determine the amount of goodwill impairment by comparing the fair value of a reporting unit with its carrying amount. To the extent the carrying value of a reporting unit exceeds its fair value, a goodwill impairment charge is recognized. The annual and interim impairment tests in the fiscal year ended July 31, 2020 did no t result in impairments to goodwill. Acquired finite-lived intangible assets are amortized over their estimated useful lives. The Company evaluates 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. |
Property and Equipment | Property and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Depreciation and amortization is computed by applying the straight-line method to 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. |
Leases | Leases As discussed below, the Company adopted Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) and related ASUs at the beginning of fiscal year 2020. The Company leases office space, warehouse facilities, equipment and automobiles under operating leases. These leases may also include rent escalation clauses or lease incentives in the form of construction allowances and rent reduction. In determining the lease term used in the lease right-of-use ("ROU") asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease ROU asset and lease liability. The Company is typically required to make fixed minimum rent payments, variable rent payments primarily based on performance, or a combination thereof, directly related to its ROU asset. The Company is also often required, by the lease, to pay for certain other costs including real estate taxes, insurance, common area maintenance fees and/or certain other costs, which may be fixed or variable, depending upon the terms of the respective lease agreement. To the extent these payments are fixed, the Company has included them in calculating the lease ROU assets and lease liabilities. The Company calculates lease ROU assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date. When discount rates implicit in leases cannot be readily determined, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term and are not recognized on the consolidated balance sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. |
Income Taxes | Income Taxes Income taxes are accounted for 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. Deferred tax assets are 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. Income tax accounting standards prescribe: (1) a minimum recognition threshold that an income tax benefit arising from an uncertain income tax position taken, or expected to be taken, on an income tax return is required to meet before being recognized in the financial statements and (2) the measurement of the income tax benefits recognized from such positions. The Company's accounting policy is to classify uncertain income tax positions that are not expected to be resolved in one year as non-current income tax liabilities and to classify potential interest and penalties on uncertain income tax positions as elements of the provision for income taxes in its financial statements. See Note 14 - "Income Taxes," for additional information. |
Pension Plans | Pension Plans The Company sponsors defined benefit pension plans covering certain of its employees in the Netherlands and Japan. In accordance with accounting standards for employee pension benefits, the Company recognizes on a plan-by-plan basis the unfunded status of its pension and post-retirement benefit plans in the consolidated financial statements and measures its pension plan assets and benefit obligations as of July 31. The obligation for the Company's pension plans and the related annual costs of employee benefits are calculated based on several long-term assumptions, including discount rates and expected mortality for employee benefit liabilities, rates of return on plan assets and expected annual rates for salary increases for employee participants. |
Share-Based Compensation Plans | Share-Based Compensation Plans All share-based payment awards to employees and directors are measured based upon their fair values and expensed over the period during with the employee or director is required to provide service in exchange for the award (the vesting period). The Company accounts for forfeitures in the period in which they occur. |
Deferred Debt Issue Costs | Deferred Debt Issue Costs Costs to issue debt are capitalized and deferred when incurred and subsequently amortized to interest expense over the term of the related debt using the effective interest rate method. Deferred debt issuance costs are presented in the Company's consolidated balance sheets as a direct deduction from the carrying amount of the associated debt liability. |
Major Clients and Concentration of Credit Risk | 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. |
Adoption of New Accounting Standards and Accounting Standards Issued and Not yet Implemented | Adoption of New Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842) , which supersedes the previous guidance for lease accounting, Leases (Topic 840). The ASU requires lessees to recognize leases on their balance sheets (through ROU assets and lease liabilities). The Company adopted the provisions of the ASU on August 1, 2019, using the modified retrospective approach and the option presented under ASU 2018-11, Leases (Topic 842) Targeted Improvements , to transition only active leases as of the August 1, 2019 adoption date, with a cumulative effect adjustment recorded as of that date. All comparative periods prior to August 1, 2019 retain the financial reporting and disclosure requirements of ASC 840. The Company elected to utilize the transition package of practical expedients permitted under ASC 842, which, among other things, allowed the Company to carry forward the historical lease classification. Additionally, the Company made an accounting policy election to exempt short-term leases (with an initial term of 12 months or less) from the provisions of ASC 842, which resulted in recognition of the related lease payments on a straight-line basis over the lease term, consistent with prior treatment under ASC 840. The Company did not elect the "hindsight" practical expedient when determining the lease terms under ASC 842. Adoption of ASC 842 resulted in the recording of ROU operating lease assets and corresponding operating lease liabilities of $51.1 million and $53.1 million , respectively, as of August 1, 2019. The difference between the ROU assets and the lease liabilities represents the existing deferred rent balance (under ASC 840), which was reduced to zero, net of prepaids, upon adoption of ASC 842 on August 1, 2019. The adoption of ASC 842 did not materially impact the Company's net earnings and had no impact on its cash flows. The Company's current lease arrangements expire through 2030. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This standard was created to simplify the accounting for share-based payments to nonemployees and provides guidance on how to account for share-based payment awards issued in transactions in which a grantor acquires goods or services to be used or consumed in the grantor's own operations. The amendments in ASU 2018-07 are effective for the Company's 2020 fiscal year. The adoption of the accounting standard did not have a material impact on the Company's financial statements. Accounting Standards Issued and Not Yet Implemented In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Loses on Financial Instruments , an accounting standard update that requires measurement and recognition of expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal year 2024 on a modified retrospective basis which requires a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements. 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 fiscal year 2021, except that the standard permits an entity to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until the effective date. 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 2018-14, 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 fiscal year 2021. 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 first quarter of fiscal year 2021. The Company is currently evaluating the potential impact of this new guidance. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The new guidance is effective for the Company's first quarter of fiscal year 2022. The Company does not expect that the adoption of this new guidance will have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which is intended to provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate, known as LIBOR, or by another reference rate expected to be discontinued. This optional guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
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 $ 1,804 $ 480 Provisions charged to expense 111 1,418 Accounts written off (1,781 ) (94 ) $ 134 $ 1,804 |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: July 31, July 31, (In thousands) Cash and bank deposits $ 70,770 $ 32,183 Money market funds 5,117 365 $ 75,887 $ 32,548 The amount of cash, cash equivalents and restricted cash as of July 31, 2020 and 2019 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2020 2019 (In thousands) Cash and cash equivalents $ 75,887 $ 32,548 Funds held for clients 18,755 13,516 Cash, cash equivalents and restricted cash $ 94,642 $ 46,064 |
Estimated Useful Lives of Property and Equipment | The estimated useful lives are as follows: Category Useful Lives Buildings 32 years Machinery and equipment 3 to 7 years Furniture and fixtures 5 to 7 years Automobiles 5 years Software 3 to 8 years Leasehold improvements Shorter of the lease term or the estimated useful life of the asset |
INVENTORIES INVENTORIES (Tables
INVENTORIES INVENTORIES (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net consisted of the following: July 31, July 31, (In thousands) Raw materials $ 14,216 $ 21,322 Work-in-process 253 587 Finished goods 885 1,765 $ 15,354 $ 23,674 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment at Cost | Property and equipment at cost, consists of the following: July 31, 2020 2019 (In thousands) Land $ 942 $ 942 Machinery and equipment 112,407 99,961 Leasehold improvements 24,659 23,711 Software 53,715 52,961 Other 20,138 24,230 211,861 201,805 Less: accumulated depreciation and amortization (132,183 ) (110,537 ) Property and equipment, net $ 79,678 $ 91,268 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The table below presents information for the Company's identifiable intangible assets that are subject to amortization: July 31, 2020 July 31, 2019 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in years) (In thousands) Customer Relationships 15 $ 192,730 $ 60,032 $ 132,698 $ 192,730 $ 39,617 $ 153,113 Trademarks and Trade Names 3 20,520 17,955 2,565 20,520 11,115 9,405 Total $ 213,250 $ 77,987 $ 135,263 $ 213,250 $ 50,732 $ 162,518 |
Schedule of Finite-Lived Intangible Assets Amortization Expense | The table below presents amortization expense recorded by the Company for its identifiable intangible assets. Fiscal Year Ended July 31, 2020 2019 (In thousands) Customer relationships $ 20,415 $ 23,606 Trademarks and trade names 6,840 6,840 Total $ 27,255 $ 30,446 |
Schedule of Estimated Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets as of July 31, 2020 is as follows (in thousands): For the Fiscal Years Ended July 31, 2021 $ 20,258 2022 15,334 2023 11,427 2024 9,371 2025 9,371 Thereafter 69,502 $ 135,263 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expenses | The following tables reflect the components of "Accrued expenses" and "Other current liabilities": July 31, July 31, Accrued Expenses (In thousands) Accrued taxes $ 60,744 $ 59,057 Accrued compensation 25,439 22,584 Accrued interest 476 467 Accrued audit, tax and legal 3,399 3,148 Accrued contract labor 981 1,650 Accrued worker's compensation 3,949 4,549 Accrued other 16,392 21,203 $ 111,380 $ 112,658 |
Components of Other Current Liabilities | July 31, July 31, Other Current Liabilities (In thousands) Accrued pricing liabilities $ 13,499 $ 14,309 Customer postage deposits 8,551 11,816 Revolving credit facility — 6,000 Other 7,900 6,794 $ 29,950 $ 38,919 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Components of Debt and Reconciliation to Carrying Amount | The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below: July 31, 2020 July 31, 2019 (In thousands) Secured Cerberus Term Loan due December 15, 2022 $ 371,972 $ 375,125 Unsecured 7.50% Convertible Senior Note due March 1, 2024 14,940 14,940 Credit Facilities Cerberus Bank Credit Facility — 6,000 MidCap Credit Facility — — Less: unamortized discounts and issuance costs (7,863 ) (8,396 ) Total debt, net 379,049 387,669 Less: current portion of debt, net (5,527 ) (5,732 ) Total long-term debt, net $ 373,522 $ 381,937 |
Summary of Debt | The table below presents the net carrying value of the SPHG Note: July 31, 2020 July 31, 2019 (In thousands) Carrying amount of equity component $ 8,200 $ 8,200 Principal amount of note $ 14,940 $ 14,940 Unamortized debt discount (6,886 ) (7,508 ) Net carrying amount $ 8,054 $ 7,432 July 31, 2020 July 31, 2019 (In thousands) Principal amount outstanding on the Term Loan $ 371,972 $ 375,125 Unamortized debt issuance costs (977 ) (888 ) Net carrying value of the Term Loan $ 370,995 $ 374,237 |
Summary of Interest Expense Related to Convertible Notes | During the fiscal years ended July 31, 2020 and 2019 , the Company recognized interest expense associated with the SPHG Note as follows: Fiscal Year Ended 2020 2019 (In thousands) Interest expense related to contractual interest coupon $ 1,142 $ 473 Interest expense related to accretion of the discount 622 692 $ 1,764 $ 1,165 Fiscal Year Ended (In thousands) Interest expense related to contractual interest coupon $ 1,932 Interest expense related to accretion of the discount 2,741 Interest expense related to debt issuance costs 243 $ 4,916 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
Lease cost | Supplemental cash flow information related to the Company's leases during the fiscal year ended July 31, 2020 was as follows (in thousands): Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 15,885 Operating cash flows from finance leases $ 9 Financing cash flows from finance leases $ 100 The components of the Company's lease expense are presented below: Fiscal Year Ended (In thousands) Operating lease cost $ 16,722 Short-term lease expense 2,358 Variable lease cost 68 Amortization of finance lease assets 38 Interest on finance lease liabilities 11 $ 19,197 |
Future minimum lease payments under operating leases | The Company's future minimum lease payments required under operating and finance leases that have commenced as of July 31, 2020 were as follows: Operating Leases Finance Leases (In thousands) 2021 $ 16,059 $ 76 2022 13,039 76 2023 7,904 38 2024 5,579 — 2025 5,410 — Thereafter 18,329 — Total lease payments 66,320 190 Less: imputed interest 8,972 9 Present value of lease payments 57,348 181 Less: current lease obligations 14,207 111 Long-term lease obligations $ 43,141 $ 70 |
Future minimum lease payments under financing leases | The Company's future minimum lease payments required under operating and finance leases that have commenced as of July 31, 2020 were as follows: Operating Leases Finance Leases (In thousands) 2021 $ 16,059 $ 76 2022 13,039 76 2023 7,904 38 2024 5,579 — 2025 5,410 — Thereafter 18,329 — Total lease payments 66,320 190 Less: imputed interest 8,972 9 Present value of lease payments 57,348 181 Less: current lease obligations 14,207 111 Long-term lease obligations $ 43,141 $ 70 |
Additional lease information | Additional information related to the Company's leases as of July 31, 2020 was as follows: Weighted average remaining lease term: Operating leases 6.1 years Finance leases 2.4 years Weighted average discount rate: Operating leases 4.4% Finance leases 3.8% |
DEFINED BENEFIT PENSION PLANS (
DEFINED BENEFIT PENSION PLANS (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
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, 2020 and 2019 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2020 Asset Allocations Level 1 Level 2 Level 3 Insurance contract $ 28,388 98 % $ 28,388 Other investments 662 2 % — — 662 $ 29,050 100 % $ — $ — $ 29,050 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 |
Aggregate Change in Benefit Obligation and Plan Assets | The following table summarizes the changes in benefit obligation, plan assets and funded status for these plans: July 31, 2020 2019 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 34,538 $ 29,849 Service cost 185 365 Interest cost 543 633 Actuarial (gain) loss (691 ) 5,125 Employee contributions 28 72 Benefits and administrative expenses paid (212 ) (197 ) Adjustments — (20 ) Effect of curtailment (2,390 ) — Currency translation 1,926 (1,289 ) Benefit obligation at end of year $ 33,927 $ 34,538 Change in plan assets Fair value of plan assets at beginning of year $ 27,267 $ 22,860 Actual return on plan assets 476 5,136 Employer contributions, net (39 ) 422 Employee contributions 28 73 Settlements — (19 ) Benefits and administrative expenses paid (212 ) (197 ) Currency translation 1,530 (1,008 ) Fair value of plan assets at end of year $ 29,050 $ 27,267 Funded status Current liabilities $ (31 ) $ (13 ) Noncurrent liabilities (4,846 ) (7,259 ) Net amounts recognized on the consolidated balance sheet $ (4,877 ) $ (7,272 ) |
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, 2020 2019 (In thousands) Projected benefit obligation $ 33,927 $ 34,538 Accumulated benefit obligation $ 33,927 $ 32,361 Fair value of plan assets $ 29,050 $ 27,267 |
Components of Net Periodic Pension Cost | The following table summarizes the components of net periodic pension cost: Fiscal Year Ended 2020 2019 (In thousands) Service cost $ 185 $ 365 Interest costs 543 633 Expected return on plan assets (458 ) (492 ) Amortization of net actuarial loss 74 127 Curtailment gain (143 ) — Net periodic pension costs $ 201 $ 633 |
Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost | The table below summarizes the weighted average assumptions used to determine benefit obligations: Fiscal Year Ended 2020 2019 Discount rate 1.48 % 1.48 % Rate of compensation increase 1.96 % 1.97 % The table below summarizes weighted average assumptions used to determine net periodic pension cost: Fiscal Year Ended 2020 2019 Discount rate 1.39 % 1.46 % Expected long-term rate of return on plan assets 1.37 % 1.45 % Rate of compensation increase 1.77 % 1.92 % |
Summary of Expected Benefit Payments from the Plans through Fiscal 2026 | The following table summarizes expected benefit payments from the plans through fiscal year 2025. Actual benefit payments may differ from expected benefit payments. The minimum employer required contributions to the plans are expected to be approximately $0.3 million in fiscal year 2021 . Pension Benefit Payments (In thousands) For the fiscal year ending July 31: 2021 247 2022 258 2023 309 2024 472 2025 396 Next 5 years 2,811 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of reconciliation of the disaggregated revenue | The following table presents the Company's revenues from customers with contracts disaggregated by major good or service line and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments. Fiscal Year Ended Fiscal Year Ended Direct Marketing Supply Chain Consolidated Total Direct Marketing Supply Chain Consolidated Total (In thousands) (In thousands) Major Goods/Service Lines Marketing solutions offerings $ 444,360 $ — $ 444,360 $ 486,902 $ — $ 486,902 Supply chain management services — 336,491 336,491 — 331,022 331,022 Other — 1,962 1,962 — 1,906 1,906 $ 444,360 $ 338,453 $ 782,813 $ 486,902 $ 332,928 $ 819,830 Timing of Revenue Recognition Products transferred over time $ 444,360 $ — $ 444,360 $ 486,902 $ — $ 486,902 Services transferred over time — 338,453 338,453 — 332,928 332,928 $ 444,360 $ 338,453 $ 782,813 $ 486,902 $ 332,928 $ 819,830 |
Summary of changes in deferred revenue | The table below presents information for the Company's contract balances: July 31, July 31, (In thousands) Accounts receivable, trade, net $ 93,072 $ 112,141 Contract assets $ 13,016 $ 21,473 Deferred revenue - current $ 2,860 $ 2,967 Deferred revenue - long-term 85 62 Total deferred revenue $ 2,945 $ 3,029 Remaining Performance Obligations Remaining performance obligations are comprised of deferred revenue. Changes in deferred revenue during the fiscal year ended July 31, 2020 were as follows: Fiscal year ended July 31, 2020 (In thousands) Balance at beginning of period $ 3,029 Deferral of revenue 4,310 Recognition of deferred amounts upon satisfaction of performance obligation (4,394 ) Balance at end of period $ 2,945 |
OTHER GAINS, NET (Tables)
OTHER GAINS, NET (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Components of Other Gains (Losses), Net | The following schedule reflects the components of "Other gains (losses), net": Fiscal Year Ended 2020 2019 (In thousands) Foreign currency exchange gains, net $ 890 $ 337 Derecognition of accrued pricing liabilities 810 4,573 Other, net 398 (307 ) $ 2,098 $ 4,603 |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
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 for the fiscal years ended July 31, 2020 and 2019 : Fiscal Year Ended 2020 2019 (In thousands) Cost of revenue $ — $ — Selling, general and administrative 720 1,267 $ 720 $ 1,267 |
Summary of Option Activity | A summary of option activity for the fiscal year ended July 31, 2020 is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) (In thousands, except exercise price and years) Stock options outstanding, July 31, 2019 325 $ 4.07 Granted — — Exercised — — Forfeited or expired (130 ) 3.38 Stock options outstanding, July 31, 2020 195 4.54 0.45 Stock options exercisable, July 31, 2020 195 $ 4.54 0.45 |
Summary of Activity of Nonvested Stock | A summary of the activity of the Company's nonvested stock for the fiscal year ended July 31, 2020 , is as follows: Number of Shares Weighted Average Grant Date Fair Value (Share amounts in thousands) Nonvested stock outstanding, July 31, 2019 905 $ 1.60 Granted 1,060 0.80 Vested (438 ) 1.72 Forfeited (133 ) 1.47 Nonvested stock outstanding, July 31, 2020 1,394 $ 0.97 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Components of Loss from Continuing Operations before Provision for Income Taxes | The components of income (loss) before provision for income taxes are as follows: Fiscal Year Ended 2020 2019 (In thousands) Income (loss) from operations before income taxes: U.S. $ (9,168 ) $ (68,959 ) Foreign 9,801 6,860 Total income (loss) from operations before income taxes $ 633 $ (62,099 ) |
Components of Income Tax Expense | The components of income tax expense have been recorded in the Company's consolidated financial statements as follows: Fiscal Year Ended 2020 2019 (In thousands) Income tax expense from operations $ 5,917 $ 4,670 Total income tax expense $ 5,917 $ 4,670 |
Components of Income Tax Expense from Operations | The components of income tax expense from operations consist of the following: Fiscal Year Ended 2020 2019 (In thousands) Current provision: Federal $ — $ — State 430 288 Foreign 3,283 1,525 3,713 1,813 Deferred provision: Federal 91 1,563 State 1,452 753 Foreign 661 541 2,204 2,857 Total tax provision $ 5,917 $ 4,670 |
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 $ 8,563 $ 21,297 Tax basis in excess of financial basis of investments in affiliates — 6,534 Tax basis in excess of financial basis for intangible and fixed assets 225 187 Net operating loss and capital loss carry forwards 468,132 469,735 Total gross deferred tax assets 476,920 497,753 Less: valuation allowance (452,969 ) (451,189 ) Net deferred tax assets $ 23,951 $ 46,564 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (22,889 ) $ (43,885 ) Convertible debt (1,595 ) (1,761 ) Total gross deferred tax liabilities (24,484 ) (45,646 ) Net deferred tax asset $ (533 ) $ 918 |
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: Fiscal Year Ended 2020 2019 (In thousands) Computed "expected" income tax expense (benefit) $ 160 $ (13,041 ) Increase (decrease) in income tax expense resulting from: Change in valuation allowance 2,227 16,158 Foreign tax rate differential (23 ) (593 ) Nondeductible expenses 3,010 2,484 Foreign withholding taxes 553 336 Addition of uncertain tax position reserves 498 645 State benefit of U.S. loss (624 ) — State income taxes, net of federal benefit 133 113 Other (17 ) (1,432 ) Actual income tax expense $ 5,917 $ 4,670 |
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: Fiscal Year Ended 2020 2019 (In thousands) Balance as of beginning of year $ 2,207 $ 1,525 Additions for current year tax positions 667 704 Currency translation 2 (22 ) Reductions for lapses in statute of limitations (416 ) — Balance as of end of year $ 2,460 $ 2,207 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of earnings per share | The following table reconciles loss per share for the fiscal years ended July 31, 2020 and 2019 . Fiscal Year Ended 2020 2019 (In thousands, except per share data) Net loss $ (5,284 ) $ (66,727 ) Less: Preferred dividends on redeemable preferred stock (2,129 ) (2,129 ) Net loss attributable to common stockholders (7,413 ) (68,856 ) Effect of dilutive securities: 7.50% Convertible Senior Note — — Redeemable preferred stock — — Net loss attributable to common stockholders after assumed conversions $ (7,413 ) $ (68,856 ) Weighted average common shares outstanding 61,644 61,180 Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock — — Weighted average number of common and potential common shares 61,644 61,180 Basic and diluted net loss per share attributable to common stockholders $ (0.12 ) $ (1.13 ) |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
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, 2019 $ 5,017 $ (4,079 ) $ 96 $ 1,034 Foreign currency translation adjustment 8 — — 8 Net unrealized holding loss on securities — — (96 ) (96 ) Pension liability adjustments — 2,897 — 2,897 Net current-period other comprehensive income (loss) 8 2,897 (96 ) 2,809 Accumulated other comprehensive income (loss) at July 31, 2020 $ 5,025 $ (1,182 ) $ — $ 3,843 |
STATEMENT OF CASH FLOWS SUPPL_2
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
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 $ 70,770 $ 32,183 Money market funds 5,117 365 $ 75,887 $ 32,548 The amount of cash, cash equivalents and restricted cash as of July 31, 2020 and 2019 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2020 2019 (In thousands) Cash and cash equivalents $ 75,887 $ 32,548 Funds held for clients 18,755 13,516 Cash, cash equivalents and restricted cash $ 94,642 $ 46,064 |
Schedule of Restrictions on Cash and Cash Equivalents | The amount of cash, cash equivalents and restricted cash as of July 31, 2020 and 2019 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: July 31, 2020 2019 (In thousands) Cash and cash equivalents $ 75,887 $ 32,548 Funds held for clients 18,755 13,516 Cash, cash equivalents and restricted cash $ 94,642 $ 46,064 |
Schedule of Cash Flow, Supplemental Disclosure | Cash used for operating activities reflect cash payments for interest and income taxes as follows: Fiscal Year Ended 2020 2019 (In thousands) Cash paid for interest $ 32,799 $ 38,525 Cash paid for income taxes $ 4,991 $ 5,451 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
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, 2020 and 2019 , classified by fair value hierarchy: Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2020 Level 1 Level 2 Level 3 Money market funds $ 5,117 $ 5,117 $ — $ — Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2019 Level 1 Level 2 Level 3 Money market funds $ 365 $ 365 $ — $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
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: Fiscal Year Ended 2020 2019 (In thousands) Net revenue: Direct Marketing $ 444,360 $ 486,902 Supply Chain 338,453 332,928 $ 782,813 $ 819,830 Operating income (loss): Direct Marketing $ 12,940 $ (9,154 ) Supply Chain 27,952 (3,822 ) Total segment operating income (loss) 40,892 (12,976 ) Corporate-level activity (8,449 ) (12,303 ) Total operating income (loss) 32,443 (25,279 ) Total other expense (31,810 ) (36,820 ) Income (loss) before income taxes $ 633 $ (62,099 ) |
Total Assets of Continuing Operations | July 31, July 31, (In thousands) Total assets: Direct Marketing $ 584,477 $ 600,390 Supply Chain 138,773 112,712 Sub-total—segment assets 723,250 713,102 Corporate 35,922 18,461 $ 759,172 $ 731,563 |
Summarized Financial Information of Net Revenue from External Customers by Group of Services | Summarized financial information of the Company's net revenue by geographic location is as follows: Fiscal Year Ended 2020 2019 (In thousands) United States $ 524,249 $ 557,813 China 126,611 142,661 Netherlands 41,983 51,447 Other 89,970 67,909 $ 782,813 $ 819,830 Summarized financial information of the Company's net revenue from external customers by group of services is as follows: Fiscal Year Ended 2020 2019 (In thousands) Products: Direct Marketing $ 444,360 $ 486,902 Services: Supply Chain 338,453 332,928 $ 782,813 $ 819,830 |
NATURE OF OPERATIONS - Addition
NATURE OF OPERATIONS - Additional Information (Detail) - USD ($) | Jul. 31, 2020 | Dec. 31, 2019 | Jul. 31, 2019 |
Nature Of Operations [Line Items] | |||
Cash and cash equivalents | $ 75,887,000 | $ 32,548,000 | |
Working capital deficit | (26,400,000) | ||
MidCap Credit Facility | |||
Nature Of Operations [Line Items] | |||
Credit facility, readily available borrowing capacity | 4,400,000 | ||
Line of credit facility, maximum credit commitment | $ 12,500,000 | ||
Line of Credit | Cerberus Credit Facility | |||
Nature Of Operations [Line Items] | |||
Line of credit facility, maximum credit commitment | $ 25,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of year | $ 1,804 | $ 480 |
Provisions charged to expense | 111 | 1,418 |
Accounts written off | (1,781) | (94) |
Balance at end of year | $ 134 | $ 1,804 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Aug. 01, 2019 | |
Significant Of Accounting Policies [Line Items] | ||||
Operating expenses | $ 130,516,000 | $ 175,009,000 | ||
Net loss | $ (5,284,000) | $ (66,727,000) | ||
Highly liquid investment period to be considered cash equivalent | 3 months | |||
Goodwill impairment loss | $ 0 | |||
Operating right-of-use assets | $ 56,140,000 | |||
Ten Largest Clients | Sales Revenue, Net | Customer Concentration Risk | ||||
Significant Of Accounting Policies [Line Items] | ||||
Concentration risk percentage | 57.00% | 49.00% | ||
Computing Market Client | Net Accounts Receivable | Customer Concentration Risk | ||||
Significant Of Accounting Policies [Line Items] | ||||
Concentration risk percentage | 11.00% | |||
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 | 17.00% | 11.00% | ||
Accounting Standards Update 2016-02 | ||||
Significant Of Accounting Policies [Line Items] | ||||
Operating right-of-use assets | $ 51,100,000 | |||
Lease liability | $ 53,100,000 | |||
Adjustment of Tax Related Liabilities | ||||
Significant Of Accounting Policies [Line Items] | ||||
Adjustments of tax related liabilities | $ 6,400,000 | |||
Adjustments | ||||
Significant Of Accounting Policies [Line Items] | ||||
Accrued expenses | $ 106,300,000 | |||
Adjustments | Net loss | ||||
Significant Of Accounting Policies [Line Items] | ||||
Net loss | 60,300,000 | |||
Adjustments | Adjustment of Tax Related Liabilities | Operating Expense | ||||
Significant Of Accounting Policies [Line Items] | ||||
Operating expenses | $ 137,700,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Accounting Policies [Abstract] | ||
Cash and bank deposits | $ 70,770 | $ 32,183 |
Money market funds | 5,117 | 365 |
Cash and cash equivalents | $ 75,887 | $ 32,548 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Jul. 31, 2020 | |
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 and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Minimum | Furniture and 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 and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 7 years |
Maximum | Furniture and 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 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,216 | $ 21,322 |
Work-in-process | 253 | 587 |
Finished goods | 885 | 1,765 |
Inventory, net | $ 15,354 | $ 23,674 |
PROPERTY AND EQUIPMENT - At Cos
PROPERTY AND EQUIPMENT - At Cost (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 942 | $ 942 |
Machinery and equipment | 112,407 | 99,961 |
Leasehold improvements | 24,659 | 23,711 |
Software | 53,715 | 52,961 |
Other | 20,138 | 24,230 |
Property plant and equipment, gross | 211,861 | 201,805 |
Less: accumulated depreciation and amortization | (132,183) | (110,537) |
Property and equipment, net | $ 79,678 | $ 91,268 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) | 9 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | |
Goodwill [Line Items] | |||
Goodwill | $ 257,128,000 | $ 257,128,000 | |
Goodwill impairment loss | 0 | ||
Direct Marketing | |||
Goodwill [Line Items] | |||
Goodwill | $ 257,100,000 | ||
Reporting unit, amount of fair value in excess of carrying amount | $ 30,000,000 | ||
Goodwill impairment loss | $ 0 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 213,250 | $ 213,250 |
Accumulated Amortization | 77,987 | 50,732 |
Net Carrying Amount | $ 135,263 | $ 162,518 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 15 years | 15 years |
Gross Carrying Amount | $ 192,730 | $ 192,730 |
Accumulated Amortization | 60,032 | 39,617 |
Net Carrying Amount | $ 132,698 | $ 153,113 |
Trademarks and Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 3 years | 3 years |
Gross Carrying Amount | $ 20,520 | $ 20,520 |
Accumulated Amortization | 17,955 | 11,115 |
Net Carrying Amount | $ 2,565 | $ 9,405 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Finite-lived Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 27,255 | $ 30,446 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 20,415 | 23,606 |
Trademarks and Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 6,840 | $ 6,840 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense of Intangible Assets (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 20,258 | |
2022 | 15,334 | |
2023 | 11,427 | |
2024 | 9,371 | |
2025 | 9,371 | |
Thereafter | 69,502 | |
Net Carrying Amount | $ 135,263 | $ 162,518 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued taxes | $ 60,744 | $ 59,057 |
Accrued compensation | 25,439 | 22,584 |
Accrued interest | 476 | 467 |
Accrued audit, tax and legal | 3,399 | 3,148 |
Accrued contract labor | 981 | 1,650 |
Accrued worker's compensation | 3,949 | 4,549 |
Accrued other | 16,392 | 21,203 |
Accrued expenses | $ 111,380 | $ 112,658 |
DEBT - Summary of the Component
DEBT - Summary of the Components of Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 0 | $ 6,000 |
Less: unamortized discounts and issuance costs | (7,863) | (8,396) |
Total debt, net | 379,049 | 387,669 |
Less: current portion of debt, net | (5,527) | (5,732) |
Total long-term debt, net | 373,522 | 381,937 |
Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Principal amount of long term debt | 14,940 | 14,940 |
Cerberus Credit Facility | ||
Debt Instrument [Line Items] | ||
Principal amount of long term debt | 371,972 | 375,125 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | 0 | 6,000 |
MidCap Credit Facility | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 0 | $ 0 |
7.50% Convertible Senior Note | ||
Debt Instrument [Line Items] | ||
Debt instrument stated percentage | 7.50% |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued pricing liabilities | $ 13,499 | $ 14,309 |
Customer postage deposits | 8,551 | 11,816 |
Revolving credit facility | 0 | 6,000 |
Other | 7,900 | 6,794 |
Other current liabilities | $ 29,950 | $ 38,919 |
ACCRUED EXPENSES AND OTHER CU_5
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Change in Accounting Estimate [Line Items] | |||
Accrued taxes | $ 60,744 | $ 59,057 | |
Accrued pricing liabilities | 13,499 | 14,309 | |
Derecognition of accrued pricing liabilities | $ 810 | 4,573 | |
Adjustment of Tax Related Liabilities | |||
Change in Accounting Estimate [Line Items] | |||
Accrued taxes | $ 32,100 | ||
Adjustment of Tax Related Liabilities | |||
Change in Accounting Estimate [Line Items] | |||
Adjustments of tax related liabilities | $ 6,400 |
DEBT - 5.25% Convertible Senior
DEBT - 5.25% Convertible Senior Note (Details) - USD ($) | Jul. 31, 2020 | Mar. 01, 2019 | Feb. 28, 2019 | Mar. 18, 2014 |
Debt Instrument [Line Items] | ||||
Convertible notes payable | $ 65,600,000 | |||
Debt instrument, interest rate, effective percentage | 27.80% | |||
5.25% Convertible Senior Notes Due 2019 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument stated percentage | 5.25% | |||
Principal amount of notes held | $ 100,000,000 | |||
Debt instrument, interest rate, effective percentage | 13.90% | |||
SPHG Holdings | Convertible Senior Unsecured Note | ||||
Debt Instrument [Line Items] | ||||
Debt instrument stated percentage | 7.50% | |||
Principal amount of notes held | $ 14,900,000 | |||
Convertible notes payable, current | $ 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, 2020 | Jul. 31, 2019 | |
5.25% Convertible Senior Notes Due 2019 | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | $ 4,916 | |
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 | |
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 | |
5.25% Convertible Senior Notes Due 2019 | Amortization Of Debt Issue Cost [Member] | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | 243 | |
Convertible Notes Payable | SPHG Holdings | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | $ 1,764 | 1,165 |
Convertible Notes Payable | SPHG Holdings | Interest expense related to contractual interest coupon | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | 1,142 | 473 |
Convertible Notes Payable | SPHG Holdings | Interest expense related to accretion of the discount | ||
Interest Expense, Debt [Line Items] | ||
Debt instrument, interest expense | $ 622 | $ 692 |
DEBT - PNC Bank, MidCap Credit
DEBT - PNC Bank, MidCap Credit Facility and Cerberus Credit Facility (Details) - USD ($) | Mar. 30, 2020 | Dec. 15, 2017 | Jun. 30, 2014 | Dec. 31, 2019 | Apr. 30, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | Mar. 29, 2020 | Apr. 30, 2019 |
Debt Instrument [Line Items] | |||||||||
Unused line fee | 0.50% | ||||||||
Aggregate amount of each consecutive quarterly scheduled principal installment | $ 1,500,000 | ||||||||
Revolving credit facility | $ 0 | $ 6,000,000 | |||||||
PNC Bank Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, term | 5 years | ||||||||
Line of credit facility, maximum credit commitment | $ 50,000,000 | $ 25,000,000 | |||||||
MidCap Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, term | 3 years | ||||||||
Line of credit facility, maximum credit commitment | $ 12,500,000 | ||||||||
Debt instrument, percentage points added to the reference rate | 4.00% | ||||||||
Credit facility, readily available borrowing capacity | 4,400,000 | ||||||||
Long-term line of credit | 0 | ||||||||
Revolving credit facility | $ 0 | 0 | |||||||
MidCap Credit Facility | Letter of Credit Sublimit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum credit commitment | $ 5,000,000 | ||||||||
MidCap Credit Facility | Inventory Sublimit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum credit commitment | $ 4,500,000 | ||||||||
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 | ||||||||
Leverage ratio | 3.50% | ||||||||
Principal deferral amount | $ 3,000,000 | ||||||||
Maximum amount borrower may distribute for management fees and tax sharing | 5,000,000 | ||||||||
Liquidity requirement | 14,500,000 | $ 15,000,000 | |||||||
Principal amount outstanding on the Term Loan | $ 371,972,000 | $ 375,125,000 | |||||||
Cerberus Credit Facility | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, percentage points added to the reference rate | 3.75% | ||||||||
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 | Scenario 1 | |||||||||
Debt Instrument [Line Items] | |||||||||
Excess cash flow payment percentage | 50.00% | ||||||||
Principal payments extinguished | $ 4,300,000 | ||||||||
Cerberus Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum credit commitment | 25,000,000 | ||||||||
Revolving credit facility | 0 | $ 6,000,000 | |||||||
Cerberus Credit Facility | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount outstanding on the Term Loan | 371,972,000 | 375,125,000 | |||||||
Current and long-term net | $ 370,995,000 | $ 374,237,000 | |||||||
Rate Applicable When Leverage Ratio is Below 3.50 | Cerberus Credit Facility | Scenario 2 | |||||||||
Debt Instrument [Line Items] | |||||||||
Excess cash flow payment percentage | 25.00% |
DEBT - Net Carrying Value of Te
DEBT - Net Carrying Value of Term Loan (Detail) - Cerberus Credit Facility - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Debt Instrument [Line Items] | ||
Principal amount outstanding on the Term Loan | $ 371,972 | $ 375,125 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Principal amount outstanding on the Term Loan | 371,972 | 375,125 |
Unamortized debt discount | (977) | (888) |
Total debt | $ 370,995 | $ 374,237 |
DEBT - 7.5% Convertible Note (D
DEBT - 7.5% Convertible Note (Details) | Feb. 28, 2019USD ($)$ / shares | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||
Debt instrument, redemption price percentage | 100.00% | ||
Issuance of nonvested common stock, value | $ 1,000,000 | $ 700,000 | |
Carrying amount of equity component (net of allocated debt issuance costs) | $ 8,200,000 | 8,200,000 | |
Debt instrument, interest rate, effective percentage | 27.80% | ||
SPHG Holdings | |||
Debt Instrument [Line Items] | |||
Issuance of nonvested common stock, value | $ 1,000 | ||
Conversion ratio (shares) | 0.4213 | ||
Initial Conversion price (in usd per share) | $ / shares | $ 2.37 | ||
SPHG Holdings | Convertible Senior Unsecured Note | |||
Debt Instrument [Line Items] | |||
Debt instrument stated percentage | 7.50% | ||
Debt instrument issued | $ 14,900,000 | ||
SPHG Holdings | Convertible Notes Payable | |||
Debt Instrument [Line Items] | |||
Debt instrument issued | $ 14,940,000 | $ 14,940,000 | |
Period over which the unamotized discount will be amortized | 44 months |
DEBT - Net Carrying Value of th
DEBT - Net Carrying Value of the Notes (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Debt Instrument [Line Items] | ||
Carrying amount of equity component (net of allocated debt issuance costs) | $ 8,200 | $ 8,200 |
Total debt, net | 379,049 | 387,669 |
SPHG Holdings | Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Principal amount of Notes | 14,940 | 14,940 |
Unamortized debt discount | (6,886) | (7,508) |
Total debt, net | $ 8,054 | $ 7,432 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 12 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
Remaining lease term | 11 years |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) $ in Thousands | 12 Months Ended |
Jul. 31, 2020USD ($) | |
Lease, Cost [Abstract] | |
Operating lease cost | $ 16,722 |
Short-term lease expense | 2,358 |
Variable lease cost | 68 |
Amortization of finance lease assets | 38 |
Interest on finance lease liabilities | 11 |
Total lease cost | $ 19,197 |
LEASES - Lease Commitments (Det
LEASES - Lease Commitments (Details) $ in Thousands | Jul. 31, 2020USD ($) |
Accounts Payable and Accrued Liabilities | |
Operating Leases | |
2021 | $ 16,059 |
2022 | 13,039 |
2023 | 7,904 |
2024 | 5,579 |
2025 | 5,410 |
Thereafter | 18,329 |
Total lease payments | 66,320 |
Less: imputed interest | 8,972 |
Present value of lease payments | 57,348 |
Finance Leases | |
2021 | 76 |
2022 | 76 |
2023 | 38 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total lease payments | 190 |
Less: imputed interest | 9 |
Present value of lease payments | 181 |
Operating and Finance Lease Liability, Current | |
Operating Leases | |
Less: current lease obligations | 14,207 |
Finance Leases | |
Less: current lease obligations | 111 |
Operating and Finance Lease Liability, Noncurrent | |
Operating Leases | |
Long-term lease obligations | 43,141 |
Finance Leases | |
Long-term lease obligations | $ 70 |
LEASES - Lease Information (Det
LEASES - Lease Information (Details) | Jul. 31, 2020 |
Weighted average remaining lease term: | |
Operating leases | 6 years 1 month |
Finance leases | 2 years 4 months 25 days |
Weighted average discount rate: | |
Operating leases | 4.40% |
Finance leases | 3.80% |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Jul. 31, 2020USD ($) | |
Cash paid for amounts included in measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 15,885 |
Operating cash flows from finance leases | 9 |
Financing cash flows from finance leases | $ 100 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) $ in Millions | Dec. 15, 2017USD ($) |
Purchase Agreement | SPHG Holdings | Series C Convertible Preferred Stock | |
Commitments and Contingencies [Line Items] | |
Proceeds from issuance of preferred stock | $ 35 |
DEFINED BENEFIT PENSION PLANS -
DEFINED BENEFIT PENSION PLANS - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021USD ($) | Jul. 31, 2020USD ($)pension_plan | Jul. 31, 2019USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2019 | $ (2,100) | ||
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 | $ 300 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pre-tax curtailment gain | $ 2,390 | $ 0 | |
Pension Plan | Netherlands | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of pension plans | pension_plan | 2 | ||
Pension Plan | 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) - Pension Plan - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 29,050 | $ 27,267 | $ 22,860 |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 100.00% | 100.00% | |
Defined benefit plan, fair value of plan assets | $ 29,050 | $ 27,267 | |
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 | $ 29,050 | $ 27,267 | |
Fair Value, Measurements, Recurring | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 98.00% | 98.00% | |
Defined benefit plan, fair value of plan assets | $ 28,388 | $ 26,651 | |
Fair Value, Measurements, Recurring | Insurance contract | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | ||
Fair Value, Measurements, Recurring | Insurance contract | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | ||
Fair Value, Measurements, Recurring | Insurance contract | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 28,388 | $ 26,651 | |
Fair Value, Measurements, Recurring | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Asset Allocations | 2.00% | 2.00% | |
Defined benefit plan, fair value of plan assets | $ 662 | $ 616 | |
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 | $ 662 | $ 616 |
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, 2020 | Jul. 31, 2019 | |
Change in benefit obligation | ||
Service cost | $ 185 | $ 365 |
Interest cost | 543 | 633 |
Pension Plan | ||
Change in benefit obligation | ||
Benefit obligation at beginning of year | 34,538 | 29,849 |
Service cost | 185 | 365 |
Interest cost | 543 | 633 |
Actuarial (gain) loss | (691) | 5,125 |
Employee contributions | 28 | 72 |
Benefits and administrative expenses paid | (212) | (197) |
Adjustments | 0 | (20) |
Effect of curtailment | (2,390) | 0 |
Currency translation | 1,926 | (1,289) |
Benefit obligation at end of year | 33,927 | 34,538 |
Change in plan assets | ||
Fair value of plan assets at beginning of year | 27,267 | 22,860 |
Actual return on plan assets | 476 | 5,136 |
Employer contributions, net | (39) | 422 |
Employee contributions | 28 | 73 |
Settlements | 0 | (19) |
Benefits and administrative expenses paid | (212) | (197) |
Currency translation | 1,530 | (1,008) |
Fair value of plan assets at end of year | 29,050 | 27,267 |
Funded status | ||
Current liabilities | (31) | (13) |
Noncurrent liabilities | (4,846) | (7,259) |
Net amounts recognized on the consolidated balance sheet | $ (4,877) | $ (7,272) |
DEFINED BENEFIT PENSION PLANS_4
DEFINED BENEFIT PENSION PLANS - Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets (Detail) - Pension Plan - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 33,927 | $ 34,538 |
Accumulated benefit obligation | 33,927 | 32,361 |
Fair value of plan assets | $ 29,050 | $ 27,267 |
DEFINED BENEFIT PENSION PLANS_5
DEFINED BENEFIT PENSION PLANS - Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Service cost | $ 185 | $ 365 |
Interest costs | 543 | 633 |
Expected return on plan assets | (458) | (492) |
Amortization of net actuarial loss | 74 | 127 |
Curtailment gain | (143) | 0 |
Net periodic pension costs | $ 201 | $ 633 |
Pension plans | us-gaap:PensionPlansDefinedBenefitMember |
DEFINED BENEFIT PENSION PLANS_6
DEFINED BENEFIT PENSION PLANS - Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) - Pension Plan | Jul. 31, 2020 | Jul. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 1.48% | 1.48% |
Rate of compensation increase | 1.96% | 1.97% |
DEFINED BENEFIT PENSION PLANS_7
DEFINED BENEFIT PENSION PLANS - Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost (Detail) - Pension Plan | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 1.39% | 1.46% |
Expected long-term rate of return on plan assets | 1.37% | 1.45% |
Rate of compensation increase | 1.77% | 1.92% |
DEFINED BENEFIT PENSION PLANS_8
DEFINED BENEFIT PENSION PLANS - Summary of Expected Benefit Payments from Plans (Detail) - Pension Plan $ in Thousands | Jul. 31, 2020USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2021 | $ 247 |
2022 | 258 |
2023 | 309 |
2024 | 472 |
2025 | 396 |
Next 5 years | $ 2,811 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 782,813 | $ 819,830 |
Supply chain management services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 444,360 | 331,022 |
Marketing solutions offerings | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 336,491 | 486,902 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 1,962 | 1,906 |
Products transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 444,360 | 486,902 |
Products transferred over time | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 444,360 | 486,902 |
Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 338,453 | 332,928 |
Services transferred over time | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 338,453 | 332,928 |
Direct Marketing | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 444,360 | 486,902 |
Direct Marketing | Supply chain management services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 444,360 | 486,902 |
Direct Marketing | Marketing solutions offerings | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | 0 |
Direct Marketing | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | 0 |
Direct Marketing | Products transferred over time | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 444,360 | 486,902 |
Direct Marketing | Services transferred over time | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | 0 |
Supply Chain | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 338,453 | 332,928 |
Supply Chain | Supply chain management services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | 0 |
Supply Chain | Marketing solutions offerings | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 336,491 | 331,022 |
Supply Chain | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 1,962 | 1,906 |
Supply Chain | Products transferred over time | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 0 | 0 |
Supply Chain | Services transferred over time | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 338,453 | $ 332,928 |
REVENUE RECOGNITION REVENUE REC
REVENUE RECOGNITION REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | $ 13,016 | $ 21,473 |
Deferred revenue - current | 2,860 | 2,967 |
Deferred revenue - long-term | 85 | 62 |
Total deferred revenue | 2,945 | 3,029 |
Trade Accounts Receivable | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable, trade, net | $ 93,072 | $ 112,141 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Changes in Deferred Revenue (Detail) $ in Thousands | 12 Months Ended |
Jul. 31, 2020USD ($) | |
Change in Deferred Revenue | |
Balance at beginning of period | $ 3,029 |
Deferral of revenue | 4,310 |
Recognition of deferred amounts upon satisfaction of performance obligation | (4,394) |
Balance at end of period | $ 2,945 |
REVENUE RECOGNITION - Performan
REVENUE RECOGNITION - Performance Obligations (Details) $ in Millions | Jul. 31, 2020USD ($) |
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 | $ 2.9 |
Unearned revenue, timing of satisfaction | 12 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-08-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unearned revenue | $ 0.1 |
Unearned revenue, timing of satisfaction |
OTHER GAINS, NET - Components o
OTHER GAINS, NET - Components of Other Gains (Losses), Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Foreign currency exchange gains, net | $ 890 | $ 337 |
Derecognition of accrued pricing liabilities | 810 | 4,573 |
Other, net | 398 | (307) |
Other gains (losses), net | $ 2,098 | $ 4,603 |
OTHER GAINS, NET - Additional I
OTHER GAINS, NET - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Other gains, net | $ 2,098 | $ 4,603 |
Derecognition of accrued pricing liabilities | 810 | 4,573 |
Net realized and unrealized foreign currency exchange gain (losses) | 900 | 300 |
Other, net | $ 398 | $ (307) |
SHARE-BASED PAYMENTS - Addition
SHARE-BASED PAYMENTS - Additional Information (Detail) - USD ($) $ in Millions | Dec. 15, 2017 | Jul. 31, 2020 | Jul. 31, 2019 | Jul. 23, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non vested stock compensation expense | $ 0.7 | $ 1.2 | ||
Grant date fair value of nonvested stock | 0.8 | $ 0.5 | ||
Unrecognized compensation cost related to nonvested stock | $ 0.5 | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common Stock shares available for future issuance (in shares) | 87,000 | |||
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) | 22,000 | 17,000 | ||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period of cost expected to be expensed (in years) | 1 year 2 months 5 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of restriction period (in years) | 1 year | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of restriction period (in years) | 5 years | |||
2020 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant | 4,945,000 | |||
Common Stock shares available for future issuance (in shares) | 8,646,038 | |||
2010 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common Stock shares available for future issuance (in shares) | 3,668,143 | |||
2010 Plan additional shares of common stock (in shares) | 1,060,523 | |||
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 | |||
Forfeited restricted stock grants (in shares) | 50,000 |
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, 2020 | Jul. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 720 | $ 1,267 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 0 | 0 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 720 | $ 1,267 |
SHARE-BASED PAYMENTS - Summar_2
SHARE-BASED PAYMENTS - Summary of Option Activity (Detail) shares in Thousands | 12 Months Ended |
Jul. 31, 2020$ / sharesshares | |
Number of Shares | |
Stock options outstanding, July 31, 2018 (in shares) | shares | 325 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | 0 |
Forfeited or expired (in shares) | shares | (130) |
Stock options outstanding, July 31, 2019 (in shares) | shares | 195 |
Stock options exercisable, July 31, 2019 (in shares) | shares | 195 |
Weighted Average Exercise Price | |
Stock options outstanding, July 31, 2018 (in usd per shares) | $ / shares | $ 4.07 |
Granted (in usd per shares) | $ / shares | 0 |
Exercised (in usd per shares) | $ / shares | 0 |
Forfeited or expired (in usd per shares) | $ / shares | 3.38 |
Stock options outstanding, July 31, 2019 (in usd per shares) | $ / shares | 4.54 |
Stock options exercisable, July 31, 2019 (in usd per shares) | $ / shares | $ 4.54 |
Weighted Average Remaining Contractual Term (Years) | |
Stock options outstanding, July 31, 2019 | 5 months 12 days |
Stock options exercisable, July 31, 2019 | 5 months 12 days |
SHARE-BASED PAYMENTS - Summar_3
SHARE-BASED PAYMENTS - Summary of Activity of Nonvested Stock (Detail) shares in Thousands | 12 Months Ended |
Jul. 31, 2020$ / sharesshares | |
Number of Shares | |
Nonvested stock outstanding, July 31, 2018 (in shares) | shares | 905 |
Granted (in shares) | shares | 1,060 |
Vested (in shares) | shares | (438) |
Forfeited (in shares) | shares | (133) |
Nonvested stock outstanding, July 31, 2019 (in shares) | shares | 1,394 |
Weighted-Average Grant Date Fair Value | |
Nonvested stock outstanding, July 31, 2018 (in usd per shares) | $ / shares | $ 1.60 |
Granted (in usd per shares) | $ / shares | 0.80 |
Vested (in usd per shares) | $ / shares | 1.72 |
Forfeited (in usd per shares) | $ / shares | 1.47 |
Nonvested stock outstanding, July 31, 2019 (in usd per shares) | $ / shares | $ 0.97 |
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, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
U.S. | $ (9,168) | $ (68,959) |
Foreign | 9,801 | 6,860 |
Income (loss) before income taxes | $ 633 | $ (62,099) |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense from operations | $ 5,917 | $ 4,670 |
Total income tax expense | $ 5,917 | $ 4,670 |
INCOME TAXES - Components of _2
INCOME TAXES - Components of Income Tax Expense from Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Current provision | ||
Federal | $ 0 | $ 0 |
State | 430 | 288 |
Foreign | 3,283 | 1,525 |
Current provision: | 3,713 | 1,813 |
Deferred provision: | ||
Federal | 91 | 1,563 |
State | 1,452 | 753 |
Foreign | 661 | 541 |
Deferred provision | 2,204 | 2,857 |
Total tax provision | $ 5,917 | $ 4,670 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Income Taxes [Line Items] | ||
Net deferred tax assets | $ 23,951 | $ 46,564 |
Deferred tax liability | 533 | |
Change in valuation allowance | $ 1,800 | (12,700) |
Ownership percentage | 5.00% | |
Stockholder owning ownership on corporation's securities rolling period | 3 years | |
Deferred employer-paid portion of social security taxes | $ 5,300 | |
Unrecognized tax benefits, including interest, related to federal, state and foreign taxes | 2,800 | 2,400 |
Expected any unrecognized tax benefits to reverse in the next twelve months | 200 | |
Increase (decrease) in liabilities for interest expense related to uncertain tax positions | 100 | 200 |
Federal | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 2,100,000 | |
State | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 117,000 | |
Foreign | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 70,900 | |
Foreign net operating loss carryforward with indefinite period | 56,600 | |
Federal and State | ||
Income Taxes [Line Items] | ||
Net capital loss carryforwards | 48,500 | |
Other Assets | ||
Income Taxes [Line Items] | ||
Net deferred tax assets | 300 | 1,000 |
Other Long -term Liabilities | ||
Income Taxes [Line Items] | ||
Deferred tax liability | $ 800 | $ 100 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Deferred tax assets: | ||
Accruals and reserves | $ 8,563 | $ 21,297 |
Tax basis in excess of financial basis of investments in affiliates | 0 | 6,534 |
Tax basis in excess of financial basis for intangible and fixed assets | 225 | 187 |
Net operating loss and capital loss carry forwards | 468,132 | 469,735 |
Total gross deferred tax assets | 476,920 | 497,753 |
Less: valuation allowance | (452,969) | (451,189) |
Net deferred tax assets | 23,951 | 46,564 |
Deferred tax liabilities: | ||
Financial basis in excess of tax basis for intangible and fixed assets | (22,889) | (43,885) |
Convertible debt | (1,595) | (1,761) |
Total gross deferred tax liabilities | (24,484) | (45,646) |
Net deferred tax liabilities | $ (533) | |
Net deferred tax asset | $ 918 |
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, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Computed expected income tax expense (benefit) | $ 160 | $ (13,041) |
Increase (decrease) in income tax expense resulting from: | ||
Change in valuation allowance | 2,227 | 16,158 |
Foreign tax rate differential | (23) | (593) |
Nondeductible expenses | 3,010 | 2,484 |
Foreign withholding taxes | 553 | 336 |
Addition of uncertain tax position reserves | 498 | 645 |
State benefit of U.S. loss | (624) | 0 |
State income taxes, net of federal benefit | 133 | 113 |
Other | (17) | (1,432) |
Total tax provision | $ 5,917 | $ 4,670 |
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, 2020 | Jul. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance as of beginning of year | $ 2,207 | $ 1,525 |
Additions for current year tax positions | 667 | 704 |
Currency translation | 2 | |
Currency translation | (22) | |
Reductions for lapses in statute of limitations | (416) | 0 |
Balance as of end of year | $ 2,460 | $ 2,207 |
EARNINGS (LOSS) PER SHARE - Rec
EARNINGS (LOSS) PER SHARE - Reconciliation of Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Net loss | $ (5,284) | $ (66,727) |
Less: Preferred dividends on redeemable preferred stock | (2,129) | (2,129) |
Net loss attributable to common stockholders | (7,413) | (68,856) |
Effect of dilutive securities: | ||
Net loss attributable to common stockholders after assumed conversions | $ (7,413) | $ (68,856) |
Weighted average common shares outstanding (in shares) | 61,644 | 61,180 |
Weighted average common equivalent shares arising from dilutive stock options, restricted stock, convertible notes and convertible preferred stock (in shares) | 0 | 0 |
Weighted average number of common and potential common shares (in shares) | 61,644 | 61,180 |
Basic and diluted net loss per share attributable to common stockholders (in usd per share) | $ (0.12) | $ (1.13) |
Convertible Senior Unsecured Note | ||
Effect of dilutive securities: | ||
Dilutive securities | $ 0 | $ 0 |
Contingent Convertible Preferred Stock | ||
Effect of dilutive securities: | ||
Dilutive securities | $ 0 | $ 0 |
EARNINGS (LOSS) PER SHARE - Add
EARNINGS (LOSS) PER SHARE - Additional Information (Detail) - shares shares in Millions | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Contingent Convertible Preferred Stock | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Common stock equivalent shares excluded from the denominator in the calculation of diluted loss per share (in shares) | 17.9 | 17.9 |
Convertible Senior Unsecured Note | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Common stock equivalent shares excluded from the denominator in the calculation of diluted loss per share (in shares) | 6.3 | 2.6 |
Convertible Senior Unsecured Note | Stock Options, Restricted Stock, and Redeemable Preferred Stock | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Common stock equivalent shares excluded from the denominator in the calculation of diluted loss per share (in shares) | 24.4 | 20.9 |
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, 2020 | Jul. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | $ 52,692 | $ 107,628 |
Foreign currency translation adjustment | 8 | (1,331) |
Net unrealized holding loss on securities | (96) | (85) |
Pension liability adjustments | 2,897 | (284) |
Other comprehensive income (loss) | 2,809 | (1,700) |
Balance | 48,818 | 52,692 |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | 1,034 | 2,734 |
Foreign currency translation adjustment | 8 | |
Net unrealized holding loss on securities | (96) | |
Pension liability adjustments | 2,897 | |
Other comprehensive income (loss) | 2,809 | (1,700) |
Balance | 3,843 | 1,034 |
Foreign currency items | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | 5,017 | |
Foreign currency translation adjustment | 8 | |
Net unrealized holding loss on securities | 0 | |
Pension liability adjustments | 0 | |
Other comprehensive income (loss) | 8 | |
Balance | 5,025 | 5,017 |
Pension items | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | (4,079) | |
Foreign currency translation adjustment | 0 | |
Net unrealized holding loss on securities | 0 | |
Pension liability adjustments | 2,897 | |
Other comprehensive income (loss) | 2,897 | |
Balance | (1,182) | (4,079) |
Unrealized gains (losses) on securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance | 96 | |
Foreign currency translation adjustment | 0 | |
Net unrealized holding loss on securities | (96) | |
Pension liability adjustments | 0 | |
Other comprehensive income (loss) | (96) | |
Balance | $ 0 | $ 96 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME - Additional Information (Detail) $ in Millions | 12 Months Ended |
Jul. 31, 2019USD ($) | |
Equity [Abstract] | |
Other comprehensive income (loss), tax | $ 0.1 |
STATEMENT OF CASH FLOWS SUPPL_3
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION - Reconciliation of Cash (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 |
Supplemental Cash Flow Elements [Abstract] | |||
Cash and cash equivalents | $ 75,887 | $ 32,548 | |
Funds held for clients | 18,755 | 13,516 | |
Cash, cash equivalents and restricted cash | $ 94,642 | $ 46,064 | $ 103,826 |
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, 2020 | Jul. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 32,799 | $ 38,525 |
Cash paid for income taxes | $ 4,991 | $ 5,451 |
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, 2020 | Jul. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Issuance of nonvested common stock ( in shares) | 1 | 0.4 |
Issuance of nonvested common stock, value | $ 1 | $ 0.7 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Detail) $ / shares in Units, $ in Thousands | Dec. 15, 2017USD ($)d$ / sharesshares | Mar. 12, 2013USD ($)$ / sharesshares | Jul. 31, 2020USD ($)$ / sharesshares | Jul. 31, 2019USD ($)$ / sharesshares |
Equity [Line Items] | ||||
Preferred stock, shares issued (in shares) | shares | 0 | 0 | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||
Price per share (in usd per share) | $ 4 | |||
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 | $ 19 | $ 15 | |
Issuance of warrants to acquire additional shares (in shares) | shares | 2,000,000 | |||
Issuance of warrants to acquire additional shares, exercise price (in 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 (in 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 shares) | shares | 35,000 | |||
Preferred stock, par value (in usd per share) | $ 0.01 | |||
Price per share (in 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 (in usd 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, 2020 | Jul. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | $ 5,117 | $ 365 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure, recurring | 5,117 | 365 |
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 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020USD ($)segment | Jul. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Total assets | $ 759,172 | $ 731,563 |
Capital expenditures | 12,070 | 14,539 |
Depreciation | 23,075 | 22,058 |
Amortization of intangible assets | 27,255 | 30,446 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total assets | 79,700 | 91,300 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 723,250 | 713,102 |
Operating Segments | Direct Marketing | ||
Segment Reporting Information [Line Items] | ||
Total assets | 584,477 | 600,390 |
Capital expenditures | 10,200 | 10,400 |
Depreciation | 19,000 | 16,400 |
Amortization of intangible assets | 27,255 | 30,446 |
Operating Segments | Supply Chain | ||
Segment Reporting Information [Line Items] | ||
Total assets | 138,773 | 112,712 |
Capital expenditures | 1,900 | 4,100 |
Depreciation | $ 4,100 | $ 5,600 |
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, 2020 | Jul. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 782,813 | $ 819,830 |
Total operating income (loss) | 32,443 | (25,279) |
Total other expense | (31,810) | (36,820) |
Income (loss) before income taxes | 633 | (62,099) |
Direct Marketing | ||
Segment Reporting Information [Line Items] | ||
Revenues | 444,360 | 486,902 |
Supply Chain | ||
Segment Reporting Information [Line Items] | ||
Revenues | 338,453 | 332,928 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | 40,892 | (12,976) |
Operating Segments | Direct Marketing | ||
Segment Reporting Information [Line Items] | ||
Revenues | 444,360 | 486,902 |
Total operating income (loss) | 12,940 | (9,154) |
Operating Segments | Supply Chain | ||
Segment Reporting Information [Line Items] | ||
Revenues | 338,453 | 332,928 |
Total operating income (loss) | 27,952 | (3,822) |
Corporate-level activity | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | $ (8,449) | $ (12,303) |
SEGMENT INFORMATION - Total Ass
SEGMENT INFORMATION - Total Assets of Continuing Operations (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 759,172 | $ 731,563 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 723,250 | 713,102 |
Operating Segments | Direct Marketing | ||
Segment Reporting Information [Line Items] | ||
Total assets | 584,477 | 600,390 |
Operating Segments | Supply Chain | ||
Segment Reporting Information [Line Items] | ||
Total assets | 138,773 | 112,712 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 35,922 | $ 18,461 |
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, 2020 | Jul. 31, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 782,813 | $ 819,830 |
Direct Marketing | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 444,360 | 486,902 |
Supply Chain | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 338,453 | $ 332,928 |
SEGMENT INFORMATION - Summari_3
SEGMENT INFORMATION - Summarized Financial Information of Net Revenue by Geographical Location (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 782,813 | $ 819,830 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 524,249 | 557,813 |
China | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 126,611 | 142,661 |
Netherlands | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 41,983 | 51,447 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 89,970 | $ 67,909 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Dec. 15, 2017 | Jul. 31, 2020 | Jul. 31, 2019 | Mar. 01, 2019 | Feb. 28, 2019 | Dec. 04, 2018 | Mar. 12, 2013 |
Related Party Transaction [Line Items] | |||||||
Convertible notes payable | $ 65,600 | ||||||
Net carrying value of note | $ 379,049 | $ 387,669 | |||||
Interest expense | $ 33,969 | $ 41,951 | |||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | |||||
Price per share (in usd per share) | $ 4 | ||||||
Preferred dividends paid | $ 2,129 | $ 2,129 | |||||
Steel Holdings | 5.25% Convertible Senior Notes | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage in capital stock | 48.80% | ||||||
SPHG Holdings | Convertible Senior Unsecured Note | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible notes payable, current | $ 14,900 | ||||||
Debt instrument stated percentage | 7.50% | ||||||
SPHG Holdings | Convertible Notes Payable | |||||||
Related Party Transaction [Line Items] | |||||||
Net carrying value of note | 8,054 | 7,432 | |||||
Debt instrument, interest expense | 1,764 | 1,165 | |||||
Interest expense | 1,200 | ||||||
Purchase Agreement | SPHG Holdings | Series C Convertible Preferred Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Preferred stock, shares issued (in shares) | 35,000 | ||||||
Preferred stock, par value (in usd per share) | $ 0.01 | ||||||
Price per share (in usd per share) | $ 1,000 | ||||||
Proceeds from issuance of preferred stock | $ 35,000 | ||||||
Preferred dividends paid | 2,100 | 2,100 | |||||
SPHG Holdings | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible notes payable | 14,900 | 14,900 | |||||
SPHG Holdings | Convertible Senior Unsecured Note | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible notes payable, current | $ 14,900 | ||||||
Steel Services Ltd | Management Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Total expenses incurred related to Management Services Agreement and Transfer Agreement | 3,400 | 1,800 | |||||
SP Corporate Services Llc and Steel Services Limited | Management Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Amount due to related parties | $ 800 | $ 500 |