Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Sep. 19, 2019 | Jan. 31, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jul. 31, 2019 | ||
Current Fiscal Year End Date | --07-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Registrant Name | COMTECH TELECOMMUNICATIONS CORP /DE/ | ||
Entity Central Index Key | 0000023197 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 24,267,980 | ||
Entity Public Float | $ 584,329,000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 45,576,000 | $ 43,484,000 |
Accounts receivable, net | 145,032,000 | 147,439,000 |
Inventories, net | 74,839,000 | 75,076,000 |
Prepaid expenses and other current assets | 14,867,000 | 13,794,000 |
Total current assets | 280,314,000 | 279,793,000 |
Property, plant and equipment, net | 28,026,000 | 28,987,000 |
Goodwill | 310,489,000 | 290,633,000 |
Intangibles with finite lives, net | 261,890,000 | 240,796,000 |
Deferred financing costs, net | 3,128,000 | 2,205,000 |
Other assets, net | 3,864,000 | 2,743,000 |
Total assets | 887,711,000 | 845,157,000 |
Current liabilities: | ||
Accounts payable | 24,330,000 | 43,928,000 |
Accrued expenses and other current liabilities | 78,584,000 | 65,034,000 |
Dividends payable | 2,406,000 | 2,356,000 |
Contract liabilities | 38,682,000 | 34,452,000 |
Current portion of long-term debt | 0 | 17,211,000 |
Current portion of capital lease and other obligations | 757,000 | 1,836,000 |
Interest payable | 588,000 | 499,000 |
Total current liabilities | 145,347,000 | 165,316,000 |
Non-current portion of long-term debt, net | 165,000,000 | 148,087,000 |
Non-current portion of capital lease and other obligations | 0 | 765,000 |
Income taxes payable | 325,000 | 2,572,000 |
Deferred tax liability, net | 12,481,000 | 10,927,000 |
Long-term contract liabilities | 10,654,000 | 7,689,000 |
Other liabilities | 18,822,000 | 4,117,000 |
Total liabilities | 352,629,000 | 339,473,000 |
Commitments and contingencies (See Note 13) | ||
Stockholders’ equity: | ||
Preferred stock, par value $.10 per share; shares authorized and unissued 2,000,000 | 0 | 0 |
Common stock, par value $.10 per share; authorized 100,000,000 shares; issued 39,276,161 shares and 38,860,571 shares at July 31, 2019 and 2018, respectively | 3,928,000 | 3,886,000 |
Additional paid-in capital | 552,670,000 | 538,453,000 |
Retained earnings | 420,333,000 | 405,194,000 |
Stockholders' equity before treasury stock | 976,931,000 | 947,533,000 |
Treasury stock, at cost (15,033,317 shares at July 31, 2019 and 2018) | (441,849,000) | (441,849,000) |
Total stockholders’ equity | 535,082,000 | 505,684,000 |
Total liabilities and stockholders’ equity | $ 887,711,000 | $ 845,157,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2019 | Jul. 31, 2018 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares Issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 39,276,161 | 38,860,571 |
Treasury stock, shares (in shares) | 15,033,317 | 15,033,317 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income Statement [Abstract] | |||
Net sales | $ 671,797,000 | $ 570,589,000 | $ 550,368,000 |
Cost of sales | 424,357,000 | 346,648,000 | 332,183,000 |
Gross profit | 247,440,000 | 223,941,000 | 218,185,000 |
Expenses: | |||
Selling, general and administrative | 128,639,000 | 113,922,000 | 116,080,000 |
Research and development | 56,407,000 | 53,869,000 | 54,260,000 |
Amortization of intangibles | 18,320,000 | 21,075,000 | 22,823,000 |
Settlement of intellectual property litigation | (3,204,000) | 0 | (12,020,000) |
Acquisition plan expenses | 5,871,000 | 0 | 0 |
Total operating expenses | 206,033,000 | 188,866,000 | 181,143,000 |
Operating income | 41,407,000 | 35,075,000 | 37,042,000 |
Other expenses (income): | |||
Interest expense | 9,245,000 | 10,195,000 | 11,629,000 |
Write-off of deferred financing costs | 3,217,000 | 0 | 0 |
Interest (income) and other | 35,000 | 254,000 | (68,000) |
Income before provision for (benefit from) income taxes | 28,910,000 | 24,626,000 | 25,481,000 |
Provision for (benefit from) income taxes | 3,869,000 | (5,143,000) | 9,654,000 |
Net income | $ 25,041,000 | $ 29,769,000 | $ 15,827,000 |
Net income per share: | |||
Basic (in dollars per share) | $ 1.04 | $ 1.25 | $ 0.68 |
Diluted (in dollars per share) | $ 1.03 | $ 1.24 | $ 0.67 |
Weighted average number of common shares outstanding - basic (in shares) | 24,124,000 | 23,825,000 | 23,433,000 |
Weighted average number of common and common equivalent shares outstanding - diluted (in shares) | 24,302,000 | 24,040,000 | 23,489,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock |
Beginning balance at Jul. 31, 2016 | $ 470,401,000 | $ 3,837,000 | $ 524,797,000 | $ 383,616,000 | $ (441,849,000) |
Beginning balance (in shares) at Jul. 31, 2016 | 38,367,997 | ||||
Beginning balance (in shares) at Jul. 31, 2016 | 15,033,317 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-classified stock award compensation | 8,467,000 | 8,467,000 | |||
Proceeds from issuance of employee stock purchase plan shares | 694,000 | $ 7,000 | 687,000 | ||
Proceeds from issuance of employee stock purchase plan shares (in shares) | 64,367 | ||||
Issuance of restricted stock, net | 0 | $ 14,000 | (14,000) | ||
Issuance of restricted stock, net (in shares) | 144,988 | ||||
Net settlement of stock-based awards | (262,000) | $ 4,000 | (266,000) | ||
Net settlement of stock-based awards (in shares) | 42,115 | ||||
Cash dividends declared | (14,034,000) | (14,034,000) | |||
Accrual of dividend equivalents, net of reversal | (273,000) | (273,000) | |||
Net income tax shortfall from settlement of stock-based awards | (248,000) | (248,000) | |||
Reversal of deferred tax assets associated with expired and unexercised stock-based awards | (422,000) | (422,000) | |||
Net income | 15,827,000 | 15,827,000 | |||
Ending balance at Jul. 31, 2017 | 480,150,000 | $ 3,862,000 | 533,001,000 | 385,136,000 | $ (441,849,000) |
Ending balance (in shares) at Jul. 31, 2017 | 38,619,467 | ||||
Ending balance (in shares) at Jul. 31, 2017 | 15,033,317 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-classified stock award compensation | 8,605,000 | 8,605,000 | |||
Proceeds from issuance of employee stock purchase plan shares | 855,000 | $ 5,000 | 850,000 | ||
Proceeds from issuance of employee stock purchase plan shares (in shares) | 44,996 | ||||
Proceeds from exercises of stock options | 326,000 | $ 1,000 | 325,000 | ||
Proceeds from exercises of stock options (in shares) | 13,100 | ||||
Forfeiture of restricted stock | 0 | $ (1,000) | 1,000 | ||
Forfeiture of restricted stock (in shares) | (10,254) | ||||
Net settlement of stock-based awards | $ (4,310,000) | $ 19,000 | (4,329,000) | ||
Net settlement of stock-based awards (in shares) | 8,706 | 193,262 | |||
Cash dividends declared | $ (9,411,000) | (9,411,000) | |||
Accrual of dividend equivalents, net of reversal | (300,000) | (300,000) | |||
Net income | 29,769,000 | 29,769,000 | |||
Ending balance at Jul. 31, 2018 | $ 505,684,000 | $ 3,886,000 | 538,453,000 | 405,194,000 | $ (441,849,000) |
Ending balance (in shares) at Jul. 31, 2018 | 38,860,571 | 38,860,571 | |||
Ending balance (in shares) at Jul. 31, 2018 | 15,033,317 | 15,033,317 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-classified stock award compensation | $ 11,427,000 | 11,427,000 | |||
Proceeds from issuance of employee stock purchase plan shares | 926,000 | $ 4,000 | 922,000 | ||
Proceeds from issuance of employee stock purchase plan shares (in shares) | 43,316 | ||||
Proceeds from exercises of stock options | 216,000 | $ 1,000 | 215,000 | ||
Proceeds from exercises of stock options (in shares) | 8,100 | ||||
Issuance of restricted stock, net | 0 | $ 1,000 | (1,000) | ||
Issuance of restricted stock, net (in shares) | 10,386 | ||||
Net settlement of stock-based awards | $ (3,916,000) | $ 15,000 | (3,931,000) | ||
Net settlement of stock-based awards (in shares) | 9,345 | 145,119 | |||
Common stock issued for acquisition of Solacom Technologies, Inc. | $ 5,606,000 | $ 21,000 | 5,585,000 | ||
Common stock issued for acquisition of Solacom Technologies, Inc. (in shares) | 208,669 | ||||
Cash dividends declared | (9,575,000) | (9,575,000) | |||
Accrual of dividend equivalents, net of reversal | (327,000) | (327,000) | |||
Net income | 25,041,000 | 25,041,000 | |||
Ending balance at Jul. 31, 2019 | $ 535,082,000 | $ 3,928,000 | $ 552,670,000 | $ 420,333,000 | $ (441,849,000) |
Ending balance (in shares) at Jul. 31, 2019 | 39,276,161 | 39,276,161 | |||
Ending balance (in shares) at Jul. 31, 2019 | 15,033,317 | 15,033,317 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Statement of Financial Position [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 0.40 | $ 0.40 | $ 0.60 |
Accrual of dividend equivalents (in dollars per share) | $ 0.40 | $ 0.40 | $ 0.60 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 25,041,000 | $ 29,769,000 | $ 15,827,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of property, plant and equipment | 11,927,000 | 13,655,000 | 14,354,000 |
Amortization of intangible assets with finite lives | 18,320,000 | 21,075,000 | 22,823,000 |
Amortization of stock-based compensation | 11,427,000 | 8,569,000 | 8,506,000 |
Amortization of deferred financing costs | 1,099,000 | 2,196,000 | 1,977,000 |
Estimated contract settlement costs | 6,351,000 | 0 | 0 |
Settlement of intellectual property litigation | (3,204,000) | 0 | (12,020,000) |
Write-off of deferred financing costs | 3,217,000 | 0 | 0 |
Changes in other liabilities | (1,056,000) | 0 | 0 |
Loss (gain) on disposal of property, plant and equipment | 144,000 | 79,000 | (126,000) |
Provision for allowance for doubtful accounts | 1,136,000 | 573,000 | 497,000 |
Provision for excess and obsolete inventory | 6,015,000 | 5,628,000 | 2,900,000 |
Deferred income tax expense (benefit) | 4,283,000 | (6,379,000) | 9,056,000 |
Excess income tax benefit from stock-based award exercises | 0 | 0 | (82,000) |
Changes in assets and liabilities, net of effects of business acquisition: | |||
Accounts receivable | 6,315,000 | (24,578,000) | 25,508,000 |
Inventories | (3,787,000) | (20,065,000) | 7,812,000 |
Prepaid expenses and other current assets | 915,000 | 787,000 | (956,000) |
Other assets | 102,000 | (140,000) | 666,000 |
Accounts payable | (21,290,000) | 13,728,000 | (4,472,000) |
Accrued expenses and other current liabilities | 3,554,000 | (3,374,000) | (21,796,000) |
Contract liabilities | (127,000) | 9,143,000 | (2,431,000) |
Other liabilities, non-current | (84,000) | (682,000) | (1,442,000) |
Interest payable | 151,000 | 234,000 | (1,039,000) |
Income taxes payable | (2,418,000) | 126,000 | 1,355,000 |
Net cash provided by operating activities | 68,031,000 | 50,344,000 | 66,917,000 |
Cash flows from investing activities: | |||
Payment for acquisition of Solacom Technologies Inc., net of cash acquired | (25,883,000) | 0 | 0 |
Payment for acquisition of the GD NG-911 business | (10,000,000) | 0 | 0 |
Purchases of property, plant and equipment | (8,785,000) | (8,642,000) | (8,150,000) |
Net cash used in investing activities | (44,668,000) | (8,642,000) | (8,150,000) |
Cash flows from financing activities: | |||
Net borrowings of long-term debt under Credit Facility | 165,000,000 | 0 | 0 |
Repayment of debt under Term Loan portion of Prior Credit Facility | (120,121,000) | (18,960,000) | (33,567,000) |
Net payments under Revolving Loan portion of Prior Credit Facility | (48,603,000) | (8,800,000) | (26,500,000) |
Cash dividends paid | (9,789,000) | (9,538,000) | (18,872,000) |
Remittance of employees' statutory tax withholdings for stock awards | (5,042,000) | (1,143,000) | (262,000) |
Repayment of principal amounts under capital lease and other obligations | (1,906,000) | (2,802,000) | (3,592,000) |
Payment of deferred financing costs | (1,813,000) | 0 | (1,085,000) |
Proceeds from issuance of employee stock purchase plan shares | 935,000 | 855,000 | 694,000 |
Proceeds from exercises of stock options | 216,000 | 326,000 | 0 |
Payment of shelf registration costs and equity issuance costs | (148,000) | 0 | (626,000) |
Excess income tax benefit from stock-based award exercises | 0 | 0 | 82,000 |
Net cash used in financing activities | (21,271,000) | (40,062,000) | (83,728,000) |
Net increase (decrease) in cash and cash equivalents | 2,092,000 | 1,640,000 | (24,961,000) |
Cash and cash equivalents at beginning of year | 43,484,000 | 41,844,000 | 66,805,000 |
Cash and cash equivalents at end of year | 45,576,000 | 43,484,000 | 41,844,000 |
Cash paid (received) during the year for: | |||
Interest | 7,669,000 | 7,291,000 | 10,424,000 |
Income taxes, net | 2,005,000 | 1,112,000 | (758,000) |
Non-cash investing and financing activities: | |||
Accrued remittance of employees' statutory tax withholdings for fully-vested share units | 1,787,000 | 2,963,000 | 0 |
Cash dividends declared but unpaid (including accrual of dividend equivalents) | 2,733,000 | 2,656,000 | 2,616,000 |
Capital lease and other obligations incurred | 0 | 1,306,000 | 68,000 |
Accrued additions to property, plant and equipment | 902,000 | 719,000 | 1,221,000 |
Issuance (forfeiture) of restricted stock | 1,000 | (1,000) | 14,000 |
Common stock issued for acquisition of Solacom Technologies Inc. | $ 5,606,000 | $ 0 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting and Reporting Policies | Summary of Significant Accounting and Reporting Policies (a) Principles of Consolidation The accompanying consolidated financial statements include the accounts of Comtech Telecommunications Corp. and its subsidiaries ("Comtech," "we," "us," or "our"), all of which are wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. (b) Nature of Business We design, develop, produce and market innovative products, systems and services for advanced communications solutions. We conduct our business through two reportable operating segments: Commercial Solutions and Government Solutions. Our business is highly competitive and characterized by rapid technological change. Our growth and financial position depends on our ability to keep pace with such changes and developments and to respond to the sophisticated requirements of an increasing variety of secure wireless communications technology users, among other things. Many of our competitors are substantially larger, and have significantly greater financial, marketing and operating resources and broader product lines than our own. A significant technological or sales breakthrough by others, including smaller competitors or new companies, could have a material adverse effect on our business. In addition, certain of our customers have technological capabilities in our product areas and could choose to replace our products with their own. International sales expose us to certain risks, including barriers to trade, fluctuations in foreign currency exchange rates (which may make our products less price competitive), political and economic instability, availability of suitable export financing, export license requirements, tariff regulations, and other United States ("U.S.") and foreign regulations that may apply to the export of our products, as well as the generally greater difficulties of doing business abroad. We attempt to reduce the risk of doing business in foreign countries by seeking contracts denominated in U.S. dollars, advance or milestone payments, credit insurance and irrevocable letters of credit in our favor. (c) Adoption of New Leasing Standard On August 1, 2019 (the start of our first quarter of fiscal 2020), we adopted ASU No. 2016-02 "Leases (Topic 842)," which requires lessees to recognize the following for all leases (with the exception of short-term leases): (i) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, initially measured at the present value of the lease payments; and (ii) a right-of-use asset, which is an asset that represents the lessee's right to use a specified asset for the lease term. In January 2018, FASB ASU No. 2018-01 was issued to permit an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity’s adoption of Topic 842. In July 2018, the FASB issued ASU Nos. 2018-10 and 2018-11, which provide further codification improvements and relieves the requirement to present prior comparative year results when adopting the new lease standard. Instead, companies can choose to recognize the cumulative effect of applying the new standard to leased assets and liabilities as an adjustment to opening retained earnings. In December 2018, FASB ASU No. 2018-20 was issued to simplify the implementation of Topic 842 for lessors as it relates to sales taxes, lessor costs paid directly by the lessee and recognition of variable payments for contracts with lease and non-lease components. In March 2019, FASB ASU No. 2019-01 was issued, which addresses: (i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; (ii) presentation of sales types and direct financing leases on the statement of cash flows; and (iii) transition disclosures related to Topic 250, "Accounting Changes and Error Corrections." This latest ASU specifically provides an exception to the paragraph 250-10-50-3 that would otherwise have required interim disclosures in the period of an accounting change including the effect of that change on income from continuing operations, net income, any other financial statement line item and any affected per-share amounts. On August 1, 2019, we adopted the new leasing standard using the modified retrospective approach. In addition, we elected certain practical expedients permitted under the transition guidance within the new standard. Except for recording a total right-of-use asset and corresponding lease liability on our Consolidated Balance Sheet, which amount approximates 4.0% of our total consolidated assets at July 31, 2019, our adoption of Topic 842 is not expected to have a material impact to our future statements of operations or cash flows. (d) Revenue Recognition On August 1, 2018, we adopted ASU No. 2014-09 "Revenue from Contracts with Customers (Topic 606)" or "ASC 606" applying the modified retrospective transition method. Except for new presentation or disclosure requirements, the impact of adoption, both as of August 1, 2018 and for fiscal 2019 , was not material to our business, results of operations or financial condition. As a practical expedient, we adopted the new standard only for existing contracts as of August 1, 2018. All periods prior to August 1, 2018 will continue to be reported under the accounting standards in effect in those periods. As a result of ASC 606, we made the following adjustments to our Consolidated Balance Sheet as of August 1, 2018: As reported at Adoption of Balance at July 31, 2018 ASC 606 August 1, 2018 Accrued expenses and other current liabilities (1) $ 65,034,000 $ (2,079,000 ) $ 62,955,000 Contract liabilities, current and non-current (2) 42,141,000 2,079,000 44,220,000 (1) See Note (6) - " Accrued Expenses and Other Current Liabilities " for further discussion of reclassification. (2) Formerly presented on the face of our Consolidated Balance Sheet as "Customer advances and deposits, current and non-current" prior to our adoption of ASC 606. The core principle of ASC 606 is that revenue should be recorded in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, we follow a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue using one of the following two methods: • Over time - We recognize revenue using the over time method when there is a continuous transfer of control to the customer over the contractual period of performance. This generally occurs when we enter into a long-term contract relating to the design, development or manufacture of complex equipment or technology platforms to a buyer’s specification (or to provide services related to the performance of such contracts). Continuous transfer of control is typically supported by contract clauses which allow our customers to unilaterally terminate a contract for convenience, pay for costs incurred plus a reasonable profit and take control of work-in-process. Revenue recognized over time is generally based on the extent of progress toward completion of the related performance obligations. The selection of the method to measure progress requires judgment and is based on the nature of the products or services provided. In certain instances, typically for firm fixed-price contracts, we use the cost-to-cost measure because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion, including warranty costs. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill generally include direct labor, materials, subcontractor costs, other direct costs and an allocation of indirect costs. When these contracts are modified, the additional goods or services are generally not distinct from those already provided. As a result, these modifications form part of an existing contract and we must update the transaction price and our measure of progress for the single performance obligation and recognize a cumulative catch-up to revenue and gross profits. For over time contracts using a cost-to-cost measure of progress, we have an estimate at completion ("EAC") process in which management reviews the progress and execution of our performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Since certain contracts extend over a long period of time, the impact of revisions in revenue and or cost estimates during the progress of work may impact current period earnings through a cumulative adjustment. Additionally, if the EAC process indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract revenue and cost estimates for significant contracts are generally reviewed and reassessed at least quarterly. The cost-to-cost method is principally used to account for contracts in our mission-critical technologies and high-performance transmission technologies product lines and, to a lesser extent, certain location-based and messaging infrastructure contracts in our public safety and location technologies product line. For service-based contracts in our public safety and location technologies product line, we recognize revenue over time. These services are typically recognized as a series of services performed over the contract term using the straight-line method, or based on our customers’ actual usage of the networks and platforms which we provide. • Point in time - When a performance obligation is not satisfied over time, we must record revenue using the point in time accounting method which generally results in revenue being recognized upon shipment or delivery of a promised good or service to a customer. This generally occurs when we enter into short term contracts or purchase orders where items are provided to customers with relatively quick turn-around times. Modifications to such contracts and or purchase orders, which typically provide for additional quantities or services, are accounted for as a new contract because the pricing for these additional quantities or services are based on standalone selling prices. Point in time accounting is principally applied to contracts in our satellite ground station technologies product line (which includes satellite modems, solid-state and traveling wave tube amplifiers) and certain contracts for our solid-state, high-power amplifiers in our high-performance transmission technologies product line. Point in time accounting is also applied to certain contracts in our mission-critical technologies product line. The contracts related to these product lines do not meet the requirements for over time revenue recognition because our customers cannot utilize the equipment for its intended purpose during any phase of our manufacturing process; customers do not simultaneously receive and or consume the benefits provided by our performance; customers do not control the asset (i.e., prior to delivery, customers cannot direct the use of the asset, sell or exchange the equipment, etc.); and, although many of our contracts have termination for convenience clauses and or an enforceable right to payment for performance completed to date, our performance creates an asset with an alternative use through the point of delivery. In determining that our equipment has alternative use, we considered the underlying manufacturing process for our products. In the early phases of manufacturing, raw materials and work in process (including subassemblies) consist of common parts that are highly fungible among many different types of products and customer applications. Finished products are either configured to our standard configuration or based on our customers’ specifications. Finished products, whether built to our standard specification or to a customers’ specification, can be sold to a variety of customers and across many different end use applications with minimal rework, if needed, and without incurring a significant economic loss. When identifying a contract with our customer, we consider when it has approval and commitment from both parties, if the rights of the parties are identified, if the payment terms are identified, if it has commercial substance and if collectability is probable. When identifying performance obligations, we consider whether there are multiple promises and how to account for them. In our contracts, multiple promises are separated if they are distinct, both individually and in the context of the contract. If multiple promises in a contract are highly interrelated or comprise a series of distinct services performed over time, they are combined into a single performance obligation. In some cases, we may also provide the customer with an additional service-type warranty, which we recognize as a separate performance obligation. Service-type warranties do not represent a significant portion of our consolidated net sales. When service-type warranties represent a separate performance obligation, the revenue is deferred and recognized ratably over the extended warranty period. Our contracts, from time-to-time, may also include options for additional goods and services. To-date, these options have not represented material rights to the customer as the pricing for them reflects standalone selling prices. As a result, we do not consider options we offer to be performance obligations for which we must allocate a portion of the transaction price. In many cases, we provide assurance-type warranty coverage for some of our products for a period of at least one year from the date of delivery. When identifying the transaction price, we typically utilize the contract's stated price as a starting point. The transaction price in certain arrangements may include estimated amounts of variable consideration, including award fees, incentive fees or other provisions that can either increase or decrease the transaction price. We estimate variable consideration as the amount to which we expect to be entitled, and we include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the estimation uncertainty is resolved. The estimation of this variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (e.g., historical, current and forecasted) that is reasonably available to us. When allocating the contract’s transaction price, we consider each distinct performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We determine standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions, including geographic or regional specific factors, competitive positioning, internal costs, profit objectives and internally approved pricing guidelines related to the performance obligations. Almost all of our contracts with customers are denominated in U.S. dollars and typically are either firm fixed-price or cost reimbursable type contracts (including fixed-fee, incentive-fee and time-and-material type contracts). In almost all of our contracts with customers, we are the principal in the arrangement and report revenue on a gross basis. Transaction prices for contracts with U.S. domestic and international customers are usually based on specific negotiations with each customer and in the case of the U.S. government, sometimes based on estimated or actual costs of providing the goods or services in accordance with applicable regulations. Sales by geography and customer type, as a percentage of consolidated net sales, are as follows: Fiscal Years Ended July 31, 2019 2018 2017 United States U.S. government 40.1 % 35.5 % 32.7 % Domestic 34.5 % 38.9 % 38.9 % Total United States 74.6 % 74.4 % 71.6 % International 25.4 % 25.6 % 28.4 % Total 100.0 % 100.0 % 100.0 % Sales to U.S. government customers include sales to the U.S. Department of Defense ("DoD"), intelligence and civilian agencies, as well as sales directly to or through prime contractors. Domestic sales include sales to commercial customers, as well as to U.S. state and local governments. Included in domestic sales are sales to Verizon Communications Inc. ("Verizon"). Sales to Verizon were 10.0% of consolidated net sales for fiscal 2018 . Except for the U.S. government, there were no customers that represented more than 10.0% of consolidated net sales during fiscal 2019 and 2017 . International sales for fiscal 2019 , 2018 and 2017 (which include sales to U.S. domestic companies for inclusion in products that are sold to international customers) were $170,607,000 , $145,784,000 and $156,483,000 , respectively. Except for the U.S., no individual country (including sales to U.S. domestic companies for inclusion in products that are sold to a foreign country) represented more than 10% of consolidated net sales for fiscal 2019 , 2018 and 2017 . The following tables summarize our disaggregation of revenue consistent with information reviewed by our chief operating decision-maker ("CODM") for the fiscal year ended July 31, 2019 . We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors which impact our business: Fiscal Year Ended July 31, 2019 Commercial Solutions Government Solutions Total Geographical region and customer type U.S. government $ 68,534,000 200,708,000 $ 269,242,000 Domestic 192,516,000 39,432,000 231,948,000 Total United States 261,050,000 240,140,000 501,190,000 International 96,243,000 74,364,000 170,607,000 Total $ 357,293,000 314,504,000 $ 671,797,000 Contract type Firm fixed-price $ 350,850,000 231,400,000 $ 582,250,000 Cost reimbursable 6,443,000 83,104,000 89,547,000 Total $ 357,293,000 314,504,000 $ 671,797,000 Transfer of control Point in time $ 177,090,000 176,067,000 $ 353,157,000 Over time 180,203,000 138,437,000 318,640,000 Total $ 357,293,000 314,504,000 $ 671,797,000 The timing of revenue recognition, billings and collections results in receivables, unbilled receivables and contract liabilities on our Consolidated Balance Sheet. Under typical payment terms for our contracts accounted for over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly) or upon achievement of contractual milestones. For certain contracts with provisions that are intended to protect customers in the event we do not satisfy our performance obligations, billings occur subsequent to revenue recognition, resulting in what we have historically presented as unbilled receivables. Contract assets increased $3,331,000 due to business combinations discussed in Note (2) - "Acquisitions . " Under ASC 606, unbilled receivables constitute contract assets. There were no material impairment losses recognized on contract assets during the fiscal year ended 2019 . On large long-term contracts, and for contracts with international customers that do not do business with us regularly, payment terms typically require advanced payments and deposits. Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability. These contract liabilities are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract. Under the typical payment terms for our contracts accounted for at a point in time, costs are accumulated in inventory until the time of billing, which generally coincides with revenue recognition. Contract liabilities increased $5,411,000 due to business combinations discussed in Note (2) - "Acquisitions . " Of the total contract liabilities at August 1, 2018, $33,139,000 was recognized as revenue during fiscal 2019 . We recognize the incremental costs to obtain or fulfill a contract as an expense when incurred if the amortization period of the asset is one year or less. Incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material. As commissions payable to our internal sales and marketing employees or contractors are contingent upon multiple factors, such commissions are not considered direct costs to obtain or fulfill a contract with a customer and are expensed as incurred in selling, general and administrative expenses on our Consolidated Statements of Operations. As for commissions payable to third-party sales representatives related to large long-term contracts, we do consider these types of commissions both direct and incremental costs to obtain and fulfill such contracts. Therefore, such types of commissions are included in total estimated costs at completion for such contracts and expensed over time through cost of sales on our Consolidated Statements of Operations. Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the end of a fiscal period. Remaining performance obligations, which we refer to as backlog, exclude unexercised contract options and potential orders under indefinite delivery / indefinite quantity ("IDIQ") contracts. As of July 31, 2019 , the aggregate amount of the transaction price allocated to remaining performance obligations was $682,954,000 (which represents the amount of our consolidated backlog). We expect that a significant portion of our remaining performance obligations at July 31, 2019 will be completed and recognized as revenue during the next twelve-month period. During fiscal 2019 , revenue recognized from performance obligations satisfied, or partially satisfied, in previous periods (for example due to changes in the transaction price) was not material. (e) Cash and Cash Equivalents Our cash equivalents are short-term, highly liquid investments that are both readily convertible to known amounts of cash and have insignificant risk of change in value as a result of changes in interest rates. Our cash and cash equivalents, as of July 31, 2019 and 2018 , amounted to $45,576,000 and $43,484,000 , respectively, and primarily consist of bank deposits and money market deposit accounts insured by the Federal Deposit Insurance Corporation. Cash equivalents are carried at cost, which approximates fair value. (f) Inventories Our inventories are stated at the lower of cost and net realizable value, the latter of which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Our inventories are reduced to their estimated net realizable value by a charge to cost of sales in the period such excess costs are determined. Our inventories are principally recorded using either average or standard costing methods. Work-in-process (including our contracts-in-progress) and finished goods inventory reflect all accumulated production costs, which are comprised of direct production costs and overhead, and is reduced by amounts recorded in cost of sales as the related revenue is recognized. Indirect costs relating to long-term contracts, which include expenses such as general and administrative, are charged to expense as incurred and are not included in our cost of sales or work-in-process (including our contracts-in-progress) and finished goods inventory. (g) Long-Lived Assets Our machinery and equipment, which are recorded at cost, are depreciated or amortized over their estimated useful lives ( three to eight years) under the straight-line method. Capitalized values of properties and leasehold improvements under leases are amortized over the life of the lease or the estimated life of the asset, whichever is less. Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. In accordance with FASB ASC 350 " Intangibles - Goodwill and Other " goodwill is not amortized. We periodically, at least on an annual basis in the first quarter of each fiscal year, review goodwill, considering factors such as projected cash flows and revenue and earnings multiples, to determine whether the carrying value of the goodwill is impaired. If we fail the quantitative assessment of goodwill impairment ("quantitative assessment"), we would be required to recognize an impairment loss equal to the amount that a reporting unit's carrying value exceeded its fair value; however, any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We define our reporting units to be the same as our operating segments. We performed our annual goodwill impairment assessment for fiscal 2020 on August 1, 2019 (the first day of our fiscal 2020 ). See Note (14) - " Goodwill " for more information. Unless there are future indicators that the fair value of a reporting unit is more likely than not less than its carrying value, such as a significant adverse change in our future financial performance, our next impairment assessment for goodwill will be performed and completed in the first quarter of fiscal 2021 . Any impairment charges that we may record in the future could be material to our results of operations and financial condition. We assess the recoverability of the carrying value of our other long-lived assets, including identifiable intangible assets with finite useful lives, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We evaluate the recoverability of such assets based upon the expectations of undiscounted cash flows from such assets. If the sum of the expected future undiscounted cash flows were less than the carrying amount of the asset, a loss would be recognized for the difference between the fair value and the carrying amount. (h) Research and Development Costs We charge research and development costs to operations as incurred, except in those cases in which such costs are reimbursable under customer funded contracts. In fiscal 2019 , 2018 and 2017 , we were reimbursed by customers for such activities in the amount of $14,679,000 , $16,924,000 and $27,050,000 , respectively. These amounts are not reflected in the reported research and development expenses in each of the respective periods but are included in net sales with the related costs included in cost of sales in each of the respective periods. (i) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years 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. We determine the uncertain tax positions taken or expected to be taken in income tax returns in accordance with the provisions of FASB ASC 740-10-25 " Income Taxes, " which prescribes a two-step evaluation process for tax positions. The first step is recognition based on a determination of whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is to measure a tax position that meets the more-likely-than-not threshold. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. Our policy is to recognize potential interest and penalties related to uncertain tax positions in income tax expense. (j) Earnings Per Share Our basic earnings per share ("EPS") is computed based on the weighted average number of common shares (including vested but unissued stock units, share units, performance shares and restricted stock units ("RSUs")), outstanding during each respective period. Our diluted EPS reflects the dilution from potential common stock issuable pursuant to the exercise of equity-classified stock-based awards, if dilutive, outstanding during each respective period. Pursuant to FASB ASC 260 " Earnings Per Share, " equity-classified stock-based awards that are subject to performance conditions are not considered in our diluted EPS calculations until the respective performance conditions have been satisfied. When calculating our diluted earnings per share, we consider the amount an employee must pay upon assumed exercise of stock-based awards and the amount of stock-based compensation cost attributed to future services and not yet recognized. As a result of our adoption of ASU No. 2016-09 on August 1, 2017 (the start of our first quarter of fiscal 2018), the amount of excess tax benefits assuming exercise of in-the-money stock-based awards is no longer included in the calculation of diluted earnings per share on a prospective basis and the denominator for our diluted calculation could increase in the future as compared to prior calculations. See Note (11) - “ Stock-Based Compensation ” for more information on the impact of adopting ASU No. 2016-09. There were no repurchases of our common stock during the fiscal years ended July 31, 2019 , 2018 and 2017 . See Note (16) - " Stockholders’ Equity " for more information. Weighted average stock options, RSUs and restricted stock outstanding of 1,347,000 , 1,739,000 and 1,986,000 shares for fiscal 2019 , 2018 and 2017 , respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Our EPS calculations exclude 243,000 , 258,000 and 228,000 weighted average performance shares outstanding for fiscal 2019 , 2018 and 2017 , respectively, as the performance conditions have not yet been satisfied. However, net income (the numerator) for EPS calculations for each respective period, is reduced by the compensation expense related to these awards. The following table reconciles the numerators and denominators used in the basic and diluted EPS calculations: Fiscal Years Ended July 31, 2019 2018 2017 Numerator: Net income for basic calculation $ 25,041,000 29,769,000 15,827,000 Numerator for diluted calculation $ 25,041,000 29,769,000 15,827,000 Denominator: Denominator for basic calculation 24,124,000 23,825,000 23,433,000 Effect of dilutive securities: Stock-based awards 178,000 215,000 56,000 Denominator for diluted calculation 24,302,000 24,040,000 23,489,000 (k) Fair Value Measurements and Financial Instruments Using the fair value hierarchy described in FASB ASC 820 " Fair Value Measurements and Disclosures," we valued our cash and cash equivalents using Level 1 inputs that were based on quoted market prices. We believe that the carrying amounts of our other current financial assets (such as accounts receivable) and other current liabilities (including accounts payable, accrued expenses and the current portion of our favorable AT&T warranty settlement) approximat |
Acquisitions
Acquisitions | 12 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Solacom Technologies Inc. On February 28, 2019 , we completed our acquisition of Solacom Technologies Inc. ("Solacom"), pursuant to the Arrangement Agreement, dated as of January 7, 2019 , by and among Solacom, Comtech and Solar Acquisition Corp., a Canadian corporation and a direct, wholly-owned subsidiary of Comtech. Solacom is a leading provider of Next Generation 911 ("NG-911") solutions for public safety agencies. The acquisition of Solacom was a significant step in our strategy of enhancing our public safety and location technologies. The acquisition has an aggregate purchase price for accounting purposes of $32,934,000 , of which $27,328,000 was settled in cash and $5,606,000 was settled with the issuance of 208,669 shares of Comtech’s common stock at a volume weighted average stock price of $26.86 . The fair value of consideration transferred in connection with this acquisition was $31,489,000 , which was net of $1,445,000 of cash acquired. The cash portion of the purchase price was funded principally through borrowings under our Credit Facility. We are accounting for the acquisition of Solacom under the acquisition method of accounting in accordance with FASB ASC 805, "Business Combinations" ("ASC 805"). The purchase price was allocated to the assets acquired and liabilities assumed, based on their preliminary fair value as of February 28, 2019 , pursuant to the business combination accounting rules. Acquisition plan expenses were not included as a component of consideration transferred and were expensed in the period incurred. Our Consolidated Statement of Operations for fiscal 2019 includes a nominal amount of revenue and contribution from Solacom. Pro forma financial information is not disclosed, as the acquisition is not material. The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the Solacom acquisition: Preliminary Purchase Price Allocation (1) Measurement Period Adjustments Purchase Price Allocation (as adjusted) Settled in cash $ 27,328,000 — $ 27,328,000 Settled in common stock issued by Comtech 5,606,000 — 5,606,000 Aggregate purchase price at fair value $ 32,934,000 — $ 32,934,000 Allocation of aggregate purchase price: Cash and cash equivalents $ 1,445,000 — $ 1,445,000 Current assets 9,425,000 471,000 9,896,000 Property, plant and equipment 777,000 — 777,000 Deferred tax assets, non-current 5,374,000 (315,000 ) 5,059,000 Accrued warranty obligations (1,431,000 ) — (1,431,000 ) Current liabilities (4,477,000 ) — (4,477,000 ) Contract liabilities, non-current (1,604,000 ) — (1,604,000 ) Net tangible assets at preliminary fair value $ 9,509,000 156,000 $ 9,665,000 Identifiable intangibles, deferred taxes and goodwill: Estimated Useful Lives Technology $ 6,779,000 — $ 6,779,000 10 years Customer relationships 7,007,000 — 7,007,000 20 years Trade name 1,828,000 — 1,828,000 20 years Deferred tax liabilities (4,153,000 ) — (4,153,000 ) Goodwill 11,964,000 (156,000 ) 11,808,000 Indefinite Allocation of aggregate purchase price $ 32,934,000 — $ 32,934,000 (1) As initially reported in the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2019. The acquired identifiable intangible assets are being amortized on a straight-line basis, which we believe approximates the pattern in which the assets are utilized over their estimated useful lives. The fair value of customer relationships and backlog was estimated primarily based on the value of the discounted cash flows that the related intangible asset could be expected to generate in the future. The fair value of technology and trade name was estimated based on the discounted capitalization of royalty expense saved because we now own the assets. Among the factors contributing to the recognition of goodwill, as a component of the purchase price allocation, were synergies in products and technologies and the addition of a skilled, assembled workforce. This goodwill has been assigned to our Commercial Solutions segment based on specific identification and is generally not deductible for income tax purposes. The allocation of the aggregate purchase price shown in the above table was based upon a valuation and estimates and assumptions that are subject to change within the purchase price allocation period (generally one year from the acquisition date). The primary areas of the purchase price allocation not yet finalized include a final assessment of income taxes and residual goodwill. GD NG-911 Business On April 29, 2019 , we completed the acquisition of a state and local government NG-911 business pursuant to the Asset Purchase Agreement, dated as of April 29, 2019 , by and among General Dynamics Information Technology, Inc., Comtech and Comtech NextGen LLC, a Delaware limited liability company and indirect, wholly-owned subsidiary of Comtech. The acquisition of this NG-911 business from GD (the "GD NG-911 business") has a preliminary cash purchase price of $10,000,000 (which is subject to a working capital adjustment). In connection with this acquisition, we also announced an award of a five-year contract to develop, implement and operate a NG-911 emergency communications system for a Northeastern state. Immediately after our announcement of this acquisition, we hired approximately sixty GD NG-911 employees and completed the integration of this business into our Commercial Solutions segment’s public safety and location technologies product line. The acquisition, contract award and hiring of talented employees are expected to strengthen Comtech’s position in the growing NG-911 solutions market. We are accounting for the acquisition of this business under the acquisition method of accounting in accordance with FASB ASC 805. The purchase price, which is subject to a pending closing date balance sheet adjustment process under the purchase agreement, was allocated to the assets acquired and liabilities assumed, based on their preliminary fair value as of April 29, 2019 , pursuant to the business combination accounting rules. Acquisition plan expenses were not included as a component of consideration transferred and were expensed in the period incurred. Our Consolidated Statements of Operatons for fiscal 2019 include a nominal amount of revenue and contribution from the GD NG-911 business. Pro forma financial information is not disclosed, as the acquisition is not material. The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the acquisition of the GD NG-911 business: Preliminary Purchase Price Allocation (1) Measurement Period Adjustments Purchase Price Allocation (as adjusted) Aggregate purchase price at fair value $ 10,000,000 — $ 10,000,000 Allocation of aggregate purchase price: Current assets $ 5,790,000 (1,330,000 ) $ 4,460,000 Property, plant and equipment 646,000 — 646,000 Deferred tax assets, non-current 3,292,000 134,000 3,426,000 Accrued warranty obligations (5,000,000 ) — (5,000,000 ) Current liabilities (3,960,000 ) 798,000 (3,162,000 ) Net tangible assets at preliminary fair value $ 768,000 (398,000 ) $ 370,000 Identifiable intangibles, deferred taxes and goodwill: Estimated Useful Lives Customer relationships $ 20,300,000 $ — $ 20,300,000 10 years Technology 3,500,000 — 3,500,000 15 years Other liabilities (21,700,000 ) — (21,700,000 ) Deferred tax liabilities (518,000 ) — (518,000 ) Goodwill 7,650,000 398,000 8,048,000 Indefinite Allocation of aggregate purchase price $ 10,000,000 — $ 10,000,000 (1) As initially reported in the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2019. The acquired identifiable intangible assets are being amortized on a straight-line basis, which we believe approximates the pattern in which the assets are utilized over their estimated useful lives. The fair value of customer relationships was estimated based on the value of the discounted cash flows that the related intangible asset could be expected to generate in the future. The fair value of technology was estimated based on the discounted capitalization of royalty expense saved because we now own the assets. The preliminary fair value of other liabilities was based on the difference in discounted cash flows related to remaining performance obligations under a certain acquired contract as compared to current market terms for similar arrangements that a market participant would expect. Other liabilities will be credited against cost of sales over the remaining performance of the contract, which was 5.25 years as of the acquisition date. Among the factors contributing to the recognition of goodwill, as a component of the purchase price allocation, were synergies in solution offerings and the addition of a skilled, assembled workforce. We currently estimate that approximately $7,300,000 of goodwill resulting from the acquisition will be tax deductible. This goodwill has been assigned to our Commercial Solutions segment based on specific identification. We are currently finalizing a working capital adjustment, pursuant to the terms of the purchase agreement. In August 2019, the seller proposed and requested an approximate $2,900,000 upward adjustment to the preliminary purchase price. We do not agree with their proposed adjustment and believe that we are entitled to a reduction of approximately $890,000 to the preliminary purchase price. We expect to reach an amicable resolution. The allocation of the preliminary purchase price shown in the above table was based on a valuation and estimates and assumptions that are subject to change within the purchase price allocation period (generally one year from the acquisition date). The primary areas of the purchase price allocation not yet finalized include the purchase price (due to a pending closing date balance sheet adjustment process under the purchase agreement), a final assessment of accrued warranty obligations, income taxes and residual goodwill. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Jul. 31, 2019 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consist of the following at July 31, 2019 and 2018 : 2019 2018 Receivables from commercial and international customers $ 85,556,000 83,411,000 Unbilled receivables from commercial and international customers 20,469,000 19,731,000 Receivables from the U.S. government and its agencies 38,856,000 26,251,000 Unbilled receivables from the U.S government and its agencies 2,018,000 19,807,000 Total accounts receivable 146,899,000 149,200,000 Less allowance for doubtful accounts 1,867,000 1,761,000 Accounts receivable, net $ 145,032,000 147,439,000 Unbilled receivables as of July 31, 2019 relate to contracts-in-progress for which revenue has been recognized, but for which we have not yet earned the right to bill the customer for work performed to-date. Under ASC 606, which we adopted on August 1, 2018 (see Note (1)(d) - "Revenue Recognition" ), unbilled receivables constitute contract assets. Management estimates that substantially all amounts not yet billed at July 31, 2019 will be billed and collected within one year. As of July 31, 2019 , except for the U.S. government (and its agencies), which represented 27.8% of total accounts receivable, there were no other customers which accounted for greater than 10.0% of total accounts receivable. As of July 31, 2018 , the U.S. government (and its agencies) and Verizon represented 30.9% and 10.1% , respectively, of total accounts receivable. |
Inventories
Inventories | 12 Months Ended |
Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following at July 31, 2019 and 2018 : 2019 2018 Raw materials and components $ 53,959,000 53,649,000 Work-in-process and finished goods 40,576,000 38,854,000 Total inventories 94,535,000 92,503,000 Less reserve for excess and obsolete inventories 19,696,000 17,427,000 Inventories, net $ 74,839,000 75,076,000 As of July 31, 2019 and 2018 , the amount of inventory directly related to long-term contracts (including contracts-in-progress) was $4,053,000 and $1,249,000 , respectively, and the amount of inventory related to contracts from third-party commercial customers who outsource their manufacturing to us was $1,513,000 and $1,310,000 , respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consist of the following at July 31, 2019 and 2018 : 2019 2018 Machinery and equipment $ 159,882,000 154,556,000 Leasehold improvements 14,265,000 13,807,000 174,147,000 168,363,000 Less accumulated depreciation and amortization 146,121,000 139,376,000 Property, plant and equipment, net $ 28,026,000 28,987,000 Depreciation and amortization expense on property, plant and equipment amounted to $11,927,000 , $13,655,000 and $14,354,000 for the fiscal years ended July 31, 2019 , 2018 and 2017 , respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Jul. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following at July 31, 2019 and 2018 : 2019 2018 Accrued wages and benefits $ 23,295,000 23,936,000 Accrued contract costs 15,007,000 10,016,000 Accrued warranty obligations 15,968,000 11,738,000 Accrued legal costs 2,835,000 6,179,000 Accrued commissions and royalties 5,114,000 4,654,000 Other 16,365,000 8,511,000 Accrued expenses and other current liabilities $ 78,584,000 65,034,000 On August 1, 2018, in connection with our adoption of ASC 606, $2,079,000 of accrued expenses and other current liabilities were reclassified to contract liabilities on our Consolidated Balance Sheet. Of this total amount, $1,679,000 and $400,000 , respectively, was reclassified from the "accrued warranty obligations" and "other" categories presented in the above table to contract liabilities, as they represented deferred revenue related to service-type warranty performance obligations. See Note (1)(d) - "Revenue Recognition" for further discussion of our adoption of ASC 606. Accrued expenses and other current liabilities as of July 31, 2019 includes the amounts from our acquisitions of Solacom and the GD NG-911 business, as discussed in Note (2) "Acquisitions." Accrued wages and benefits as of July 31, 2019 and 2018 include $1,787,000 and $2,963,000 , respectively, of accrued remittance of employees' statutory tax withholdings related to the net settlement of fully-vested share units, as discussed in more detail in Note (11) - " Stock-Based Compensation. " Accrued contract costs represent direct and indirect costs on contracts as well as estimates of amounts owed for invoices not yet received from vendors or reflected in accounts payable. Accrued legal costs as of July 31, 2018 included $3,372,000 related to estimated costs associated with a certain TeleCommunication Systems, Inc. ("TCS") intellectual property matter. During the fiscal year ended July 31, 2019 , this matter was resolved in our favor. As a result, we reduced such accrued legal costs and recorded a $3,204,000 benefit in the Consolidated Statement of Operations. See Note (13)(b) - " Commitments and Contingencies - Legal Proceedings and Other Matters " for additional information. Other accrued expenses as of July 31, 2019 include $568,000 for the current portion of facility exit costs related to the closure of a manufacturing facility, as discussed in more detail in Note (7) - "Cost Reduction Actions." Accrued warranty obligations as of July 31, 2019 relate to estimated liabilities for assurance type warranty coverage that we provide to our customers. We generally provide warranty coverage for some of our products for a period of at least one year from the date of delivery. We record a liability for estimated warranty expense based on historical claims, product failure rates, a consideration of contractual obligations, future costs to resolve software issues and other factors. Some of our product warranties are provided under long-term contracts, the costs of which are incorporated into our estimates of total contract costs. Changes in our accrued warranty obligations during the fiscal years ended July 31, 2019 and 2018 were as follows: 2019 2018 Balance at beginning of year $ 11,738,000 17,617,000 Reclass to contract liabilities as of August 1, 2018 (1,679,000 ) — Provision for warranty obligations 3,902,000 5,055,000 Additions (in connection with acquisitions) 6,431,000 — Charges incurred (6,151,000 ) (8,244,000 ) Warranty settlement and reclass (see below) 1,727,000 (2,690,000 ) Balance at end of year $ 15,968,000 11,738,000 Our current accrued warranty obligations at July 31, 2019 and 2018 include $3,999,000 and $4,650,000 , respectively, of warranty obligations for a small product line that we refer to as the TCS 911 call handling software solution. This solution was licensed to customers prior to our acquisition of TCS. During the fiscal year ended July 31, 2018, we entered into a full and final warranty settlement with AT&T, the largest customer/distributor of this product line, pursuant to which we issued thirty-six credits to AT&T of $153,000 which AT&T can apply on a monthly basis to purchases of solutions from us, beginning October 2017 through September 2020. As of July 31, 2019 , the total present value of these monthly credits is $2,029,000 , of which $1,727,000 is included in our current accrued warranty obligations and $302,000 is reflected in other liabilities (non-current) on our Consolidated Balance Sheet. In connection with this favorable settlement, during the fiscal year ended July 31, 2018 , we recorded a benefit to cost of sales of $660,000 . In connection with our acquisition of Solacom and the GD NG-911 business, during the fiscal year ended July 31, 2019 , we assumed warranty obligations related to certain contracts acquired. See Note (2) - "Acquisitions" for further information pertaining to these acquisitions. |
Cost Reduction Actions
Cost Reduction Actions | 12 Months Ended |
Jul. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Cost Reduction Actions | Cost Reduction Actions During the three months ended October 31, 2018, we took steps to improve our future operating results and successfully consolidated our Government Solutions segment’s manufacturing facility located in Tampa, Florida with another facility that we maintain in Orlando, Florida. In doing so, we accrued $1,373,000 of facility exit costs, which were recorded in selling, general and administrative expenses in our Consolidated Statements of Operations. During the fiscal year ended 2019 , we made cash payments of $805,000 related to such facility exit cost accrual. As of July 31, 2019 , the remaining estimated facility exit costs amounted to $568,000 , which is included in accrued expenses on our Consolidated Balance Sheet. To-date, we have incurred an immaterial amount of severance and retention costs related to our Florida facilities consolidation. During the second quarter of fiscal 2019 , we began an evaluation and repositioning of our public safety and location technologies solutions in order to focus on providing higher margin solution offerings. This evaluation and repositioning continued throughout the remainder of fiscal 2019 and is ongoing. To date, we have ceased offering certain solutions, have worked with customers to wind-down certain legacy contracts and have not renewed certain contracts. In connection with this ongoing repositioning, we recorded $6,351,000 of estimated contract settlement costs in our Commercial Solutions segment during the fiscal year ended July 31, 2019 . |
Credit Facility
Credit Facility | 12 Months Ended |
Jul. 31, 2019 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility On October 31, 2018, we entered into a First Amended and Restated Credit Agreement (the "Credit Facility") with a syndicate of lenders, replacing our prior Credit Agreement dated as of February 23, 2016 (as amended by that certain First Amendment, dated as of June 6, 2017 (the "Prior Credit Facility")). In connection with the establishment of our new Credit Facility, during the three months ended October 31, 2018, we wrote-off $3,217,000 of deferred financing costs primarily related to the Term Loan Facility portion of our Prior Credit Facility and capitalized deferred financing costs of $1,813,000 related to the new Credit Facility. The Credit Facility provides a senior secured loan facility of up to $550,000,000 consisting of: (i) a revolving loan facility ("Revolving Loan Facility") with a borrowing limit of $300,000,000 ; (ii) an accordion feature allowing us to borrow up to an additional $250,000,000 ; (iii) a $35,000,000 letter of credit sublimit; and (iv) a swingline loan credit sublimit of $25,000,000 . The Credit Facility matures on October 31, 2023 (the "Revolving Maturity Date"). If we issue new unsecured debt in excess of $5,000,000 with a maturity date that is less than 91 days from October 31, 2023, the Revolving Maturity Date would automatically accelerate so that it would be 91 days earlier than the maturity date of the new unsecured debt. The proceeds of the new Credit Facility were used, in part, to repay in full the outstanding borrowings under the Prior Credit Facility, and additional proceeds of the Credit Facility are expected to be used by us for working capital and other general corporate purposes. As of July 31, 2019 , the amount outstanding under our Credit Facility was $165,000,000 which is reflected in the non-current portion of long-term debt on our Consolidated Balance Sheet. At July 31, 2019 , we had $2,686,000 of standby letters of credit outstanding under our Credit Facility related to guarantees of future performance on certain customer contracts and no outstanding commercial letters of credit. Since October 31, 2018, we had outstanding balances under the new Credit Facility ranging from $150,000,000 to $184,000,000 . As of July 31, 2019 , total net deferred financing costs related to the Credit Facility were $3,128,000 and are being amortized over the term of our Credit Facility through October 31, 2023. Interest expense, including amortization of deferred financing costs, recorded during the fiscal years ended July 31, 2019 , 2018 and 2017 was $8,859,000 , $9,614,000 and $11,106,000 , respectively. The amount for the most recent fiscal year relates to both our Prior Credit Facility and new Credit Facility; whereas, the amount in the prior fiscal years relates to our Prior Credit Facility. Our blended interest rate approximated 5.25% , 5.40% and 4.90% for fiscal 2019, 2018 and 2017, respectively. Borrowings under the Credit Facility shall be either: (i) Alternate Base Rate borrowings, which bear interest from the applicable borrowing date at a rate per annum equal to (x) the greatest of (a) the Prime Rate (as defined) in effect on such day, (b) the Federal Funds Effective Rate (as defined) in effect on such day plus 1/2 of 1.00% per annum and (c) the Adjusted LIBO Rate (as defined) on such day (or, if such day is not a business day, the immediately preceding business day) plus 1.00% per annum, plus (y) the Applicable Rate (as defined), or (ii) Eurodollar borrowings, which bear interest from the applicable borrowing date at a rate per annum equal to (x) the Adjusted LIBO Rate for such interest period plus (y) the Applicable Rate. Determination of the Applicable Rate is based on a pricing grid that is dependent upon our Secured Leverage Ratio (as defined) as of the end of each fiscal quarter for which consolidated financial statements have been most recently delivered. The Credit Facility contains customary representations, warranties and affirmative covenants. The Credit Facility also contains customary negative covenants, subject to negotiated exceptions, including but not limited to: (i) liens, (ii) investments, (iii) indebtedness, (iv) significant corporate changes, including mergers and acquisitions, (v) dispositions, (vi) restricted payments, including stockholder dividends, and (vii) certain other restrictive agreements. The Credit Facility also contains certain financial covenants and customary events of default (subject to grace periods, as appropriate), such as payment defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency, the occurrence of a defined change in control and the failure to observe the negative covenants and other covenants related to the operation of our business. In addition, under certain circumstances, we may be required to enter into amendments to the Credit Facility in connection with any further syndication of the Credit Facility. The Credit Facility provides for, among other things: (i) no scheduled payments of principal until maturity; (ii) a maximum Secured Leverage Ratio of 3.75 x trailing twelve months ("TTM") Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") and a Maximum Total Leverage Ratio of 4.50 x TTM Adjusted EBITDA, each with no step downs; and (iii) a Minimum Interest Expense Coverage Ratio of 3.25 x TTM Adjusted EBITDA. As of July 31, 2019, our Secured Leverage Ratio was 1.74 x TTM Adjusted EBITDA compared to the maximum allowable Secured Leverage Ratio of 3.75 x TTM Adjusted EBITDA. Our Interest Expense Coverage Ratio as of July 31, 2019 was 12.05 x TTM Adjusted EBITDA compared to the Minimum Interest Expense Coverage Ratio of 3.25 x TTM Adjusted EBITDA. Given our expected future business performance, we anticipate maintaining compliance with the terms and financial covenants in our Credit Facility for the foreseeable future. The obligations under the Credit Facility are guaranteed by certain of our domestic subsidiaries (the "Guarantors"). As collateral security under the Credit Facility and the guarantees thereof, we and the Guarantors have granted to the administrative agent, for the benefit of the lenders, a lien on, and first priority security interest in, substantially all of our tangible and intangible assets. On December 6, 2018, we entered into the first amendment to the Credit Facility. The purpose of the amendment is to provide for a mechanism to replace the LIBO Rate for Eurodollar borrowings with an alternative benchmark interest rate, should the LIBO Rate generally become unavailable in the future on an other-than-temporary basis. The Prior Credit Facility was a $400,000,000 secured credit facility and comprised of a senior secured term loan A facility of $250,000,000 (the "Term Loan Facility") and a secured revolving loan facility of up to $150,000,000 , including a $25,000,000 letter of credit sublimit (the "Revolving Loan Facility"). The proceeds of the Prior Credit Facility were primarily used to finance our acquisition of TCS, including the repayment of certain existing indebtedness of TCS. During the three months ended October 31, 2018, we had outstanding balances under the Revolving Loan Facility, ranging from $34,904,000 to $63,804,000 . As of July 31, 2018 , the net amount outstanding under the Prior Credit Facility was as follows: 2018 Term Loan Facility $ 120,121,000 Less unamortized deferred financing costs related to Term Loan Facility 3,427,000 Term Loan Facility, net 116,694,000 Revolving Loan Facility 48,604,000 Amount outstanding under Secured Credit Facility, net 165,298,000 Less current portion of long-term debt 17,211,000 Non-current portion of long-term debt $ 148,087,000 Capitalized terms used but not defined herein have the meanings set forth for such terms in the Credit Facility and the Prior Credit Facility, which have been documented and filed with the SEC. |
Capital Lease and Other Obligat
Capital Lease and Other Obligations | 12 Months Ended |
Jul. 31, 2019 | |
Leases [Abstract] | |
Capital Lease and Other Obligations | Capital Lease and Other Obligations We lease certain equipment under capital leases. As of July 31, 2019 and 2018 , the net book value of the leased assets which collateralize the capital lease and other obligations was $864,000 and $2,547,000 , respectively, and consisted primarily of machinery and equipment. Depreciation of leased assets is included in depreciation expense. As of July 31, 2019 , our capital lease and other obligations reflect a blended interest rate of approximately 7.00% . Our capital leases generally contain provisions whereby we can purchase the equipment at the end of the lease for a one dollar buyout. Future minimum payments under capital lease and other obligations consisted of the following at July 31, 2019 : Fiscal 2020 $ 789,000 Total minimum lease payments 789,000 Less: amounts representing interest 32,000 Present value of net minimum lease payments 757,000 Current portion of capital lease and other obligations 757,000 Non-current portion of capital lease and other obligations $ — |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, H.R.1, also known as the Tax Cuts and Jobs Act ("Tax Reform"), was enacted in the U.S. Tax Reform significantly lowered the amount of our current and future income tax expense primarily due to the reduction in the U.S. statutory income tax rate from 35.0% to 21.0% . This provision went into effect on January 1, 2018 and required us to remeasure our deferred tax assets and liabilities. In connection with Tax Reform, during fiscal 2018 , we recorded a net discrete tax benefit of $11,792,000 , primarily related to the remeasurement of deferred tax liabilities associated with non-deductible amortization related to intangible assets. This remeasurement was recorded pursuant to ASC 740 "Income Taxes" and SEC Staff Accounting Bulletin ("SAB") 118, using estimates based on reasonable and supportable assumptions and available information as of such reporting date. In the event the Internal Revenue Service ("IRS") issues clarifying or interpretive guidance related to Tax Reform, it may result in a change to our estimated income tax. In fiscal 2019 and beyond, Tax Reform will result in the loss of our ability to take the domestic production activities deduction, which has been repealed, and is also likely to result in lower tax deductions for certain executive compensation expenses. For fiscal 2019 , we were subject to a U.S. statutory income tax rate of 21.0% . For fiscal 2018 , we were subject to a 35.0% statutory income tax rate with respect to the period August 1, 2017 through December 31, 2017 and a 21.0% statutory income tax rate with respect to the period January 1, 2018 through July 31, 2018, or a blended U.S. statutory income tax rate for fiscal 2018 of approximately 27.0% . As such, our effective tax rate for accounting purposes in fiscal 2018 , excluding discrete items, was 27.0% . Income before provision for (benefit from) income taxes consists of the following: Fiscal Years Ended July 31, 2019 2018 2017 U.S. $ 28,813,000 22,243,000 23,732,000 Foreign 97,000 2,383,000 1,749,000 $ 28,910,000 24,626,000 25,481,000 The provision for (benefit from) income taxes included in the accompanying Consolidated Statements of Operations consists of the following: Fiscal Years Ended July 31, 2019 2018 2017 Federal – current $ (2,190,000 ) 367,000 (441,000 ) Federal – deferred 4,782,000 (7,499,000 ) 8,399,000 State and local – current 1,715,000 440,000 608,000 State and local – deferred (321,000 ) 1,115,000 659,000 Foreign – current 62,000 429,000 413,000 Foreign – deferred (179,000 ) 5,000 16,000 Provision for (benefit from) income taxes $ 3,869,000 (5,143,000 ) 9,654,000 The provision for (benefit from) income taxes differed from the amounts computed by applying the U.S. Federal income tax rate as a result of the following: Fiscal Years Ended July 31, 2019 2018 2017 Amount Rate Amount Rate Amount Rate Computed "expected" tax expense $ 6,071,000 21.0 % 6,615,000 27.0 % 8,919,000 35.0 % Increase (reduction) in income taxes resulting from: State and local income taxes, net of federal benefit 967,000 3.3 1,193,000 4.8 1,257,000 4.9 Stock-based compensation (44,000 ) (0.1 ) (1,112,000 ) (4.5 ) 78,000 0.3 Research and experimentation credits (1,129,000 ) (3.9 ) (678,000 ) (2.8 ) (919,000 ) (3.6 ) Foreign-derived intangible income deduction (632,000 ) (2.2 ) — — — — Nondeductible transaction costs 394,000 1.4 — — — — Nondeductible executive compensation 330,000 1.1 (22,000 ) (0.1 ) 88,000 0.3 Audit settlements (2,081,000 ) (7.2 ) — — — — Tax Reform remeasurement of deferred taxes — — (11,317,000 ) (46.0 ) — — Foreign income taxes 5,000 — (221,000 ) (0.9 ) (151,000 ) (0.6 ) Other, net (12,000 ) — 399,000 1.5 382,000 1.6 Provision for (benefit from) income taxes $ 3,869,000 13.4 % (5,143,000 ) (21.0 )% 9,654,000 37.9 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at July 31, 2019 and 2018 are presented below: 2019 2018 Deferred tax assets: Inventory and warranty reserves $ 7,318,000 5,089,000 Compensation and commissions 3,548,000 3,511,000 Contract liabilities 5,331,000 — Federal, state and foreign research and experimentation credits 18,183,000 18,816,000 Federal alternative minimum tax credit 1,800,000 3,243,000 Stock-based compensation 5,817,000 5,092,000 Acquisition-related contingent liabilities 1,250,000 2,477,000 Federal, state and foreign net operating losses 6,248,000 7,349,000 Other 7,651,000 4,672,000 Less: valuation allowance (12,568,000 ) (11,854,000 ) Total deferred tax assets 44,578,000 38,395,000 Deferred tax liabilities: Plant and equipment (1,362,000 ) (1,155,000 ) Intangibles (54,612,000 ) (48,167,000 ) Total deferred tax liabilities (55,974,000 ) (49,322,000 ) Net deferred tax liabilities $ (11,396,000 ) (10,927,000 ) At July 31, 2019, our net deferred tax liability of $11,396,000 includes $1,085,000 of foreign net deferred tax assets that were recorded as other assets, net in our Consolidated Balance Sheets. At July 31, 2018, the entire $10,927,000 of net deferred tax liabilities were recorded as deferred tax liability, net in our Consolidated Balance Sheets. We provide for income taxes under the provisions of FASB ASC 740 "Income Taxes." FASB ASC 740 requires an asset and liability based approach in accounting for income taxes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of them will not be realized. If management determines that it is more likely than not that some or all of its deferred tax assets will not be realized, a valuation allowance will be recorded against such deferred tax assets. At July 31, 2019 , we had federal alternative minimum tax credit carryforwards of $1,800,000 , which are available to offset future federal income taxes. We have federal research and experimentation credits of $8,725,000 that will begin to expire in 2027. The timing and manner in which we may utilize tax credits in future tax years will be limited by the amounts and timing of future taxable income and by the application of the ownership change rules under Section 383 of the Internal Revenue Code. We have state net operating loss carryforwards available of $3,808,000 which expire through 2038, utilization of which will be limited by the amounts and timing of future taxable income and by the application of the ownership change rules under Section 382 of the Internal Revenue Code. We believe that it is more likely than not that the benefit from certain state net operating loss carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance of $3,746,000 on the deferred tax assets relating to these state net operating loss carryforwards. We have state research and experimentation credit carryforwards of $7,032,000 expiring through 2038. We believe that it is more likely than not that the benefit from certain state research and experimentation credits will not be realized. In recognition of this risk, we have provided a valuation allowance of $6,820,000 on the deferred tax assets relating to these state credits. At July 31, 2019 , we had foreign deferred tax assets relating to net operating loss carryforwards of $2,440,000 . These losses were generated by Solacom prior to being acquired by Comtech and will begin to expire in 2023. We believe that it is more likely than not that a portion of these net operating loss carryforwards may not be realized. In recognition of this risk, we have provided a valuation allowance of $656,000 on the deferred tax assets relating to these net operating loss carryforwards. We have foreign deferred tax assets relating to research and experimentation credits of $2,426,000 that will begin to expire in 2019. We believe that it is more likely than not that the benefit from certain foreign research and experimentation credits may not be realized. In recognition of this risk, we have provided a valuation allowance of $539,000 on the deferred tax assets relating to foreign research and experimentation credits. At July 31, 2018, our foreign deferred tax assets relating to research and experimentation credits have been offset by a valuation allowance as they may not be utilized in a future period. Our foreign earnings and profits are insignificant and, as such, we have not recorded any deferred tax liability on unremitted foreign earnings. We must generate $197,600,000 of taxable income in the future to fully utilize our net deferred tax assets as of July 31, 2019 . Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. At July 31, 2019 and 2018 , total unrecognized tax benefits were $7,215,000 and $9,339,000 , respectively, including interest of $12,000 and $202,000 , respectively. At July 31, 2019 and 2018 , $325,000 and 2,572,000 , respectively, of our unrecognized tax benefits were recorded as non-current income taxes payable on our Consolidated Balance Sheets. The remaining unrecognized tax benefits of $6,890,000 and $6,767,000 at July 31, 2019 and 2018 , respectively, were presented as an offset to the associated non-current deferred tax assets on our Consolidated Balance Sheets. Of the total unrecognized tax benefits, $6,670,000 and $8,563,000 at July 31, 2019 and 2018 , respectively, net of the reversal of the federal benefit recognized as a deferred tax asset relating to state reserves, would favorably impact our effective tax rate, if recognized. Unrecognized tax benefits result from income tax positions taken or expected to be taken on our income tax returns for which a tax benefit has not been recorded in our consolidated financial statements. We do not expect that there will be any significant changes to our total unrecognized tax benefits within the next twelve months. Our policy is to recognize potential interest and penalties relating to uncertain tax positions in income tax expense. The following table summarizes the activity related to our unrecognized tax benefits for fiscal years 2019 , 2018 and 2017 (excluding interest): 2019 2018 2017 Balance at beginning of period $ 9,137,000 8,586,000 9,108,000 Increase related to current period 893,000 645,000 587,000 Increase related to prior periods 17,000 49,000 86,000 Expiration of statute of limitations (394,000 ) (81,000 ) (404,000 ) Decrease related to prior periods (2,450,000 ) (62,000 ) (791,000 ) Balance at end of period $ 7,203,000 9,137,000 8,586,000 Our federal income tax returns for fiscal 2017 and 2018 are subject to potential future IRS audit. None of our state income tax returns prior to fiscal 2015 are subject to audit. TCS's federal income tax returns for tax year 2015 and the tax period from January 1, 2016 to February 23, 2016, the date we acquired TCS, are subject to potential future IRS audit. None of TCS's state income tax returns prior to calendar year 2014 are subject to audit. Future tax assessments or settlements could have a material adverse effect on our consolidated results of operations and financial condition. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jul. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Overview We issue stock-based awards to certain of our employees and our Board of Directors pursuant to our 2000 Stock Incentive Plan, as amended, (the "Plan") and our 2001 Employee Stock Purchase Plan (the "ESPP") and recognize related stock-based compensation in our consolidated financial statements. The Plan provides for the granting to employees and consultants of Comtech (including prospective employees and consultants): (i) incentive and non-qualified stock options, (ii) restricted stock units ("RSUs"), (iii) RSUs with performance measures (which we refer to as "performance shares"), (iv) restricted stock, (v) stock units (reserved for issuance to non-employee directors) and share units (reserved for issuance to employees) (collectively, "share units") and (vi) stock appreciation rights ("SARs"), among other types of awards. Our non-employee directors are eligible to receive non-discretionary grants of stock-based awards, subject to certain limitations. On August 1, 2017 (the start of our first quarter of fiscal 2018), we adopted ASU No. 2016-09, which amended several aspects of the accounting for and reporting of our share-based payment transactions, including: Excess tax benefits and shortfalls - ASU No. 2016-09 requires that all tax effects related to our share-based awards be recognized in the Consolidated Statement of Operations. ASU No. 2016-09 also removed the prior requirement to delay recognition of excess tax benefits until it reduces current taxes payable; instead, we are now required to recognize excess tax benefits as discrete items in the interim period in which they occur, subject to normal valuation allowance considerations. As ASU No. 2016-09 eliminated the concept of accumulated hypothetical tax benefits, excess tax benefits and shortfalls are no longer recognized in stockholders’ equity. As a result, ASU No. 2016-09 is expected to result in future volatility of our income tax expense (as the future tax effects of share-based awards will be dependent on the price of our common stock at the time of settlement). Additionally, on a prospective basis, excess income tax benefits from the settlement of share-based awards are presented as a cash inflow from operating activities in our Consolidated Statement of Cash Flows. Diluted earnings per share - Prior to the adoption of ASU No. 2016-09, in addition to considering the amount an employee must pay upon assumed exercise of stock-based awards and the amount of stock-based compensation cost attributed to future services and not yet recognized, when calculating our diluted earnings per share, the assumed proceeds also included the amount of excess tax benefits, if any, that would have been credited to additional paid-in capital assuming exercise of in-the-money stock-based awards. Effective with our adoption of ASU No. 2016-09, excess tax benefits are to be excluded from the calculation on a prospective basis. As a result, the denominator for our diluted calculations could increase in the future as compared to prior calculations. Forfeitures - As permitted by ASU No. 2016-09, we elected to continue to estimate forfeitures of share-based awards. Statutory Tax Withholding Requirements - ASU No. 2016-09 now allows us, when net settling share-based awards, to withhold an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction, without resulting in liability classification of the award. To qualify, we must have at least some withholding obligation. This aspect of adopting ASU No. 2016-09 did not have any material impact on us. However, with respect to cash payments that we make to taxing authorities on behalf of employees for such shares withheld, on a retrospective basis, we are required to present such payments as a cash outflow from financing activities in our Consolidated Statements of Cash Flows (as opposed to operating activities). As of July 31, 2019 , the aggregate number of shares of common stock which may be issued, pursuant to the Plan, may not exceed 10,362,500 . Stock options granted may not have a term exceeding ten years or, in the case of an incentive stock award granted to a stockholder who owns stock representing more than 10.0% of the voting power, no more than five years . We expect to settle all outstanding awards under the Plan and employee purchases under the ESPP with the issuance of new shares of our common stock. As of July 31, 2019 , we had granted stock-based awards pursuant to the Plan representing the right to purchase and/or acquire an aggregate of 8,546,187 shares (net of 3,989,425 expired and canceled awards), of which an aggregate of 6,035,956 have been exercised or settled. As of July 31, 2019 , the following stock-based awards, by award type, were outstanding: July 31, 2019 Stock options 1,555,555 Performance shares 261,336 RSUs and restricted stock 432,550 Share units 260,790 Total 2,510,231 Our ESPP provides for the issuance of up to 1,050,000 shares of our common stock. Our ESPP is intended to provide our eligible employees the opportunity to acquire our common stock at 85% of fair market value at the date of issuance. Through July 31, 2019 , we have cumulatively issued 787,051 shares of our common stock to participating employees in connection with our ESPP. Stock-based compensation for awards issued is reflected in the following line items in our Consolidated Statements of Operations: Fiscal Years Ended July 31, 2019 2018 2017 Cost of sales $ 1,047,000 758,000 760,000 Selling, general and administrative expenses 9,336,000 6,866,000 7,071,000 Research and development expenses 1,044,000 945,000 675,000 Stock-based compensation expense before income tax benefit 11,427,000 8,569,000 8,506,000 Estimated income tax benefit (2,553,000 ) (2,005,000 ) (3,065,000 ) Net stock-based compensation expense $ 8,874,000 6,564,000 5,441,000 Stock-based compensation for equity-classified awards is measured at the date of grant, based on an estimate of the fair value of the award and is generally expensed over the vesting period of the award. At July 31, 2019 , unrecognized stock-based compensation of $7,714,000 , net of estimated forfeitures of $869,000 , is expected to be recognized over a weighted average period of 2.8 years. Total stock-based compensation capitalized and included in ending inventory at both July 31, 2019 and 2018 was $48,000 . There are no liability-classified stock-based awards outstanding as of July 31, 2019 or 2018 . Stock-based compensation expense, by award type, is summarized as follows: Fiscal Years Ended July 31, 2019 2018 2017 Stock options $ 739,000 1,089,000 1,400,000 Performance shares 1,554,000 1,013,000 1,607,000 RSUs and restricted stock 2,149,000 1,458,000 829,000 ESPP 215,000 205,000 162,000 Share units 6,770,000 4,804,000 4,508,000 Stock-based compensation expense before income tax benefit 11,427,000 8,569,000 8,506,000 Estimated income tax benefit (2,553,000 ) (2,005,000 ) (3,065,000 ) Net stock-based compensation expense $ 8,874,000 6,564,000 5,441,000 ESPP stock-based compensation expense primarily relates to the 15% discount offered to participants in the ESPP. During the fiscal years ended July 31, 2019 and 2018 , we recorded benefits of $130,000 and $62,000 , respectively, which primarily represents the recoupment of certain share units. The estimated income tax benefit as shown in the above table was computed using income tax rates expected to apply when the awards are settled. Such deferred tax asset was recorded net as part of our non-current deferred tax liability on our Consolidated Balance Sheet as of July 31, 2019 and 2018 . The actual income tax benefit recognized for tax reporting is based on the fair market value of our common stock at the time of settlement and can significantly differ from the estimated income tax benefit recorded for financial reporting. Stock Options The following table summarizes the Plan's activity: Awards (in Shares) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 31, 2016 2,256,679 $ 28.87 Expired/canceled (400,804 ) 30.15 Outstanding at July 31, 2017 1,855,875 28.60 Expired/canceled (72,190 ) 27.58 Exercised (114,710 ) 27.44 Outstanding at July 31, 2018 1,668,975 28.72 Expired/canceled (32,490 ) 30.11 Exercised (80,930 ) 28.18 Outstanding at July 31, 2019 1,555,555 $ 28.72 3.54 $ 2,512,000 Exercisable at July 31, 2019 1,389,895 $ 28.73 3.26 $ 2,186,000 Vested and expected to vest at July 31, 2019 1,538,930 $ 28.75 3.51 $ 2,460,000 Stock options outstanding as of July 31, 2019 have exercise prices ranging from $20.90 - $33.94 , representing the fair market value of our common stock on the date of grant, a contractual term of five or ten years and a vesting period of three or five years. The total intrinsic value relating to stock options exercised during the fiscal years ended July 31, 2019 and 2018 was $576,000 and $469,000 , respectively. There were no stock options exercised during the fiscal year ended 2017. During fiscal 2019 and 2018 , at the election of certain holders of vested stock options, 72,830 and 101,610 stock options, respectively, were net settled upon exercise. As a result, 9,345 and 8,706 net shares of our common stock were issued during the fiscal years ended July 31, 2019 and 2018 , respectively, after reduction of shares retained to satisfy the exercise price and minimum statutory tax withholding requirements. Performance Shares, RSUs, Restricted Stock and Share Unit Awards The following table summarizes the Plan's activity relating to performance shares, RSUs, restricted stock and share units: Awards (in Shares) Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Outstanding at July 31, 2016 217,213 $ 28.32 Granted 705,241 14.31 Settled (61,462 ) 26.63 Forfeited (30,795 ) 17.13 Outstanding at July 31, 2017 830,197 16.95 Granted 473,005 22.45 Settled (354,822 ) 17.66 Canceled/Forfeited (129,942 ) 17.26 Outstanding at July 31, 2018 818,438 19.78 Granted 442,363 29.76 Settled (275,619 ) 26.05 Canceled/Forfeited (30,506 ) 25.52 Outstanding at July 31, 2019 954,676 $ 22.40 $ 28,411,000 Vested at July 31, 2019 321,702 $ 25.82 $ 9,574,000 Vested and expected to vest at July 31, 2019 914,082 $ 22.55 $ 27,203,000 The total intrinsic value relating to fully-vested awards settled during the fiscal years ended July 31, 2019 , 2018 and 2017 was $8,772,000 , $10,473,000 and $1,039,000 respectively. The performance shares granted to employees since fiscal 2014 principally vest over a three -year performance period, if pre-established performance goals are attained, or as specified pursuant to the Plan and related agreements. As of July 31, 2019 , the number of outstanding performance shares included in the above table, and the related compensation expense prior to consideration of estimated pre-vesting forfeitures, assume achievement of the pre-established goals at a target level. RSUs and restricted stock granted to non-employee directors have a vesting period of three years and are convertible into shares of our common stock generally at the time of termination, on a one -for-one basis for no cash consideration, or earlier under certain circumstances. RSUs granted to employees have a vesting period of five years and are convertible into shares of our common stock generally at the time of vesting, on a one -for-one basis for no cash consideration. Share units granted prior to July 31, 2017 were vested when issued and are convertible into shares of our common stock, generally at the time of termination, on a one -for-one basis for no cash consideration, or earlier under certain circumstances. Share units granted on or after July 31, 2017 were granted to certain employees in lieu of non-equity incentive compensation and are convertible into shares of our common stock on the one-year anniversary of the respective grant date. On July 31, 2019 , 257,608 fully vested share units were granted to certain employees in lieu of fiscal 2019 non-equity incentive compensation. Also, on July 31, 2019 , 146,410 fully vested share units (previously granted in lieu of fiscal 2018 non-equity incentive compensation) were settled by delivery of 90,928 shares of our common stock after reduction of share units retained to satisfy employees’ statutory tax withholding requirements. Cumulatively, through July 31, 2019 , 421,966 share units granted have been settled. The fair value of performance shares, RSUs, restricted stock and share units is determined using the closing market price of our common stock on the date of grant, less the present value of any estimated future dividend equivalents such awards are not entitled to receive and an applicable estimated discount for any post-vesting transfer restrictions. RSUs, performance shares and restricted stock granted since fiscal 2013 are entitled to dividend equivalents unless forfeited before vesting occurs. Share units granted since fiscal 2014 are entitled to dividend equivalents while the underlying shares are unissued. Dividend equivalents are subject to forfeiture, similar to the terms of the underlying stock-based awards, and are payable in cash generally at the time of settlement of the underlying award. During fiscal 2019 , 2018 and 2017 , we accrued $327,000 , $300,000 and $273,000 , respectively, of dividend equivalents (net of forfeitures) and paid out $263,000 , $141,000 and $176,000 , respectively. Accrued dividend equivalents were recorded as a reduction to retained earnings. As of July 31, 2019 and 2018 , accrued dividend equivalents were $777,000 and $713,000 , respectively. With respect to the actual settlement of stock-based awards for income tax reporting, during the fiscal years ended July 31, 2019 and 2018 we recorded income tax benefits of $479,000 and $1,193,000 , respectively, which primarily represent the net excess income tax benefits upon settlement of stock-based awards during each of the respective periods. During fiscal 2017 , net income tax shortfalls from similar items totaled $670,000 and, pursuant to prior GAAP, were recorded as a reduction to additional paid-in capital. Subsequent Events In the first quarter of fiscal 2020, our Board of Directors authorized the issuance of stock-based awards with a total unrecognized compensation expense, net of estimated forfeitures, of approximately $5,632,000 . |
Segment Information
Segment Information | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Reportable operating segments are determined based on Comtech’s management approach. The management approach, as defined by FASB ASC 280 "Segment Reporting" is based on the way that the CODM organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our CODM, for purposes of FASB ASC 280, is our Chief Executive Officer and President. Our Commercial Solutions segment offers satellite ground station technologies (such as modems and amplifiers) and public safety and location technologies (such as 911 call routing and mapping solutions) to commercial customers and smaller government customers, such as state and local governments. This segment also serves certain large government customers (including the U.S. government) that have requirements for off-the-shelf commercial equipment. Our Government Solutions segment provides mission-critical technologies (such as tactical satellite-based networks and ongoing support for complicated communications networks) and high-performance transmission technologies (such as troposcatter systems and solid-state, high-power amplifiers) to large government end-users (including those of foreign countries), large international customers and domestic prime contractors. Our CODM primarily uses a metric that we refer to as Adjusted EBITDA to measure an operating segment’s performance and to make decisions about resources to be allocated. Our Adjusted EBITDA metric for the Commercial Solutions and Government Solutions segments do not consider any allocation of indirect expenses, or any of the following: income taxes, interest (income) and other, write-off of deferred financing costs, interest expense, amortization of stock-based compensation, amortization of intangible assets, depreciation expense, estimated contract settlement costs, settlement of intellectual property litigation, acquisition plan expenses, facility exit costs or strategic alternatives analysis expenses and other expenses that relate to our Unallocated segment. These items, while periodically affecting our results, may vary significantly from period to period and may have a disproportionate effect in a given period, thereby affecting the comparability of results. Any amounts shown in the Adjusted EBITDA calculation for our Commercial Solutions and Government Solutions segments are directly attributable to those segments. Our Adjusted EBITDA is also used by our management in assessing the Company's operating results. Although closely aligned, the Company's definition of Adjusted EBITDA is different than the Consolidated EBITDA (as such term is defined in our Credit Facility) utilized for financial covenant calculations and also may differ from the definition of EBITDA or Adjusted EBITDA used by other companies and, therefore, may not be comparable to similarly titled measures used by other companies. Operating segment information, along with a reconciliation of segment net income (loss) and consolidated net income to Adjusted EBITDA is presented in the tables below: Fiscal Year Ended July 31, 2019 Commercial Solutions Government Solutions Unallocated Total Net sales $ 357,293,000 314,504,000 — $ 671,797,000 Operating income (loss) $ 36,053,000 28,997,000 (23,643,000 ) $ 41,407,000 Net income (loss) $ 35,888,000 29,029,000 (39,876,000 ) $ 25,041,000 Provision for income taxes 19,000 — 3,850,000 3,869,000 Interest (income) and other 75,000 (41,000 ) 1,000 35,000 Write-off of deferred financing costs — — 3,217,000 3,217,000 Interest expense 71,000 9,000 9,165,000 9,245,000 Amortization of stock-based compensation — — 11,427,000 11,427,000 Amortization of intangibles 14,944,000 3,376,000 — 18,320,000 Depreciation 9,265,000 1,891,000 771,000 11,927,000 Estimated contract settlement costs 6,351,000 — — 6,351,000 Settlement of intellectual property litigation — — (3,204,000 ) (3,204,000 ) Acquisition plan expenses — — 5,871,000 5,871,000 Facility exit costs — 1,373,000 — 1,373,000 Adjusted EBITDA $ 66,613,000 35,637,000 (8,778,000 ) $ 93,472,000 Purchases of property, plant and equipment $ 6,293,000 1,902,000 590,000 $ 8,785,000 Long-lived assets acquired in connection with acquisitions $ 60,693,000 — — $ 60,693,000 Total assets at July 31, 2019 $ 662,580,000 186,438,000 38,693,000 $ 887,711,000 Fiscal Year Ended July 31, 2018 Commercial Solutions Government Solutions Unallocated Total Net sales $ 345,076,000 225,513,000 — $ 570,589,000 Operating income (loss) $ 40,837,000 10,950,000 (16,712,000 ) $ 35,075,000 Net income (loss) $ 40,297,000 10,835,000 (21,363,000 ) $ 29,769,000 Provision for (benefit from) income taxes 270,000 — (5,413,000 ) (5,143,000 ) Interest (income) and other 151,000 112,000 (9,000 ) 254,000 Interest expense 119,000 3,000 10,073,000 10,195,000 Amortization of stock-based compensation — — 8,569,000 8,569,000 Amortization of intangibles 17,699,000 3,376,000 — 21,075,000 Depreciation 9,479,000 3,088,000 1,088,000 13,655,000 Adjusted EBITDA $ 68,015,000 17,414,000 (7,055,000 ) $ 78,374,000 Purchases of property, plant and equipment $ 7,151,000 901,000 590,000 $ 8,642,000 Total assets at July 31, 2018 $ 610,166,000 195,924,000 39,067,000 $ 845,157,000 Fiscal Year Ended July 31, 2017 Commercial Solutions Government Solutions Unallocated Total Net sales $ 330,867,000 219,501,000 — $ 550,368,000 Operating income (loss) $ 33,234,000 9,393,000 (5,585,000 ) $ 37,042,000 Net income (loss) $ 32,871,000 9,421,000 (26,465,000 ) $ 15,827,000 Provision for income taxes 258,000 — 9,396,000 9,654,000 Interest (income) and other (108,000 ) (34,000 ) 74,000 (68,000 ) Interest expense 213,000 6,000 11,410,000 11,629,000 Amortization of stock-based compensation — — 8,506,000 8,506,000 Amortization of intangibles 17,698,000 5,125,000 — 22,823,000 Depreciation 9,938,000 2,938,000 1,478,000 14,354,000 Settlement of intellectual property litigation — — (12,020,000 ) (12,020,000 ) Adjusted EBITDA $ 60,870,000 17,456,000 (7,621,000 ) $ 70,705,000 Purchases of property, plant and equipment $ 7,007,000 1,046,000 97,000 $ 8,150,000 Total assets at July 31, 2017 $ 606,436,000 185,234,000 40,393,000 $ 832,063,000 Unallocated expenses result from corporate expenses such as executive compensation, accounting, legal and other regulatory compliance related costs and also includes all of our amortization of stock-based compensation. During fiscal 2019 , unallocated expenses also include $5,871,000 of acquisition plan expenses. In addition, offsetting unallocated expenses in fiscal 2019 is a $3,204,000 benefit resulting from a favorable ruling of the U.S. Court of Appeals for the Federal Circuit related to a legacy TCS intellectual property matter. See Note (13) (b)- "Commitments and Contingencies - Legal Proceedings and Other Matters" for further information. Unallocated expenses reflect favorable adjustments to operating income related to: (i) warranty and sales and use tax settlements in fiscal 2018; and (ii) settlement of certain legacy TCS intellectual property matters in fiscal 2017. Interest expense in the tables above relate to our Prior Credit Facility and new Credit Facility, and includes the amortization of deferred financing costs. In addition, during fiscal 2019, we recorded a $3,217,000 loss from the write-off of deferred financing costs primarily related to the Term Loan Facility portion of our Prior Credit Facility. See Note (8) - " Credit Facility " for further discussion. There were no comparable losses recorded in fiscal 2018 and 2017. Intersegment sales in fiscal 2019 , 2018 and 2017 by the Commercial Solutions segment to the Government Solutions segment were $17,371,000 , $9,630,000 and $12,492,000 , respectively. There were nominal sales by the Government Solutions segment to the Commercial Solutions segment for these fiscal periods. All intersegment sales are eliminated in consolidation and are excluded from the tables above. Unallocated assets at July 31, 2019 consist principally of cash and cash equivalents, income taxes receivable, corporate property, plant and equipment and deferred financing costs. Substantially all of our long-lived assets are located in the U.S. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Operating Leases At July 31, 2019 , future minimum lease payments, net of subleases, under non-cancelable operating lease agreements are as follows: Fiscal Year: 2020 $ 11,812,000 2021 8,723,000 2022 7,343,000 2023 5,776,000 2024 3,430,000 Thereafter 7,130,000 Total $ 44,214,000 Lease expense charged to operations was $11,953,000 , $12,733,000 and $13,270,000 in fiscal 2019 , 2018 and 2017 , respectively. We lease our Melville, New York production facility from a partnership controlled by our President, CEO and Chairman. Lease payments made in fiscal 2019 were $636,000 . The current lease provides for our use of the premises as they exist through December 2021 with an option for an additional 10 years . The annual rent of the facility for calendar year 2020 is $657,000 and is subject to customary adjustments. We have a right of first refusal in the event of a sale of the facility. (b) Legal Proceedings and Other Matters Legacy TCS Intellectual Property Matter - Vehicle IP In December 2009, Vehicle IP, LLC ("Vehicle IP") filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware (the "District Court"), seeking monetary damages, fees and expenses and other relief from, among others, our customer Verizon Wireless ("Verizon") based on the VZ Navigator product. TCS defended Verizon against Vehicle IP. In January 2019, we received a ruling from the U.S. Court of Appeals for the Federal Circuit upholding the District Court's claim construction in our favor. Consequently, we and Vehicle IP filed a joint stipulation requesting a judgment of non-infringement, which judgment was entered on March 5, 2019. As a result of the Federal Circuit Court’s decision, this matter is now closed and during the second quarter of fiscal 2019 , we reduced our accrued legal costs related to this matter and recorded a $3,204,000 benefit in the Consolidated Statement of Operations. See Note (6) - " Accrued Expenses and Other Current Liabilities " for additional information. Legacy TCS 911 Call Handling Software Matter A customer that purchased a TCS 911 call handling software solution in December 2014 (which was more than one year prior to our acquisition of TCS) (the "TCS Legacy Customer") informed us in fiscal 2019 that it experienced several network outages and that it would seek indemnification for any claims made against it as a result of such outages. In connection with these outages, the TCS Legacy Customer informed us that it believed certain communication failover redundancies promised to it by former senior management of TCS were never completed and had originally demanded that we refund to it all amounts previously paid to us under the contract, which through July 31, 2019 exceeded $14,000,000 . In response to such claim, we engaged legal counsel to review the claims made by our customer. Settlement conversations were had with this customer for several months and a mutual agreement was not reached. In September 2019, this customer filed a lawsuit in the Sixth Judicial Circuit Court of the State of South Dakota and has accused us of committing fraud because, among other things, we failed to provide them with certain redundancy. We believe that TCS has complied with its contractual requirements and that the customer is not entitled to any such reimbursement. Our contract to provide services to this customer expires in December 2019 and the amount of annual revenue we generate from this customer is immaterial. We vigorously contest that we violated any contractual obligations, much less committed fraud, and have submitted notification to our insurance carriers of the lawsuit for review and consideration of coverage for potential liability that may arise from this lawsuit. We are also reviewing with counsel our multiple counter claims against this TCS Legacy Customer. We also filed a lawsuit in March 2019 against a former employee and her new employer arising from such former employee's violation of her obligation to TCS of confidentiality, non-competition and non-solicitation of customers, including the TCS Legacy Customer. The former employee has responded with her own lawsuit against us. The ultimate resolution of these matters could vary and have a material adverse effect on our consolidated results of operations, financial position or cash flows in future periods. Other Matters In October 2014, we disclosed to the U.S. Department of the Treasury, Office of Foreign Assets Control ("OFAC") that we learned during a self-assessment of our export transactions that a shipment of modems sent to a Canadian customer by Comtech EF Data Corp. was incorporated into a communication system, the ultimate end user of which was the Sudan Civil Aviation Authority. The sales value of this equipment was approximately $288,000 . At the time of shipment, OFAC regulations prohibited U.S. persons from doing business directly or indirectly with Sudan. In late 2015, OFAC issued an administrative subpoena seeking information about the disclosed transaction. We responded to the subpoena, including alerting OFAC to Comtech’s repair of three modems for a customer in Lebanon who may have rerouted the modems from Lebanon to Sudan without the required U.S. licensing authorization. In September 2018, Comtech agreed to enter into a Tolling Agreement with OFAC, which extends the statute of limitations in this matter through December 31, 2019. The Tolling Agreement was shortly followed by a second administrative subpoena seeking additional information about the disclosed transaction. In December 2018, Comtech responded to a second administrative subpoena from OFAC, answering the questions it posed and providing all the documents it sought. U.S. sanctions with respect to Sudan were revoked in 2017. Consistent with the revocation of the Sudan Sanction Regulations ("SSR"), shipments to the Sudan Civil Aviation Authority by U.S. persons are now permissible. We are not able to predict whether OFAC will take any enforcement action against us in light of the revocation of the SSR. If OFAC determines that we have violated U.S. trade sanctions, civil and criminal penalties could apply, and we may suffer reputational harm. Even though we take precautions to avoid engaging in transactions that may violate U.S. trade sanctions, those measures may not be effective in every instance. In May 2018, we were informed by the Office of Export Enforcement ("OEE") of the Department of Commerce ("DoC") that it was forwarding to the DoC's Office of Chief Counsel, the results of its audit of international shipments by Comtech Xicom Technology, Inc. for further review and possible determination of an administrative penalty. We fully cooperated with the OEE in their audit and, based on our self-assessment of the approximately 7,800 individual transactions audited, have determined that six ( 6 ) transactions may not have been fully in compliance with the Export Administration Regulations ("EAR"). These six ( 6 ) items, for which export licenses were not obtained, were either spares or repaired power amplifier subassembly components valued at less than $100,000 (in aggregate) and were shipped to Brazil, Italy, Russia, Thailand and the United Arab Emirates. The EAR provides an exception to the requirement to obtain an export license for the replacement of a defective or damaged component. During our self-assessment, we determined that we inadvertently did not obtain export licenses for the spares or evidence of the return or destruction of the defective or damaged components necessary to authorize our use of the export license exception for the replacements. Since discovering this issue, we have implemented additional controls and procedures and have increased awareness of these specific export requirements throughout the Company to help avoid similar occurrences in the future. Administrative penalties under the EAR can range from a warning letter to a denial of export privileges. A civil monetary penalty not to exceed the amount set forth in the Export Administration Act ("EAA") may be imposed for each violation, and in the event that any provision of the EAR is continued by any other authority, the maximum monetary civil penalty for each violation shall be that provided by such other authority. Administrative penalties under the EAR are currently determined pursuant to the International Emergency Economic Powers Act ("IEEPA"), which can reach the greater of twice the amount of the transaction that is the basis of the violation or approximately $300,000 per violation. We have not recorded an accrual related to a possible administrative penalty and continue to work cooperatively with the OEE. In the ordinary course of business, we include indemnification provisions in certain of our customer contracts to indemnify, hold harmless and reimburse such customers for certain losses, including but not limited to losses related to third-party claims of intellectual property infringement arising from the customer’s use of our products or services. We may also, from time to time, receive indemnification requests from customers related to third-party claims that 911 calls were improperly routed during an emergency. We evaluate such claims as and when they arise. We do not always agree with customers that they are entitled to indemnification and in such cases reject their claims. Despite maintaining that we have properly carried out our duties, we may seek coverage under our various insurance policies; however, we cannot be sure that we will be able to maintain or obtain insurance coverage at acceptable costs or in sufficient amounts or that our insurer will not disclaim coverage as to such claims. Accordingly, pending or future claims asserted against us by a party that we agree to indemnify could result in legal costs and damages that could have a material adverse effect on our consolidated results of operations and financial condition. There are certain other pending and threatened legal actions which arise in the normal course of business. Although the ultimate outcome of litigation is difficult to accurately predict, we believe that the outcome of these other pending and threatened actions will not have a material adverse effect on our consolidated financial condition or results of operations. (c) Employment Change of Control and Indemnification Agreements We have an employment agreement with our CEO and President. The employment agreement generally provides for an annual salary and bonus award. We have also entered into change of control agreements with certain of our executive officers and certain key employees. All of these agreements may require payments by us, in certain circumstances, including, but not limited to, a change in control of our Company. |
Goodwill
Goodwill | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill [Abstract] | |
Goodwill | Goodwill The following table represents goodwill by reportable operating segment, including the changes in the net carrying value of goodwill during the fiscal year ended July 31, 2019 : Commercial Solutions Government Solutions Total Balance as of July 31, 2018 $ 231,440,000 59,193,000 $ 290,633,000 Addition resulting from Solacom acquisition 11,808,000 — 11,808,000 Addition resulting from the GD NG-911 acquisition 8,048,000 — 8,048,000 Balance as of July 31, 2019 $ 251,296,000 59,193,000 $ 310,489,000 As discussed further in Note (2) -" Acquisitions ," the goodwill resulting from the acquisitions of Solacom and the GD NG-911 business was based upon valuation and estimates and assumptions that are subject to change within the purchase price allocation period (generally one year from the acquisition date). In accordance with FASB ASC 350 " Intangibles - Goodwill and Other, " we perform a goodwill impairment analysis at least annually (in the first quarter of each fiscal year), unless indicators of impairment exist in interim periods. If we fail the quantitative assessment of goodwill impairment ("quantitative assessment"), we would be required to recognize an impairment loss equal to the amount that a reporting unit's carrying value exceeded its fair value; however, any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. On August 1, 2019 (the first day of our fiscal 2020 ), we performed our annual quantitative assessment using market participant assumptions to determine if the fair value of each of our reporting units with goodwill exceeded its carrying value. In making this assessment, we considered, among other things, expectations of projected net sales and cash flows, assumptions impacting the weighted average cost of capital, trends in trading multiples of comparable companies, changes in our stock price and changes in the carrying values of our reporting units with goodwill. We also considered overall business conditions. In performing the quantitative assessment, we estimated the fair value of each of our reporting units using a combination of the income and market approaches. The income approach, also known as the discounted cash flow ("DCF") method, utilizes the present value of cash flows to estimate fair value. The future cash flows for our reporting units were projected based on our estimates, at that time, of future revenues, operating income and other factors (such as working capital and capital expenditures). For purposes of conducting our impairment analysis, we assumed revenue growth rates and cash flow projections that are below our actual long-term expectations. The discount rates used in our DCF method were based on a weighted-average cost of capital ("WACC") determined from relevant market comparisons, adjusted upward for specific reporting unit risks (primarily the uncertainty of achieving projected operating cash flows). A terminal value growth rate was applied to the final year of the projected period, which reflects our estimate of stable, perpetual growth. We then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach. Under the market approach, we estimated a fair value based on comparable companies' market multiples of revenues and earnings before interest, taxes, depreciation and amortization and factored in a control premium. Finally, we compared our estimates of fair values to our August 1, 2019 total public market capitalization and assessed implied control premiums based on our common stock price of $29.54 as of August 1, 2019 . Based on our quantitative evaluation, we determined that our Commercial Solutions and Government Solutions reporting units had estimated fair values in excess of their carrying values of at least 29.0% and 122.2% , respectively, and concluded that our goodwill was not impaired and that neither of our two reporting units was at risk of failing the quantitative assessment. It is possible that, during fiscal 2020 or beyond, business conditions (both in the U.S. and internationally) could deteriorate from the current state, our current or prospective customers could materially postpone, reduce or even forgo purchases of our products and services to a greater extent than we currently anticipate, or our common stock price could decline. A significant decline in our customers' spending that is greater than we anticipate or a shift in funding priorities may also have a negative effect on future orders, sales, income and cash flows and we might be required to perform a quantitative assessment during fiscal 2020 or beyond. If assumed net sales and cash flow projections are not achieved in future periods or our common stock price significantly declines from current levels, our Commercial Solutions and Government Solutions reporting units could be at risk of failing the quantitative assessment and goodwill assigned to the respective reporting units could be impaired. In any event, we are required to perform the next annual goodwill impairment analysis on August 1, 2020 (the start of our fiscal 2021 ). If our assumptions and related estimates change in the future, or if we change our reporting unit structure or other events and circumstances change (e.g., a sustained decrease in the price of our common stock (considered on both absolute terms and relative to peers)), we may be required to record impairment charges when we perform these tests, or in other future periods. Any impairment charges that we may record in the future could be material to our results of operations and financial condition. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jul. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets with finite lives as of July 31, 2019 and 2018 are as follows: July 31, 2019 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 20.5 $ 276,834,000 66,484,000 $ 210,350,000 Technologies 12.7 92,649,000 59,522,000 33,127,000 Trademarks and other 16.7 31,026,000 12,613,000 18,413,000 Total $ 400,509,000 138,619,000 $ 261,890,000 July 31, 2018 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 21.0 $ 249,831,000 55,350,000 $ 194,481,000 Technologies 12.8 82,370,000 54,386,000 27,984,000 Trademarks and other 16.4 28,894,000 10,563,000 18,331,000 Total $ 361,095,000 120,299,000 $ 240,796,000 The weighted average amortization period in the above table excludes fully amortized intangible assets. Amortization expense for the fiscal years ended July 31, 2019 , 2018 and 2017 was $18,320,000 , $21,075,000 and $22,823,000 , respectively. As further discussed in Note (2) -" Acquisitions ," intangible assets as of July 31, 2019 include recently acquired intangibles resulting from the acquisitions of Solacom and the GD NG-911 business. The estimated amortization expense consists of the following for the fiscal years ending July 31: 2020 $ 20,700,000 2021 19,563,000 2022 18,322,000 2023 18,322,000 2024 17,631,000 We review net intangible assets with finite lives for impairment when an event occurs indicating the potential for impairment. No such event has occurred during the fiscal year ended July 31, 2019 . We believe that the carrying values of our net intangible assets were recoverable as of July 31, 2019 . Any impairment charges that we may record in the future could be material to our results of operations and financial condition. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jul. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Sale of Common Stock In December 2018, we filed a $400,000,000 shelf registration with the SEC for the sale of various types of securities, including debt. The shelf registration was declared effective by the SEC as of December 14, 2018. To-date, we have not issued any securities related to our $400,000,000 shelf registration. Stock Repurchase Program As of July 31, 2019 and September 24, 2019 , we were authorized to repurchase up to an additional $8,664,000 of our common stock, pursuant to our current $100,000,000 stock repurchase program. Our stock repurchase program has no time restrictions and repurchases may be made in open-market or privately negotiated transactions and may be made pursuant to SEC Rule 10b5-1 trading plans. There were no repurchases made during the fiscal years ended July 31, 2019 or 2018 . Dividends Since September 2010, we have paid quarterly dividends pursuant to an annual targeted dividend amount that was established by our Board of Directors. On September 26, 2018 , December 6, 2018 , March 6, 2019 and June 5, 2019 , our Board of Directors declared a dividend of $0.10 per common share, which were paid on November 16, 2018 , February 15, 2019 , May 17, 2019 and August 16, 2019 , respectively. On September 24, 2019 , our Board of Directors declared a dividend of $0.10 per common share, payable on November 15, 2019 to stockholders of record at the close of business on October 16, 2019 . Future dividends remain subject to compliance with financial covenants under our Credit Facility as well as Board approval. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Jul. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Unaudited Quarterly Financial Data | Unaudited Quarterly Financial Data The following is a summary of unaudited quarterly operating results: Fiscal 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 160,844,000 164,133,000 170,448,000 176,372,000 $ 671,797,000 Gross profit 57,769,000 61,245,000 64,416,000 64,010,000 247,440,000 Net income 3,468,000 7,826,000 7,612,000 6,135,000 25,041,000 Diluted income per share 0.14 0.32 0.31 0.25 1.03 * Fiscal 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 121,569,000 133,731,000 147,854,000 167,435,000 $ 570,589,000 Gross profit 47,716,000 50,801,000 62,436,000 62,988,000 223,941,000 Net (loss) income (1,660,000 ) 15,761,000 8,210,000 7,458,000 29,769,000 Diluted (loss) income per share (0.07 ) 0.66 0.34 0.31 1.24 * Fiscal 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 135,786,000 139,028,000 127,792,000 147,762,000 $ 550,368,000 Gross profit 52,108,000 53,204,000 52,461,000 60,412,000 218,185,000 Net (loss) income (2,489,000 ) 6,585,000 4,417,000 7,314,000 15,827,000 Diluted (loss) income per share (0.11 ) 0.28 0.19 0.31 0.67 * * The per share information is computed independently for each quarter and the full year based on the respective weighted average number of common shares outstanding. Therefore, income per share information for the full fiscal year may not equal the total of the quarters within the year. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Jul. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts and Reserves | Schedule II COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Valuation and Qualifying Accounts and Reserves Fiscal Years Ended July 31, 2019, 2018 and 2017 Column A Column B Column C Additions Column D Column E Description Balance at beginning of period Charged to cost and expenses Charged to other accounts - describe Transfers (deductions) - describe Balance at end of period Allowance for doubtful accounts receivable: Year ended July 31, 2019 $ 1,761,000 1,136,000 (A) — (1,030,000 ) (B) $ 1,867,000 2018 1,300,000 573,000 (A) — (112,000 ) (B) 1,761,000 2017 1,029,000 497,000 (A) — (226,000 ) (B) 1,300,000 Inventory reserves: Year ended July 31, 2019 $ 17,427,000 6,015,000 (C) — (3,746,000 ) (D) $ 19,696,000 2018 16,019,000 5,628,000 (C) — (4,220,000 ) (D) 17,427,000 2017 16,198,000 2,900,000 (C) — (3,079,000 ) (D) 16,019,000 Valuation allowance for deferred tax assets: Year ended July 31, 2019 $ 11,854,000 58,000 (E) 656,000 (F) — $ 12,568,000 2018 8,633,000 3,221,000 (E) — — 11,854,000 2017 9,624,000 324,000 (E) 121,000 (F) (1,436,000 ) (F) 8,633,000 (A) Provision for doubtful accounts. (B) Write-off of uncollectible receivables. (C) Provision for excess and obsolete inventory. (D) Write-off of inventory. (E) Change in valuation allowance. (F) Acquisition related valuation allowance charged to (deducted from) goodwill. |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policy) | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Comtech Telecommunications Corp. and its subsidiaries ("Comtech," "we," "us," or "our"), all of which are wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. |
Nature of Business | Nature of Business We design, develop, produce and market innovative products, systems and services for advanced communications solutions. We conduct our business through two reportable operating segments: Commercial Solutions and Government Solutions. Our business is highly competitive and characterized by rapid technological change. Our growth and financial position depends on our ability to keep pace with such changes and developments and to respond to the sophisticated requirements of an increasing variety of secure wireless communications technology users, among other things. Many of our competitors are substantially larger, and have significantly greater financial, marketing and operating resources and broader product lines than our own. A significant technological or sales breakthrough by others, including smaller competitors or new companies, could have a material adverse effect on our business. In addition, certain of our customers have technological capabilities in our product areas and could choose to replace our products with their own. International sales expose us to certain risks, including barriers to trade, fluctuations in foreign currency exchange rates (which may make our products less price competitive), political and economic instability, availability of suitable export financing, export license requirements, tariff regulations, and other United States ("U.S.") and foreign regulations that may apply to the export of our products, as well as the generally greater difficulties of doing business abroad. We attempt to reduce the risk of doing business in foreign countries by seeking contracts denominated in U.S. dollars, advance or milestone payments, credit insurance and irrevocable letters of credit in our favor. |
Adoption of New Accounting Standards and Updates | (c) Adoption of New Leasing Standard On August 1, 2019 (the start of our first quarter of fiscal 2020), we adopted ASU No. 2016-02 "Leases (Topic 842)," which requires lessees to recognize the following for all leases (with the exception of short-term leases): (i) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, initially measured at the present value of the lease payments; and (ii) a right-of-use asset, which is an asset that represents the lessee's right to use a specified asset for the lease term. In January 2018, FASB ASU No. 2018-01 was issued to permit an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity’s adoption of Topic 842. In July 2018, the FASB issued ASU Nos. 2018-10 and 2018-11, which provide further codification improvements and relieves the requirement to present prior comparative year results when adopting the new lease standard. Instead, companies can choose to recognize the cumulative effect of applying the new standard to leased assets and liabilities as an adjustment to opening retained earnings. In December 2018, FASB ASU No. 2018-20 was issued to simplify the implementation of Topic 842 for lessors as it relates to sales taxes, lessor costs paid directly by the lessee and recognition of variable payments for contracts with lease and non-lease components. In March 2019, FASB ASU No. 2019-01 was issued, which addresses: (i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; (ii) presentation of sales types and direct financing leases on the statement of cash flows; and (iii) transition disclosures related to Topic 250, "Accounting Changes and Error Corrections." This latest ASU specifically provides an exception to the paragraph 250-10-50-3 that would otherwise have required interim disclosures in the period of an accounting change including the effect of that change on income from continuing operations, net income, any other financial statement line item and any affected per-share amounts. On August 1, 2019, we adopted the new leasing standard using the modified retrospective approach. In addition, we elected certain practical expedients permitted under the transition guidance within the new standard. Except for recording a total right-of-use asset and corresponding lease liability on our Consolidated Balance Sheet, which amount approximates 4.0% of our total consolidated assets at July 31, 2019, our adoption of Topic 842 is not expected to have a material impact to our future statements of operations or cash flows. (o) Adoption of Accounting Standards and Updates We are required to prepare our consolidated financial statements in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") which is the source for all authoritative U.S. generally accepted accounting principles, which are commonly referred to as "GAAP." The FASB ASC is subject to updates by the FASB, which are known as Accounting Standards Updates ("ASUs"). During fiscal 2019 , we adopted: • FASB ASU No. 2014-09 "Revenue from Contracts with Customers (Topic 606)." See Note (1)(d) - "Revenue Recognition" for further information. • FASB ASU No. 2016-16 "Intra-Entity Transfers of Assets Other Than Inventory," which eliminates a prior exception and now requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory (for example, intellectual property and property, plant and equipment) when the transfer occurs. We adopted this ASU on August 1, 2018. There was no material impact to our consolidated financial statements (including any cumulative effect adjustment) and related disclosures upon such adoption. • FASB ASU No. 2019-07, issued in June 2019, which amends various SEC guidance pursuant to the issuance of recent SEC Final Rule Release No. 33-10532, 33-10231, and 33-10442. This ASU clarifies or improves the disclosure and presentation requirements of a variety of Codification Topics by aligning them with the SEC’s regulations, eliminating redundancies, and making the Codification easier to apply. There was no material impact to our consolidated financial statements and related disclosures upon such adoption. |
Revenue Recognition | The timing of revenue recognition, billings and collections results in receivables, unbilled receivables and contract liabilities on our Consolidated Balance Sheet. Under typical payment terms for our contracts accounted for over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly) or upon achievement of contractual milestones. For certain contracts with provisions that are intended to protect customers in the event we do not satisfy our performance obligations, billings occur subsequent to revenue recognition, resulting in what we have historically presented as unbilled receivables. On large long-term contracts, and for contracts with international customers that do not do business with us regularly, payment terms typically require advanced payments and deposits. Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability. These contract liabilities are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract. Under the typical payment terms for our contracts accounted for at a point in time, costs are accumulated in inventory until the time of billing, which generally coincides with revenue recognition. We recognize the incremental costs to obtain or fulfill a contract as an expense when incurred if the amortization period of the asset is one year or less. Incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material. As commissions payable to our internal sales and marketing employees or contractors are contingent upon multiple factors, such commissions are not considered direct costs to obtain or fulfill a contract with a customer and are expensed as incurred in selling, general and administrative expenses on our Consolidated Statements of Operations. As for commissions payable to third-party sales representatives related to large long-term contracts, we do consider these types of commissions both direct and incremental costs to obtain and fulfill such contracts. Therefore, such types of commissions are included in total estimated costs at completion for such contracts and expensed over time through cost of sales on our Consolidated Statements of Operations. Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the end of a fiscal period. Remaining performance obligations, which we refer to as backlog, exclude unexercised contract options and potential orders under indefinite delivery / indefinite quantity ("IDIQ") contracts. Under ASC 606, unbilled receivables constitute contract assets. Sales to U.S. government customers include sales to the U.S. Department of Defense ("DoD"), intelligence and civilian agencies, as well as sales directly to or through prime contractors. Domestic sales include sales to commercial customers, as well as to U.S. state and local governments. The core principle of ASC 606 is that revenue should be recorded in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, we follow a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue using one of the following two methods: • Over time - We recognize revenue using the over time method when there is a continuous transfer of control to the customer over the contractual period of performance. This generally occurs when we enter into a long-term contract relating to the design, development or manufacture of complex equipment or technology platforms to a buyer’s specification (or to provide services related to the performance of such contracts). Continuous transfer of control is typically supported by contract clauses which allow our customers to unilaterally terminate a contract for convenience, pay for costs incurred plus a reasonable profit and take control of work-in-process. Revenue recognized over time is generally based on the extent of progress toward completion of the related performance obligations. The selection of the method to measure progress requires judgment and is based on the nature of the products or services provided. In certain instances, typically for firm fixed-price contracts, we use the cost-to-cost measure because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion, including warranty costs. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill generally include direct labor, materials, subcontractor costs, other direct costs and an allocation of indirect costs. When these contracts are modified, the additional goods or services are generally not distinct from those already provided. As a result, these modifications form part of an existing contract and we must update the transaction price and our measure of progress for the single performance obligation and recognize a cumulative catch-up to revenue and gross profits. For over time contracts using a cost-to-cost measure of progress, we have an estimate at completion ("EAC") process in which management reviews the progress and execution of our performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Since certain contracts extend over a long period of time, the impact of revisions in revenue and or cost estimates during the progress of work may impact current period earnings through a cumulative adjustment. Additionally, if the EAC process indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract revenue and cost estimates for significant contracts are generally reviewed and reassessed at least quarterly. The cost-to-cost method is principally used to account for contracts in our mission-critical technologies and high-performance transmission technologies product lines and, to a lesser extent, certain location-based and messaging infrastructure contracts in our public safety and location technologies product line. For service-based contracts in our public safety and location technologies product line, we recognize revenue over time. These services are typically recognized as a series of services performed over the contract term using the straight-line method, or based on our customers’ actual usage of the networks and platforms which we provide. • Point in time - When a performance obligation is not satisfied over time, we must record revenue using the point in time accounting method which generally results in revenue being recognized upon shipment or delivery of a promised good or service to a customer. This generally occurs when we enter into short term contracts or purchase orders where items are provided to customers with relatively quick turn-around times. Modifications to such contracts and or purchase orders, which typically provide for additional quantities or services, are accounted for as a new contract because the pricing for these additional quantities or services are based on standalone selling prices. Point in time accounting is principally applied to contracts in our satellite ground station technologies product line (which includes satellite modems, solid-state and traveling wave tube amplifiers) and certain contracts for our solid-state, high-power amplifiers in our high-performance transmission technologies product line. Point in time accounting is also applied to certain contracts in our mission-critical technologies product line. The contracts related to these product lines do not meet the requirements for over time revenue recognition because our customers cannot utilize the equipment for its intended purpose during any phase of our manufacturing process; customers do not simultaneously receive and or consume the benefits provided by our performance; customers do not control the asset (i.e., prior to delivery, customers cannot direct the use of the asset, sell or exchange the equipment, etc.); and, although many of our contracts have termination for convenience clauses and or an enforceable right to payment for performance completed to date, our performance creates an asset with an alternative use through the point of delivery. In determining that our equipment has alternative use, we considered the underlying manufacturing process for our products. In the early phases of manufacturing, raw materials and work in process (including subassemblies) consist of common parts that are highly fungible among many different types of products and customer applications. Finished products are either configured to our standard configuration or based on our customers’ specifications. Finished products, whether built to our standard specification or to a customers’ specification, can be sold to a variety of customers and across many different end use applications with minimal rework, if needed, and without incurring a significant economic loss. When identifying a contract with our customer, we consider when it has approval and commitment from both parties, if the rights of the parties are identified, if the payment terms are identified, if it has commercial substance and if collectability is probable. When identifying performance obligations, we consider whether there are multiple promises and how to account for them. In our contracts, multiple promises are separated if they are distinct, both individually and in the context of the contract. If multiple promises in a contract are highly interrelated or comprise a series of distinct services performed over time, they are combined into a single performance obligation. In some cases, we may also provide the customer with an additional service-type warranty, which we recognize as a separate performance obligation. Service-type warranties do not represent a significant portion of our consolidated net sales. When service-type warranties represent a separate performance obligation, the revenue is deferred and recognized ratably over the extended warranty period. Our contracts, from time-to-time, may also include options for additional goods and services. To-date, these options have not represented material rights to the customer as the pricing for them reflects standalone selling prices. As a result, we do not consider options we offer to be performance obligations for which we must allocate a portion of the transaction price. In many cases, we provide assurance-type warranty coverage for some of our products for a period of at least one year from the date of delivery. When identifying the transaction price, we typically utilize the contract's stated price as a starting point. The transaction price in certain arrangements may include estimated amounts of variable consideration, including award fees, incentive fees or other provisions that can either increase or decrease the transaction price. We estimate variable consideration as the amount to which we expect to be entitled, and we include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the estimation uncertainty is resolved. The estimation of this variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (e.g., historical, current and forecasted) that is reasonably available to us. When allocating the contract’s transaction price, we consider each distinct performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We determine standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions, including geographic or regional specific factors, competitive positioning, internal costs, profit objectives and internally approved pricing guidelines related to the performance obligations. Almost all of our contracts with customers are denominated in U.S. dollars and typically are either firm fixed-price or cost reimbursable type contracts (including fixed-fee, incentive-fee and time-and-material type contracts). In almost all of our contracts with customers, we are the principal in the arrangement and report revenue on a gross basis. Transaction prices for contracts with U.S. domestic and international customers are usually based on specific negotiations with each customer and in the case of the U.S. government, sometimes based on estimated or actual costs of providing the goods or services in accordance with applicable regulations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Our cash equivalents are short-term, highly liquid investments that are both readily convertible to known amounts of cash and have insignificant risk of change in value as a result of changes in interest rates. Our cash and cash equivalents, as of July 31, 2019 and 2018 , amounted to $45,576,000 and $43,484,000 , respectively, and primarily consist of bank deposits and money market deposit accounts insured by the Federal Deposit Insurance Corporation. Cash equivalents are carried at cost, which approximates fair value. |
Inventories | Inventories Our inventories are stated at the lower of cost and net realizable value, the latter of which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Our inventories are reduced to their estimated net realizable value by a charge to cost of sales in the period such excess costs are determined. Our inventories are principally recorded using either average or standard costing methods. Work-in-process (including our contracts-in-progress) and finished goods inventory reflect all accumulated production costs, which are comprised of direct production costs and overhead, and is reduced by amounts recorded in cost of sales as the related revenue is recognized. Indirect costs relating to long-term contracts, which include expenses such as general and administrative, are charged to expense as incurred and are not included in our cost of sales or work-in-process (including our contracts-in-progress) and finished goods inventory. |
Long-Lived Assets | Long-Lived Assets Our machinery and equipment, which are recorded at cost, are depreciated or amortized over their estimated useful lives ( three to eight years) under the straight-line method. Capitalized values of properties and leasehold improvements under leases are amortized over the life of the lease or the estimated life of the asset, whichever is less. Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. In accordance with FASB ASC 350 " Intangibles - Goodwill and Other " goodwill is not amortized. We periodically, at least on an annual basis in the first quarter of each fiscal year, review goodwill, considering factors such as projected cash flows and revenue and earnings multiples, to determine whether the carrying value of the goodwill is impaired. If we fail the quantitative assessment of goodwill impairment ("quantitative assessment"), we would be required to recognize an impairment loss equal to the amount that a reporting unit's carrying value exceeded its fair value; however, any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We define our reporting units to be the same as our operating segments. We performed our annual goodwill impairment assessment for fiscal 2020 on August 1, 2019 (the first day of our fiscal 2020 ). See Note (14) - " Goodwill " for more information. Unless there are future indicators that the fair value of a reporting unit is more likely than not less than its carrying value, such as a significant adverse change in our future financial performance, our next impairment assessment for goodwill will be performed and completed in the first quarter of fiscal 2021 . Any impairment charges that we may record in the future could be material to our results of operations and financial condition. We assess the recoverability of the carrying value of our other long-lived assets, including identifiable intangible assets with finite useful lives, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We evaluate the recoverability of such assets based upon the expectations of undiscounted cash flows from such assets. If the sum of the expected future undiscounted cash flows were less than the carrying amount of the asset, a loss would be recognized for the difference between the fair value and the carrying amount. |
Research and Development Costs | Research and Development Costs We charge research and development costs to operations as incurred, except in those cases in which such costs are reimbursable under customer funded contracts. In fiscal 2019 , 2018 and 2017 , we were reimbursed by customers for such activities in the amount of $14,679,000 , $16,924,000 and $27,050,000 , respectively. These amounts are not reflected in the reported research and development expenses in each of the respective periods but are included in net sales with the related costs included in cost of sales in each of the respective periods. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years 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. We determine the uncertain tax positions taken or expected to be taken in income tax returns in accordance with the provisions of FASB ASC 740-10-25 " Income Taxes, " which prescribes a two-step evaluation process for tax positions. The first step is recognition based on a determination of whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is to measure a tax position that meets the more-likely-than-not threshold. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. Our policy is to recognize potential interest and penalties related to uncertain tax positions in income tax expense. |
Earnings Per Share | Earnings Per Share Our basic earnings per share ("EPS") is computed based on the weighted average number of common shares (including vested but unissued stock units, share units, performance shares and restricted stock units ("RSUs")), outstanding during each respective period. Our diluted EPS reflects the dilution from potential common stock issuable pursuant to the exercise of equity-classified stock-based awards, if dilutive, outstanding during each respective period. Pursuant to FASB ASC 260 " Earnings Per Share, " equity-classified stock-based awards that are subject to performance conditions are not considered in our diluted EPS calculations until the respective performance conditions have been satisfied. When calculating our diluted earnings per share, we consider the amount an employee must pay upon assumed exercise of stock-based awards and the amount of stock-based compensation cost attributed to future services and not yet recognized. As a result of our adoption of ASU No. 2016-09 on August 1, 2017 (the start of our first quarter of fiscal 2018), the amount of excess tax benefits assuming exercise of in-the-money stock-based awards is no longer included in the calculation of diluted earnings per share on a prospective basis and the denominator for our diluted calculation could increase in the future as compared to prior calculations. See Note (11) - “ Stock-Based Compensation ” for more information on the impact of adopting ASU No. 2016-09. There were no repurchases of our common stock during the fiscal years ended July 31, 2019 , 2018 and 2017 . See Note (16) - " Stockholders’ Equity " for more information. Weighted average stock options, RSUs and restricted stock outstanding of 1,347,000 , 1,739,000 and 1,986,000 shares for fiscal 2019 , 2018 and 2017 , respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Our EPS calculations exclude 243,000 , 258,000 and 228,000 weighted average performance shares outstanding for fiscal 2019 , 2018 and 2017 , respectively, as the performance conditions have not yet been satisfied. However, net income (the numerator) for EPS calculations for each respective period, is reduced by the compensation expense related to these awards. |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Using the fair value hierarchy described in FASB ASC 820 " Fair Value Measurements and Disclosures," we valued our cash and cash equivalents using Level 1 inputs that were based on quoted market prices. We believe that the carrying amounts of our other current financial assets (such as accounts receivable) and other current liabilities (including accounts payable, accrued expenses and the current portion of our favorable AT&T warranty settlement) approximate their fair values due to their short-term maturities. We believe the fair value of our current portion of capital lease and other obligations, which currently has a blended interest rate of approximately 7.0% , would not be materially different than its carrying value as of July 31, 2019 . The fair value of our Credit Facility that we entered into on October 31, 2018 approximates its carrying amount due to its variable interest rate and pricing grid that is dependent upon our leverage ratio as of the end of each fiscal quarter. The fair value of the non-current portion of our favorable AT&T warranty settlement would not be materially different than its carrying value as of July 31, 2019 , given our belief that the present value of such liability reflects market participants' assumptions for a similar junior, unsecured debt instrument. See Note (6) - "Accrued Expenses and Other Current Liabilities" for further discussion of the favorable AT&T warranty settlement. As of July 31, 2019 and 2018 , other than the financial instruments discussed above, we had no other significant assets or liabilities included in our Consolidated Balance Sheets recorded at fair value, as such term is defined by FASB ASC 820. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidated financial statements and the reported amounts of net sales and expenses during the reported period. We make significant estimates in many areas of our accounting, including but not limited to the following: long-term contracts, stock-based compensation, intangible assets and liabilities including goodwill, provision for excess and obsolete inventory, allowance for doubtful accounts, warranty obligations and income taxes. Actual results may differ from those estimates. |
Comprehensive Income | Comprehensive Income In accordance with FASB ASC 220 " Comprehensive Income ," we report all changes in equity during a period, except those resulting from investment by owners and distribution to owners, for the period in which they are recognized. Comprehensive income is the total of net income and all other non-owner changes in equity (or other comprehensive income) such as unrealized gains/losses on securities classified as available-for-sale, foreign currency translation adjustments and minimum pension liability adjustments. Comprehensive income was the same as our net income in fiscal 2019 , 2018 and 2017 . |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Adjustments as a Result of Adoption of New Accounting Pronouncement | As a result of ASC 606, we made the following adjustments to our Consolidated Balance Sheet as of August 1, 2018: As reported at Adoption of Balance at July 31, 2018 ASC 606 August 1, 2018 Accrued expenses and other current liabilities (1) $ 65,034,000 $ (2,079,000 ) $ 62,955,000 Contract liabilities, current and non-current (2) 42,141,000 2,079,000 44,220,000 (1) See Note (6) - " Accrued Expenses and Other Current Liabilities " for further discussion of reclassification. (2) Formerly presented on the face of our Consolidated Balance Sheet as "Customer advances and deposits, current and non-current" prior to our adoption of ASC 606. |
Sale by Geography and Customer Type | Sales by geography and customer type, as a percentage of consolidated net sales, are as follows: Fiscal Years Ended July 31, 2019 2018 2017 United States U.S. government 40.1 % 35.5 % 32.7 % Domestic 34.5 % 38.9 % 38.9 % Total United States 74.6 % 74.4 % 71.6 % International 25.4 % 25.6 % 28.4 % Total 100.0 % 100.0 % 100.0 % |
Disaggregation of Revenue | The following tables summarize our disaggregation of revenue consistent with information reviewed by our chief operating decision-maker ("CODM") for the fiscal year ended July 31, 2019 . We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors which impact our business: Fiscal Year Ended July 31, 2019 Commercial Solutions Government Solutions Total Geographical region and customer type U.S. government $ 68,534,000 200,708,000 $ 269,242,000 Domestic 192,516,000 39,432,000 231,948,000 Total United States 261,050,000 240,140,000 501,190,000 International 96,243,000 74,364,000 170,607,000 Total $ 357,293,000 314,504,000 $ 671,797,000 Contract type Firm fixed-price $ 350,850,000 231,400,000 $ 582,250,000 Cost reimbursable 6,443,000 83,104,000 89,547,000 Total $ 357,293,000 314,504,000 $ 671,797,000 Transfer of control Point in time $ 177,090,000 176,067,000 $ 353,157,000 Over time 180,203,000 138,437,000 318,640,000 Total $ 357,293,000 314,504,000 $ 671,797,000 |
Schedule of numerators and denominators used in basic and diluted EPS calculations | The following table reconciles the numerators and denominators used in the basic and diluted EPS calculations: Fiscal Years Ended July 31, 2019 2018 2017 Numerator: Net income for basic calculation $ 25,041,000 29,769,000 15,827,000 Numerator for diluted calculation $ 25,041,000 29,769,000 15,827,000 Denominator: Denominator for basic calculation 24,124,000 23,825,000 23,433,000 Effect of dilutive securities: Stock-based awards 178,000 215,000 56,000 Denominator for diluted calculation 24,302,000 24,040,000 23,489,000 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Solacom | |
Business Acquisition [Line Items] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the Solacom acquisition: Preliminary Purchase Price Allocation (1) Measurement Period Adjustments Purchase Price Allocation (as adjusted) Settled in cash $ 27,328,000 — $ 27,328,000 Settled in common stock issued by Comtech 5,606,000 — 5,606,000 Aggregate purchase price at fair value $ 32,934,000 — $ 32,934,000 Allocation of aggregate purchase price: Cash and cash equivalents $ 1,445,000 — $ 1,445,000 Current assets 9,425,000 471,000 9,896,000 Property, plant and equipment 777,000 — 777,000 Deferred tax assets, non-current 5,374,000 (315,000 ) 5,059,000 Accrued warranty obligations (1,431,000 ) — (1,431,000 ) Current liabilities (4,477,000 ) — (4,477,000 ) Contract liabilities, non-current (1,604,000 ) — (1,604,000 ) Net tangible assets at preliminary fair value $ 9,509,000 156,000 $ 9,665,000 Identifiable intangibles, deferred taxes and goodwill: Estimated Useful Lives Technology $ 6,779,000 — $ 6,779,000 10 years Customer relationships 7,007,000 — 7,007,000 20 years Trade name 1,828,000 — 1,828,000 20 years Deferred tax liabilities (4,153,000 ) — (4,153,000 ) Goodwill 11,964,000 (156,000 ) 11,808,000 Indefinite Allocation of aggregate purchase price $ 32,934,000 — $ 32,934,000 (1) As initially reported in the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2019. |
GD NG-911 business | |
Business Acquisition [Line Items] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the acquisition of the GD NG-911 business: Preliminary Purchase Price Allocation (1) Measurement Period Adjustments Purchase Price Allocation (as adjusted) Aggregate purchase price at fair value $ 10,000,000 — $ 10,000,000 Allocation of aggregate purchase price: Current assets $ 5,790,000 (1,330,000 ) $ 4,460,000 Property, plant and equipment 646,000 — 646,000 Deferred tax assets, non-current 3,292,000 134,000 3,426,000 Accrued warranty obligations (5,000,000 ) — (5,000,000 ) Current liabilities (3,960,000 ) 798,000 (3,162,000 ) Net tangible assets at preliminary fair value $ 768,000 (398,000 ) $ 370,000 Identifiable intangibles, deferred taxes and goodwill: Estimated Useful Lives Customer relationships $ 20,300,000 $ — $ 20,300,000 10 years Technology 3,500,000 — 3,500,000 15 years Other liabilities (21,700,000 ) — (21,700,000 ) Deferred tax liabilities (518,000 ) — (518,000 ) Goodwill 7,650,000 398,000 8,048,000 Indefinite Allocation of aggregate purchase price $ 10,000,000 — $ 10,000,000 (1) As initially reported in the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2019. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Accounts Receivable | Accounts receivable consist of the following at July 31, 2019 and 2018 : 2019 2018 Receivables from commercial and international customers $ 85,556,000 83,411,000 Unbilled receivables from commercial and international customers 20,469,000 19,731,000 Receivables from the U.S. government and its agencies 38,856,000 26,251,000 Unbilled receivables from the U.S government and its agencies 2,018,000 19,807,000 Total accounts receivable 146,899,000 149,200,000 Less allowance for doubtful accounts 1,867,000 1,761,000 Accounts receivable, net $ 145,032,000 147,439,000 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following at July 31, 2019 and 2018 : 2019 2018 Raw materials and components $ 53,959,000 53,649,000 Work-in-process and finished goods 40,576,000 38,854,000 Total inventories 94,535,000 92,503,000 Less reserve for excess and obsolete inventories 19,696,000 17,427,000 Inventories, net $ 74,839,000 75,076,000 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | Property, plant and equipment consist of the following at July 31, 2019 and 2018 : 2019 2018 Machinery and equipment $ 159,882,000 154,556,000 Leasehold improvements 14,265,000 13,807,000 174,147,000 168,363,000 Less accumulated depreciation and amortization 146,121,000 139,376,000 Property, plant and equipment, net $ 28,026,000 28,987,000 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following at July 31, 2019 and 2018 : 2019 2018 Accrued wages and benefits $ 23,295,000 23,936,000 Accrued contract costs 15,007,000 10,016,000 Accrued warranty obligations 15,968,000 11,738,000 Accrued legal costs 2,835,000 6,179,000 Accrued commissions and royalties 5,114,000 4,654,000 Other 16,365,000 8,511,000 Accrued expenses and other current liabilities $ 78,584,000 65,034,000 |
Product warranty rollforward | Changes in our accrued warranty obligations during the fiscal years ended July 31, 2019 and 2018 were as follows: 2019 2018 Balance at beginning of year $ 11,738,000 17,617,000 Reclass to contract liabilities as of August 1, 2018 (1,679,000 ) — Provision for warranty obligations 3,902,000 5,055,000 Additions (in connection with acquisitions) 6,431,000 — Charges incurred (6,151,000 ) (8,244,000 ) Warranty settlement and reclass (see below) 1,727,000 (2,690,000 ) Balance at end of year $ 15,968,000 11,738,000 |
Credit Facility (Tables)
Credit Facility (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Line of Credit Facility [Abstract] | |
Schedule of Line of Credit Facilities | As of July 31, 2018 , the net amount outstanding under the Prior Credit Facility was as follows: 2018 Term Loan Facility $ 120,121,000 Less unamortized deferred financing costs related to Term Loan Facility 3,427,000 Term Loan Facility, net 116,694,000 Revolving Loan Facility 48,604,000 Amount outstanding under Secured Credit Facility, net 165,298,000 Less current portion of long-term debt 17,211,000 Non-current portion of long-term debt $ 148,087,000 |
Capital Lease and Other Oblig_2
Capital Lease and Other Obligations (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum payments under capital lease and other obligations consisted of the following at July 31, 2019 : Fiscal 2020 $ 789,000 Total minimum lease payments 789,000 Less: amounts representing interest 32,000 Present value of net minimum lease payments 757,000 Current portion of capital lease and other obligations 757,000 Non-current portion of capital lease and other obligations $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income before provision for income taxes | Income before provision for (benefit from) income taxes consists of the following: Fiscal Years Ended July 31, 2019 2018 2017 U.S. $ 28,813,000 22,243,000 23,732,000 Foreign 97,000 2,383,000 1,749,000 $ 28,910,000 24,626,000 25,481,000 |
Provision for income taxes | The provision for (benefit from) income taxes included in the accompanying Consolidated Statements of Operations consists of the following: Fiscal Years Ended July 31, 2019 2018 2017 Federal – current $ (2,190,000 ) 367,000 (441,000 ) Federal – deferred 4,782,000 (7,499,000 ) 8,399,000 State and local – current 1,715,000 440,000 608,000 State and local – deferred (321,000 ) 1,115,000 659,000 Foreign – current 62,000 429,000 413,000 Foreign – deferred (179,000 ) 5,000 16,000 Provision for (benefit from) income taxes $ 3,869,000 (5,143,000 ) 9,654,000 |
Provision for income taxes differed from amounts computed by applying the U.S. Federal income tax rate | The provision for (benefit from) income taxes differed from the amounts computed by applying the U.S. Federal income tax rate as a result of the following: Fiscal Years Ended July 31, 2019 2018 2017 Amount Rate Amount Rate Amount Rate Computed "expected" tax expense $ 6,071,000 21.0 % 6,615,000 27.0 % 8,919,000 35.0 % Increase (reduction) in income taxes resulting from: State and local income taxes, net of federal benefit 967,000 3.3 1,193,000 4.8 1,257,000 4.9 Stock-based compensation (44,000 ) (0.1 ) (1,112,000 ) (4.5 ) 78,000 0.3 Research and experimentation credits (1,129,000 ) (3.9 ) (678,000 ) (2.8 ) (919,000 ) (3.6 ) Foreign-derived intangible income deduction (632,000 ) (2.2 ) — — — — Nondeductible transaction costs 394,000 1.4 — — — — Nondeductible executive compensation 330,000 1.1 (22,000 ) (0.1 ) 88,000 0.3 Audit settlements (2,081,000 ) (7.2 ) — — — — Tax Reform remeasurement of deferred taxes — — (11,317,000 ) (46.0 ) — — Foreign income taxes 5,000 — (221,000 ) (0.9 ) (151,000 ) (0.6 ) Other, net (12,000 ) — 399,000 1.5 382,000 1.6 Provision for (benefit from) income taxes $ 3,869,000 13.4 % (5,143,000 ) (21.0 )% 9,654,000 37.9 % |
Tax effects of temporary differences | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at July 31, 2019 and 2018 are presented below: 2019 2018 Deferred tax assets: Inventory and warranty reserves $ 7,318,000 5,089,000 Compensation and commissions 3,548,000 3,511,000 Contract liabilities 5,331,000 — Federal, state and foreign research and experimentation credits 18,183,000 18,816,000 Federal alternative minimum tax credit 1,800,000 3,243,000 Stock-based compensation 5,817,000 5,092,000 Acquisition-related contingent liabilities 1,250,000 2,477,000 Federal, state and foreign net operating losses 6,248,000 7,349,000 Other 7,651,000 4,672,000 Less: valuation allowance (12,568,000 ) (11,854,000 ) Total deferred tax assets 44,578,000 38,395,000 Deferred tax liabilities: Plant and equipment (1,362,000 ) (1,155,000 ) Intangibles (54,612,000 ) (48,167,000 ) Total deferred tax liabilities (55,974,000 ) (49,322,000 ) Net deferred tax liabilities $ (11,396,000 ) (10,927,000 ) |
Summary of unrecognized tax benefits | The following table summarizes the activity related to our unrecognized tax benefits for fiscal years 2019 , 2018 and 2017 (excluding interest): 2019 2018 2017 Balance at beginning of period $ 9,137,000 8,586,000 9,108,000 Increase related to current period 893,000 645,000 587,000 Increase related to prior periods 17,000 49,000 86,000 Expiration of statute of limitations (394,000 ) (81,000 ) (404,000 ) Decrease related to prior periods (2,450,000 ) (62,000 ) (791,000 ) Balance at end of period $ 7,203,000 9,137,000 8,586,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock-based Awards Outstanding by Award Type | As of July 31, 2019 , the following stock-based awards, by award type, were outstanding: July 31, 2019 Stock options 1,555,555 Performance shares 261,336 RSUs and restricted stock 432,550 Share units 260,790 Total 2,510,231 |
Stock-based compensation for awards detailing where recorded in Consolidated Statement of Operations | Stock-based compensation for awards issued is reflected in the following line items in our Consolidated Statements of Operations: Fiscal Years Ended July 31, 2019 2018 2017 Cost of sales $ 1,047,000 758,000 760,000 Selling, general and administrative expenses 9,336,000 6,866,000 7,071,000 Research and development expenses 1,044,000 945,000 675,000 Stock-based compensation expense before income tax benefit 11,427,000 8,569,000 8,506,000 Estimated income tax benefit (2,553,000 ) (2,005,000 ) (3,065,000 ) Net stock-based compensation expense $ 8,874,000 6,564,000 5,441,000 |
Summary of stock-based compensation expense by award type | Stock-based compensation expense, by award type, is summarized as follows: Fiscal Years Ended July 31, 2019 2018 2017 Stock options $ 739,000 1,089,000 1,400,000 Performance shares 1,554,000 1,013,000 1,607,000 RSUs and restricted stock 2,149,000 1,458,000 829,000 ESPP 215,000 205,000 162,000 Share units 6,770,000 4,804,000 4,508,000 Stock-based compensation expense before income tax benefit 11,427,000 8,569,000 8,506,000 Estimated income tax benefit (2,553,000 ) (2,005,000 ) (3,065,000 ) Net stock-based compensation expense $ 8,874,000 6,564,000 5,441,000 |
Summary of the Plan's activity relating to stock options | The following table summarizes the Plan's activity: Awards (in Shares) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 31, 2016 2,256,679 $ 28.87 Expired/canceled (400,804 ) 30.15 Outstanding at July 31, 2017 1,855,875 28.60 Expired/canceled (72,190 ) 27.58 Exercised (114,710 ) 27.44 Outstanding at July 31, 2018 1,668,975 28.72 Expired/canceled (32,490 ) 30.11 Exercised (80,930 ) 28.18 Outstanding at July 31, 2019 1,555,555 $ 28.72 3.54 $ 2,512,000 Exercisable at July 31, 2019 1,389,895 $ 28.73 3.26 $ 2,186,000 Vested and expected to vest at July 31, 2019 1,538,930 $ 28.75 3.51 $ 2,460,000 |
Summary of the Plan's activity relating to performance shares, RSUs, restricted stock and share units | The following table summarizes the Plan's activity relating to performance shares, RSUs, restricted stock and share units: Awards (in Shares) Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Outstanding at July 31, 2016 217,213 $ 28.32 Granted 705,241 14.31 Settled (61,462 ) 26.63 Forfeited (30,795 ) 17.13 Outstanding at July 31, 2017 830,197 16.95 Granted 473,005 22.45 Settled (354,822 ) 17.66 Canceled/Forfeited (129,942 ) 17.26 Outstanding at July 31, 2018 818,438 19.78 Granted 442,363 29.76 Settled (275,619 ) 26.05 Canceled/Forfeited (30,506 ) 25.52 Outstanding at July 31, 2019 954,676 $ 22.40 $ 28,411,000 Vested at July 31, 2019 321,702 $ 25.82 $ 9,574,000 Vested and expected to vest at July 31, 2019 914,082 $ 22.55 $ 27,203,000 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Operating segment information, along with a reconciliation of segment net income (loss) and consolidated net income to Adjusted EBITDA is presented in the tables below: Fiscal Year Ended July 31, 2019 Commercial Solutions Government Solutions Unallocated Total Net sales $ 357,293,000 314,504,000 — $ 671,797,000 Operating income (loss) $ 36,053,000 28,997,000 (23,643,000 ) $ 41,407,000 Net income (loss) $ 35,888,000 29,029,000 (39,876,000 ) $ 25,041,000 Provision for income taxes 19,000 — 3,850,000 3,869,000 Interest (income) and other 75,000 (41,000 ) 1,000 35,000 Write-off of deferred financing costs — — 3,217,000 3,217,000 Interest expense 71,000 9,000 9,165,000 9,245,000 Amortization of stock-based compensation — — 11,427,000 11,427,000 Amortization of intangibles 14,944,000 3,376,000 — 18,320,000 Depreciation 9,265,000 1,891,000 771,000 11,927,000 Estimated contract settlement costs 6,351,000 — — 6,351,000 Settlement of intellectual property litigation — — (3,204,000 ) (3,204,000 ) Acquisition plan expenses — — 5,871,000 5,871,000 Facility exit costs — 1,373,000 — 1,373,000 Adjusted EBITDA $ 66,613,000 35,637,000 (8,778,000 ) $ 93,472,000 Purchases of property, plant and equipment $ 6,293,000 1,902,000 590,000 $ 8,785,000 Long-lived assets acquired in connection with acquisitions $ 60,693,000 — — $ 60,693,000 Total assets at July 31, 2019 $ 662,580,000 186,438,000 38,693,000 $ 887,711,000 Fiscal Year Ended July 31, 2018 Commercial Solutions Government Solutions Unallocated Total Net sales $ 345,076,000 225,513,000 — $ 570,589,000 Operating income (loss) $ 40,837,000 10,950,000 (16,712,000 ) $ 35,075,000 Net income (loss) $ 40,297,000 10,835,000 (21,363,000 ) $ 29,769,000 Provision for (benefit from) income taxes 270,000 — (5,413,000 ) (5,143,000 ) Interest (income) and other 151,000 112,000 (9,000 ) 254,000 Interest expense 119,000 3,000 10,073,000 10,195,000 Amortization of stock-based compensation — — 8,569,000 8,569,000 Amortization of intangibles 17,699,000 3,376,000 — 21,075,000 Depreciation 9,479,000 3,088,000 1,088,000 13,655,000 Adjusted EBITDA $ 68,015,000 17,414,000 (7,055,000 ) $ 78,374,000 Purchases of property, plant and equipment $ 7,151,000 901,000 590,000 $ 8,642,000 Total assets at July 31, 2018 $ 610,166,000 195,924,000 39,067,000 $ 845,157,000 Fiscal Year Ended July 31, 2017 Commercial Solutions Government Solutions Unallocated Total Net sales $ 330,867,000 219,501,000 — $ 550,368,000 Operating income (loss) $ 33,234,000 9,393,000 (5,585,000 ) $ 37,042,000 Net income (loss) $ 32,871,000 9,421,000 (26,465,000 ) $ 15,827,000 Provision for income taxes 258,000 — 9,396,000 9,654,000 Interest (income) and other (108,000 ) (34,000 ) 74,000 (68,000 ) Interest expense 213,000 6,000 11,410,000 11,629,000 Amortization of stock-based compensation — — 8,506,000 8,506,000 Amortization of intangibles 17,698,000 5,125,000 — 22,823,000 Depreciation 9,938,000 2,938,000 1,478,000 14,354,000 Settlement of intellectual property litigation — — (12,020,000 ) (12,020,000 ) Adjusted EBITDA $ 60,870,000 17,456,000 (7,621,000 ) $ 70,705,000 Purchases of property, plant and equipment $ 7,007,000 1,046,000 97,000 $ 8,150,000 Total assets at July 31, 2017 $ 606,436,000 185,234,000 40,393,000 $ 832,063,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments, net of subleases | At July 31, 2019 , future minimum lease payments, net of subleases, under non-cancelable operating lease agreements are as follows: Fiscal Year: 2020 $ 11,812,000 2021 8,723,000 2022 7,343,000 2023 5,776,000 2024 3,430,000 Thereafter 7,130,000 Total $ 44,214,000 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill [Abstract] | |
Schedule of goodwill by segment | : Commercial Solutions Government Solutions Total Balance as of July 31, 2018 $ 231,440,000 59,193,000 $ 290,633,000 Addition resulting from Solacom acquisition 11,808,000 — 11,808,000 Addition resulting from the GD NG-911 acquisition 8,048,000 — 8,048,000 Balance as of July 31, 2019 $ 251,296,000 59,193,000 $ 310,489,000 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible assets with finite lives | Intangible assets with finite lives as of July 31, 2019 and 2018 are as follows: July 31, 2019 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 20.5 $ 276,834,000 66,484,000 $ 210,350,000 Technologies 12.7 92,649,000 59,522,000 33,127,000 Trademarks and other 16.7 31,026,000 12,613,000 18,413,000 Total $ 400,509,000 138,619,000 $ 261,890,000 July 31, 2018 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 21.0 $ 249,831,000 55,350,000 $ 194,481,000 Technologies 12.8 82,370,000 54,386,000 27,984,000 Trademarks and other 16.4 28,894,000 10,563,000 18,331,000 Total $ 361,095,000 120,299,000 $ 240,796,000 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated amortization expense consists of the following for the fiscal years ending July 31: 2020 $ 20,700,000 2021 19,563,000 2022 18,322,000 2023 18,322,000 2024 17,631,000 |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Unaudited Quarterly Financial Data | The following is a summary of unaudited quarterly operating results: Fiscal 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 160,844,000 164,133,000 170,448,000 176,372,000 $ 671,797,000 Gross profit 57,769,000 61,245,000 64,416,000 64,010,000 247,440,000 Net income 3,468,000 7,826,000 7,612,000 6,135,000 25,041,000 Diluted income per share 0.14 0.32 0.31 0.25 1.03 * Fiscal 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 121,569,000 133,731,000 147,854,000 167,435,000 $ 570,589,000 Gross profit 47,716,000 50,801,000 62,436,000 62,988,000 223,941,000 Net (loss) income (1,660,000 ) 15,761,000 8,210,000 7,458,000 29,769,000 Diluted (loss) income per share (0.07 ) 0.66 0.34 0.31 1.24 * Fiscal 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 135,786,000 139,028,000 127,792,000 147,762,000 $ 550,368,000 Gross profit 52,108,000 53,204,000 52,461,000 60,412,000 218,185,000 Net (loss) income (2,489,000 ) 6,585,000 4,417,000 7,314,000 15,827,000 Diluted (loss) income per share (0.11 ) 0.28 0.19 0.31 0.67 * * The per share information is computed independently for each quarter and the full year based on the respective weighted average number of common shares outstanding. Therefore, income per share information for the full fiscal year may not equal the total of the quarters within the year. |
Summary of Significant Accoun_4
Summary of Significant Accounting and Reporting Policies (Narrative) (Details) | Aug. 01, 2019 | Jul. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Jul. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Jan. 31, 2018USD ($) | Oct. 31, 2017USD ($) | Jul. 31, 2017USD ($) | Apr. 30, 2017USD ($) | Jan. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Jul. 31, 2019USD ($)operating_segment | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | Jul. 31, 2016USD ($) |
Accounting Policies [Abstract] | |||||||||||||||||
Number of reportable segments | operating_segment | 2 | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||
Net sales | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 167,435,000 | $ 147,854,000 | $ 133,731,000 | $ 121,569,000 | $ 147,762,000 | $ 127,792,000 | $ 139,028,000 | $ 135,786,000 | $ 671,797,000 | $ 570,589,000 | $ 550,368,000 | ||
Contract assets, increase from business combinations | 3,331,000 | ||||||||||||||||
Contract liabilities, increase from business combinations | 5,411,000 | ||||||||||||||||
Revenue recognized, included in contract liabilities in prior period | 33,139,000 | ||||||||||||||||
Cash and cash equivalents | $ 45,576,000 | $ 43,484,000 | $ 41,844,000 | 45,576,000 | 43,484,000 | 41,844,000 | $ 66,805,000 | ||||||||||
Research and development expenses reimbursed by customers | $ 14,679,000 | $ 16,924,000 | $ 27,050,000 | ||||||||||||||
Measurement of uncertain tax position, percentage that likelihood of tax benefit being realized upon ultimate settlement must be greater than | 50.00% | ||||||||||||||||
Non-current portion of capital lease obligations, blended interest rate | 7.00% | 7.00% | |||||||||||||||
Accounting Standards Update 2016-02 | |||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||
Right-of-use asset and lease liability, percentage of total assets | 4.00% | ||||||||||||||||
International | |||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||
Net sales | $ 170,607,000 | ||||||||||||||||
Customer Concentration Risk | Net sales | Verizon Communications Inc. | |||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||
Concentration risk, percentage | 10.00% | 10.00% | |||||||||||||||
Geographic Concentration Risk | Net sales | |||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | ||||||||||||||
Geographic Concentration Risk | Net sales | International | |||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||
Concentration risk, percentage | 25.40% | 25.60% | 28.40% | ||||||||||||||
Net sales | $ 170,607,000 | $ 145,784,000 | $ 156,483,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting and Reporting Policies (Adoption of New Accounting Pronouncements) (Details) - USD ($) | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accrued expenses and other current liabilities | $ 78,584,000 | $ 62,955,000 | $ 65,034,000 |
Contract liabilities, current and non-current | 44,220,000 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accrued expenses and other current liabilities | 65,034,000 | ||
Contract liabilities, current and non-current | $ 42,141,000 | ||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accrued expenses and other current liabilities | (2,079,000) | ||
Contract liabilities, current and non-current | $ 2,079,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting and Reporting Policies (Sales by Geography and Customer Type (Details) - Net sales | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% |
U.S. government | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 40.10% | 35.50% | 32.70% |
Domestic | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 34.50% | 38.90% | 38.90% |
Total United States | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 74.60% | 74.40% | 71.60% |
International | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 25.40% | 25.60% | 28.40% |
Verizon Communications Inc. | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting and Reporting Policies (Disaggregation of Revenue) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 167,435,000 | $ 147,854,000 | $ 133,731,000 | $ 121,569,000 | $ 147,762,000 | $ 127,792,000 | $ 139,028,000 | $ 135,786,000 | $ 671,797,000 | $ 570,589,000 | $ 550,368,000 |
Point in time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 353,157,000 | ||||||||||||||
Over time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 318,640,000 | ||||||||||||||
Firm fixed-price | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 582,250,000 | ||||||||||||||
Cost reimbursable | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 89,547,000 | ||||||||||||||
U.S. government | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 269,242,000 | ||||||||||||||
Domestic | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 231,948,000 | ||||||||||||||
Total United States | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 501,190,000 | ||||||||||||||
International | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 170,607,000 | ||||||||||||||
Commercial Solutions | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 357,293,000 | ||||||||||||||
Commercial Solutions | Point in time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 177,090,000 | ||||||||||||||
Commercial Solutions | Over time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 180,203,000 | ||||||||||||||
Commercial Solutions | Firm fixed-price | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 350,850,000 | ||||||||||||||
Commercial Solutions | Cost reimbursable | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 6,443,000 | ||||||||||||||
Commercial Solutions | U.S. government | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 68,534,000 | ||||||||||||||
Commercial Solutions | Domestic | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 192,516,000 | ||||||||||||||
Commercial Solutions | Total United States | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 261,050,000 | ||||||||||||||
Commercial Solutions | International | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 96,243,000 | ||||||||||||||
Government Solutions | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 314,504,000 | ||||||||||||||
Government Solutions | Point in time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 176,067,000 | ||||||||||||||
Government Solutions | Over time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 138,437,000 | ||||||||||||||
Government Solutions | Firm fixed-price | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 231,400,000 | ||||||||||||||
Government Solutions | Cost reimbursable | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 83,104,000 | ||||||||||||||
Government Solutions | U.S. government | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 200,708,000 | ||||||||||||||
Government Solutions | Domestic | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 39,432,000 | ||||||||||||||
Government Solutions | Total United States | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 240,140,000 | ||||||||||||||
Government Solutions | International | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | $ 74,364,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting and Reporting Policies (Remaining Performance Obligations) (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-08-01 | Jul. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, amount | $ 682,954,000 |
Remaining performance obligations, period | 12 months |
Summary of Significant Accoun_9
Summary of Significant Accounting and Reporting Policies (Long-Lived Assets) (Details) | 12 Months Ended |
Jul. 31, 2019 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 8 years |
Summary of Significant Accou_10
Summary of Significant Accounting and Reporting Policies (Earnings Per Share) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Accounting Policies [Abstract] | |||||||||||||||
Reduction in weighted average shares as a result of the repurchase of common shares (in shares) | 0 | 0 | 0 | ||||||||||||
Weighted average performance shares outstanding during the period that are excluded from EPS calculation | 243,000 | 258,000 | 228,000 | ||||||||||||
Numerator: | |||||||||||||||
Net income for basic calculation | $ 6,135,000 | $ 7,612,000 | $ 7,826,000 | $ 3,468,000 | $ 7,458,000 | $ 8,210,000 | $ 15,761,000 | $ (1,660,000) | $ 7,314,000 | $ 4,417,000 | $ 6,585,000 | $ (2,489,000) | $ 25,041,000 | $ 29,769,000 | $ 15,827,000 |
Numerator for diluted calculation | $ 25,041,000 | $ 29,769,000 | $ 15,827,000 | ||||||||||||
Denominator: | |||||||||||||||
Denominator for basic calculation (in shares) | 24,124,000 | 23,825,000 | 23,433,000 | ||||||||||||
Effect of dilutive securities: | |||||||||||||||
Stock-based awards (in shares) | 178,000 | 215,000 | 56,000 | ||||||||||||
Denominator for diluted calculation (in shares) | 24,302,000 | 24,040,000 | 23,489,000 | ||||||||||||
Stock-based Awards | |||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||
Antidilutive equity-classified stock-based awards not included in calculation of diluted earnings per share (in shares) | 1,347,000 | 1,739,000 | 1,986,000 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) | Aug. 01, 2019USD ($) | Jul. 31, 2019USD ($) | Apr. 29, 2019USD ($)employee | Feb. 28, 2019USD ($)$ / sharesshares | Jul. 31, 2019 |
Business Acquisition [Line Items] | |||||
Contract period to develop, implement and operate emergency communications system | 5 years | ||||
Solacom | |||||
Business Acquisition [Line Items] | |||||
Aggregate purchase price | $ 32,934,000 | $ 32,934,000 | |||
Aggregate purchase price - settled in cash | 27,328,000 | 27,328,000 | |||
Aggregate purchase price - settled with issuance of common stock | 5,606,000 | $ 5,606,000 | |||
Aggregate purchase price - settled with issuance of common stock (in shares) | shares | 208,669 | ||||
Weighted average stock price (in dollars per share) | $ / shares | $ 26.86 | ||||
Consideration transferred, net of cash acquired | $ 31,489,000 | ||||
Cash acquired from acquisition | $ 1,445,000 | ||||
GD NG-911 business | |||||
Business Acquisition [Line Items] | |||||
Aggregate purchase price | $ 10,000,000 | $ 10,000,000 | |||
Number of employees hired | employee | 60 | ||||
Amortization period of other liabilities | 5 years 3 months | ||||
Goodwill amount estimated to be tax deductible | $ 7,300,000 | ||||
Subsequent Event | GD NG-911 business | |||||
Business Acquisition [Line Items] | |||||
Proposed upward adjustment | $ 2,900,000 | ||||
Proposed reduction to the purchase price | $ 890,000 |
Acquisitions (Fair Value of Ass
Acquisitions (Fair Value of Assets Acquired and Liabilities Assumed) (Details) - USD ($) | Jul. 31, 2019 | Apr. 29, 2019 | Feb. 28, 2019 | Jul. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 310,489,000 | $ 310,489,000 | $ 310,489,000 | $ 290,633,000 | ||
Solacom | ||||||
Business Acquisition [Line Items] | ||||||
Settled in cash | 27,328,000 | $ 27,328,000 | ||||
Settled in common stock issued by Comtech | 5,606,000 | 5,606,000 | ||||
Aggregate purchase price at fair value | 32,934,000 | 32,934,000 | ||||
Cash and cash equivalents | 1,445,000 | 1,445,000 | 1,445,000 | 1,445,000 | ||
Current assets | 9,896,000 | 9,425,000 | 9,896,000 | 9,896,000 | ||
Property, plant and equipment | 777,000 | 777,000 | 777,000 | 777,000 | ||
Deferred tax assets, non-current | 5,059,000 | 5,374,000 | 5,059,000 | 5,059,000 | ||
Accrued warranty obligations | (1,431,000) | (1,431,000) | (1,431,000) | (1,431,000) | ||
Current liabilities | (4,477,000) | (4,477,000) | (4,477,000) | (4,477,000) | ||
Contract liabilities, non-current | (1,604,000) | (1,604,000) | (1,604,000) | (1,604,000) | ||
Net tangible assets at preliminary fair value | 9,665,000 | 9,509,000 | 9,665,000 | 9,665,000 | ||
Deferred tax liabilities | (4,153,000) | (4,153,000) | (4,153,000) | (4,153,000) | ||
Goodwill | 11,808,000 | 11,964,000 | 11,808,000 | 11,808,000 | ||
Allocation of aggregate purchase price | 32,934,000 | 32,934,000 | 32,934,000 | 32,934,000 | ||
Measurement Period Adjustments | ||||||
Current assets | 471,000 | |||||
Deferred tax assets, non-current | (315,000) | |||||
Net tangible assets at preliminary fair value | 156,000 | |||||
Goodwill | (156,000) | |||||
Solacom | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | 6,779,000 | $ 6,779,000 | 6,779,000 | 6,779,000 | ||
Measurement Period Adjustments | ||||||
Estimated Useful Lives | 10 years | |||||
Solacom | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | 7,007,000 | $ 7,007,000 | 7,007,000 | 7,007,000 | ||
Measurement Period Adjustments | ||||||
Estimated Useful Lives | 20 years | |||||
Solacom | Trade name | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | 1,828,000 | $ 1,828,000 | 1,828,000 | 1,828,000 | ||
Measurement Period Adjustments | ||||||
Estimated Useful Lives | 20 years | |||||
GD NG-911 business | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate purchase price at fair value | 10,000,000 | $ 10,000,000 | ||||
Current assets | 4,460,000 | 5,790,000 | 4,460,000 | 4,460,000 | ||
Property, plant and equipment | 646,000 | 646,000 | 646,000 | 646,000 | ||
Deferred tax assets, non-current | 3,426,000 | 3,292,000 | 3,426,000 | 3,426,000 | ||
Accrued warranty obligations | (5,000,000) | (5,000,000) | (5,000,000) | (5,000,000) | ||
Current liabilities | (3,162,000) | (3,960,000) | (3,162,000) | (3,162,000) | ||
Net tangible assets at preliminary fair value | 370,000 | 768,000 | 370,000 | 370,000 | ||
Other liabilities | (21,700,000) | (21,700,000) | (21,700,000) | (21,700,000) | ||
Deferred tax liabilities | (518,000) | (518,000) | (518,000) | (518,000) | ||
Goodwill | 8,048,000 | 7,650,000 | 8,048,000 | 8,048,000 | ||
Allocation of aggregate purchase price | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||
Measurement Period Adjustments | ||||||
Current assets | (1,330,000) | |||||
Deferred tax assets, non-current | 134,000 | |||||
Current liabilities | 798,000 | |||||
Net tangible assets at preliminary fair value | (398,000) | |||||
Goodwill | 398,000 | |||||
GD NG-911 business | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | 3,500,000 | $ 3,500,000 | 3,500,000 | 3,500,000 | ||
Measurement Period Adjustments | ||||||
Estimated Useful Lives | 15 years | |||||
GD NG-911 business | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 20,300,000 | $ 20,300,000 | $ 20,300,000 | $ 20,300,000 | ||
Measurement Period Adjustments | ||||||
Estimated Useful Lives | 10 years |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Statement [Line Items] | ||
Total accounts receivable | $ 146,899,000 | $ 149,200,000 |
Less: Allowance for doubtful accounts | 1,867,000 | 1,761,000 |
Accounts receivable, net | $ 145,032,000 | $ 147,439,000 |
Accounts Receivable | Customer Concentration Risk | U.S. government | ||
Statement [Line Items] | ||
Concentration risk, percentage | 27.80% | 30.90% |
Accounts Receivable | Customer Concentration Risk | Verizon Communications Inc. | ||
Statement [Line Items] | ||
Concentration risk, percentage | 10.10% | |
Billed Receivables | Commercial and International Customers | ||
Statement [Line Items] | ||
Total accounts receivable | $ 85,556,000 | $ 83,411,000 |
Billed Receivables | U.S. Government and Its Agencies | ||
Statement [Line Items] | ||
Total accounts receivable | 38,856,000 | 26,251,000 |
Unbilled Receivables | Commercial and International Customers | ||
Statement [Line Items] | ||
Total accounts receivable | 20,469,000 | 19,731,000 |
Unbilled Receivables | U.S. Government and Its Agencies | ||
Statement [Line Items] | ||
Total accounts receivable | $ 2,018,000 | $ 19,807,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and components | $ 53,959,000 | $ 53,649,000 |
Work-in-process and finished goods | 40,576,000 | 38,854,000 |
Total inventories | 94,535,000 | 92,503,000 |
Less reserve for excess and obsolete inventories | 19,696,000 | 17,427,000 |
Inventories, net | 74,839,000 | 75,076,000 |
Inventory directly related to long-term contracts | 4,053,000 | 1,249,000 |
Inventory related to contracts from third party commercial customers who outsource their manufacturing to us | $ 1,513,000 | $ 1,310,000 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 174,147,000 | $ 168,363,000 | |
Less accumulated depreciation and amortization | 146,121,000 | 139,376,000 | |
Property, plant and equipment, net | 28,026,000 | 28,987,000 | |
Depreciation and amortization | 11,927,000 | 13,655,000 | $ 14,354,000 |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 159,882,000 | 154,556,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 14,265,000 | $ 13,807,000 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Jul. 31, 2019 | Aug. 01, 2018 | Jul. 31, 2018 | Jul. 31, 2017 |
Accrued Liabilities, Current [Abstract] | ||||
Accrued wages and benefits | $ 23,295,000 | $ 23,936,000 | ||
Accrued contract costs | 15,007,000 | 10,016,000 | ||
Accrued warranty obligations | 15,968,000 | 11,738,000 | $ 17,617,000 | |
Accrued legal costs | 2,835,000 | 6,179,000 | ||
Accrued commissions and royalties | 5,114,000 | 4,654,000 | ||
Other | 16,365,000 | 8,511,000 | ||
Accrued expenses and other current liabilities | $ 78,584,000 | $ 62,955,000 | $ 65,034,000 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Product Warranty Rollforward) (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Changes in Product Warranty Liability | ||
Balance at beginning of year | $ 11,738,000 | $ 17,617,000 |
Provision for warranty obligations | 3,902,000 | 5,055,000 |
Additions (in connection with acquisitions) | 6,431,000 | |
Charges incurred | (6,151,000) | (8,244,000) |
Warranty settlement and reclass | 1,727,000 | (2,690,000) |
Balance at end of year | $ 15,968,000 | $ 11,738,000 |
Accrued Expenses and Other Cu_5
Accrued Expenses and Other Current Liabilities (Narrative) (Details) | 12 Months Ended | |||
Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($)credit | Jul. 31, 2017USD ($) | Aug. 01, 2018USD ($) | |
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Accrued expenses and other current liabilities | $ 78,584,000 | $ 65,034,000 | $ 62,955,000 | |
Contract liabilities, current and non-current | 44,220,000 | |||
Accrued warranty obligations | 15,968,000 | 11,738,000 | $ 17,617,000 | |
Other | 16,365,000 | 8,511,000 | ||
Contract liabilities | 38,682,000 | 34,452,000 | ||
Accrued employee tax withholdings | 1,787,000 | 2,963,000 | ||
Accrued contract costs | 15,007,000 | 10,016,000 | ||
Settlement of intellectual property litigation | $ 3,204,000 | $ 0 | $ 12,020,000 | |
Minimum coverage period of product warranty from the date of shipment | 1 year | |||
Number of monthly credits issued | credit | 36 | |||
Amount of monthly credit | $ 153,000 | |||
TeleCommunication Systems, Inc. | Pre-Acquisition Contingencies Related To TCS Intellectual Property | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Accrued contract costs | 3,372,000 | |||
TeleCommunication Systems, Inc. | TCS's 911 call handling software | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Accrued warranty obligations | $ 3,999,000 | $ 4,650,000 | ||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Accrued expenses and other current liabilities | (2,079,000) | |||
Contract liabilities, current and non-current | 2,079,000 | |||
Accrued warranty obligations | (1,679,000) | |||
Other | (400,000) | |||
Warranty obligations | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Contract liabilities | 1,679,000 | |||
Other obligations | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Contract liabilities | $ 400,000 | |||
Other Current Liabilities | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Remaining estimated facility exit costs | 568,000 | |||
Full and Final Warranty Settlement With AT&T | TeleCommunication Systems, Inc. | TCS's 911 call handling software | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Present value of monthly credits | 2,029,000 | |||
Full and Final Warranty Settlement With AT&T | Accounts Payable and Accrued Liabilities | TeleCommunication Systems, Inc. | TCS's 911 call handling software | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Present value of monthly credits | 1,727,000 | |||
Full and Final Warranty Settlement With AT&T | Other Noncurrent Liabilities | TeleCommunication Systems, Inc. | TCS's 911 call handling software | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Present value of monthly credits | 302,000 | |||
Cost of sales | Full and Final Warranty Settlement With AT&T | TeleCommunication Systems, Inc. | TCS's 911 call handling software | ||||
Accrued Expenses And Other Current Liabilities [Line Items] | ||||
Benefit in connection with favorable settlement | $ 660,000 |
Cost Reduction Actions (Details
Cost Reduction Actions (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Facility exit costs | $ 1,373,000 | ||
Cash payments | 805,000 | ||
Estimated contract settlement costs | 6,351,000 | $ 0 | $ 0 |
Other Current Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Remaining estimated facility exit costs | $ 568,000 |
Credit Facility (Narrative) (De
Credit Facility (Narrative) (Details) | Jul. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | Feb. 23, 2016USD ($) |
Line of Credit Facility [Line Items] | |||||||
Write-off of deferred financing costs | $ 3,217,000 | $ 0 | $ 0 | ||||
Prior Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Write-off of deferred financing costs | $ 3,217,000 | 3,217,000 | |||||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 | ||||||
Outstanding balance | 165,298,000 | ||||||
Prior Credit Facility | Revolving Loan Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Outstanding balance | 48,604,000 | ||||||
Prior Credit Facility | Letter of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 25,000,000 | ||||||
Prior Credit Facility | Term Loan Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 250,000,000 | ||||||
Less unamortized deferred financing costs related to Term Loan Facility | 3,427,000 | ||||||
Outstanding balance | 116,694,000 | ||||||
Prior Credit Facility | Secured Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | ||||||
Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Capitalized deferred financing costs | 1,813,000 | ||||||
Accordion feature | $ 250,000,000 | $ 250,000,000 | 250,000,000 | ||||
Triggering event debt issuance amount | 5,000,000 | 5,000,000 | $ 5,000,000 | ||||
Triggering event period | 91 days | ||||||
Credit facility amount outstanding | 165,000,000 | 165,000,000 | $ 165,000,000 | ||||
Outstanding standby letters of credit at period end | 2,686,000 | 2,686,000 | 2,686,000 | ||||
Outstanding balance during period, minimum | 150,000,000 | ||||||
Outstanding balance during period, maximum | 184,000,000 | ||||||
Less unamortized deferred financing costs related to Term Loan Facility | $ 3,128,000 | $ 3,128,000 | 3,128,000 | ||||
Interest expense related to credit facility | $ 8,859,000 | $ 9,614,000 | $ 11,106,000 | ||||
Weighted average interest rate | 5.25% | 5.25% | 5.25% | 5.40% | 4.90% | ||
Maximum Secured Leverage Ratio | 3.75 | ||||||
Maximum Total Leverage Ratio | 4.50 | ||||||
Minimum Interest Expense Coverage Ratio | 3.25 | ||||||
Actual Secured Leverage Ratio | 1.74 | ||||||
Actual Interest Expense Coverage Ratio | 12.05 | ||||||
Interest rate increase (decrease) | (0.25%) | ||||||
Credit Facility | Revolving Loan Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Credit Facility | Letter of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 35,000,000 | 35,000,000 | 35,000,000 | ||||
Credit Facility | Swingline Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 25,000,000 | 25,000,000 | 25,000,000 | ||||
Credit Facility | Secured Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 550,000,000 | $ 550,000,000 | $ 550,000,000 | ||||
Federal Funds Effective Swap Rate | Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Adjusted LIBO Rate | Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.00% | ||||||
Minimum | Prior Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Outstanding balance | 34,904,000 | ||||||
Maximum | Prior Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Outstanding balance | $ 63,804,000 |
Credit Facility (Details)
Credit Facility (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Less current portion of long-term debt | $ 0 | $ 17,211,000 |
Non-current portion of long-term debt | $ 165,000,000 | 148,087,000 |
Prior Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Amount outstanding under Secured Credit Facility, net | 165,298,000 | |
Less current portion of long-term debt | 17,211,000 | |
Non-current portion of long-term debt | 148,087,000 | |
Prior Credit Facility | Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Term Loan Facility | 120,121,000 | |
Less unamortized deferred financing costs related to Term Loan Facility | 3,427,000 | |
Amount outstanding under Secured Credit Facility, net | 116,694,000 | |
Prior Credit Facility | Revolving Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Amount outstanding under Secured Credit Facility, net | $ 48,604,000 |
Capital Lease and Other Oblig_3
Capital Lease and Other Obligations (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Leases [Abstract] | ||
Net book value of the leased assets | $ 864,000 | $ 2,547,000 |
Blended interest rate | 7.00% | |
Capital lease assets, amount of buyout option per unit | $ 1 | |
Fiscal 2020 | 789,000 | |
Total minimum lease payments | 789,000 | |
Less: amounts representing interest | 32,000 | |
Present value of net minimum lease payments | 757,000 | |
Current portion of capital lease and other obligations | 757,000 | 1,836,000 |
Non-current portion of capital lease and other obligations | $ 0 | $ 765,000 |
Income Taxes (Income Before Pro
Income Taxes (Income Before Provision for Income Taxes) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 28,813,000 | $ 22,243,000 | $ 23,732,000 |
Foreign | 97,000 | 2,383,000 | 1,749,000 |
Income before provision for (benefit from) income taxes | $ 28,910,000 | $ 24,626,000 | $ 25,481,000 |
Income Taxes (Provision for Inc
Income Taxes (Provision for Income Taxes) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal - current | $ (2,190,000) | $ 367,000 | $ (441,000) |
Federal - deferred | 4,782,000 | (7,499,000) | 8,399,000 |
State and local - current | 1,715,000 | 440,000 | 608,000 |
State and local - deferred | (321,000) | 1,115,000 | 659,000 |
Foreign - current | 62,000 | 429,000 | 413,000 |
Foreign - deferred | (179,000) | 5,000 | 16,000 |
Provision for (benefit from) income taxes | $ 3,869,000 | $ (5,143,000) | $ 9,654,000 |
Income Taxes (Provision for I_2
Income Taxes (Provision for Income Taxes Differed from Amounts Computed by the U.S. Federal Income Tax Rate) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Amount | |||
Computed expected tax expense | $ 6,071,000 | $ 6,615,000 | $ 8,919,000 |
State and local income taxes, net of federal benefit | 967,000 | 1,193,000 | 1,257,000 |
Stock-based compensation | (44,000) | (1,112,000) | 78,000 |
Research and experimentation credits | (1,129,000) | (678,000) | (919,000) |
Nondeductible transaction costs | 394,000 | 0 | 0 |
Nondeductible executive compensation | 330,000 | (22,000) | 88,000 |
Audit settlements | $ (2,081,000) | $ 0 | $ 0 |
Audit settlements | (7.20%) | 0.00% | 0.00% |
Tax Reform remeasurement of deferred taxes | $ 0 | $ (11,317,000) | $ 0 |
Foreign income taxes | 5,000 | (221,000) | (151,000) |
Other, net | (12,000) | 399,000 | 382,000 |
Provision for (benefit from) income taxes | $ 3,869,000 | $ (5,143,000) | $ 9,654,000 |
Rate | |||
Computed expected tax expense | 21.00% | 27.00% | 35.00% |
State and local income taxes, net of federal benefit | 3.30% | 4.80% | 4.90% |
Stock-based compensation | (0.10%) | (4.50%) | 0.30% |
Research and experimentation credits | (3.90%) | (2.80%) | (3.60%) |
Foreign-derived intangible income deduction | $ (632,000) | $ 0 | $ 0 |
Foreign-derived intangible income deduction | (2.20%) | (0.00%) | (0.00%) |
Nondeductible transaction costs | 1.40% | 0.00% | 0.00% |
Nondeductible executive compensation | 1.10% | (0.10%) | 0.30% |
Tax Reform remeasurement of deferred taxes | 0.00% | (46.00%) | 0.00% |
Foreign income taxes | 0.00% | (0.90%) | (0.60%) |
Other, net | 0.00% | 1.50% | 1.60% |
Provision for (benefit from) income taxes | 13.40% | (21.00%) | 37.90% |
Income Taxes (Tax Effects of Te
Income Taxes (Tax Effects of Temporary Differences) (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Deferred tax assets: | ||
Inventory and warranty reserves | $ 7,318,000 | $ 5,089,000 |
Compensation and commissions | 3,548,000 | 3,511,000 |
Contract liabilities | 5,331,000 | 0 |
Federal, state and foreign research and experimentation credits | 18,183,000 | 18,816,000 |
Federal alternative minimum tax credit | 1,800,000 | 3,243,000 |
Stock-based compensation | 5,817,000 | 5,092,000 |
Acquisition-related contingent liabilities | 1,250,000 | 2,477,000 |
Federal, state and foreign net operating losses | 6,248,000 | 7,349,000 |
Other | 7,651,000 | 4,672,000 |
Less: valuation allowance | (12,568,000) | (11,854,000) |
Total deferred tax assets | 44,578,000 | 38,395,000 |
Deferred tax liabilities: | ||
Plant and equipment | (1,362,000) | (1,155,000) |
Intangibles | (54,612,000) | (48,167,000) |
Total deferred tax liabilities | (55,974,000) | (49,322,000) |
Net deferred tax liabilities | $ (11,396,000) | $ (10,927,000) |
Income Taxes (Summary of Unreco
Income Taxes (Summary of Unrecognized Tax Benefits) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Activity Related to Unrecognized Tax Benefits [Roll Forward] | |||
Balance at beginning of period | $ 9,137,000 | $ 8,586,000 | $ 9,108,000 |
Increase related to current period | 893,000 | 645,000 | 587,000 |
Increase related to prior periods | 17,000 | 49,000 | 86,000 |
Expiration of statute of limitations | (394,000) | (81,000) | (404,000) |
Decrease related to prior periods | (2,450,000) | (62,000) | (791,000) |
Balance at end of period | $ 7,203,000 | $ 9,137,000 | $ 8,586,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Net discrete tax benefit from Tax Reform | $ 11,792,000 | ||
Enacted federal statutory income tax rate | 21.00% | 27.00% | 35.00% |
Net deferred tax liabilities | $ 11,396,000 | $ 10,927,000 | |
Net deferred tax assets | 1,085,000 | ||
Federal alternative minimum tax credit | 1,800,000 | 3,243,000 | |
Federal, state and foreign research and experimentation credits | 18,183,000 | 18,816,000 | |
Minimum taxable income in the future to fully utilize net deferred tax assets | 197,600,000 | ||
Unrecognized tax benefits, including interest | 7,215,000 | 9,339,000 | |
Interest accrued relating to income taxes | 12,000 | 202,000 | |
Unrecognized tax benefits that would positively impact our effective tax rate, if recognized | 6,670,000 | 8,563,000 | |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Federal alternative minimum tax credit | 1,800,000 | ||
Federal, state and foreign research and experimentation credits | 8,725,000 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Federal, state and foreign research and experimentation credits | 7,032,000 | ||
State and local operating loss carryforwards | 3,808,000 | ||
Operating loss carryforwards, valuation allowance | 3,746,000 | ||
Valuation allowance | 6,820,000 | ||
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Federal, state and foreign research and experimentation credits | 2,426,000 | ||
Operating loss carryforwards, valuation allowance | 656,000 | ||
Foreign operating loss carryforwards | 2,440,000 | ||
Valuation allowance | 539,000 | ||
Non-current income taxes payable | |||
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits, including interest | 325,000 | 2,572,000 | |
Non-current deferred tax assets | |||
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits, including interest | $ 6,890,000 | $ 6,767,000 |
Stock-Based Compensation (Overv
Stock-Based Compensation (Overview) (Details) - shares | 12 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Stock options | ||||
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of stock-based awards outstanding at period end (in shares) | 1,555,555 | 1,668,975 | 1,855,875 | 2,256,679 |
2000 Stock Incentive Plan | ||||
2000 Stock Incentive Plan | ||||
Aggregate maximum number of shares of common stock which may be issued under stock option plan (in shares) | 10,362,500 | |||
Aggregate net number of stock-based awards granted (in shares) | 8,546,187 | |||
Aggregate number of stock based awards expired and canceled (in shares) | 3,989,425 | |||
Aggregate number of stock-based awards exercised (in shares) | 6,035,956 | |||
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of total stock-based awards outstanding (in shares) | 2,510,231 | |||
2000 Stock Incentive Plan | Stock options | ||||
2000 Stock Incentive Plan | ||||
Maximum term for grants of incentive and non-qualified stock-based awards, excluding incentive stock-based awards granted to stockholders who own more than 10% of the voting power | 10 years | |||
Percentage of a stockholder's voting power that limits the contractual term of an incentive stock-based award | 10.00% | |||
Maximum term for incentive stock-based awards granted to stockholders who own more than 10% of the voting power | 5 years | |||
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of stock-based awards outstanding at period end (in shares) | 1,555,555 | |||
2000 Stock Incentive Plan | Performance Shares | ||||
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of stock-based awards outstanding at period end (in shares) | 261,336 | |||
2000 Stock Incentive Plan | RSUs and restricted stock | ||||
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of stock-based awards outstanding at period end (in shares) | 432,550 | |||
2000 Stock Incentive Plan | Share units | ||||
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of stock-based awards outstanding at period end (in shares) | 260,790 | |||
2001 Employee Stock Purchase Plan | Employee Stock Purchase Plan - ESPP | ||||
2001 Employee Stock Purchase Plan | ||||
Total number of common shares reserved for issuance under employee stock purchase plan (in shares) | 1,050,000 | |||
Discount rate from market value, on purchase date, offered to employees participating in the Employee Stock Purchase Plan (ESPP) | 85.00% | |||
Total number of shares of common stock issued to employees under employee stock purchase plan and through the end of the reporting period (in shares) | 787,051 |
(Stock-Based Compensation Expen
(Stock-Based Compensation Expenses) (Details) - USD ($) | 12 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 11,427,000 | $ 8,569,000 | $ 8,506,000 | |
Estimated Income tax benefit | (2,553,000) | (2,005,000) | (3,065,000) | |
Net stock-based compensation expense | 8,874,000 | 6,564,000 | 5,441,000 | |
Total remaining unrecognized compensation cost related to the unvested stock-based awards | 7,714,000 | |||
Estimated forfeitures related to unvested stock-based awards | $ 869,000 | |||
Weighted average number of years net compensation cost is expected to be recognized over | 2 years 9 months 18 days | |||
Stock-based compensation capitalized and included in ending inventory | 48,000 | |||
Stock options | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 739,000 | $ 1,089,000 | $ 1,400,000 | |
Number of stock-based awards outstanding at period end (in shares) | 1,555,555 | 1,668,975 | 1,855,875 | 2,256,679 |
Performance Shares | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 1,554,000 | $ 1,013,000 | $ 1,607,000 | |
RSUs and restricted stock | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | 2,149,000 | 1,458,000 | 829,000 | |
Employee Stock Purchase Plan | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 215,000 | 205,000 | 162,000 | |
Discount offered to employees participating in the ESPP as a percentage of market price | 15.00% | |||
Share units | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 6,770,000 | 4,804,000 | 4,508,000 | |
Recoupment of share units | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ (130,000) | $ (62,000) | ||
2000 Stock Incentive Plan | Stock options | ||||
Stock-based Compensation Expenses | ||||
Number of stock-based awards outstanding at period end (in shares) | 1,555,555 | |||
2000 Stock Incentive Plan | Stock appreciation rights (SARs) | ||||
Stock-based Compensation Expenses | ||||
Number of stock-based awards outstanding at period end (in shares) | 0 | 0 | ||
Cost of sales | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 1,047,000 | $ 758,000 | 760,000 | |
Selling, general and administrative expenses | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | 9,336,000 | 6,866,000 | 7,071,000 | |
Research and development expenses | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 1,044,000 | $ 945,000 | $ 675,000 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Additional Disclosures | |||
Common stock issued for net settlement of stock-based awards (in shares) | 9,345 | 8,706 | |
Stock options | |||
Awards (In Shares) | |||
Outstanding, Beginning Balance (in shares) | 1,668,975 | 1,855,875 | 2,256,679 |
Expired/canceled (in shares) | (32,490) | (72,190) | (400,804) |
Exercised (in shares) | (80,930) | (114,710) | 0 |
Outstanding, Ending Balance (in shares) | 1,555,555 | 1,668,975 | 1,855,875 |
Exercisable, Ending Balance (in shares) | 1,389,895 | ||
Vested and Expected to Vest, Ending Balance (in shares) | 1,538,930 | ||
Weighted Average Exercise Price (Per Share) | |||
Outstanding, Beginning Balance (in dollars per share) | $ 28.72 | $ 28.60 | $ 28.87 |
Expired/canceled (in dollars per share) | 30.11 | 27.58 | 30.15 |
Exercised (in dollars per share) | 28.18 | 27.44 | |
Outstanding, Ending Balance (in dollars per share) | 28.72 | $ 28.72 | $ 28.60 |
Exercisable, Ending Balance (in dollars per share) | 28.73 | ||
Vested and Expected to Vest, Ending Balance (in dollars per share) | $ 28.75 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Outstanding, Ending Balance | 3 years 6 months 14 days | ||
Exercisable, Ending Balance | 3 years 3 months 4 days | ||
Vested And Expected To Vest, Ending Balance | 3 years 6 months 4 days | ||
Aggregated Intrinsic Value | |||
Outstanding, Ending Balance | $ 2,512,000 | ||
Exercisable, Ending Balance | 2,186,000 | ||
Vested and Expected to Vest, Ending Balance | $ 2,460,000 | ||
Additional Disclosures | |||
Exercise price, lower range limit (in dollars per share) | $ 20.90 | ||
Exercise price, upper range limit (in dollars per share) | $ 33.94 | ||
Total intrinsic value relating to stock-based awards exercised during the period | $ 576,000 | $ 469,000 | |
Vested stock-based awards net settled upon exercise (in shares) | 72,830 | 101,610 | |
Stock options | Stock-based Awards with Five Year Contractual Term | |||
Additional Disclosures | |||
Contractual term (in years) | 5 years | ||
Vesting period (in years) | 3 years | ||
Stock options | Stock-based Awards with Ten Year Contractual Term | |||
Additional Disclosures | |||
Contractual term (in years) | 10 years | ||
Vesting period (in years) | 5 years |
Stock-Based Compensation (Perfo
Stock-Based Compensation (Performance Shares, RSUs, Restricted Stock and Share Unit Awards) (Details) | Jul. 31, 2017$ / sharesshares | Jul. 31, 2019USD ($)$ / sharesshares | Jul. 31, 2018USD ($)$ / sharesshares | Jul. 31, 2017USD ($)$ / sharesshares |
Dividend Equivalents [Abstract] | ||||
Accrued during the period | $ | $ 327,000 | $ 300,000 | $ 273,000 | |
Carrying value at period end | $ | 352,629,000 | 339,473,000 | ||
Income tax benefit from settlement of stock-based awards | $ | $ 479,000 | $ 1,193,000 | ||
Net reduction to additional paid in capital from income tax shortfalls | $ | $ 670,000 | |||
Performance Shares, RSUs, Restricted Stock and Share Units | ||||
Awards (In Shares) | ||||
Outstanding, Beginning Balance (in shares) | shares | 818,438 | 830,197 | 217,213 | |
Granted (in shares) | shares | 442,363 | 473,005 | 705,241 | |
Settled (in shares) | shares | (275,619) | (354,822) | (61,462) | |
Forfeited (in shares) | shares | (30,506) | (129,942) | (30,795) | |
Outstanding, Ending Balance (in shares) | shares | 830,197 | 954,676 | 818,438 | 830,197 |
Vested, Ending Balance (in shares) | shares | 321,702 | |||
Vested and Expected to Vest, Ending Balance (in shares) | shares | 914,082 | |||
Weighted Average Grant Date Fair Value | ||||
Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 19.78 | $ 16.95 | $ 28.32 | |
Granted (in dollars per share) | $ / shares | 29.76 | 22.45 | 14.31 | |
Settled (in dollars per share) | $ / shares | 26.05 | 17.66 | 26.63 | |
Forfeited (in dollars per share) | $ / shares | 25.52 | 17.26 | 17.13 | |
Outstanding, Ending Balance (in dollars per share) | $ / shares | $ 16.95 | 22.40 | $ 19.78 | $ 16.95 |
Vested, Ending Balance (in dollars per share) | $ / shares | 25.82 | |||
Vested and Expected to Vest, Ending Balance (in dollars per share) | $ / shares | $ 22.55 | |||
Aggregate Intrinsic Value | ||||
Outstanding, Ending Balance | $ | $ 28,411,000 | |||
Vested, Ending Balance | $ | 9,574,000 | |||
Vested and Expected to Vest, Ending Balance | $ | 27,203,000 | |||
Additional Disclosures | ||||
Total intrinsic value relating to fully vested stock-based awards converted during the period | $ | $ 8,772,000 | $ 10,473,000 | $ 1,039,000 | |
Performance Shares | Employees | Granted since fiscal 2014 | ||||
Additional Disclosures | ||||
Performance period (in years) | 3 years | |||
RSUs and restricted stock | Employees | ||||
Additional Disclosures | ||||
Vesting period (in years) | 5 years | |||
Common stock, conversion ratio (in shares) | 1 | |||
RSUs and restricted stock | Non-Employee Director | ||||
Additional Disclosures | ||||
Vesting period (in years) | 3 years | |||
Common stock, conversion ratio (in shares) | 1 | |||
Share units | ||||
Awards (In Shares) | ||||
Granted (in shares) | shares | 257,608 | |||
Additional Disclosures | ||||
Common stock, conversion ratio (in shares) | 1 | |||
Conversion period of vested share units | 1 year | |||
Granted units converted into common stock (in shares) | shares | 146,410 | |||
Number of shares issued as result of conversion | shares | 90,928 | |||
Number of units settled to date (in shares) | shares | 421,966 | |||
Dividend Equivalents | ||||
Dividend Equivalents [Abstract] | ||||
Accrued during the period | $ | $ 327,000 | $ 300,000 | 273,000 | |
Paid during the period | $ | 263,000 | 141,000 | $ 176,000 | |
Carrying value at period end | $ | $ 777,000 | $ 713,000 |
Stock-Based Compensation Subseq
Stock-Based Compensation Subsequent Events (Details) | Sep. 24, 2019USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Total unrecognized stock-based compensation, net of estimated forfeitures and assuming achievement of the pre-established performance goal at a target level, related to stock-based awards authorized for issuance. | $ 5,632,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 167,435,000 | $ 147,854,000 | $ 133,731,000 | $ 121,569,000 | $ 147,762,000 | $ 127,792,000 | $ 139,028,000 | $ 135,786,000 | $ 671,797,000 | $ 570,589,000 | $ 550,368,000 |
Operating income (loss) | 41,407,000 | 35,075,000 | 37,042,000 | ||||||||||||
Net income (loss) | 6,135,000 | $ 7,612,000 | $ 7,826,000 | 3,468,000 | 7,458,000 | $ 8,210,000 | $ 15,761,000 | $ (1,660,000) | 7,314,000 | $ 4,417,000 | $ 6,585,000 | $ (2,489,000) | 25,041,000 | 29,769,000 | 15,827,000 |
Provision for income taxes | 3,869,000 | (5,143,000) | 9,654,000 | ||||||||||||
Interest (income) and other | 35,000 | 254,000 | (68,000) | ||||||||||||
Write-off of deferred financing costs | 3,217,000 | 0 | 0 | ||||||||||||
Interest expense | 9,245,000 | 10,195,000 | 11,629,000 | ||||||||||||
Amortization of stock-based compensation | 11,427,000 | 8,569,000 | 8,506,000 | ||||||||||||
Amortization of intangibles | 18,320,000 | 21,075,000 | 22,823,000 | ||||||||||||
Depreciation and amortization of property, plant and equipment | 11,927,000 | 13,655,000 | 14,354,000 | ||||||||||||
Estimated contract settlement costs | 6,351,000 | 0 | 0 | ||||||||||||
Settlement of intellectual property litigation | (3,204,000) | 0 | (12,020,000) | ||||||||||||
Facility exit costs | 1,373,000 | ||||||||||||||
Adjusted EBITDA | 93,472,000 | 78,374,000 | 70,705,000 | ||||||||||||
Purchases of property, plant and equipment | 8,785,000 | 8,642,000 | 8,150,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 60,693,000 | ||||||||||||||
Total assets | 887,711,000 | 845,157,000 | 832,063,000 | 887,711,000 | 845,157,000 | 832,063,000 | |||||||||
Acquisition plan expenses | 5,871,000 | 0 | 0 | ||||||||||||
Prior Credit Facility | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Write-off of deferred financing costs | $ 3,217,000 | 3,217,000 | |||||||||||||
Unallocated | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 0 | 0 | 0 | ||||||||||||
Operating income (loss) | (23,643,000) | (16,712,000) | (5,585,000) | ||||||||||||
Net income (loss) | (39,876,000) | (21,363,000) | (26,465,000) | ||||||||||||
Provision for income taxes | 3,850,000 | (5,413,000) | 9,396,000 | ||||||||||||
Interest (income) and other | 1,000 | (9,000) | 74,000 | ||||||||||||
Write-off of deferred financing costs | 3,217,000 | ||||||||||||||
Interest expense | 9,165,000 | 10,073,000 | 11,410,000 | ||||||||||||
Amortization of stock-based compensation | 11,427,000 | 8,569,000 | 8,506,000 | ||||||||||||
Amortization of intangibles | 0 | 0 | 0 | ||||||||||||
Depreciation and amortization of property, plant and equipment | 771,000 | 1,088,000 | 1,478,000 | ||||||||||||
Estimated contract settlement costs | 0 | ||||||||||||||
Settlement of intellectual property litigation | (3,204,000) | (12,020,000) | |||||||||||||
Facility exit costs | 0 | ||||||||||||||
Adjusted EBITDA | (8,778,000) | (7,055,000) | (7,621,000) | ||||||||||||
Purchases of property, plant and equipment | 590,000 | 590,000 | 97,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 0 | ||||||||||||||
Total assets | 38,693,000 | 39,067,000 | 40,393,000 | 38,693,000 | 39,067,000 | 40,393,000 | |||||||||
Acquisition plan expenses | 5,871,000 | ||||||||||||||
Commercial Solutions | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 357,293,000 | ||||||||||||||
Commercial Solutions | Operating Segments | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 357,293,000 | 345,076,000 | 330,867,000 | ||||||||||||
Operating income (loss) | 36,053,000 | 40,837,000 | 33,234,000 | ||||||||||||
Net income (loss) | 35,888,000 | 40,297,000 | 32,871,000 | ||||||||||||
Provision for income taxes | 19,000 | 270,000 | 258,000 | ||||||||||||
Interest (income) and other | 75,000 | 151,000 | (108,000) | ||||||||||||
Write-off of deferred financing costs | 0 | ||||||||||||||
Interest expense | 71,000 | 119,000 | 213,000 | ||||||||||||
Amortization of stock-based compensation | 0 | 0 | 0 | ||||||||||||
Amortization of intangibles | 14,944,000 | 17,699,000 | 17,698,000 | ||||||||||||
Depreciation and amortization of property, plant and equipment | 9,265,000 | 9,479,000 | 9,938,000 | ||||||||||||
Estimated contract settlement costs | 6,351,000 | ||||||||||||||
Settlement of intellectual property litigation | 0 | 0 | |||||||||||||
Facility exit costs | 0 | ||||||||||||||
Adjusted EBITDA | 66,613,000 | 68,015,000 | 60,870,000 | ||||||||||||
Purchases of property, plant and equipment | 6,293,000 | 7,151,000 | 7,007,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 60,693,000 | ||||||||||||||
Total assets | 662,580,000 | 610,166,000 | 606,436,000 | 662,580,000 | 610,166,000 | 606,436,000 | |||||||||
Acquisition plan expenses | 0 | ||||||||||||||
Commercial Solutions | Intersegment Eliminations | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 17,371,000 | 9,630,000 | 12,492,000 | ||||||||||||
Government Solutions | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 314,504,000 | ||||||||||||||
Government Solutions | Operating Segments | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 314,504,000 | 225,513,000 | 219,501,000 | ||||||||||||
Operating income (loss) | 28,997,000 | 10,950,000 | 9,393,000 | ||||||||||||
Net income (loss) | 29,029,000 | 10,835,000 | 9,421,000 | ||||||||||||
Provision for income taxes | 0 | 0 | 0 | ||||||||||||
Interest (income) and other | (41,000) | 112,000 | (34,000) | ||||||||||||
Write-off of deferred financing costs | 0 | ||||||||||||||
Interest expense | 9,000 | 3,000 | 6,000 | ||||||||||||
Amortization of stock-based compensation | 0 | 0 | 0 | ||||||||||||
Amortization of intangibles | 3,376,000 | 3,376,000 | 5,125,000 | ||||||||||||
Depreciation and amortization of property, plant and equipment | 1,891,000 | 3,088,000 | 2,938,000 | ||||||||||||
Estimated contract settlement costs | 0 | ||||||||||||||
Settlement of intellectual property litigation | 0 | 0 | |||||||||||||
Facility exit costs | 1,373,000 | ||||||||||||||
Adjusted EBITDA | 35,637,000 | 17,414,000 | 17,456,000 | ||||||||||||
Purchases of property, plant and equipment | 1,902,000 | 901,000 | 1,046,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 0 | ||||||||||||||
Total assets | $ 186,438,000 | $ 195,924,000 | $ 185,234,000 | 186,438,000 | $ 195,924,000 | $ 185,234,000 | |||||||||
Acquisition plan expenses | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Jul. 31, 2019USD ($) | May 31, 2018USD ($)transaction | Oct. 31, 2014USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) |
Future Minimum Lease Payments, Net Of Subleases, Under Operating Leases | ||||||
2020 | $ 11,812,000 | $ 11,812,000 | ||||
2021 | 8,723,000 | 8,723,000 | ||||
2022 | 7,343,000 | 7,343,000 | ||||
2023 | 5,776,000 | 5,776,000 | ||||
2024 | 3,430,000 | 3,430,000 | ||||
Thereafter | 7,130,000 | 7,130,000 | ||||
Total | 44,214,000 | 44,214,000 | ||||
Lease Expense | ||||||
Lease expense charged to operations | 11,953,000 | $ 12,733,000 | $ 13,270,000 | |||
Loss Contingency [Abstract] | ||||||
Settlement of intellectual property litigation | 3,204,000 | $ 0 | $ 12,020,000 | |||
Executive Chairman | ||||||
Related Party Transaction [Line Items] | ||||||
Related party lease payments made | $ 636,000 | |||||
Additional term of related party lease agreement as an option to exercise (in years) | 10 years | |||||
Rent amount in next calendar year for related party lease agreement | 657,000 | |||||
Legacy TCS 911 Call Handling Software Matter | ||||||
Loss Contingency [Abstract] | ||||||
Loss contingency estimate | $ 14,000,000 | $ 14,000,000 | ||||
Other Matters | ||||||
Loss Contingency [Abstract] | ||||||
Sales value of equipment | $ 288,000 | |||||
Approximate number of transactions audited by the Office of Export Enforcement relating to international shipments by Xicom Technologies, Inc. | transaction | 7,800 | |||||
Number of transactions that may not have been fully in compliance with the Export Administrative Regulations, based on the Company's self assessment of audited transactions | transaction | 6 | |||||
Aggregate value of international shipments that man not have been fully in compliance with Export Administration Regulations (less than) | $ 100,000 |
Goodwill (Details)
Goodwill (Details) | 12 Months Ended | |
Jul. 31, 2019USD ($)operating_segment | Aug. 01, 2019$ / shares | |
Goodwill [Roll Forward] | ||
Balance as of July 31, 2018 | $ 290,633,000 | |
Balance as of July 31, 2019 | $ 310,489,000 | |
Number of operating segments | operating_segment | 2 | |
Commercial Solutions | ||
Goodwill [Roll Forward] | ||
Balance as of July 31, 2018 | $ 231,440,000 | |
Balance as of July 31, 2019 | 251,296,000 | |
Government Solutions | ||
Goodwill [Roll Forward] | ||
Balance as of July 31, 2018 | 59,193,000 | |
Balance as of July 31, 2019 | 59,193,000 | |
Subsequent Event | Commercial Solutions | ||
Goodwill [Roll Forward] | ||
Percentage of fair value in excess of carrying amount for reporting unit | 29.00% | |
Subsequent Event | Government Solutions | ||
Goodwill [Roll Forward] | ||
Percentage of fair value in excess of carrying amount for reporting unit | 122.20% | |
Subsequent Event | Common Stock | ||
Goodwill [Roll Forward] | ||
Share price (in usd per share) | $ / shares | $ 29.54 | |
Solacom | ||
Goodwill [Roll Forward] | ||
Additions resulting from acquisitions | 11,808,000 | |
Balance as of July 31, 2019 | 11,808,000 | |
Solacom | Commercial Solutions | ||
Goodwill [Roll Forward] | ||
Additions resulting from acquisitions | 11,808,000 | |
GD NG-911 business | ||
Goodwill [Roll Forward] | ||
Additions resulting from acquisitions | 8,048,000 | |
Balance as of July 31, 2019 | 8,048,000 | |
GD NG-911 business | Commercial Solutions | ||
Goodwill [Roll Forward] | ||
Additions resulting from acquisitions | $ 8,048,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 400,509,000 | $ 361,095,000 | |
Accumulated Amortization | 138,619,000 | 120,299,000 | |
Net Carrying Amount | 261,890,000 | 240,796,000 | |
Amortization of intangibles | 18,320,000 | $ 21,075,000 | $ 22,823,000 |
Estimated Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2020 | 20,700,000 | ||
2021 | 19,563,000 | ||
2022 | 18,322,000 | ||
2023 | 18,322,000 | ||
2024 | $ 17,631,000 | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 20 years 6 months | 21 years | |
Gross Carrying Amount | $ 276,834,000 | $ 249,831,000 | |
Accumulated Amortization | 66,484,000 | 55,350,000 | |
Net Carrying Amount | $ 210,350,000 | $ 194,481,000 | |
Technologies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 12 years 8 months 12 days | 12 years 9 months 15 days | |
Gross Carrying Amount | $ 92,649,000 | $ 82,370,000 | |
Accumulated Amortization | 59,522,000 | 54,386,000 | |
Net Carrying Amount | $ 33,127,000 | $ 27,984,000 | |
Trademarks and other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 16 years 8 months 12 days | 16 years 4 months 22 days | |
Gross Carrying Amount | $ 31,026,000 | $ 28,894,000 | |
Accumulated Amortization | 12,613,000 | 10,563,000 | |
Net Carrying Amount | $ 18,413,000 | $ 18,331,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Nov. 15, 2019 | Aug. 16, 2019 | May 17, 2019 | Feb. 15, 2019 | Nov. 16, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Sep. 24, 2019 | Jun. 05, 2019 | Mar. 06, 2019 | Dec. 06, 2018 | Sep. 26, 2018 |
Class of Stock [Line Items] | ||||||||||||
Shelf registration authorized amount | $ 400,000,000 | |||||||||||
Stock Repurchase Program | ||||||||||||
Amount that remains to be expended under the current board repurchase authorization | $ 8,664,000 | |||||||||||
Maximum amount authorized by the board of directors for the repurchase of shares of the company's common stock | $ 100,000,000 | |||||||||||
Shares acquired (in shares) | 0 | 0 | ||||||||||
Dividends | ||||||||||||
Dividends declared (in dollars per share) | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.10 | ||||||||
Dividends paid (in dollars per share) | $ 0.1 | $ 0.1 | $ 0.1 | |||||||||
Subsequent Event | ||||||||||||
Stock Repurchase Program | ||||||||||||
Amount that remains to be expended under the current board repurchase authorization | $ 8,664,000 | |||||||||||
Dividends | ||||||||||||
Dividends declared (in dollars per share) | $ 0.1 | |||||||||||
Dividends paid (in dollars per share) | $ 0.1 | |||||||||||
Scenario, Forecast | ||||||||||||
Dividends | ||||||||||||
Dividends paid (in dollars per share) | $ 0.10 |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||||||
Net sales | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 167,435,000 | $ 147,854,000 | $ 133,731,000 | $ 121,569,000 | $ 147,762,000 | $ 127,792,000 | $ 139,028,000 | $ 135,786,000 | $ 671,797,000 | $ 570,589,000 | $ 550,368,000 |
Gross profit | 64,010,000 | 64,416,000 | 61,245,000 | 57,769,000 | 62,988,000 | 62,436,000 | 50,801,000 | 47,716,000 | 60,412,000 | 52,461,000 | 53,204,000 | 52,108,000 | 247,440,000 | 223,941,000 | 218,185,000 |
Net income | $ 6,135,000 | $ 7,612,000 | $ 7,826,000 | $ 3,468,000 | $ 7,458,000 | $ 8,210,000 | $ 15,761,000 | $ (1,660,000) | $ 7,314,000 | $ 4,417,000 | $ 6,585,000 | $ (2,489,000) | $ 25,041,000 | $ 29,769,000 | $ 15,827,000 |
Diluted income (loss) per share (in dollars per share) | $ 0.25 | $ 0.31 | $ 0.32 | $ 0.14 | $ 0.31 | $ 0.34 | $ 0.66 | $ (0.07) | $ 0.31 | $ 0.19 | $ 0.28 | $ (0.11) | $ 1.03 | $ 1.24 | $ 0.67 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts and Reserves (Details) - USD ($) | 12 Months Ended | |||||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Charged to cost and expenses | $ 1,136,000 | $ 573,000 | $ 497,000 | |||
Charged to cost and expenses | 6,015,000 | 5,628,000 | 2,900,000 | |||
Allowance for doubtful accounts receivable: | ||||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Balance at beginning of period | 1,761,000 | 1,300,000 | 1,029,000 | |||
Charged to cost and expenses | [1] | 1,136,000 | 573,000 | 497,000 | ||
Charged to other accounts - describe | 0 | 0 | 0 | |||
Transfers (deductions) - describe | [2] | (1,030,000) | (112,000) | (226,000) | ||
Balance at end of period | 1,867,000 | 1,761,000 | 1,300,000 | |||
Inventory reserves: | ||||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Balance at beginning of period | 17,427,000 | 16,019,000 | 16,198,000 | |||
Charged to cost and expenses | [3] | 6,015,000 | 5,628,000 | 2,900,000 | ||
Charged to other accounts - describe | 0 | 0 | 0 | |||
Transfers (deductions) - describe | [4] | (3,746,000) | (4,220,000) | (3,079,000) | ||
Balance at end of period | 19,696,000 | 17,427,000 | 16,019,000 | |||
Valuation allowance for deferred tax assets: | ||||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Balance at beginning of period | 11,854,000 | 8,633,000 | 9,624,000 | |||
Charged to cost and expenses | [5] | 58,000 | 3,221,000 | 324,000 | ||
Charged to other accounts - describe | 656,000 | [6] | 0 | 121,000 | [6] | |
Transfers (deductions) - describe | 0 | 0 | (1,436,000) | [6] | ||
Balance at end of period | $ 12,568,000 | $ 11,854,000 | $ 8,633,000 | |||
[1] | Provision for doubtful accounts. | |||||
[2] | Write-off of uncollectible receivables. | |||||
[3] | Provision for excess and obsolete inventory. | |||||
[4] | Write-off of inventory. | |||||
[5] | Change in valuation allowance. | |||||
[6] | Acquisition related valuation allowance charged to (deducted from) goodwill. |