Cover
Cover - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Sep. 30, 2021 | Jan. 31, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jul. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 0-7928 | ||
Entity Registrant Name | COMTECH TELECOMMUNICATIONS CORP /DE/ | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --07-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Central Index Key | 0000023197 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 11-2139466 | ||
Entity Address, Address Line One | 68 South Service Road | ||
Entity Address, Address Line Two | Suite 230 | ||
Entity Address, City or Town | Melville | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11747 | ||
City Area Code | (631) | ||
Local Phone Number | 962-7000 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 523,931,000 | ||
Entity Common Stock, Shares Outstanding | 26,335,695 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE. Certain portions of the document listed below have been incorporated by reference into the indicated Part of this Annual Report on Form 10-K: Proxy Statement for 2021 Annual Meeting of Stockholders - Part III | ||
Common Stock, par value $.10 per share | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $.10 per share | ||
Trading Symbol | CMTL | ||
Security Exchange Name | NASDAQ | ||
Series A Junior Participating Cumulative Preferred Stock, par value $0.10 per share | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series A Junior Participating Cumulative Preferred Stock, par value $0.10 per share |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 30,861,000 | $ 47,878,000 |
Accounts receivable, net | 158,110,000 | 126,816,000 |
Inventories, net | 80,358,000 | 82,302,000 |
Prepaid expenses and other current assets | 18,167,000 | 20,101,000 |
Total current assets | 287,496,000 | 277,097,000 |
Property, plant and equipment, net | 35,286,000 | 27,037,000 |
Operating lease right-of-use assets, net | 44,486,000 | 30,033,000 |
Goodwill | 347,698,000 | 330,519,000 |
Intangibles with finite lives, net | 268,699,000 | 258,019,000 |
Deferred financing costs, net | 1,824,000 | 2,391,000 |
Other assets, net | 7,622,000 | 4,551,000 |
Total assets | 993,111,000 | 929,647,000 |
Current liabilities: | ||
Accounts payable | 36,193,000 | 23,423,000 |
Accrued expenses and other current liabilities | 89,601,000 | 85,161,000 |
Operating lease liabilities, current | 8,841,000 | 8,247,000 |
Dividends payable | 2,601,000 | 2,468,000 |
Contract liabilities | 66,130,000 | 40,250,000 |
Interest payable | 195,000 | 163,000 |
Total current liabilities | 203,561,000 | 159,712,000 |
Non-current portion of long-term debt, net | 201,000,000 | 149,500,000 |
Operating lease liabilities, non-current | 39,569,000 | 24,109,000 |
Income taxes payable | 2,717,000 | 1,963,000 |
Deferred tax liability, net | 21,230,000 | 17,637,000 |
Long-term contract liabilities | 9,808,000 | 9,596,000 |
Other liabilities | 14,507,000 | 17,831,000 |
Total liabilities | 492,392,000 | 380,348,000 |
Commitments and contingencies (See Note 12) | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.10 per share; shares authorized and unissued 2,000,000 | 0 | 0 |
Common stock, par value $0.10 per share; authorized 100,000,000 shares; issued 41,281,812 shares and 39,924,439 shares at July 31, 2021 and 2020, respectively | 4,128,000 | 3,992,000 |
Additional paid-in capital | 605,439,000 | 569,891,000 |
Retained earnings | 333,001,000 | 417,265,000 |
Stockholders' equity before treasury stock | 942,568,000 | 991,148,000 |
Treasury stock, at cost (15,033,317 shares at July 31, 2021 and 2020) | (441,849,000) | (441,849,000) |
Total stockholders’ equity | 500,719,000 | 549,299,000 |
Total liabilities and stockholders’ equity | $ 993,111,000 | $ 929,647,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2021 | Jul. 31, 2020 |
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 |
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) | 41,281,812 | 39,924,439 |
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, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 581,695,000 | $ 616,715,000 | $ 671,797,000 |
Cost of sales | 367,737,000 | 389,882,000 | 424,357,000 |
Gross profit | 213,958,000 | 226,833,000 | 247,440,000 |
Expenses: | |||
Selling, general and administrative | 111,796,000 | 117,130,000 | 128,639,000 |
Research and development | 49,148,000 | 52,180,000 | 56,407,000 |
Amortization of intangibles | 21,020,000 | 21,595,000 | 18,320,000 |
Settlement of intellectual property litigation | 0 | 0 | (3,204,000) |
Acquisition plan expenses | 100,292,000 | 20,754,000 | 5,871,000 |
Total operating expenses | 282,256,000 | 211,659,000 | 206,033,000 |
Operating (loss) income | (68,298,000) | 15,174,000 | 41,407,000 |
Other expenses (income): | |||
Interest expense | 6,821,000 | 6,054,000 | 9,245,000 |
Write-off of deferred financing costs | 0 | 0 | 3,217,000 |
Interest (income) and other | (139,000) | (190,000) | 35,000 |
(Loss) income before (benefit from) provision for income taxes | (74,980,000) | 9,310,000 | 28,910,000 |
(Benefit from) provision for income taxes | (1,500,000) | 2,290,000 | 3,869,000 |
Net (loss) income | $ (73,480,000) | $ 7,020,000 | $ 25,041,000 |
Net (loss) income per share: | |||
Basic (in dollars per share) | $ (2.86) | $ 0.28 | $ 1.04 |
Diluted (in dollars per share) | $ (2.86) | $ 0.28 | $ 1.03 |
Weighted average number of common shares outstanding - basic (in shares) | 25,685,000 | 24,798,000 | 24,124,000 |
Weighted average number of common and common equivalent shares outstanding - diluted (in shares) | 25,685,000 | 24,899,000 | 24,302,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Treasury Stock |
Beginning balance (in shares) at Jul. 31, 2018 | 38,860,571 | ||||||
Beginning balance (in shares) at Jul. 31, 2018 | 15,033,317 | ||||||
Beginning balance at Jul. 31, 2018 | $ 505,684,000 | $ 3,886,000 | $ 538,453,000 | $ 405,194,000 | $ (441,849,000) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-classified stock award compensation | $ 11,427,000 | 11,427,000 | |||||
Proceeds from exercises of stock options (in shares) | 80,930 | 8,100 | |||||
Proceeds from exercises of stock options | $ 216,000 | $ 1,000 | 215,000 | ||||
Proceeds from issuance of employee stock purchase plan shares (in shares) | 43,316 | ||||||
Proceeds from issuance of employee stock purchase plan shares | 926,000 | $ 4,000 | 922,000 | ||||
Issuance of restricted stock (in shares) | 10,386 | ||||||
Issuance of restricted stock | 0 | $ 1,000 | (1,000) | ||||
Net settlement of stock-based awards (in shares) | 145,119 | ||||||
Net settlement of stock-based awards | (3,916,000) | $ 15,000 | (3,931,000) | ||||
Common stock issued for acquisitions (in shares) | 208,669 | ||||||
Common stock issued for acquisitions | 5,606,000 | $ 21,000 | 5,585,000 | ||||
Cash dividends declared, net | (9,575,000) | (9,575,000) | |||||
Accrual of dividend equivalents, net of reversal | (327,000) | (327,000) | |||||
Net (loss) income | 25,041,000 | 25,041,000 | |||||
Ending balance (in shares) at Jul. 31, 2019 | 39,276,161 | ||||||
Ending balance (in shares) at Jul. 31, 2019 | 15,033,317 | ||||||
Ending balance at Jul. 31, 2019 | 535,082,000 | $ 3,928,000 | 552,670,000 | 420,333,000 | $ (441,849,000) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-classified stock award compensation | $ 9,275,000 | 9,275,000 | |||||
Proceeds from exercises of stock options (in shares) | 285,790 | 16,700 | |||||
Proceeds from exercises of stock options | $ 468,000 | $ 2,000 | 466,000 | ||||
Proceeds from issuance of employee stock purchase plan shares (in shares) | 52,958 | ||||||
Proceeds from issuance of employee stock purchase plan shares | 855,000 | $ 5,000 | 850,000 | ||||
Issuance of restricted stock, net of forfeiture (in shares) | 3,319 | ||||||
Issuance of restricted stock, net of forfeiture | 0 | ||||||
Net settlement of stock-based awards (in shares) | 251,797 | ||||||
Net settlement of stock-based awards | (4,888,000) | $ 25,000 | (4,913,000) | ||||
Common stock issued for acquisitions (in shares) | 323,504 | ||||||
Common stock issued for acquisitions | 11,575,000 | $ 32,000 | 11,543,000 | ||||
Cash dividends declared, net | (9,794,000) | (9,794,000) | |||||
Accrual of dividend equivalents, net of reversal | (294,000) | (294,000) | |||||
Net (loss) income | $ 7,020,000 | 7,020,000 | |||||
Ending balance (in shares) at Jul. 31, 2020 | 39,924,439 | 39,924,439 | |||||
Ending balance (in shares) at Jul. 31, 2020 | 15,033,317 | 15,033,317 | |||||
Ending balance at Jul. 31, 2020 | $ 549,299,000 | $ (215,000) | $ 3,992,000 | 569,891,000 | 417,265,000 | $ (215,000) | $ (441,849,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 [Member] | ||||||
Equity-classified stock award compensation | 9,983,000 | 9,983,000 | |||||
Proceeds from issuance of employee stock purchase plan shares (in shares) | 54,762 | ||||||
Proceeds from issuance of employee stock purchase plan shares | 809,000 | $ 5,000 | 804,000 | ||||
Issuance of restricted stock, net of forfeiture (in shares) | 35,495 | ||||||
Issuance of restricted stock, net of forfeiture | 0 | $ 4,000 | (4,000) | ||||
Net settlement of stock-based awards (in shares) | 240,549 | ||||||
Net settlement of stock-based awards | (4,000,000) | $ 24,000 | (4,024,000) | ||||
Common stock issued for acquisitions (in shares) | 1,026,567 | ||||||
Common stock issued for acquisitions | 28,892,000 | $ 103,000 | 28,789,000 | ||||
Cash dividends declared, net | (10,189,000) | (10,189,000) | |||||
Accrual of dividend equivalents, net of reversal | (380,000) | (380,000) | |||||
Net (loss) income | $ (73,480,000) | (73,480,000) | |||||
Ending balance (in shares) at Jul. 31, 2021 | 41,281,812 | 41,281,812 | |||||
Ending balance (in shares) at Jul. 31, 2021 | 15,033,317 | 15,033,317 | |||||
Ending balance at Jul. 31, 2021 | $ 500,719,000 | $ 4,128,000 | $ 605,439,000 | $ 333,001,000 | $ (441,849,000) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Statement of Financial Position [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 0.40 | $ 0.40 | $ 0.40 |
Accrual of dividend equivalents (in dollars per share) | $ 0.40 | $ 0.40 | $ 0.40 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (73,480,000) | $ 7,020,000 | $ 25,041,000 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization of property, plant and equipment | 9,379,000 | 10,561,000 | 11,927,000 |
Amortization of intangible assets with finite lives | 21,020,000 | 21,595,000 | 18,320,000 |
Amortization of stock-based compensation | 9,983,000 | 9,275,000 | 11,427,000 |
Amortization of deferred financing costs | 736,000 | 737,000 | 1,099,000 |
Estimated contract settlement costs | 0 | 444,000 | 6,351,000 |
Write-off of deferred financing costs | 0 | 0 | 3,217,000 |
Settlement of intellectual property litigation | 0 | 0 | (3,204,000) |
Changes in other liabilities | (6,633,000) | (4,133,000) | (1,056,000) |
Loss on disposal of property, plant and equipment | 215,000 | 0 | 144,000 |
(Benefit from) provision for allowance for doubtful accounts | (18,000) | (431,000) | 1,136,000 |
Provision for excess and obsolete inventory | 4,364,000 | 1,647,000 | 6,015,000 |
Deferred income tax (benefit) expense | (3,263,000) | 860,000 | 4,283,000 |
Other | (225,000) | 0 | 0 |
Changes in assets and liabilities, net of effects of business acquisitions: | |||
Accounts receivable | (31,223,000) | 20,929,000 | 6,315,000 |
Inventories | (2,338,000) | (9,132,000) | (3,787,000) |
Prepaid expenses and other current assets | (265,000) | (2,261,000) | 915,000 |
Other assets | (4,215,000) | (719,000) | 102,000 |
Accounts payable | 11,016,000 | (2,206,000) | (21,290,000) |
Accrued expenses and other current liabilities | (7,886,000) | 4,292,000 | 3,554,000 |
Contract liabilities | 25,444,000 | (6,312,000) | (127,000) |
Other liabilities, non-current | 3,583,000 | 2,422,000 | (84,000) |
Interest payable | 32,000 | (397,000) | 151,000 |
Income taxes payable | 3,136,000 | (1,427,000) | (2,418,000) |
Net cash (used in) provided by operating activities | (40,638,000) | 52,764,000 | 68,031,000 |
Cash flows from investing activities: | |||
Net cash acquired from acquisition of UHP | 1,304,000 | 0 | 0 |
Purchases of property, plant and equipment | (16,037,000) | (7,225,000) | (8,785,000) |
Net cash used in investing activities | (15,483,000) | (20,184,000) | (44,668,000) |
Cash flows from financing activities: | |||
Net borrowings (payments) of long-term debt under Credit Facility | 51,500,000 | 165,000,000 | |
Net borrowings (payments) of long-term debt under Credit Facility | (15,500,000) | ||
Net payments under Revolving Loan portion of Prior Credit Facility | 0 | 0 | (48,603,000) |
Repayment of debt under Term Loan portion of Prior Credit Facility | 0 | 0 | (120,121,000) |
Remittance of employees' statutory tax withholding for stock awards | (2,803,000) | (5,276,000) | (5,042,000) |
Cash dividends paid | (10,334,000) | (10,020,000) | (9,789,000) |
Repayment of principal amounts under finance lease and other obligations | (38,000) | (805,000) | (1,906,000) |
Payment of deferred financing costs | (30,000) | 0 | (1,813,000) |
Proceeds from issuance of employee stock purchase plan shares | 809,000 | 855,000 | 935,000 |
Proceeds from exercises of stock options | 0 | 468,000 | 216,000 |
Payment of shelf registration costs | 0 | 0 | (148,000) |
Net cash provided by (used in) financing activities | 39,104,000 | (30,278,000) | (21,271,000) |
Net (decrease) increase in cash and cash equivalents | (17,017,000) | 2,302,000 | 2,092,000 |
Cash and cash equivalents at beginning of year | 47,878,000 | 45,576,000 | 43,484,000 |
Cash and cash equivalents at end of year | 30,861,000 | 47,878,000 | 45,576,000 |
Supplemental cash flow disclosure | |||
Interest | 5,987,000 | 5,549,000 | 7,669,000 |
Income taxes, net | (1,373,000) | 2,875,000 | 2,005,000 |
Non-cash investing and financing activities: | |||
Reclass of finance lease right-of-use assets to property, plant and equipment | 0 | 698,000 | 0 |
Accrued remittance of employees' statutory tax withholdings for fully-vested share units | 2,596,000 | 1,399,000 | 1,787,000 |
Cash dividends declared but unpaid (including accrual of dividend equivalents) | 2,981,000 | 2,762,000 | 2,733,000 |
Accrued additions to property, plant and equipment | 2,466,000 | 1,408,000 | 902,000 |
Issuance of restricted stock | 4,000 | 0 | 1,000 |
Common stock issued for acquisitions | 28,892,000 | 11,575,000 | 5,606,000 |
Accrued deferred financing costs | 139,000 | 0 | 0 |
Accruals related to acquisitions | 0 | 1,157,000 | 0 |
CGC | |||
Cash flows from investing activities: | |||
Payment for acquisitions, net of cash acquired | (750,000) | (11,165,000) | 0 |
Solacom | |||
Cash flows from investing activities: | |||
Payment for acquisitions, net of cash acquired | 0 | 0 | (25,883,000) |
GD NG-911 business | |||
Cash flows from investing activities: | |||
Payment for acquisition of businesses | 0 | (1,013,000) | (10,000,000) |
NG-911 | |||
Cash flows from investing activities: | |||
Payment for acquisition of businesses | 0 | (781,000) | 0 |
UHP | |||
Non-cash investing and financing activities: | |||
Fair value of UHP acquisition contingent earn-out consideration | $ 8,500,000 | $ 0 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting and Reporting Policies | Summary of Significant Accounting and Reporting PoliciesPrinciples of ConsolidationThe 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 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. On October 4, 2021, we announced that our Board of Directors has appointed Michael D. Porcelain, our President and Chief Operating Officer, to be Chief Executive Officer, taking over from Fred Kornberg after a short transition period. The change of leadership is expected to occur by the end of calendar 2021, at which point Mr. Porcelain will also join our Board of Directors and continue as President. Mr. Kornberg will serve as non-executive Chairman of the Board and is expect to take on a technology advisory role. Costs associated with this leadership transition will be announced once they are finalized. In accordance with FASB ASC 606 - Revenue from Contracts with Customers ("ASC 606"), we record revenue 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 Government Solutions segment and, to a lesser extent, certain location-based and messaging infrastructure contracts in our public safety and location technologies product line within our Commercial Solutions segment. For service-based contracts in our public safety and location technologies product line, we also 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 RF amplifiers in our Government Solutions segment. 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. Most 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, 2021 2020 2019 United States U.S. government 34.6 % 36.2 % 40.1 % Domestic 41.5 % 40.3 % 34.5 % Total United States 76.1 % 76.5 % 74.6 % International 23.9 % 23.5 % 25.4 % 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 10.7% of consolidated net sales for fiscal 2021. Except for the U.S. government, there were no customers that represented more than 10.0% of consolidated net sales during fiscal 2020 and 2019. International sales for fiscal 2021, 2020 and 2019 (which include sales to U.S. domestic companies for inclusion in products that are sold to international customers) were $138,942,000, $145,107,000 and $170,607,000, 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 10.0% of consolidated net sales for fiscal 2021, 2020 and 2019. The following tables summarize our disaggregation of revenue consistent with information reviewed by our chief operating decision-maker ("CODM") for the fiscal years ended July 31, 2021, 2020 and 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, 2021 Commercial Solutions Government Solutions Total Geographical region and customer type U.S. government $ 52,976,000 148,105,000 $ 201,081,000 Domestic 210,493,000 31,178,000 241,671,000 Total United States 263,469,000 179,283,000 442,752,000 International 96,677,000 42,266,000 138,943,000 Total $ 360,146,000 221,549,000 $ 581,695,000 Contract type Firm fixed-price $ 357,521,000 141,367,000 $ 498,888,000 Cost reimbursable 2,625,000 80,182,000 82,807,000 Total $ 360,146,000 221,549,000 $ 581,695,000 Transfer of control Point in time $ 141,707,000 94,687,000 $ 236,394,000 Over time 218,439,000 126,862,000 345,301,000 Total $ 360,146,000 221,549,000 $ 581,695,000 Fiscal Year Ended July 31, 2020 Commercial Solutions Government Solutions Total Geographical region and customer type U.S. government $ 52,327,000 171,036,000 $ 223,363,000 Domestic 208,284,000 39,961,000 248,245,000 Total United States 260,611,000 210,997,000 471,608,000 International 93,119,000 51,988,000 145,107,000 Total $ 353,730,000 262,985,000 $ 616,715,000 Contract type Firm fixed-price $ 349,855,000 178,237,000 $ 528,092,000 Cost reimbursable 3,875,000 84,748,000 88,623,000 Total $ 353,730,000 262,985,000 $ 616,715,000 Transfer of control Point in time $ 142,448,000 136,518,000 $ 278,966,000 Over time 211,282,000 126,467,000 337,749,000 Total $ 353,730,000 262,985,000 $ 616,715,000 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 unbilled receivables. Under ASC 606, unbilled receivables constitute contract assets. There were no material impairment losses recognized on contract assets during the fiscal years ended July 31, 2021, 2020 and 2019, respectively. 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. Of the contract liability balance at July 31, 2020 and July 31, 2019, $34,545,000 and $34,225,000 was recognized as revenue during fiscal years 2021 and 2020, respectively. In fiscal 2021 and 2020, contract liabilities increased $648,000 and $6,890,000, respectively, due to business combinations discussed in Note (2) - " Acquisitions ." 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 our 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 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, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $658,896,000 (which represents the amount of our consolidated backlog). We estimate that a substantial portion of our remaining performance obligations at July 31, 2021 will be completed and recognized as revenue during the next twenty-four month period, with the rest thereafter. During fiscal 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in previous periods (for example due to changes in the transaction price) was not material. 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. Our machinery and equipment, which are recorded at cost, are depreciated or amortized over their estimated useful lives ( three 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 2022 on August 1, 2021 (the first day of our fiscal 2022). See Note (13) - " 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 2023. 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. 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. 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. There were no repurchases of our common stock during the fiscal years ended July 31, 2021, 2020 and 2019. See Note (15) - " Stockholders’ Equity " for more information. Weighted average stock options, RSUs and restricted stock outstanding of 1,440,000, 1,348,000 and 1,347,000 shares for fiscal 2021, 2020 and 2019, respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Our EPS calculations exclude 232,000, 201,000 and 243,000 weighted average performance shares outstanding for fiscal 2021, 2020 and 2019, respectively, as the performance conditions have not yet been satisfied. However, net income (loss) (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, 2021 2020 2019 Numerator: Net (loss) income for basic calculation $ (73,480,000) 7,020,000 25,041,000 Numerator for diluted calculation $ (73,480,000) 7,020,000 25,041,000 Denominator: Denominator for basic calculation 25,685,000 24,798,000 24,124,000 Effect of dilutive securities: Stock-based awards — 101,000 178,000 Denominator for diluted calculation 25,685,000 24,899,000 24,302,000 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 and accrued expenses) approximate their fair values due to their short-term maturities. 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. As of July 31, 2021 and 2020, 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. 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 2021, 2020 and 2019. 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 2021, we adopted: • FASB ASU No. 2016-13, which requires companies to utilize an impairment model (current expected credit loss ("CECL”)) for most financial assets measured at amortized cost and certain other financial instruments, which include, but are not limited to trade receivables and contract assets. This accounting standard replaced the incurred loss model with a model that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate those losses. On August 1, 2020, we adopted this ASU on a modified-retrospective basis and recorded a $215,000 decrease to opening retained earnings. • FASB ASU No. 2018-13, which modifies the disclosure requirements for fair value measurements in Topic 820. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. • FASB ASU No. 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this ASU. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. • FASB ASU No. 2018-17, which requires entities to consider indirect interests held through related parties under common control on a proportional basis, rather than as the equivalent of a direct interest in its entirety, when determining whether a decision-making fee is a variable interest. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. • FASB ASU No. 2018-18, which clarifies when certain transactions between collaborative arrangement participants should be accounted for under ASC 606 and incorporates unit-of-account guidance consistent with ASC 606 to aid in this determination. The ASU also precludes entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. On August 1, 2020, we adopted this ASU. Our adoption of this |
Acquisitions
Acquisitions | 12 Months Ended |
Jul. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions UHP Networks Inc. On March 2, 2021, we completed our acquisition of UHP Networks Inc. ("UHP"), a leading provider of innovative and disruptive satellite ground station technology solutions, pursuant to a stock purchase agreement initially entered into in November 2019 and amended in June 2020 and on March 1, 2021, respectively. With end-markets for high-speed satellite-based networks anticipated to significantly grow, our acquisition allows us to enhance our Commercial Solutions segment's offerings with low cost time division multiple access ("TDMA") satellite modems. The acquisition has a preliminary purchase price for accounting purposes of $37,470,000. Pursuant to the stock purchase agreement, during fiscal 2021, the initial upfront payment of approximately $23,979,000 was paid mostly in shares of our common stock, with $87,000 paid in cash. In August 2021, $3,991,000 of the $4,991,000 hold back amount previously placed into escrow at closing was paid to the seller in shares of our Common Stock, as the conditions pursuant to the stock purchase agreement were met. The stock purchase agreement also provides for an earn-out payment of up to $9,000,000, also payable at our option in cash and or shares of our common stock, if specified sales milestones are reached during the eighteen-month period ending September 30, 2022. The preliminary estimated fair value of such contingent earn-out consideration at the acquisition date was $8,500,000. Of the $23,979,000 paid at closing, $4,560,000 was placed into escrow to be released ratably over three years upon settlement of potential indemnification obligations of the seller. We issued 1,026,567 shares of our common stock at closing, based on a volume weighted average stock price of approximately $28.14 per share, in satisfaction of initial payment and escrow arrangements under the terms of the stock purchase agreement. We are accounting for the acquisition 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 March 2, 2021 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 operations for the fiscal year ended July 31, 2021 include a nominal amount of revenue contribution from the acquisition. 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: Purchase Price Allocation (1) Measurement Period Adjustments Purchase Price Allocation (As adjusted) Initial upfront payment $ 23,902,000 $ 77,000 $ 23,979,000 Hold back amount 5,000,000 (9,000) 4,991,000 Contingent earn-out consideration 8,500,000 — 8,500,000 Preliminary purchase price at fair value $ 37,402,000 $ 68,000 $ 37,470,000 Preliminary allocation of aggregate purchase price: Cash and cash equivalents $ 1,391,000 $ — $ 1,391,000 Current assets 1,235,000 123,000 1,358,000 Property, plant and equipment 10,000 — 10,000 Deferred tax assets 286,000 27,000 313,000 Contract liabilities (657,000) 9,000 (648,000) Accrued warranty obligations (750,000) — (750,000) Other current liabilities (1,166,000) (9,000) (1,175,000) Non-current liabilities (160,000) — (160,000) Net tangible assets at preliminary fair value $ 189,000 150,000 $ 339,000 Identifiable intangibles, deferred taxes and goodwill: Estimated Useful Lives Technology $ 15,300,000 $ — $ 15,300,000 15 years Customer relationships 15,500,000 — 15,500,000 15 years Trade name 800,000 — 800,000 20 years Deferred tax liabilities (8,374,000) — (8,374,000) Goodwill 13,987,000 (82,000) 13,905,000 Indefinite Preliminary allocation of aggregate purchase price $ 37,402,000 $ 68,000 $ 37,470,000 (1) As reported in the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2021. 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 preliminary fair value of customer relationships was primarily based on the value of the discounted cash flows that the related intangible asset could be expected to generate in the future. The preliminary fair value of technology and trade name was based on the discounted capitalization of royalty expense saved because we now own the assets. The preliminary estimated fair value of contingent earn-out consideration represents the present value of the estimated amount payable, based on a probability-weighted amount of net sales, as defined, during the earn-out period, which reflects significant management estimates and assumptions using unobservable Level 3 inputs, including: (i) possible outcomes for targeted net sales during the earn-out period; (ii) timing of each possible outcome; (iii) probability of each possible outcome; and (vi) discount rate reflecting the credit risk of the Company. Among the factors contributing to the recognition of goodwill, as a component of the preliminary 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 preliminary purchase price shown in the above table was based upon a preliminary 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 customary adjustments for potential indemnification obligations of the seller under the stock purchase agreement and contingent earn-out consideration), a final assessment of assets acquired and liabilities assumed, accrued warranty obligations, income taxes and residual goodwill. CGC Technology Limited On January 27, 2020, we completed the acquisition of CGC Technology Limited ("CGC"), a privately held company located in the United Kingdom, pursuant to the Share Purchase Agreement, dated as of January 27, 2020. CGC is a leading provider of high precision full motion fixed and mobile X/Y satellite tracking antennas, reflectors, RF feeds, radomes and other ground station equipment around the world. The acquisition had an aggregate purchase price for accounting purposes of $23,650,000, of which $12,075,000 was paid in cash and $11,575,000 was paid by the issuance of 323,504 shares of our common stock at a volume weighted average stock price of $35.78. The fair value of consideration transferred in connection with this acquisition was $23,490,000, which was net of $160,000 of cash acquired. We accounted for the acquisition of CGC under the acquisition method of accounting in accordance with FASB ASC 805. The purchase price was allocated to the assets acquired and liabilities assumed, based on their fair value as of January 27, 2020, 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. Pro forma financial information is not disclosed, as the acquisition was not material. Acquisition Plan Expenses During fiscal 2021, 2020 and 2019, we incurred acquisition plan expenses of $100,292,000, $20,754,000 and $5,871,000, respectively. Of the amount recorded in fiscal 2021, $88,343,000 related to the previously announced litigation and merger termination with Gilat Satellite Networks, Ltd. ("Gilat"), including $70,000,000 paid in cash to Gilat. The remaining costs primarily related to the April 2021 settlement of litigation associated with the 2019 acquisition of GD NG-911 as well as our acquisition of UHP, which closed in March 2021. Additionally, we recorded $1,178,000 of incremental interest expenses in fiscal 2021 related to a now terminated financing commitment letter. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Jul. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consist of the following at July 31, 2021 and 2020: 2021 2020 Receivables from commercial and international customers $ 86,890,000 67,109,000 Unbilled receivables from commercial and international customers 36,131,000 21,588,000 Receivables from the U.S. government and its agencies 33,381,000 32,870,000 Unbilled receivables from the U.S. government and its agencies 3,356,000 7,018,000 Total accounts receivable 159,758,000 128,585,000 Less allowance for doubtful accounts 1,648,000 1,769,000 Accounts receivable, net $ 158,110,000 126,816,000 Unbilled receivables as of July 31, 2021 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, unbilled receivables constitute contract assets. Management estimates that a substantial portion of the amounts not yet billed at July 31, 2021 will be billed and collected within one year. As of July 31, 2021, 23.0%, 12.7% and 12.1% of total accounts receivable related to U.S. government and its agencies, AT&T, Inc. and Verizon Communications Inc., respectively. Except for the U.S. government and its agencies, which represented 31.0%, respectively, no other customers accounted for greater than 10.0% of total accounts receivable as of July 31, 2020. |
Inventories
Inventories | 12 Months Ended |
Jul. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following at July 31, 2021 and 2020: 2021 2020 Raw materials and components $ 62,249,000 59,175,000 Work-in-process and finished goods 38,338,000 42,203,000 Total inventories 100,587,000 101,378,000 Less reserve for excess and obsolete inventories 20,229,000 19,076,000 Inventories, net $ 80,358,000 82,302,000 As of July 31, 2021 and 2020, the amount of inventory directly related to long-term contracts (including contracts-in-progress) was $7,028,000 and $7,215,000, respectively, and the amount of inventory related to contracts from third-party commercial customers who outsource their manufacturing to us was $1,509,000 and $1,387,000, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Jul. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consist of the following at July 31, 2021 and 2020: 2021 2020 Machinery and equipment $ 170,600,000 156,314,000 Leasehold improvements 15,726,000 15,596,000 186,326,000 171,910,000 Less accumulated depreciation and amortization 151,040,000 144,873,000 Property, plant and equipment, net $ 35,286,000 27,037,000 Depreciation and amortization expense on property, plant and equipment amounted to $9,343,000, $10,386,000 and $11,927,000 for the fiscal years ended July 31, 2021, 2020 and 2019, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Jul. 31, 2021 | |
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, 2021 and 2020: 2021 2020 Accrued wages and benefits $ 26,367,000 20,857,000 Accrued warranty obligations 17,600,000 15,200,000 Accrued contract costs 12,750,000 15,306,000 Accrued acquisition-related costs 9,222,000 7,014,000 Accrued commissions and royalties 5,342,000 4,621,000 Accrued legal costs 2,854,000 2,539,000 Other 15,466,000 19,624,000 Accrued expenses and other current liabilities $ 89,601,000 85,161,000 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 acquisition-related costs as of July 31, 2021 include $8,705,000 of contingent earn-out consideration related to our acquisition of UHP. See Note (2) - “ Acquisitions - UHP Networks Inc. ” for further discussion. Accrued warranty obligations as of July 31, 2021 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, 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, 2021 and 2020 were as follows: 2021 2020 Balance at beginning of year $ 15,200,000 15,968,000 Provision for warranty obligations 4,360,000 2,277,000 Additions (in connection with acquisitions) 750,000 1,000,000 Charges incurred (2,710,000) (4,347,000) Reclassification of non-current liabilities — 302,000 Balance at end of year $ 17,600,000 15,200,000 |
Credit Facility
Credit Facility | 12 Months Ended |
Jul. 31, 2021 | |
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. 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. As of July 31, 2021, the amount outstanding under our Credit Facility was $201,000,000 which is reflected in the non-current portion of long-term debt on our Consolidated Balance Sheet. At July 31, 2021, we had $1,503,000 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. During the fiscal year ended July 31, 2021, we had outstanding balances under the Credit Facility ranging from $125,000,000 to $219,000,000. As of July 31, 2021, total net deferred financing costs related to the Credit Facility were $1,824,000 and are being amortized over the term of our Credit Facility through October 31, 2023. In fiscal 2019, we wrote off $3,217,000 of deferred financing costs primarily related to the Term Loan Facility of our Prior Credit Facility. Interest expense related to our Credit Facility, including amortization of deferred financing costs, recorded during the fiscal years ended July 31, 2021, 2020 and 2019 was $5,628,000, $5,905,000 and $8,859,000, respectively. The amount for the fiscal year ended July 31, 2019 relates to both our Prior Credit Facility and our existing Credit Facility. Our blended interest rate approximated 2.84%, 3.87% and 5.25%, respectively, for fiscal 2021, 2020 and 2019. 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 3.75x trailing twelve months ("TTM") Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") and a Maximum Total Leverage Ratio of 4.50x TTM Adjusted EBITDA, each with no step downs; and (iii) a Minimum Interest Expense Coverage Ratio of 3.25x TTM Adjusted EBITDA. As of July 31, 2021, our Secured Leverage Ratio was 2.53x TTM Adjusted EBITDA compared to the maximum allowable Secured Leverage Ratio of 3.75x TTM Adjusted EBITDA. Our Interest Expense Coverage Ratio as of July 31, 2021 was 13.05x TTM Adjusted EBITDA compared to the Minimum Interest Expense Coverage Ratio of 3.25x 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 and foreign 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 an amendment to the Credit Facility 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. On January 14, 2021, we entered into a further amendment of the Credit Facility to update the LIBO Rate replacement mechanism language and other definitional items. On July 30, 2021, we entered into an amendment to incorporate certain foreign subsidiaries as loan parties and Guarantors into the Credit Facility and added certain definitional items. 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. |
Leases
Leases | 12 Months Ended |
Jul. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases Our leases historically relate to the leasing of facilities and equipment. In accordance with FASB ASC 842 - "Leases" ("ASC 842"), we determine at inception whether an arrangement is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. At lease commencement, we recognize a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the estimated lease term. We have elected to not recognize a ROU asset or lease liability for any leases with terms of twelve months or less. Instead, for such short-term leases, we recognize lease expense on a straight-line basis over the lease term. Certain of our leases include options to extend the term of the lease or to terminate the lease early. When it is reasonably certain that we will exercise a renewal option or will not exercise a termination option, we include the impact of exercising or not exercising such option, respectively, in the estimate of the lease term. As our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate ("IBR") on the commencement date to calculate the present value of future lease payments. Such IBR represents our estimated rate of interest to borrow on a collateralized basis over a term commensurate with the expected lease term. Some of our leases include payments that are based on the Consumer Price Index ("CPI") or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability using the index as of the lease commencement date. Other variable lease payments, such as common area maintenance, property taxes, and usage-based amounts, are required by ASC 842 to be excluded from the ROU asset and lease liability and expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset would also consider, to the extent applicable, any deferred rent upon adoption, lease pre-payments or initial direct costs of obtaining the lease (e.g., such as commissions). For all classes of leased assets, we elected the practical expedient to not separate lease components (i.e., the actual item being leased, such as the facility or piece of equipment) from non-lease components (i.e., the distinct elements of a contract not related to securing the use of the leased asset, such as common area maintenance and consumable supplies). Certain of our facility lease agreements (which are classified as operating leases) contain rent holidays or rent escalation clauses. For rent holidays and rent escalation clauses during the lease term, we record rental expense on a straight-line basis over the term of the lease. As of July 31, 2021, none of our leases contained a residual value guarantee and covenants included in our lease agreements are customary for the types of facilities and equipment being leased. The components of lease expense are as follows: Fiscal years ended July 31, 2021 2020 Finance lease expense: Amortization of ROU assets $ 36,000 $ 175,000 Interest on lease liabilities 3,000 4,000 Operating lease expense 12,152,000 10,728,000 Short-term lease expense 819,000 3,045,000 Variable lease expense 4,523,000 4,033,000 Sublease income (67,000) (22,000) Total lease expense $ 17,466,000 $ 17,963,000 Additional information related to leases is as follows: Fiscal years ended July 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating leases - Operating cash outflows $ 10,868,000 $ 11,437,000 Finance leases - Operating cash outflows 3,000 4,000 Finance leases - Financing cash outflows 38,000 322,000 ROU assets obtained in the exchange for lease liabilities (non-cash): Operating leases $ 24,987,000 $ 3,561,000 The following table is a reconciliation of future cash flows relating to operating and financing lease liabilities presented on our Consolidated Balance Sheet as of July 31, 2021: Operating Finance Total Fiscal 2022 $ 10,376,000 $ 32,000 $ 10,408,000 Fiscal 2023 8,029,000 3,000 8,032,000 Fiscal 2024 6,657,000 — 6,657,000 Fiscal 2025 6,123,000 — 6,123,000 Fiscal 2026 4,675,000 — 4,675,000 Thereafter 20,810,000 — 20,810,000 Total future undiscounted cash flows 56,670,000 35,000 56,705,000 Less: Present value discount 8,260,000 1,000 8,261,000 Lease liabilities $ 48,410,000 $ 34,000 $ 48,444,000 Weighted-average remaining lease terms (in years) 8.89 1.49 Weighted-average discount rate 3.52 % 7.37 % In fiscal 2021, we commenced a 15-year operating lease for a facility in Chandler, Arizona and a 10-year operating lease for a facility in the United Kingdom. Accordingly, amounts related to both leases are reflected as an operating lease right-of-use asset or related operating lease liability in our Consolidated Balance Sheet as of July 31, 2021. We lease our Melville, New York production facility from a partnership controlled by our CEO and Chairman. Lease payments made during the fiscal year ended July 31, 2021 and 2020 were $660,000 and $649,000, respectively. The current lease provides for our use of the premises as they exist through December 2031. The annual rent of the facility for calendar year 2022 is $665,000 and is subject to customary adjustments. We have a right of first refusal in the event of a sale of the facility. As of July 31, 2021, we do not have any rental commitments that have not commenced. |
Leases | Leases Our leases historically relate to the leasing of facilities and equipment. In accordance with FASB ASC 842 - "Leases" ("ASC 842"), we determine at inception whether an arrangement is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. At lease commencement, we recognize a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the estimated lease term. We have elected to not recognize a ROU asset or lease liability for any leases with terms of twelve months or less. Instead, for such short-term leases, we recognize lease expense on a straight-line basis over the lease term. Certain of our leases include options to extend the term of the lease or to terminate the lease early. When it is reasonably certain that we will exercise a renewal option or will not exercise a termination option, we include the impact of exercising or not exercising such option, respectively, in the estimate of the lease term. As our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate ("IBR") on the commencement date to calculate the present value of future lease payments. Such IBR represents our estimated rate of interest to borrow on a collateralized basis over a term commensurate with the expected lease term. Some of our leases include payments that are based on the Consumer Price Index ("CPI") or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability using the index as of the lease commencement date. Other variable lease payments, such as common area maintenance, property taxes, and usage-based amounts, are required by ASC 842 to be excluded from the ROU asset and lease liability and expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset would also consider, to the extent applicable, any deferred rent upon adoption, lease pre-payments or initial direct costs of obtaining the lease (e.g., such as commissions). For all classes of leased assets, we elected the practical expedient to not separate lease components (i.e., the actual item being leased, such as the facility or piece of equipment) from non-lease components (i.e., the distinct elements of a contract not related to securing the use of the leased asset, such as common area maintenance and consumable supplies). Certain of our facility lease agreements (which are classified as operating leases) contain rent holidays or rent escalation clauses. For rent holidays and rent escalation clauses during the lease term, we record rental expense on a straight-line basis over the term of the lease. As of July 31, 2021, none of our leases contained a residual value guarantee and covenants included in our lease agreements are customary for the types of facilities and equipment being leased. The components of lease expense are as follows: Fiscal years ended July 31, 2021 2020 Finance lease expense: Amortization of ROU assets $ 36,000 $ 175,000 Interest on lease liabilities 3,000 4,000 Operating lease expense 12,152,000 10,728,000 Short-term lease expense 819,000 3,045,000 Variable lease expense 4,523,000 4,033,000 Sublease income (67,000) (22,000) Total lease expense $ 17,466,000 $ 17,963,000 Additional information related to leases is as follows: Fiscal years ended July 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating leases - Operating cash outflows $ 10,868,000 $ 11,437,000 Finance leases - Operating cash outflows 3,000 4,000 Finance leases - Financing cash outflows 38,000 322,000 ROU assets obtained in the exchange for lease liabilities (non-cash): Operating leases $ 24,987,000 $ 3,561,000 The following table is a reconciliation of future cash flows relating to operating and financing lease liabilities presented on our Consolidated Balance Sheet as of July 31, 2021: Operating Finance Total Fiscal 2022 $ 10,376,000 $ 32,000 $ 10,408,000 Fiscal 2023 8,029,000 3,000 8,032,000 Fiscal 2024 6,657,000 — 6,657,000 Fiscal 2025 6,123,000 — 6,123,000 Fiscal 2026 4,675,000 — 4,675,000 Thereafter 20,810,000 — 20,810,000 Total future undiscounted cash flows 56,670,000 35,000 56,705,000 Less: Present value discount 8,260,000 1,000 8,261,000 Lease liabilities $ 48,410,000 $ 34,000 $ 48,444,000 Weighted-average remaining lease terms (in years) 8.89 1.49 Weighted-average discount rate 3.52 % 7.37 % In fiscal 2021, we commenced a 15-year operating lease for a facility in Chandler, Arizona and a 10-year operating lease for a facility in the United Kingdom. Accordingly, amounts related to both leases are reflected as an operating lease right-of-use asset or related operating lease liability in our Consolidated Balance Sheet as of July 31, 2021. We lease our Melville, New York production facility from a partnership controlled by our CEO and Chairman. Lease payments made during the fiscal year ended July 31, 2021 and 2020 were $660,000 and $649,000, respectively. The current lease provides for our use of the premises as they exist through December 2031. The annual rent of the facility for calendar year 2022 is $665,000 and is subject to customary adjustments. We have a right of first refusal in the event of a sale of the facility. As of July 31, 2021, we do not have any rental commitments that have not commenced. |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes (Loss) income before (benefit from) provision for income taxes consists of the following: Fiscal Years Ended July 31, 2021 2020 2019 U.S. $ (73,153,000) 7,226,000 28,813,000 Foreign (1,827,000) 2,084,000 97,000 $ (74,980,000) 9,310,000 28,910,000 The (benefit from) provision for income taxes included in the accompanying Consolidated Statements of Operations consists of the following: Fiscal Years Ended July 31, 2021 2020 2019 Federal – current $ 608,000 1,053,000 (2,190,000) Federal – deferred (877,000) 721,000 4,782,000 State and local – current 466,000 1,137,000 1,715,000 State and local – deferred (598,000) (1,312,000) (321,000) Foreign – current 688,000 298,000 62,000 Foreign – deferred (1,787,000) 393,000 (179,000) (Benefit from) provision for income taxes $ (1,500,000) 2,290,000 3,869,000 The (benefit from) provision for 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, 2021 2020 2019 Amount Rate Amount Rate Amount Rate Computed "expected" tax expense (benefit) $ (15,746,000) 21.0 % 1,955,000 21.0 % 6,071,000 21.0 % Increase (reduction) in income taxes resulting from: State and local income taxes, net of federal benefit (1,371,000) 1.8 (278,000) (3.0) 967,000 3.3 Stock-based compensation (20,000) — 308,000 3.3 (44,000) (0.1) Research and experimentation credits (1,018,000) 1.4 (1,210,000) (13.0) (1,129,000) (3.9) Foreign-derived intangible income deduction 164,000 (0.2) (162,000) (1.7) (632,000) (2.2) Nondeductible transaction costs 402,000 (0.5) 301,000 3.2 394,000 1.4 Nondeductible executive compensation 628,000 (0.8) 595,000 6.4 330,000 1.1 Fines and penalties — — 189,000 2.0 2,000 — Audit settlements 6,000 — 1,000 — (2,081,000) (7.2) Change in the beginning of the year valuation allowance for deferred tax assets (805,000) 1.1 — — — — Change in valuation allowance 15,582,000 (20.8) — — — — Remeasurement of (224,000) 0.3 (135,000) (1.5) — — Foreign income taxes 676,000 (0.9) 453,000 4.9 5,000 — Other, net 226,000 (0.4) 273,000 3.0 (14,000) — (Benefit from) provision for income taxes $ (1,500,000) 2.0 % 2,290,000 24.6 % 3,869,000 13.4 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at July 31, 2021 and 2020 are presented below: 2021 2020 Deferred tax assets: Inventory and warranty reserves $ 6,774,000 5,786,000 Compensation and commissions 4,338,000 3,210,000 Federal, state and foreign research and experimentation credits 19,324,000 19,656,000 Stock-based compensation 4,979,000 4,955,000 Foreign scientific research and experimental development expenditures 1,496,000 1,765,000 Federal, state and foreign net operating losses 5,413,000 3,942,000 Federal and state capital losses 15,582,000 28,000 Lease liabilities 10,980,000 7,335,000 Other 4,550,000 6,572,000 Less: valuation allowance (28,384,000) (11,471,000) Total deferred tax assets 45,052,000 41,778,000 Deferred tax liabilities: Plant and equipment (1,146,000) (801,000) Lease right-of-use assets (10,085,000) (7,080,000) Intangibles (54,635,000) (50,368,000) Total deferred tax liabilities (65,866,000) (58,249,000) Net deferred tax liabilities $ (20,814,000) (16,471,000) At July 31, 2021, our net deferred tax liability of $20,814,000 includes $416,000 of foreign net deferred tax assets that were recorded as other assets, net in our Consolidated Balance Sheets. At July 31, 2020, our net deferred tax liability of $16,471,000 includes $1,166,000 of foreign net deferred tax assets that were recorded as other assets, net in our Consolidated Balance Sheets. We provide for income taxes under the provisions of ASC 740 which 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, 2021, we have federal research and experimentation credits of $9,471,000 that will begin to expire in 2028. 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 $3,267,000, which expire through 2040, 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 $3,178,000 on the deferred tax assets relating to these state net operating loss carryforwards. We have state research and experimentation credit carryforwards of $8,038,000, which expire through 2040. 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 $7,451,000 on the deferred tax assets relating to these state credits. We have federal and state capital loss carryforwards of $15,582,000, which begin to expire in 2026. We believe that it is more likely than not that the benefit from these capital losses will not be realized. In recognition of this risk, we have provided a valuation allowance of $15,582,000 on the deferred tax assets relating to these capital losses. At July 31, 2021, we had foreign deferred tax assets relating to net operating loss carryforwards of $2,116,000, which will begin to expire in 2032. We believe that it is more likely than not that certain 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 $1,814,000, which will begin to expire in 2024. 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 $193,800,000 of taxable income in the future to fully utilize our net deferred tax assets as of July 31, 2021. 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, 2021 and 2020, total unrecognized tax benefits were $9,172,000 and $8,345,000, respectively, including interest of $163,000 and $75,000, respectively. At July 31, 2021 and 2020, $2,717,000 and 1,963,000, 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 $6,455,000 and $6,382,000 at July 31, 2021 and 2020, 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, $8,408,000 and $7,700,000 at July 31, 2021 and 2020, 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 2021, 2020 and 2019 (excluding interest): 2021 2020 2019 Balance at beginning of period $ 8,270,000 7,203,000 9,137,000 Increase related to current period 528,000 684,000 893,000 Increase related to prior periods 338,000 464,000 17,000 Expiration of statute of limitations (48,000) (73,000) (394,000) Decrease related to prior periods (79,000) (8,000) (2,450,000) Balance at end of period $ 9,009,000 8,270,000 7,203,000 Our U.S. federal income tax returns for fiscal 2018 through 2020 are subject to potential future Internal Revenue Service ("IRS") audit. None of our state income tax returns prior to fiscal 2017 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, 2021 | |
Share-based Payment Arrangement [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 and/or restated from time to time (the "Plan") and our 2001 Employee Stock Purchase Plan, as amended and/or restated from time to time (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. As of July 31, 2021, the aggregate number of shares of common stock which may be issued, pursuant to the Plan, may not exceed 10,962,500. 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, 2021, we had granted stock-based awards pursuant to the Plan representing the right to purchase and/or acquire an aggregate of 9,350,696 shares (net of 4,716,649 expired and canceled awards), of which an aggregate of 7,208,891 have been exercised or settled. As of July 31, 2021, the following stock-based awards, by award type, were outstanding: July 31, 2021 Stock options 1,073,435 Performance shares 236,464 RSUs and restricted stock 568,399 Share units 263,507 Total 2,141,805 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, 2021, we have cumulatively issued 894,771 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, 2021 2020 2019 Cost of sales $ 929,000 823,000 1,047,000 Selling, general and administrative expenses 8,091,000 7,527,000 9,336,000 Research and development expenses 963,000 925,000 1,044,000 Stock-based compensation expense before income tax benefit 9,983,000 9,275,000 11,427,000 Estimated income tax benefit (2,164,000) (2,042,000) (2,553,000) Net stock-based compensation expense $ 7,819,000 7,233,000 8,874,000 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, 2021, unrecognized stock-based compensation of $9,625,000, net of estimated forfeitures of $1,040,000, is expected to be recognized over a weighted average period of 3.0 years. Total stock-based compensation capitalized and included in ending inventory at both July 31, 2021 and 2020 was $48,000. There are no liability-classified stock-based awards outstanding as of July 31, 2021 or 2020. Stock-based compensation expense (benefit), by award type, is summarized as follows: Fiscal Years Ended July 31, 2021 2020 2019 Stock options $ 370,000 442,000 739,000 Performance shares 1,345,000 1,491,000 1,554,000 RSUs and restricted stock 2,985,000 2,543,000 2,149,000 ESPP 208,000 222,000 215,000 Share units 5,075,000 4,577,000 6,770,000 Stock-based compensation expense before income tax benefit 9,983,000 9,275,000 11,427,000 Estimated income tax benefit (2,164,000) (2,042,000) (2,553,000) Net stock-based compensation expense $ 7,819,000 7,233,000 8,874,000 ESPP stock-based compensation expense primarily relates to the 15% discount offered to participants in the ESPP. During the fiscal years ended July 31, 2021, 2020 and 2019 we recorded benefits of $616,000, $310,000 and $130,000 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, 2021 and 2020. 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 Weighted Average Weighted Average Aggregate 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 Granted 327,100 17.88 Expired/canceled (174,840) 29.06 Exercised (285,790) 28.82 Outstanding at July 31, 2020 1,422,025 26.17 Expired/canceled (348,590) 27.44 Outstanding at July 31, 2021 1,073,435 $ 25.76 4.31 $ 2,178,000 Exercisable at July 31, 2021 835,755 $ 28.00 3.03 $ 492,000 Vested and expected to vest at July 31, 2021 1,060,830 $ 25.85 4.26 $ 2,088,000 Stock options outstanding as of July 31, 2021 have exercise prices ranging from $17.88 - $33.94, representing the fair market value of our common stock on the date of grant, a contractual term of ten years and a vesting period of five years. The total intrinsic value relating to stock options exercised during the fiscal years ended July 31 2020 and 2019 was $1,869,000 and $576,000, respectively. There were no stock options exercised during the fiscal year ended July 31, 2021. During fiscal 2020 and 2019, at the election of certain holders of vested stock options, 269,090 and 72,830, respectively, of stock options were net settled upon exercise. As a result, 27,994 and 9,345 shares of our common stock were issued during the fiscal years ended July 31, 2020 and 2019, respectively, net of shares retained to satisfy the exercise price and minimum statutory tax withholding requirements. There were no stock options granted during fiscal years ended July 31, 2021 or 2019. The estimated per-share weighted average grant-date fair value of stock options granted during fiscal 2020 was $5.52, which was determined using the Black-Scholes option pricing model, and included weighted average assumptions as follows: (i) expected dividend yield of 2.24%, (ii) expected volatility of 40.03%, (iii) risk-free interest rate of 0.54%, and (iv) expected life of 6.5 years. Expected dividend yield is the expected annual dividend as a percentage of the fair market value of our common stock on the date of grant, based on our Board's annual dividend target at the time of grant. We estimate expected volatility by considering the historical volatility of our stock and the implied volatility of publicly-traded call options on our stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for an instrument which closely approximates the expected term. The expected term is the number of years we estimate that awards will be outstanding prior to exercise and is determined by employee groups with sufficiently distinct behavior patterns. Assumptions used in computing the fair value of stock-based awards reflect our best estimates, but involve uncertainties relating to market and other conditions, many of which are outside of our control. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by recipients of stock-based awards. 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 Weighted Average Aggregate Intrinsic Value 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 Granted 560,361 19.93 Settled (431,581) 22.02 Canceled/Forfeited (83,882) 22.84 Outstanding at July 31, 2020 999,574 21.15 Granted 644,272 19.06 Settled (455,564) 17.09 Canceled/Forfeited (119,912) 18.42 Outstanding at July 31, 2021 1,068,370 $ 21.93 $ 26,677,000 Vested at July 31, 2021 373,522 $ 21.84 $ 9,327,000 Vested and expected to vest at July 31, 2021 1,023,923 $ 21.93 $ 25,567,000 The total intrinsic value relating to fully-vested awards settled during the fiscal years ended July 31, 2021, 2020 and 2019 was $9,878,000, $9,635,000 and $8,772,000 respectively. The performance shares granted to employees 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, 2021, 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 prior to July 31, 2019 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 and restricted stock granted to non-employee directors after July 31, 2019 have a vesting period of five years. 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, 2021, 253,257 fully vested share units were granted to certain employees in lieu of fiscal 2021 non-equity incentive compensation. Also, on July 31, 2021, 266,354 fully vested share units (previously granted in lieu of fiscal 2020 non-equity incentive compensation) were settled by delivery of 98,502 shares of our common stock after reduction of share units retained to satisfy employees’ statutory tax withholding requirements. Cumulatively, through July 31, 2021, 949,357 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 2021, 2020 and 2019, we accrued $380,000, $294,000 and $327,000, respectively, of dividend equivalents (net of forfeitures) and paid out $279,000, $288,000 and $263,000, respectively. Accrued dividend equivalents were recorded as a reduction to retained earnings. As of July 31, 2021 and 2020, accrued dividend equivalents were $884,000 and $783,000, respectively. With respect to the actual settlement of stock-based awards for income tax reporting, during the fiscal year ended July 31, 2021, we recorded an income tax benefit of $142,000, and during the fiscal years ended July 31, 2020 and 2019 we recorded an income tax expense of $224,000 and an income tax benefit of $479,000, respectively. Subsequent Events In the first quarter of fiscal 2022, our Board of Directors authorized the issuance of stock-based awards with a total unrecognized compensation expense, net of estimated forfeitures, of approximately $6,185,000. |
Segment Information
Segment Information | 12 Months Ended |
Jul. 31, 2021 | |
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. We manage our business through the following reportable operating segments: 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, 911 call handling 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 tactical satellite-based networks and ongoing support for complicated communications networks, 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 expense, 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, restructuring costs, COVID-19 related costs, strategic emerging technology costs (for next-generation satellite technology), facility exit costs, strategic alternatives expenses, proxy solicitation related costs and other. 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, 2021 Commercial Solutions Government Solutions Unallocated Total Net sales $ 360,146,000 221,549,000 — $ 581,695,000 Operating income (loss) $ 41,064,000 8,402,000 (117,764,000) $ (68,298,000) Net income (loss) $ 39,200,000 9,553,000 (122,233,000) $ (73,480,000) Provision for (benefit from) income taxes 1,794,000 (1,376,000) (1,918,000) (1,500,000) Interest (income) and other 68,000 161,000 (368,000) (139,000) Interest expense 2,000 64,000 6,755,000 6,821,000 Amortization of stock-based compensation — — 9,983,000 9,983,000 Amortization of intangibles 17,054,000 3,966,000 — 21,020,000 Depreciation 7,451,000 1,586,000 342,000 9,379,000 Acquisition plan expenses (1,052,000) — 101,344,000 100,292,000 Restructuring costs 1,804,000 978,000 — 2,782,000 COVID-19 related costs — 1,046,000 — 1,046,000 Strategic emerging technology costs — 315,000 — 315,000 Adjusted EBITDA $ 66,321,000 16,293,000 (6,095,000) $ 76,519,000 Purchases of property, plant and equipment $ 10,899,000 5,055,000 83,000 $ 16,037,000 Long-lived assets acquired in connection with acquisitions $ 45,515,000 2,443,000 — $ 47,958,000 Total assets at July 31, 2021 $ 738,095,000 232,763,000 22,253,000 $ 993,111,000 Fiscal Year Ended July 31, 2020 Commercial Solutions Government Solutions Unallocated Total Net sales $ 353,730,000 262,985,000 — $ 616,715,000 Operating income (loss) $ 34,820,000 19,988,000 (39,634,000) $ 15,174,000 Net income (loss) $ 34,414,000 20,232,000 (47,626,000) $ 7,020,000 Provision for (benefit from) income taxes 410,000 (100,000) 1,980,000 2,290,000 Interest (income) and other (31,000) (169,000) 10,000 (190,000) Interest expense 27,000 25,000 6,002,000 6,054,000 Amortization of stock-based compensation — — 9,275,000 9,275,000 Amortization of intangibles 17,325,000 4,270,000 — 21,595,000 Depreciation 8,347,000 1,446,000 768,000 10,561,000 Estimated contract settlement costs 444,000 — — 444,000 Acquisition plan expenses 751,000 — 20,003,000 20,754,000 Adjusted EBITDA $ 61,687,000 $ 25,704,000 $ (9,588,000) $ 77,803,000 Purchases of property, plant and equipment $ 5,281,000 1,617,000 327,000 $ 7,225,000 Long-lived assets acquired in connection with acquisitions $ 6,060,000 32,391,000 — $ 38,451,000 Total assets at July 31, 2020 $ 647,964,000 232,052,000 49,631,000 $ 929,647,000 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 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 2021, 2020 and 2019, we recorded $100,292,000, $20,754,000 and $5,871,000 of acquisition plan expenses, respectively, most of which were recorded primarily in our unallocated expenses. See Note (2) -" Acquisitions " for further information. In addition, offsetting unallocated expenses in fiscal 2019 is a $3,204,000 benefit as a result of a favorable ruling issued by the U.S. Court of Appeals for the Federal Circuit related to a legacy TCS intellectual property matter. During fiscal 2021, our Commercial Solutions segment recorded $1,804,000 of restructuring costs incurred to shift production of our key satellite earth station products to a new 146,000 square foot facility in Chandler, Arizona. There were no such charges recorded in fiscal 2020 or 2019. During fiscal 2021, our Government Solutions segment recorded $978,000 of restructuring costs incurred to consolidate certain administrative and operating functions in our tactical communications technologies product line. In addition, during fiscal 2021, this segment also recorded $1,046,000 of incremental operating costs related to our antenna facility located in the United Kingdom due to the impact of the COVID-19 pandemic, which resulted in a temporary but complete shut-down of this facility. There were no such charges recorded in fiscal 2020 or 2019. Interest expense in the tables above primarily relates to our Credit Facility, and includes the amortization of deferred financing costs. See Note (7) - " Credit Facility " for further discussion. In addition, interest expense for fiscal 2021 includes $1,178,000 of incremental interest expense related to a now terminated financing commitment letter, as discussed in more detail in Note (2) - " Acquisitions ." 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 (7) - " Credit Facility " for further discussion. Intersegment sales in fiscal 2021, 2020 and 2019 by the Commercial Solutions segment to the Government Solutions segment were $3,481,000, $9,837,000 and $17,371,000, 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, 2021 consist principally of cash and cash equivalents, income taxes receivable, corporate property, plant and equipment and deferred financing costs. The large majority of our long-lived assets are located in the U.S. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Legal Proceedings and Other Matters April 2021 Settlement of Litigation Related to the 2019 Acquisition of GD NG-911 In April 2021, we fully and finally settled two related lawsuits with a former employee and Motorola Solutions, Inc. ("Motorola"), and the cases were dismissed with the Court's approval. The resolution of this litigation, which related to our 2019 acquisition of GD NG-911, did not have a material negative impact on our consolidated results of operations, cash flows, or financial position. Other Matters In March 2021, Comtech Xicom Technology, Inc. (“Xicom”) reached an agreement with the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) resolving a previously disclosed matter pending since 2017, which we made a voluntarily disclosure to the U.S. Department of Commerce Office of Export Enforcement (“OEE”). Based on our own audit of approximately 7,800 transactions, it was determined that for three (3) separate transactions between December 2015 and March 2017, Xicom engaged in conduct prohibited by the Export Administration Regulations (the “Regulations”) when it exported items subject to the Regulations from the United States to Russia, the United Arab Emirates, and Brazil without obtaining the necessary BIS authorizations required for exports to each of these countries. The exports were valued at $154,000. Upon discovery of this issue, we implemented additional controls and procedures and increased awareness of these specific export requirements throughout Comtech to help avoid similar occurrences in the future. Pursuant to the agreement with BIS, Xicom made a payment to BIS of $122,000 in April 2021. No other actions are to be taken by BIS or required of Xicom or Comtech in connection with this matter and we now considered the matter closed. 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. (b) Employment Change of Control and Indemnification Agreements |
Goodwill
Goodwill | 12 Months Ended |
Jul. 31, 2021 | |
Goodwill [Abstract] | |
Goodwill | Goodwill The following table represents goodwill by reportable operating segment, including the changes in the net carrying value of goodwill as of July 31, 2021: Commercial Solutions Government Solutions Total Balance as of July 31, 2020 $ 255,432,000 75,087,000 $ 330,519,000 Changes related to CGC acquisition — 2,222,000 2,222,000 Changes related to Solacom Technologies Inc. ("Solacom") 1,052,000 — 1,052,000 UHP acquisition 13,905,000 — 13,905,000 Balance as of July 31, 2021 $ 270,389,000 77,309,000 $ 347,698,000 During fiscal 2021, we recorded an adjustment to Solacom's goodwill to correct an immaterial item. In accordance with FASB ASC 350, 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, 2021 (the first day of our fiscal 2022), 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, 2021 total public market capitalization and assessed implied control premiums based on our common stock price of $24.97 as of August 1, 2021. 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 22.7% and 94.1%, 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 2022 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 fluctuate. Such fluctuation could be caused by uncertainty about the severity and length of the COVID-19 pandemic, and its impact on global activity. 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 2022 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, 2022 (the start of our fiscal 2023). 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, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets with finite lives as of July 31, 2021 and 2020 are as follows: July 31, 2021 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.2 $ 302,058,000 93,215,000 $ 208,843,000 Technologies 14.8 114,949,000 70,924,000 44,025,000 Trademarks and other 16.7 32,926,000 17,095,000 15,831,000 Total $ 449,933,000 181,234,000 $ 268,699,000 July 31, 2020 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.4 $ 286,058,000 79,534,000 $ 206,524,000 Technologies 14.0 99,349,000 65,398,000 33,951,000 Trademarks and other 16.6 32,826,000 15,282,000 17,544,000 Total $ 418,233,000 160,214,000 $ 258,019,000 The weighted average amortization period in the above table excludes fully amortized intangible assets. Amortization expense for the fiscal years ended July 31, 2021, 2020 and 2019 was $21,020,000, $21,595,000 and $18,320,000, respectively. The estimated amortization expense consists of the following for the fiscal years ending July 31: 2022 $ 21,781,000 2023 21,781,000 2024 21,154,000 2025 21,041,000 2026 19,888,000 We review net intangible assets with finite lives for impairment when an event occurs indicating the potential for impairment. Based on our last assessment, we believe that the carrying values of our net intangible assets were recoverable as of July 31, 2021. However, if business conditions deteriorate, we may be required to record impairment losses, and or increase the amortization of intangibles in the future. 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, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Sale of Common Stock In December 2018, we filed a $400,000,000 shelf registration statement 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 pursuant to our $400,000,000 shelf registration statement. On March 3, 2021, in connection with our acquisition of UHP, we filed a shelf registration statement with the SEC for the sale by the selling stockholder of UHP of up to 1,381,567 shares of our common stock. See Note (2) - " Acquisitions - UHP Networks Inc. " for further information. Stock Repurchase Program On September 29, 2020, our Board of Directors authorized a new $100,000,000 stock repurchase program, which replaced our prior program. The new $100,000,000 stock repurchase program has no time restrictions and repurchases may be made from time to time in open-market or privately negotiated transactions, or by other means in accordance with federal securities laws. There were no repurchases made during the fiscal years ended July 31, 2021 or 2020. 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 29, 2020, December 9, 2020, March 11, 2021 and June 8, 2021, our Board of Directors declared a dividend of $0.10 per common share, which were paid on October 27, 2020, February 19, 2021, May 21, 2021 and August 20, 2021, respectively. On October 4, 2021, our Board of Directors declared a dividend of $0.10 per common share, payable on November 12, 2021 to stockholders of record at the close of business on October 13, 2021. Future Common Stock 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, 2021 | |
Selected Quarterly Financial Information [Abstract] | |
Unaudited Quarterly Financial Data | Unaudited Quarterly Financial Data The following is a summary of unaudited quarterly operating results: Fiscal 2021 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 135,218,000 161,292,000 139,376,000 145,809,000 $ 581,695,000 Gross profit 50,208,000 55,680,000 53,016,000 55,054,000 213,958,000 Net (loss) income (85,840,000) 4,205,000 792,000 7,363,000 (73,480,000) Diluted (loss) income per share (3.39) 0.17 0.03 0.28 (2.86) * Fiscal 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 170,267,000 161,654,000 135,121,000 149,673,000 $ 616,715,000 Gross profit 63,567,000 60,602,000 53,001,000 49,663,000 226,833,000 Net income (loss) 6,388,000 3,495,000 (3,989,000) 1,126,000 7,020,000 Diluted income (loss) per share 0.26 0.14 (0.16) 0.04 0.28 * 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 * * 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, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | Schedule II COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES Valuation and Qualifying Accounts and Reserves Fiscal Years Ended July 31, 2021, 2020 and 2019 Column A Column B Column C Additions Column D Column E Description Balance at Charged to Charged to Transfers Balance at Allowance for doubtful accounts receivable: Year ended July 31, 2021 $ 1,769,000 (18,000) (A) 215,000 (B) (318,000) (C) $ 1,648,000 2020 1,867,000 45,000 (A) — (143,000) (C) 1,769,000 2019 1,761,000 1,136,000 (A) — (1,030,000) (C) 1,867,000 Inventory reserves: Year ended July 31, 2021 $ 19,076,000 4,364,000 (D) — (3,211,000) (E) $ 20,229,000 2020 19,696,000 1,647,000 (D) — (2,267,000) (E) 19,076,000 2019 17,427,000 6,015,000 (D) — (3,746,000) (E) 19,696,000 Valuation allowance for deferred tax assets: Year ended July 31, 2021 $ 11,471,000 17,750,000 (F) — (837,000) (F) $ 28,384,000 2020 12,568,000 750,000 (F) — (1,847,000) (F) 11,471,000 2019 11,854,000 58,000 (F) 656,000 (G) — 12,568,000 (A) Provision for doubtful accounts. (B) Increase due to our adoption FASB ASU No. 2016-13 ("CECL”). See Note (1)(n) "Summary of Significant Accounting and Reporting Policies" for further discussion (C) Write-off of uncollectible receivables. (D) Provision for excess and obsolete inventory. (E) Write-off of inventory. (F) Change in valuation allowance. See Note (9) - "Income Taxes" for further discussion. (G) Acquisition related valuation allowance charged to goodwill. |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policy) | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of ConsolidationThe 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. On October 4, 2021, we announced that our Board of Directors has appointed Michael D. Porcelain, our President and Chief Operating Officer, to be Chief Executive Officer, taking over from Fred Kornberg after a short transition period. The change of leadership is expected to occur by the end of calendar 2021, at which point Mr. Porcelain will also join our Board of Directors and continue as President. Mr. Kornberg will serve as non-executive Chairman of the Board and is expect to take on a technology advisory role. Costs associated with this leadership transition will be announced once they are finalized. |
Revenue Recognition | Revenue Recognition In accordance with FASB ASC 606 - Revenue from Contracts with Customers ("ASC 606"), we record revenue 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 Government Solutions segment and, to a lesser extent, certain location-based and messaging infrastructure contracts in our public safety and location technologies product line within our Commercial Solutions segment. For service-based contracts in our public safety and location technologies product line, we also 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 RF amplifiers in our Government Solutions segment. 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. 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 unbilled receivables. Under ASC 606, unbilled receivables constitute contract assets. There were no material impairment losses recognized on contract assets during the fiscal years ended July 31, 2021, 2020 and 2019, respectively. 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. Of the contract liability balance at July 31, 2020 and July 31, 2019, $34,545,000 and $34,225,000 was recognized as revenue during fiscal years 2021 and 2020, respectively. In fiscal 2021 and 2020, contract liabilities increased $648,000 and $6,890,000, respectively, due to business combinations discussed in Note (2) - " Acquisitions ." 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 our 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 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. |
Cash and Cash Equivalents | Cash and Cash EquivalentsOur 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, 2021 and 2020, amounted to $30,861,000 and $47,878,000, 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 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 2022 on August 1, 2021 (the first day of our fiscal 2022). See Note (13) - " 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 2023. 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 CostsWe 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 2021, 2020 and 2019, we were reimbursed by customers for such activities in the amount of $13,635,000, $11,923,000 and $14,679,000, 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. There were no repurchases of our common stock during the fiscal years ended July 31, 2021, 2020 and 2019. See Note (15) - " Stockholders’ Equity " for more information. Weighted average stock options, RSUs and restricted stock outstanding of 1,440,000, 1,348,000 and 1,347,000 shares for fiscal 2021, 2020 and 2019, respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Our EPS calculations exclude 232,000, 201,000 and 243,000 weighted average performance shares outstanding for fiscal 2021, 2020 and 2019, respectively, as the performance conditions have not yet been satisfied. However, net income (loss) (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 and accrued expenses) approximate their fair values due to their short-term maturities. 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. As of July 31, 2021 and 2020, 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 EstimatesThe 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 2021, 2020 and 2019. |
Reclassifications | ReclassificationsCertain reclassifications have been made to previously reported consolidated financial statements to conform to the fiscal 2021 presentation. |
Adoption of Accounting Standards and Updates | 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 2021, we adopted: • FASB ASU No. 2016-13, which requires companies to utilize an impairment model (current expected credit loss ("CECL”)) for most financial assets measured at amortized cost and certain other financial instruments, which include, but are not limited to trade receivables and contract assets. This accounting standard replaced the incurred loss model with a model that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate those losses. On August 1, 2020, we adopted this ASU on a modified-retrospective basis and recorded a $215,000 decrease to opening retained earnings. • FASB ASU No. 2018-13, which modifies the disclosure requirements for fair value measurements in Topic 820. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. • FASB ASU No. 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this ASU. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. • FASB ASU No. 2018-17, which requires entities to consider indirect interests held through related parties under common control on a proportional basis, rather than as the equivalent of a direct interest in its entirety, when determining whether a decision-making fee is a variable interest. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. • FASB ASU No. 2018-18, which clarifies when certain transactions between collaborative arrangement participants should be accounted for under ASC 606 and incorporates unit-of-account guidance consistent with ASC 606 to aid in this determination. The ASU also precludes entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. • FASB ASU No. 2019-08, which requires that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. The amount recorded as a reduction of the transaction price is required to be measured based on the grant-date fair value of the share-based payment award. On August 1, 2020, we adopted this ASU. Our adoption of this ASU did not have any impact on our consolidated financial statements or disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
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, 2021 2020 2019 United States U.S. government 34.6 % 36.2 % 40.1 % Domestic 41.5 % 40.3 % 34.5 % Total United States 76.1 % 76.5 % 74.6 % International 23.9 % 23.5 % 25.4 % 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 years ended July 31, 2021, 2020 and 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, 2021 Commercial Solutions Government Solutions Total Geographical region and customer type U.S. government $ 52,976,000 148,105,000 $ 201,081,000 Domestic 210,493,000 31,178,000 241,671,000 Total United States 263,469,000 179,283,000 442,752,000 International 96,677,000 42,266,000 138,943,000 Total $ 360,146,000 221,549,000 $ 581,695,000 Contract type Firm fixed-price $ 357,521,000 141,367,000 $ 498,888,000 Cost reimbursable 2,625,000 80,182,000 82,807,000 Total $ 360,146,000 221,549,000 $ 581,695,000 Transfer of control Point in time $ 141,707,000 94,687,000 $ 236,394,000 Over time 218,439,000 126,862,000 345,301,000 Total $ 360,146,000 221,549,000 $ 581,695,000 Fiscal Year Ended July 31, 2020 Commercial Solutions Government Solutions Total Geographical region and customer type U.S. government $ 52,327,000 171,036,000 $ 223,363,000 Domestic 208,284,000 39,961,000 248,245,000 Total United States 260,611,000 210,997,000 471,608,000 International 93,119,000 51,988,000 145,107,000 Total $ 353,730,000 262,985,000 $ 616,715,000 Contract type Firm fixed-price $ 349,855,000 178,237,000 $ 528,092,000 Cost reimbursable 3,875,000 84,748,000 88,623,000 Total $ 353,730,000 262,985,000 $ 616,715,000 Transfer of control Point in time $ 142,448,000 136,518,000 $ 278,966,000 Over time 211,282,000 126,467,000 337,749,000 Total $ 353,730,000 262,985,000 $ 616,715,000 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, 2021 2020 2019 Numerator: Net (loss) income for basic calculation $ (73,480,000) 7,020,000 25,041,000 Numerator for diluted calculation $ (73,480,000) 7,020,000 25,041,000 Denominator: Denominator for basic calculation 25,685,000 24,798,000 24,124,000 Effect of dilutive securities: Stock-based awards — 101,000 178,000 Denominator for diluted calculation 25,685,000 24,899,000 24,302,000 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Business Combinations [Abstract] | |
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: Purchase Price Allocation (1) Measurement Period Adjustments Purchase Price Allocation (As adjusted) Initial upfront payment $ 23,902,000 $ 77,000 $ 23,979,000 Hold back amount 5,000,000 (9,000) 4,991,000 Contingent earn-out consideration 8,500,000 — 8,500,000 Preliminary purchase price at fair value $ 37,402,000 $ 68,000 $ 37,470,000 Preliminary allocation of aggregate purchase price: Cash and cash equivalents $ 1,391,000 $ — $ 1,391,000 Current assets 1,235,000 123,000 1,358,000 Property, plant and equipment 10,000 — 10,000 Deferred tax assets 286,000 27,000 313,000 Contract liabilities (657,000) 9,000 (648,000) Accrued warranty obligations (750,000) — (750,000) Other current liabilities (1,166,000) (9,000) (1,175,000) Non-current liabilities (160,000) — (160,000) Net tangible assets at preliminary fair value $ 189,000 150,000 $ 339,000 Identifiable intangibles, deferred taxes and goodwill: Estimated Useful Lives Technology $ 15,300,000 $ — $ 15,300,000 15 years Customer relationships 15,500,000 — 15,500,000 15 years Trade name 800,000 — 800,000 20 years Deferred tax liabilities (8,374,000) — (8,374,000) Goodwill 13,987,000 (82,000) 13,905,000 Indefinite Preliminary allocation of aggregate purchase price $ 37,402,000 $ 68,000 $ 37,470,000 (1) As reported in the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2021. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Receivables [Abstract] | |
Accounts receivable | Accounts receivable consist of the following at July 31, 2021 and 2020: 2021 2020 Receivables from commercial and international customers $ 86,890,000 67,109,000 Unbilled receivables from commercial and international customers 36,131,000 21,588,000 Receivables from the U.S. government and its agencies 33,381,000 32,870,000 Unbilled receivables from the U.S. government and its agencies 3,356,000 7,018,000 Total accounts receivable 159,758,000 128,585,000 Less allowance for doubtful accounts 1,648,000 1,769,000 Accounts receivable, net $ 158,110,000 126,816,000 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following at July 31, 2021 and 2020: 2021 2020 Raw materials and components $ 62,249,000 59,175,000 Work-in-process and finished goods 38,338,000 42,203,000 Total inventories 100,587,000 101,378,000 Less reserve for excess and obsolete inventories 20,229,000 19,076,000 Inventories, net $ 80,358,000 82,302,000 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, plant, and equipment | Property, plant and equipment consist of the following at July 31, 2021 and 2020: 2021 2020 Machinery and equipment $ 170,600,000 156,314,000 Leasehold improvements 15,726,000 15,596,000 186,326,000 171,910,000 Less accumulated depreciation and amortization 151,040,000 144,873,000 Property, plant and equipment, net $ 35,286,000 27,037,000 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following at July 31, 2021 and 2020: 2021 2020 Accrued wages and benefits $ 26,367,000 20,857,000 Accrued warranty obligations 17,600,000 15,200,000 Accrued contract costs 12,750,000 15,306,000 Accrued acquisition-related costs 9,222,000 7,014,000 Accrued commissions and royalties 5,342,000 4,621,000 Accrued legal costs 2,854,000 2,539,000 Other 15,466,000 19,624,000 Accrued expenses and other current liabilities $ 89,601,000 85,161,000 |
Product warranty rollforward | Changes in our accrued warranty obligations during the fiscal years ended July 31, 2021 and 2020 were as follows: 2021 2020 Balance at beginning of year $ 15,200,000 15,968,000 Provision for warranty obligations 4,360,000 2,277,000 Additions (in connection with acquisitions) 750,000 1,000,000 Charges incurred (2,710,000) (4,347,000) Reclassification of non-current liabilities — 302,000 Balance at end of year $ 17,600,000 15,200,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Leases [Abstract] | |
Components of lease expense and additional information | The components of lease expense are as follows: Fiscal years ended July 31, 2021 2020 Finance lease expense: Amortization of ROU assets $ 36,000 $ 175,000 Interest on lease liabilities 3,000 4,000 Operating lease expense 12,152,000 10,728,000 Short-term lease expense 819,000 3,045,000 Variable lease expense 4,523,000 4,033,000 Sublease income (67,000) (22,000) Total lease expense $ 17,466,000 $ 17,963,000 Additional information related to leases is as follows: Fiscal years ended July 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating leases - Operating cash outflows $ 10,868,000 $ 11,437,000 Finance leases - Operating cash outflows 3,000 4,000 Finance leases - Financing cash outflows 38,000 322,000 ROU assets obtained in the exchange for lease liabilities (non-cash): Operating leases $ 24,987,000 $ 3,561,000 |
Future cash flows relating to operating lease liabilities | The following table is a reconciliation of future cash flows relating to operating and financing lease liabilities presented on our Consolidated Balance Sheet as of July 31, 2021: Operating Finance Total Fiscal 2022 $ 10,376,000 $ 32,000 $ 10,408,000 Fiscal 2023 8,029,000 3,000 8,032,000 Fiscal 2024 6,657,000 — 6,657,000 Fiscal 2025 6,123,000 — 6,123,000 Fiscal 2026 4,675,000 — 4,675,000 Thereafter 20,810,000 — 20,810,000 Total future undiscounted cash flows 56,670,000 35,000 56,705,000 Less: Present value discount 8,260,000 1,000 8,261,000 Lease liabilities $ 48,410,000 $ 34,000 $ 48,444,000 Weighted-average remaining lease terms (in years) 8.89 1.49 Weighted-average discount rate 3.52 % 7.37 % |
Future minimum lease payments for finance lease liabilities | The following table is a reconciliation of future cash flows relating to operating and financing lease liabilities presented on our Consolidated Balance Sheet as of July 31, 2021: Operating Finance Total Fiscal 2022 $ 10,376,000 $ 32,000 $ 10,408,000 Fiscal 2023 8,029,000 3,000 8,032,000 Fiscal 2024 6,657,000 — 6,657,000 Fiscal 2025 6,123,000 — 6,123,000 Fiscal 2026 4,675,000 — 4,675,000 Thereafter 20,810,000 — 20,810,000 Total future undiscounted cash flows 56,670,000 35,000 56,705,000 Less: Present value discount 8,260,000 1,000 8,261,000 Lease liabilities $ 48,410,000 $ 34,000 $ 48,444,000 Weighted-average remaining lease terms (in years) 8.89 1.49 Weighted-average discount rate 3.52 % 7.37 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income before provision for income taxes | (Loss) income before (benefit from) provision for income taxes consists of the following: Fiscal Years Ended July 31, 2021 2020 2019 U.S. $ (73,153,000) 7,226,000 28,813,000 Foreign (1,827,000) 2,084,000 97,000 $ (74,980,000) 9,310,000 28,910,000 |
Provision for income taxes | The (benefit from) provision for income taxes included in the accompanying Consolidated Statements of Operations consists of the following: Fiscal Years Ended July 31, 2021 2020 2019 Federal – current $ 608,000 1,053,000 (2,190,000) Federal – deferred (877,000) 721,000 4,782,000 State and local – current 466,000 1,137,000 1,715,000 State and local – deferred (598,000) (1,312,000) (321,000) Foreign – current 688,000 298,000 62,000 Foreign – deferred (1,787,000) 393,000 (179,000) (Benefit from) provision for income taxes $ (1,500,000) 2,290,000 3,869,000 |
Provision for income taxes differed from amounts computed by applying the U.S. Federal income tax rate | The (benefit from) provision for 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, 2021 2020 2019 Amount Rate Amount Rate Amount Rate Computed "expected" tax expense (benefit) $ (15,746,000) 21.0 % 1,955,000 21.0 % 6,071,000 21.0 % Increase (reduction) in income taxes resulting from: State and local income taxes, net of federal benefit (1,371,000) 1.8 (278,000) (3.0) 967,000 3.3 Stock-based compensation (20,000) — 308,000 3.3 (44,000) (0.1) Research and experimentation credits (1,018,000) 1.4 (1,210,000) (13.0) (1,129,000) (3.9) Foreign-derived intangible income deduction 164,000 (0.2) (162,000) (1.7) (632,000) (2.2) Nondeductible transaction costs 402,000 (0.5) 301,000 3.2 394,000 1.4 Nondeductible executive compensation 628,000 (0.8) 595,000 6.4 330,000 1.1 Fines and penalties — — 189,000 2.0 2,000 — Audit settlements 6,000 — 1,000 — (2,081,000) (7.2) Change in the beginning of the year valuation allowance for deferred tax assets (805,000) 1.1 — — — — Change in valuation allowance 15,582,000 (20.8) — — — — Remeasurement of (224,000) 0.3 (135,000) (1.5) — — Foreign income taxes 676,000 (0.9) 453,000 4.9 5,000 — Other, net 226,000 (0.4) 273,000 3.0 (14,000) — (Benefit from) provision for income taxes $ (1,500,000) 2.0 % 2,290,000 24.6 % 3,869,000 13.4 % |
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, 2021 and 2020 are presented below: 2021 2020 Deferred tax assets: Inventory and warranty reserves $ 6,774,000 5,786,000 Compensation and commissions 4,338,000 3,210,000 Federal, state and foreign research and experimentation credits 19,324,000 19,656,000 Stock-based compensation 4,979,000 4,955,000 Foreign scientific research and experimental development expenditures 1,496,000 1,765,000 Federal, state and foreign net operating losses 5,413,000 3,942,000 Federal and state capital losses 15,582,000 28,000 Lease liabilities 10,980,000 7,335,000 Other 4,550,000 6,572,000 Less: valuation allowance (28,384,000) (11,471,000) Total deferred tax assets 45,052,000 41,778,000 Deferred tax liabilities: Plant and equipment (1,146,000) (801,000) Lease right-of-use assets (10,085,000) (7,080,000) Intangibles (54,635,000) (50,368,000) Total deferred tax liabilities (65,866,000) (58,249,000) Net deferred tax liabilities $ (20,814,000) (16,471,000) |
Summary of unrecognized tax benefits | The following table summarizes the activity related to our unrecognized tax benefits for fiscal years 2021, 2020 and 2019 (excluding interest): 2021 2020 2019 Balance at beginning of period $ 8,270,000 7,203,000 9,137,000 Increase related to current period 528,000 684,000 893,000 Increase related to prior periods 338,000 464,000 17,000 Expiration of statute of limitations (48,000) (73,000) (394,000) Decrease related to prior periods (79,000) (8,000) (2,450,000) Balance at end of period $ 9,009,000 8,270,000 7,203,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock-based awards outstanding by award type | As of July 31, 2021, the following stock-based awards, by award type, were outstanding: July 31, 2021 Stock options 1,073,435 Performance shares 236,464 RSUs and restricted stock 568,399 Share units 263,507 Total 2,141,805 |
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, 2021 2020 2019 Cost of sales $ 929,000 823,000 1,047,000 Selling, general and administrative expenses 8,091,000 7,527,000 9,336,000 Research and development expenses 963,000 925,000 1,044,000 Stock-based compensation expense before income tax benefit 9,983,000 9,275,000 11,427,000 Estimated income tax benefit (2,164,000) (2,042,000) (2,553,000) Net stock-based compensation expense $ 7,819,000 7,233,000 8,874,000 |
Summary of stock-based compensation expense by award type | Stock-based compensation expense (benefit), by award type, is summarized as follows: Fiscal Years Ended July 31, 2021 2020 2019 Stock options $ 370,000 442,000 739,000 Performance shares 1,345,000 1,491,000 1,554,000 RSUs and restricted stock 2,985,000 2,543,000 2,149,000 ESPP 208,000 222,000 215,000 Share units 5,075,000 4,577,000 6,770,000 Stock-based compensation expense before income tax benefit 9,983,000 9,275,000 11,427,000 Estimated income tax benefit (2,164,000) (2,042,000) (2,553,000) Net stock-based compensation expense $ 7,819,000 7,233,000 8,874,000 |
Summary of the Plan's activity relating to stock options | The following table summarizes the Plan's activity: Awards Weighted Average Weighted Average Aggregate 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 Granted 327,100 17.88 Expired/canceled (174,840) 29.06 Exercised (285,790) 28.82 Outstanding at July 31, 2020 1,422,025 26.17 Expired/canceled (348,590) 27.44 Outstanding at July 31, 2021 1,073,435 $ 25.76 4.31 $ 2,178,000 Exercisable at July 31, 2021 835,755 $ 28.00 3.03 $ 492,000 Vested and expected to vest at July 31, 2021 1,060,830 $ 25.85 4.26 $ 2,088,000 |
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 Weighted Average Aggregate Intrinsic Value 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 Granted 560,361 19.93 Settled (431,581) 22.02 Canceled/Forfeited (83,882) 22.84 Outstanding at July 31, 2020 999,574 21.15 Granted 644,272 19.06 Settled (455,564) 17.09 Canceled/Forfeited (119,912) 18.42 Outstanding at July 31, 2021 1,068,370 $ 21.93 $ 26,677,000 Vested at July 31, 2021 373,522 $ 21.84 $ 9,327,000 Vested and expected to vest at July 31, 2021 1,023,923 $ 21.93 $ 25,567,000 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment reconciliation | 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, 2021 Commercial Solutions Government Solutions Unallocated Total Net sales $ 360,146,000 221,549,000 — $ 581,695,000 Operating income (loss) $ 41,064,000 8,402,000 (117,764,000) $ (68,298,000) Net income (loss) $ 39,200,000 9,553,000 (122,233,000) $ (73,480,000) Provision for (benefit from) income taxes 1,794,000 (1,376,000) (1,918,000) (1,500,000) Interest (income) and other 68,000 161,000 (368,000) (139,000) Interest expense 2,000 64,000 6,755,000 6,821,000 Amortization of stock-based compensation — — 9,983,000 9,983,000 Amortization of intangibles 17,054,000 3,966,000 — 21,020,000 Depreciation 7,451,000 1,586,000 342,000 9,379,000 Acquisition plan expenses (1,052,000) — 101,344,000 100,292,000 Restructuring costs 1,804,000 978,000 — 2,782,000 COVID-19 related costs — 1,046,000 — 1,046,000 Strategic emerging technology costs — 315,000 — 315,000 Adjusted EBITDA $ 66,321,000 16,293,000 (6,095,000) $ 76,519,000 Purchases of property, plant and equipment $ 10,899,000 5,055,000 83,000 $ 16,037,000 Long-lived assets acquired in connection with acquisitions $ 45,515,000 2,443,000 — $ 47,958,000 Total assets at July 31, 2021 $ 738,095,000 232,763,000 22,253,000 $ 993,111,000 Fiscal Year Ended July 31, 2020 Commercial Solutions Government Solutions Unallocated Total Net sales $ 353,730,000 262,985,000 — $ 616,715,000 Operating income (loss) $ 34,820,000 19,988,000 (39,634,000) $ 15,174,000 Net income (loss) $ 34,414,000 20,232,000 (47,626,000) $ 7,020,000 Provision for (benefit from) income taxes 410,000 (100,000) 1,980,000 2,290,000 Interest (income) and other (31,000) (169,000) 10,000 (190,000) Interest expense 27,000 25,000 6,002,000 6,054,000 Amortization of stock-based compensation — — 9,275,000 9,275,000 Amortization of intangibles 17,325,000 4,270,000 — 21,595,000 Depreciation 8,347,000 1,446,000 768,000 10,561,000 Estimated contract settlement costs 444,000 — — 444,000 Acquisition plan expenses 751,000 — 20,003,000 20,754,000 Adjusted EBITDA $ 61,687,000 $ 25,704,000 $ (9,588,000) $ 77,803,000 Purchases of property, plant and equipment $ 5,281,000 1,617,000 327,000 $ 7,225,000 Long-lived assets acquired in connection with acquisitions $ 6,060,000 32,391,000 — $ 38,451,000 Total assets at July 31, 2020 $ 647,964,000 232,052,000 49,631,000 $ 929,647,000 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 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Goodwill [Abstract] | |
Schedule of goodwill by segment | The following table represents goodwill by reportable operating segment, including the changes in the net carrying value of goodwill as of July 31, 2021: Commercial Solutions Government Solutions Total Balance as of July 31, 2020 $ 255,432,000 75,087,000 $ 330,519,000 Changes related to CGC acquisition — 2,222,000 2,222,000 Changes related to Solacom Technologies Inc. ("Solacom") 1,052,000 — 1,052,000 UHP acquisition 13,905,000 — 13,905,000 Balance as of July 31, 2021 $ 270,389,000 77,309,000 $ 347,698,000 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible assets with finite lives | Intangible assets with finite lives as of July 31, 2021 and 2020 are as follows: July 31, 2021 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.2 $ 302,058,000 93,215,000 $ 208,843,000 Technologies 14.8 114,949,000 70,924,000 44,025,000 Trademarks and other 16.7 32,926,000 17,095,000 15,831,000 Total $ 449,933,000 181,234,000 $ 268,699,000 July 31, 2020 Weighted Average Gross Carrying Accumulated Net Carrying Customer relationships 20.4 $ 286,058,000 79,534,000 $ 206,524,000 Technologies 14.0 99,349,000 65,398,000 33,951,000 Trademarks and other 16.6 32,826,000 15,282,000 17,544,000 Total $ 418,233,000 160,214,000 $ 258,019,000 |
Estimated amortization expense | The estimated amortization expense consists of the following for the fiscal years ending July 31: 2022 $ 21,781,000 2023 21,781,000 2024 21,154,000 2025 21,041,000 2026 19,888,000 |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Selected Quarterly Financial Information [Abstract] | |
Unaudited Quarterly Financial Data | The following is a summary of unaudited quarterly operating results: Fiscal 2021 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 135,218,000 161,292,000 139,376,000 145,809,000 $ 581,695,000 Gross profit 50,208,000 55,680,000 53,016,000 55,054,000 213,958,000 Net (loss) income (85,840,000) 4,205,000 792,000 7,363,000 (73,480,000) Diluted (loss) income per share (3.39) 0.17 0.03 0.28 (2.86) * Fiscal 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Total Net sales $ 170,267,000 161,654,000 135,121,000 149,673,000 $ 616,715,000 Gross profit 63,567,000 60,602,000 53,001,000 49,663,000 226,833,000 Net income (loss) 6,388,000 3,495,000 (3,989,000) 1,126,000 7,020,000 Diluted income (loss) per share 0.26 0.14 (0.16) 0.04 0.28 * 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 * * 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 - Nature of Business (Details) | 12 Months Ended |
Jul. 31, 2021operating_segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Summary of Significant Accoun_5
Summary of Significant Accounting and Reporting Policies (Revenue Recognition, Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Net sales | $ 145,809,000 | $ 139,376,000 | $ 161,292,000 | $ 135,218,000 | $ 149,673,000 | $ 135,121,000 | $ 161,654,000 | $ 170,267,000 | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 581,695,000 | $ 616,715,000 | $ 671,797,000 |
Revenue recognized, included in contract liabilities in prior period | 34,545,000 | 34,225,000 | |||||||||||||
Contract liabilities, increase from business combinations | 648,000 | 6,890,000 | |||||||||||||
International | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Net sales | $ 138,943,000 | $ 145,107,000 | $ 170,607,000 | ||||||||||||
Customer Concentration Risk | Net sales | Verizon Communications Inc. | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Concentration risk, percentage | 10.70% | ||||||||||||||
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 | 23.90% | 23.50% | 25.40% | ||||||||||||
Net sales | $ 138,942,000 | $ 145,107,000 | $ 170,607,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting and Reporting Policies (Sales by Geography and Customer Type (Details) - Net sales - Geographic Concentration Risk | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% |
U.S. government | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 34.60% | 36.20% | 40.10% |
Domestic | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 41.50% | 40.30% | 34.50% |
Total United States | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 76.10% | 76.50% | 74.60% |
International | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 23.90% | 23.50% | 25.40% |
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, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | $ 145,809,000 | $ 139,376,000 | $ 161,292,000 | $ 135,218,000 | $ 149,673,000 | $ 135,121,000 | $ 161,654,000 | $ 170,267,000 | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 581,695,000 | $ 616,715,000 | $ 671,797,000 |
Point in time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 236,394,000 | 278,966,000 | 353,157,000 | ||||||||||||
Over time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 345,301,000 | 337,749,000 | 318,640,000 | ||||||||||||
Firm fixed-price | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 498,888,000 | 528,092,000 | 582,250,000 | ||||||||||||
Cost reimbursable | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 82,807,000 | 88,623,000 | 89,547,000 | ||||||||||||
U.S. government | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 201,081,000 | 223,363,000 | 269,242,000 | ||||||||||||
Domestic | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 241,671,000 | 248,245,000 | 231,948,000 | ||||||||||||
Total United States | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 442,752,000 | 471,608,000 | 501,190,000 | ||||||||||||
International | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 138,943,000 | 145,107,000 | 170,607,000 | ||||||||||||
Commercial Solutions | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 360,146,000 | 353,730,000 | 357,293,000 | ||||||||||||
Commercial Solutions | Point in time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 141,707,000 | 142,448,000 | 177,090,000 | ||||||||||||
Commercial Solutions | Over time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 218,439,000 | 211,282,000 | 180,203,000 | ||||||||||||
Commercial Solutions | Firm fixed-price | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 357,521,000 | 349,855,000 | 350,850,000 | ||||||||||||
Commercial Solutions | Cost reimbursable | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 2,625,000 | 3,875,000 | 6,443,000 | ||||||||||||
Commercial Solutions | U.S. government | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 52,976,000 | 52,327,000 | 68,534,000 | ||||||||||||
Commercial Solutions | Domestic | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 210,493,000 | 208,284,000 | 192,516,000 | ||||||||||||
Commercial Solutions | Total United States | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 263,469,000 | 260,611,000 | 261,050,000 | ||||||||||||
Commercial Solutions | International | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 96,677,000 | 93,119,000 | 96,243,000 | ||||||||||||
Government Solutions | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 221,549,000 | 262,985,000 | 314,504,000 | ||||||||||||
Government Solutions | Point in time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 94,687,000 | 136,518,000 | 176,067,000 | ||||||||||||
Government Solutions | Over time | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 126,862,000 | 126,467,000 | 138,437,000 | ||||||||||||
Government Solutions | Firm fixed-price | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 141,367,000 | 178,237,000 | 231,400,000 | ||||||||||||
Government Solutions | Cost reimbursable | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 80,182,000 | 84,748,000 | 83,104,000 | ||||||||||||
Government Solutions | U.S. government | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 148,105,000 | 171,036,000 | 200,708,000 | ||||||||||||
Government Solutions | Domestic | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 31,178,000 | 39,961,000 | 39,432,000 | ||||||||||||
Government Solutions | Total United States | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | 179,283,000 | 210,997,000 | 240,140,000 | ||||||||||||
Government Solutions | International | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Net sales | $ 42,266,000 | $ 51,988,000 | $ 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]: 2021-08-01 | Jul. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, amount | $ 658,896,000 |
Remaining performance obligations, period | 24 months |
Summary of Significant Accoun_9
Summary of Significant Accounting and Reporting Policies (Cash and Cash Equivalents) (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash and cash equivalents | $ 30,861,000 | $ 47,878,000 |
Summary of Significant Accou_10
Summary of Significant Accounting and Reporting Policies (Long-Lived Assets) (Details) | 12 Months Ended |
Jul. 31, 2021 | |
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_11
Summary of Significant Accounting and Reporting Policies (Research and Development Costs) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Research and development expenses reimbursed by customers | $ 13,635,000 | $ 11,923,000 | $ 14,679,000 |
Summary of Significant Accou_12
Summary of Significant Accounting and Reporting Policies (Earnings Per Share) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
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 | 232,000 | 201,000 | 243,000 | ||||||||||||
Numerator: | |||||||||||||||
Net (loss) income for basic calculation | $ 7,363,000 | $ 792,000 | $ 4,205,000 | $ (85,840,000) | $ 1,126,000 | $ (3,989,000) | $ 3,495,000 | $ 6,388,000 | $ 6,135,000 | $ 7,612,000 | $ 7,826,000 | $ 3,468,000 | $ (73,480,000) | $ 7,020,000 | $ 25,041,000 |
Numerator for diluted calculation | $ (73,480,000) | $ 7,020,000 | $ 25,041,000 | ||||||||||||
Denominator: | |||||||||||||||
Denominator for basic calculation (in shares) | 25,685,000 | 24,798,000 | 24,124,000 | ||||||||||||
Effect of dilutive securities: | |||||||||||||||
Stock-based awards (in shares) | 0 | 101,000 | 178,000 | ||||||||||||
Denominator for diluted calculation (in shares) | 25,685,000 | 24,899,000 | 24,302,000 | ||||||||||||
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) | 1,440,000 | 1,348,000 | 1,347,000 |
Summary of Significant Accou_13
Summary of Significant Accounting and Reporting Policies (Adoption of New Accounting Pronouncements) (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Allowance for doubtful acconts | $ 1,648,000 | $ 1,769,000 |
Cumulative Effect, Period of Adoption, Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Allowance for doubtful acconts | $ 215,000 |
Acquisitions (UHP Networks, Inc
Acquisitions (UHP Networks, Inc.) (Details) - UHP - USD ($) | Jul. 31, 2021 | Mar. 02, 2021 | Aug. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
Business Acquisition [Line Items] | |||||
Aggregate purchase price | $ 37,470,000 | $ 37,402,000 | |||
Initial upfront payment | 23,979,000 | 23,902,000 | |||
Cash payment | 87,000 | ||||
Hold back amount | 4,991,000 | 5,000,000 | |||
Earn-out payment | 9,000,000 | ||||
Contingent earn-out consideration | 8,500,000 | $ 8,500,000 | $ 0 | $ 0 | |
Amount in escrow | $ 4,560,000 | ||||
Period of settlement of potential indemnification | 3 years | ||||
Aggregate purchase price - settled with issuance of common stock (in shares) | 1,026,567 | ||||
Weighted average stock price (in dollars per share) | $ 28.14 | ||||
Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Payment of hold back amount through shares of stock | $ 3,991,000 |
Acquisitions (Fair Value of Ass
Acquisitions (Fair Value of Assets Acquired and Liabilities Assumed) (Details) - USD ($) | Jul. 31, 2021 | Mar. 02, 2021 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
Preliminary allocation of aggregate purchase price: | |||||
Goodwill | $ 347,698,000 | $ 347,698,000 | $ 330,519,000 | ||
UHP | |||||
Business Acquisition [Line Items] | |||||
Initial upfront payment | 23,979,000 | $ 23,902,000 | 23,979,000 | ||
Hold back amount | 4,991,000 | 5,000,000 | 4,991,000 | ||
Contingent earn-out consideration | 8,500,000 | 8,500,000 | 8,500,000 | $ 0 | $ 0 |
Aggregate purchase price | 37,470,000 | 37,402,000 | |||
Preliminary allocation of aggregate purchase price: | |||||
Cash and cash equivalents | 1,391,000 | 1,391,000 | 1,391,000 | ||
Current assets | 1,358,000 | 1,235,000 | 1,358,000 | ||
Property, plant and equipment | 10,000 | 10,000 | 10,000 | ||
Deferred tax assets | 313,000 | 286,000 | 313,000 | ||
Contract liabilities | (648,000) | (657,000) | (648,000) | ||
Accrued warranty obligations | (750,000) | (750,000) | (750,000) | ||
Other current liabilities | (1,175,000) | (1,166,000) | (1,175,000) | ||
Non-current liabilities | (160,000) | (160,000) | (160,000) | ||
Net tangible assets at preliminary fair value | 339,000 | 189,000 | 339,000 | ||
Deferred tax liabilities | (8,374,000) | (8,374,000) | (8,374,000) | ||
Goodwill | 13,905,000 | 13,987,000 | 13,905,000 | ||
Preliminary allocation of aggregate purchase price | 37,470,000 | 37,402,000 | 37,470,000 | ||
Measurement Period Adjustments | |||||
Initial upfront payment | 77,000 | ||||
Hold back amount | (9,000) | ||||
Current assets | 123,000 | ||||
Deferred tax assets | 27,000 | ||||
Contract liabilities | 9,000 | ||||
Other current liabilities | (9,000) | ||||
Net tangible assets at preliminary fair value | 150,000 | ||||
Goodwill | (82,000) | ||||
Preliminary allocation of aggregate purchase price | 68,000 | ||||
UHP | Technology | |||||
Preliminary allocation of aggregate purchase price: | |||||
Identifiable intangible assets | 15,300,000 | $ 15,300,000 | 15,300,000 | ||
Measurement Period Adjustments | |||||
Estimated Useful Lives | 15 years | ||||
UHP | Customer relationships | |||||
Preliminary allocation of aggregate purchase price: | |||||
Identifiable intangible assets | 15,500,000 | $ 15,500,000 | 15,500,000 | ||
Measurement Period Adjustments | |||||
Estimated Useful Lives | 15 years | ||||
UHP | Trade name | |||||
Preliminary allocation of aggregate purchase price: | |||||
Identifiable intangible assets | $ 800,000 | $ 800,000 | $ 800,000 | ||
Measurement Period Adjustments | |||||
Estimated Useful Lives | 20 years |
Acquisitions (CGC Technology Li
Acquisitions (CGC Technology Limited) (Details) - CGC | Jan. 27, 2020USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Aggregate purchase price | $ 23,650,000 |
Cash payment | 12,075,000 |
Aggregate purchase price - settled with issuance of common stock | $ 11,575,000 |
Aggregate purchase price - settled with issuance of common stock (in shares) | shares | 323,504 |
Weighted average stock price (in dollars per share) | $ / shares | $ 35.78 |
Consideration transferred, net of cash acquired | $ 23,490,000 |
Cash acquired | $ 160,000 |
Acquisitions (Acquisition Plan
Acquisitions (Acquisition Plan Expenses) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Business Acquisition [Line Items] | |||
Acquisition plan expenses | $ 100,292,000 | $ 20,754,000 | $ 5,871,000 |
Incremental interest expense on financing commitment letter | 1,178,000 | ||
Gilat | |||
Business Acquisition [Line Items] | |||
Payments of acquisition expenses | 70,000,000 | ||
Gilat | |||
Business Acquisition [Line Items] | |||
Acquisition plan expenses | $ 88,343,000 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Statement [Line Items] | ||
Total accounts receivable | $ 159,758,000 | $ 128,585,000 |
Less: Allowance for doubtful accounts | 1,648,000 | 1,769,000 |
Accounts receivable, net | $ 158,110,000 | 126,816,000 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Statement [Line Items] | ||
Less: Allowance for doubtful accounts | $ 215,000 | |
U.S. Government and Its Agencies | Accounts Receivable | Customer Concentration Risk | ||
Statement [Line Items] | ||
Concentration risk, percentage | 23.00% | 31.00% |
AT&T, Inc. | Accounts Receivable | Customer Concentration Risk | ||
Statement [Line Items] | ||
Concentration risk, percentage | 12.70% | |
Verizon Communications Inc. | Accounts Receivable | Customer Concentration Risk | ||
Statement [Line Items] | ||
Concentration risk, percentage | 12.10% | |
Billed Receivables | Commercial and International Customers | ||
Statement [Line Items] | ||
Total accounts receivable | $ 86,890,000 | $ 67,109,000 |
Billed Receivables | U.S. Government and Its Agencies | ||
Statement [Line Items] | ||
Total accounts receivable | 33,381,000 | 32,870,000 |
Unbilled Receivables | Commercial and International Customers | ||
Statement [Line Items] | ||
Total accounts receivable | 36,131,000 | 21,588,000 |
Unbilled Receivables | U.S. Government and Its Agencies | ||
Statement [Line Items] | ||
Total accounts receivable | $ 3,356,000 | $ 7,018,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and components | $ 62,249,000 | $ 59,175,000 |
Work-in-process and finished goods | 38,338,000 | 42,203,000 |
Total inventories | 100,587,000 | 101,378,000 |
Less reserve for excess and obsolete inventories | 20,229,000 | 19,076,000 |
Inventories, net | 80,358,000 | 82,302,000 |
Inventory directly related to long-term contracts | 7,028,000 | 7,215,000 |
Inventory related to contracts from third party commercial customers who outsource their manufacturing to us | $ 1,509,000 | $ 1,387,000 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 186,326,000 | $ 171,910,000 | |
Less accumulated depreciation and amortization | 151,040,000 | 144,873,000 | |
Property, plant and equipment, net | 35,286,000 | 27,037,000 | |
Depreciation and amortization | 9,343,000 | 10,386,000 | $ 11,927,000 |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 170,600,000 | 156,314,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 15,726,000 | $ 15,596,000 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
Accrued Liabilities, Current [Abstract] | |||
Accrued wages and benefits | $ 26,367,000 | $ 20,857,000 | |
Accrued warranty obligations | 17,600,000 | 15,200,000 | $ 15,968,000 |
Accrued contract costs | 12,750,000 | 15,306,000 | |
Accrued acquisition-related costs | 9,222,000 | 7,014,000 | |
Accrued commissions and royalties | 5,342,000 | 4,621,000 | |
Accrued legal costs | 2,854,000 | 2,539,000 | |
Other | 15,466,000 | 19,624,000 | |
Accrued expenses and other current liabilities | $ 89,601,000 | $ 85,161,000 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Narrative) (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | ||
Minimum coverage period of product warranty from the date of shipment | 1 year | |
Accrued Expenses And Other Current Liabilities [Line Items] | ||
Accrued acquisition-related costs | $ 9,222,000 | $ 7,014,000 |
UHP | ||
Accrued Expenses And Other Current Liabilities [Line Items] | ||
Accrued acquisition-related costs | $ 8,705,000 |
Accrued Expenses and Other Cu_5
Accrued Expenses and Other Current Liabilities (Product Warranty Rollforward) (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Changes in Product Warranty Liability | ||
Balance at beginning of year | $ 15,200,000 | $ 15,968,000 |
Provision for warranty obligations | 4,360,000 | 2,277,000 |
Additions (in connection with acquisitions) | 750,000 | 1,000,000 |
Charges incurred | (2,710,000) | (4,347,000) |
Warranty settlement and reclass | 0 | 302,000 |
Balance at end of year | $ 17,600,000 | $ 15,200,000 |
Credit Facility (Details)
Credit Facility (Details) | Oct. 31, 2018 | Jul. 31, 2021USD ($) | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) |
Line of Credit Facility [Line Items] | ||||
Write-off of deferred financing costs | $ 0 | $ 0 | $ 3,217,000 | |
Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Accordion feature | 250,000,000 | |||
Triggering event debt issuance amount | $ 5,000,000 | |||
Triggering event period | 91 days | |||
Credit facility amount outstanding | $ 201,000,000 | |||
Outstanding standby letters of credit at period end | 1,503,000 | |||
Outstanding balance during period, minimum | 125,000,000 | |||
Outstanding balance during period, maximum | 219,000,000 | |||
Capitalized deferred financing costs | 1,824,000 | |||
Interest expense related to credit facility | $ 5,628,000 | $ 5,905,000 | $ 8,859,000 | |
Weighted average interest rate | 2.84% | 3.87% | 5.25% | |
Maximum Secured Leverage Ratio | 3.75 | 3.75 | ||
Maximum Total Leverage Ratio | 4.50 | |||
Minimum Interest Expense Coverage Ratio | 3.25 | 3.25 | ||
Actual Secured Leverage Ratio | 2.53 | |||
Actual Interest Expense Coverage Ratio | 13.05 | |||
Credit Facility | Federal Funds Effective Swap Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Credit Facility | Adjusted LIBO Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Secured Credit Facility | Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 550,000,000 | |||
Revolving Loan Facility | Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 300,000,000 | |||
Letter of Credit | Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 35,000,000 | |||
Swingline Loan | Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 |
Leases (Lease Cost and Addition
Leases (Lease Cost and Additional Information) (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Leases [Abstract] | ||
Amortization of ROU assets | $ 36,000 | $ 175,000 |
Interest on lease liabilities | 3,000 | 4,000 |
Operating lease expense | 12,152,000 | 10,728,000 |
Short-term lease expense | 819,000 | 3,045,000 |
Variable lease expense | 4,523,000 | 4,033,000 |
Sublease income | (67,000) | (22,000) |
Total lease expense | 17,466,000 | 17,963,000 |
Operating leases - Operating cash outflows | 10,868,000 | 11,437,000 |
Finance leases - Operating cash outflows | 3,000 | 4,000 |
Finance leases - Financing cash outflows | 38,000 | 322,000 |
ROU assets obtained in the exchange for lease liabilities (non-cash): operating leases | $ 24,987,000 | $ 3,561,000 |
Leases (Lease Liabilities) (Det
Leases (Lease Liabilities) (Details) | Jul. 31, 2021USD ($) |
Operating | |
Fiscal 2022 | $ 10,376,000 |
Fiscal 2023 | 8,029,000 |
Fiscal 2024 | 6,657,000 |
Fiscal 2025 | 6,123,000 |
Fiscal 2026 | 4,675,000 |
Thereafter | 20,810,000 |
Total future undiscounted cash flows | 56,670,000 |
Less: Present value discount | 8,260,000 |
Lease liabilities | $ 48,410,000 |
Weighted-average remaining lease terms (in years) | 8 years 10 months 20 days |
Weighted-average discount rate | 3.52% |
Finance | |
Fiscal 2022 | $ 32,000 |
Fiscal 2023 | 3,000 |
Fiscal 2024 | 0 |
Fiscal 2025 | 0 |
Fiscal 2026 | 0 |
Thereafter | 0 |
Total future undiscounted cash flows | 35,000 |
Less: Present value discount | 1,000 |
Lease liabilities | $ 34,000 |
Weighted-average remaining lease terms (in years) | 1 year 5 months 26 days |
Weighted-average discount rate | 7.37% |
Total | |
Fiscal 2022 | $ 10,408,000 |
Fiscal 2023 | 8,032,000 |
Fiscal 2024 | 6,657,000 |
Fiscal 2025 | 6,123,000 |
Fiscal 2026 | 4,675,000 |
Thereafter | 20,810,000 |
Total future undiscounted cash flows | 56,705,000 |
Less: Present value discount | 8,261,000 |
Lease liabilities | $ 48,444,000 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Annual rent | $ 10,376,000 | |
Executive Chairman | ||
Lessee, Lease, Description [Line Items] | ||
Annual rent | $ 665,000 | |
Chandler, Arizona | ||
Lessee, Lease, Description [Line Items] | ||
Contract term | 15 years | |
United Kingdom | ||
Lessee, Lease, Description [Line Items] | ||
Contract term | 10 years | |
Melville, New York | Executive Chairman | ||
Lessee, Lease, Description [Line Items] | ||
Related party lease payments made | $ 660,000 | $ 649,000 |
Income Taxes (Income Before Pro
Income Taxes (Income Before Provision for Income Taxes) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (73,153,000) | $ 7,226,000 | $ 28,813,000 |
Foreign | (1,827,000) | 2,084,000 | 97,000 |
(Loss) income before (benefit from) provision for income taxes | $ (74,980,000) | $ 9,310,000 | $ 28,910,000 |
Income Taxes (Provision for Inc
Income Taxes (Provision for Income Taxes) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal - current | $ 608,000 | $ 1,053,000 | $ (2,190,000) |
Federal - deferred | (877,000) | 721,000 | 4,782,000 |
State and local - current | 466,000 | 1,137,000 | 1,715,000 |
State and local - deferred | (598,000) | (1,312,000) | (321,000) |
Foreign - current | 688,000 | 298,000 | 62,000 |
Foreign - deferred | (1,787,000) | 393,000 | (179,000) |
(Benefit from) provision for income taxes | $ (1,500,000) | $ 2,290,000 | $ 3,869,000 |
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, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Amount | |||
Computed "expected" tax expense (benefit) | $ (15,746,000) | $ 1,955,000 | $ 6,071,000 |
State and local income taxes, net of federal benefit | (1,371,000) | (278,000) | 967,000 |
Stock-based compensation | (20,000) | 308,000 | (44,000) |
Research and experimentation credits | (1,018,000) | (1,210,000) | (1,129,000) |
Foreign-derived intangible income deduction | 164,000 | (162,000) | (632,000) |
Nondeductible transaction costs | 402,000 | 301,000 | 394,000 |
Nondeductible executive compensation | 628,000 | 595,000 | 330,000 |
Fines and penalties | 0 | 189,000 | 2,000 |
Audit settlements | 6,000 | 1,000 | (2,081,000) |
Change in the beginning of the year valuation allowance for deferred tax assets | (805,000) | 0 | 0 |
Change in valuation allowance | 15,582,000 | 0 | 0 |
Remeasurement of deferred taxes | (224,000) | (135,000) | 0 |
Foreign income taxes | 676,000 | 453,000 | 5,000 |
Other, net | 226,000 | 273,000 | (14,000) |
(Benefit from) provision for income taxes | $ (1,500,000) | $ 2,290,000 | $ 3,869,000 |
Rate | |||
Computed "expected" tax expense (benefit) | 21.00% | 21.00% | 21.00% |
State and local income taxes, net of federal benefit | 1.80% | (3.00%) | 3.30% |
Stock-based compensation | 0.00% | 3.30% | (0.10%) |
Research and experimentation credits | 1.40% | (13.00%) | (3.90%) |
Foreign-derived intangible income deduction | (0.20%) | (1.70%) | (2.20%) |
Nondeductible transaction costs | (0.50%) | 3.20% | 1.40% |
Nondeductible executive compensation | (0.80%) | 6.40% | 1.10% |
Fines and penalties | 0.00% | 2.00% | 0.00% |
Audit settlements | 0.00% | 0.00% | (7.20%) |
Change in the beginning of the year valuation allowance for deferred tax assets | 1.10% | 0.00% | 0.00% |
Change in valuation allowance | (20.80%) | 0.00% | 0.00% |
Remeasurement of deferred taxes | 0.30% | (1.50%) | 0.00% |
Foreign income taxes | (0.90%) | 4.90% | 0.00% |
Other, net | (0.40%) | 3.00% | 0.00% |
(Benefit from) provision for income taxes | 2.00% | 24.60% | 13.40% |
Income Taxes (Tax Effects of Te
Income Taxes (Tax Effects of Temporary Differences) (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Deferred tax assets: | ||
Inventory and warranty reserves | $ 6,774,000 | $ 5,786,000 |
Compensation and commissions | 4,338,000 | 3,210,000 |
Federal, state and foreign research and experimentation credits | 19,324,000 | 19,656,000 |
Stock-based compensation | 4,979,000 | 4,955,000 |
Foreign scientific research and experimental development expenditures | 1,496,000 | 1,765,000 |
Federal, state and foreign net operating losses | 5,413,000 | 3,942,000 |
Federal and state capital losses | 15,582,000 | 28,000 |
Lease liabilities | 10,980,000 | 7,335,000 |
Other | 4,550,000 | 6,572,000 |
Less: valuation allowance | (28,384,000) | (11,471,000) |
Total deferred tax assets | 45,052,000 | 41,778,000 |
Deferred tax liabilities: | ||
Plant and equipment | (1,146,000) | (801,000) |
Lease right-of-use assets | (10,085,000) | (7,080,000) |
Intangibles | (54,635,000) | (50,368,000) |
Total deferred tax liabilities | (65,866,000) | (58,249,000) |
Net deferred tax liabilities | $ (20,814,000) | $ (16,471,000) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Operating Loss Carryforwards [Line Items] | ||
Net deferred tax liabilities | $ 20,814,000 | $ 16,471,000 |
Federal, state and foreign research and experimentation credits | 19,324,000 | 19,656,000 |
Capital loss carryforward | 15,582,000 | 28,000 |
Valuation allowance | 28,384,000 | 11,471,000 |
Minimum taxable income in the future to fully utilize net deferred tax assets | 193,800,000 | |
Unrecognized tax benefits, including interest | 9,172,000 | 8,345,000 |
Interest accrued relating to income taxes | 163,000 | 75,000 |
Unrecognized tax benefits that would positively impact our effective tax rate, if recognized | 8,408,000 | 7,700,000 |
Capital Loss | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | 15,582,000 | |
Non-current income taxes payable | ||
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits, including interest | 2,717,000 | 1,963,000 |
Non-current deferred tax assets | ||
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits, including interest | 6,455,000 | 6,382,000 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net deferred tax assets | 416,000 | $ 1,166,000 |
Federal, state and foreign research and experimentation credits | 1,814,000 | |
Operating loss carryforwards, valuation allowance | 656,000 | |
Foreign operating loss carryforwards | 2,116,000 | |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Federal, state and foreign research and experimentation credits | 9,471,000 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Federal, state and foreign research and experimentation credits | 8,038,000 | |
State and local operating loss carryforwards | 3,267,000 | |
Operating loss carryforwards, valuation allowance | 3,178,000 | |
Tax credit carryforward, valuation allowance | $ 7,451,000 |
Income Taxes (Summary of Unreco
Income Taxes (Summary of Unrecognized Tax Benefits) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Activity Related to Unrecognized Tax Benefits [Roll Forward] | |||
Balance at beginning of period | $ 8,270,000 | $ 7,203,000 | $ 9,137,000 |
Increase related to current period | 528,000 | 684,000 | 893,000 |
Increase related to prior periods | 338,000 | 464,000 | 17,000 |
Expiration of statute of limitations | (48,000) | (73,000) | (394,000) |
Decrease related to prior periods | (79,000) | (8,000) | (2,450,000) |
Balance at end of period | $ 9,009,000 | $ 8,270,000 | $ 7,203,000 |
Stock-Based Compensation (Overv
Stock-Based Compensation (Overview) (Details) - shares | 12 Months Ended | |||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 | |
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of stock-based awards outstanding at period end (in shares) | 1,073,435 | 1,422,025 | 1,555,555 | 1,668,975 |
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) | 10,962,500 | |||
Aggregate net number of stock-based awards granted (in shares) | 9,350,696 | |||
Aggregate number of stock based awards expired and canceled (in shares) | 4,716,649 | |||
Aggregate number of stock-based awards exercised (in shares) | 7,208,891 | |||
Stock-Based Awards Outstanding By Award Type (In Shares) | ||||
Number of total stock-based awards outstanding (in shares) | 2,141,805 | |||
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) | 1,073,435 | |||
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) | 236,464 | |||
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) | 568,399 | |||
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) | 263,507 | |||
2001 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) | 894,771 |
Stock-Based Compensation (Expen
Stock-Based Compensation (Expenses) (Details) - USD ($) | 12 Months Ended | |||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 | |
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 9,983,000 | $ 9,275,000 | $ 11,427,000 | |
Estimated Income tax benefit | (2,164,000) | (2,042,000) | (2,553,000) | |
Net stock-based compensation expense | 7,819,000 | 7,233,000 | $ 8,874,000 | |
Total remaining unrecognized compensation cost related to the unvested stock-based awards | 9,625,000 | |||
Estimated forfeitures related to unvested stock-based awards | $ 1,040,000 | |||
Weighted average number of years net compensation cost is expected to be recognized over | 3 years | |||
Stock-based compensation capitalized and included in ending inventory | $ 48,000 | $ 48,000 | ||
Number of stock-based awards outstanding at period end (in shares) | 1,073,435 | 1,422,025 | 1,555,555 | 1,668,975 |
Stock options | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 370,000 | $ 442,000 | $ 739,000 | |
Performance shares | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | 1,345,000 | 1,491,000 | 1,554,000 | |
RSUs and restricted stock | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | 2,985,000 | 2,543,000 | 2,149,000 | |
ESPP | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 208,000 | 222,000 | 215,000 | |
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 | $ 5,075,000 | 4,577,000 | 6,770,000 | |
Recoupment of share units | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ (616,000) | $ (310,000) | (130,000) | |
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 | ||
2000 Stock Incentive Plan | Stock options | ||||
Stock-based Compensation Expenses | ||||
Number of stock-based awards outstanding at period end (in shares) | 1,073,435 | |||
Cost of sales | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 929,000 | $ 823,000 | 1,047,000 | |
Selling, general and administrative expenses | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | 8,091,000 | 7,527,000 | 9,336,000 | |
Research and development expenses | ||||
Stock-based Compensation Expenses | ||||
Stock-based compensation expense (benefit) before income tax benefit | $ 963,000 | $ 925,000 | $ 1,044,000 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Awards (In Shares) | |||
Outstanding, Beginning Balance (in shares) | 1,422,025 | 1,555,555 | 1,668,975 |
Granted (in shares) | 0 | 327,100 | 0 |
Expired/canceled (in shares) | (348,590) | (174,840) | (32,490) |
Exercised (in shares) | (285,790) | (80,930) | |
Outstanding, Ending Balance (in shares) | 1,073,435 | 1,422,025 | 1,555,555 |
Exercisable, Ending Balance (in shares) | 835,755 | ||
Vested and Expected to Vest, Ending Balance (in shares) | 1,060,830 | ||
Weighted Average Exercise Price (Per Share) | |||
Outstanding, Beginning Balance (in dollars per share) | $ 26.17 | $ 28.72 | $ 28.72 |
Granted (in dollars per share) | 17.88 | ||
Expired/canceled (in dollars per share) | 27.44 | 29.06 | 30.11 |
Exercised (in dollars per share) | 28.82 | 28.18 | |
Outstanding, Ending Balance (in dollars per share) | 25.76 | $ 26.17 | $ 28.72 |
Exercisable, Ending Balance (in dollars per share) | 28 | ||
Vested and Expected to Vest, Ending Balance (in dollars per share) | $ 25.85 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Outstanding, Ending Balance | 4 years 3 months 21 days | ||
Exercisable, Ending Balance | 3 years 10 days | ||
Vested And Expected To Vest, Ending Balance | 4 years 3 months 3 days | ||
Aggregated Intrinsic Value | |||
Outstanding, Ending Balance | $ 2,178,000 | ||
Exercisable, Ending Balance | 492,000 | ||
Vested and Expected to Vest, Ending Balance | $ 2,088,000 | ||
Additional Disclosures | |||
Exercise price, lower range limit (in dollars per share) | $ 17.88 | ||
Exercise price, upper range limit (in dollars per share) | $ 33.94 | ||
Stock options | |||
Additional Disclosures | |||
Contractual term (in years) | 10 years | ||
Vesting period (in years) | 5 years | ||
Total intrinsic value relating to stock-based awards exercised during the period | $ 0 | $ 1,869,000 | $ 576,000 |
Vested stock-based awards net settled upon exercise (in shares) | 269,090 | 72,830 | |
Common stock issued for net settlement of stock-based awards (in shares) | 27,994 | 9,345 | |
Weighted average grant-date fair value (in dollars per share) | $ 5.52 | ||
Expected dividend yield (as a percent) | 2.24% | ||
Expected volatility (as a percent) | 40.03% | ||
Risk-free interest rate (as a percent) | 0.54% | ||
Expected life | 6 years 6 months |
Stock-Based Compensation (Perfo
Stock-Based Compensation (Performance Shares, RSUs, Restricted Stock and Share Unit Awards) (Details) | 12 Months Ended | ||||
Jul. 31, 2021USD ($)$ / sharesshares | Jul. 31, 2020USD ($)$ / sharesshares | Jul. 31, 2019USD ($)$ / sharesshares | Jul. 31, 2018$ / sharesshares | Jul. 31, 2016 | |
Dividend Equivalents [Abstract] | |||||
Accrued during the period | $ | $ 380,000 | $ 294,000 | $ 327,000 | ||
Carrying value at period end | $ | 492,392,000 | 380,348,000 | |||
Income tax benefit from settlement of stock-based awards | $ | $ 142,000 | $ (224,000) | $ 479,000 | ||
Performance Shares, RSUs, Restricted Stock and Share Units | |||||
Awards (In Shares) | |||||
Outstanding, Beginning Balance (in shares) | 999,574 | 954,676 | 818,438 | ||
Granted (in shares) | 644,272 | 560,361 | 442,363 | ||
Settled (in shares) | (455,564) | (431,581) | (275,619) | ||
Canceled/Forfeited (in shares) | (119,912) | (83,882) | (30,506) | ||
Outstanding, Ending Balance (in shares) | 1,068,370 | 999,574 | 954,676 | 818,438 | |
Vested, Ending Balance (in shares) | 373,522 | ||||
Vested and Expected to Vest, Ending Balance (in shares) | 1,023,923 | ||||
Weighted Average Grant Date Fair Value | |||||
Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 21.15 | $ 22.40 | $ 19.78 | ||
Granted (in dollars per share) | $ / shares | 19.06 | 19.93 | 29.76 | ||
Settled (in dollars per share) | $ / shares | 17.09 | 22.02 | 26.05 | ||
Canceled/Forfeited (in dollars per share) | $ / shares | 18.42 | 22.84 | 25.52 | ||
Outstanding, Ending Balance (in dollars per share) | $ / shares | 21.93 | $ 21.15 | $ 22.40 | $ 19.78 | |
Vested, Ending Balance (in dollars per share) | $ / shares | 21.84 | ||||
Vested and Expected to Vest, Ending Balance (in dollars per share) | $ / shares | $ 21.93 | ||||
Aggregate Intrinsic Value | |||||
Outstanding, Ending Balance | $ | $ 26,677,000 | ||||
Vested, Ending Balance | $ | 9,327,000 | ||||
Vested and Expected to Vest, Ending Balance | $ | 25,567,000 | ||||
Additional Disclosures | |||||
Total intrinsic value relating to fully vested stock-based awards converted during the period | $ | $ 9,878,000 | $ 9,635,000 | $ 8,772,000 | ||
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) | 5 years | 3 years | |||
Common stock, conversion ratio (in shares) | 1 | ||||
Share units | |||||
Awards (In Shares) | |||||
Granted (in shares) | 253,257 | ||||
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) | 266,354 | ||||
Number of shares issued as result of conversion | 98,502 | ||||
Number of units settled to date (in shares) | 949,357 | ||||
Dividend equivalents | |||||
Dividend Equivalents [Abstract] | |||||
Accrued during the period | $ | $ 380,000 | 294,000 | 327,000 | ||
Paid during the period | $ | 279,000 | 288,000 | $ 263,000 | ||
Carrying value at period end | $ | $ 884,000 | $ 783,000 |
Stock-Based Compensation (Subse
Stock-Based Compensation (Subsequent Events) (Details) | Oct. 31, 2021USD ($) |
Scenario, Forecast | |
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. | $ 6,185,000 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jul. 31, 2021USD ($)ft² | Apr. 30, 2021USD ($) | Jan. 31, 2021USD ($) | Oct. 31, 2020USD ($) | Jul. 31, 2020USD ($) | Apr. 30, 2020USD ($) | Jan. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Jul. 31, 2021USD ($)ft² | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | |
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | $ 145,809,000 | $ 139,376,000 | $ 161,292,000 | $ 135,218,000 | $ 149,673,000 | $ 135,121,000 | $ 161,654,000 | $ 170,267,000 | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 581,695,000 | $ 616,715,000 | $ 671,797,000 |
Operating income (loss) | (68,298,000) | 15,174,000 | 41,407,000 | ||||||||||||
Net income (loss) | 7,363,000 | $ 792,000 | $ 4,205,000 | $ (85,840,000) | 1,126,000 | $ (3,989,000) | $ 3,495,000 | $ 6,388,000 | 6,135,000 | $ 7,612,000 | $ 7,826,000 | $ 3,468,000 | (73,480,000) | 7,020,000 | 25,041,000 |
(Benefit from) provision for income taxes | (1,500,000) | 2,290,000 | 3,869,000 | ||||||||||||
Interest (income) and other | (139,000) | (190,000) | 35,000 | ||||||||||||
Write-off of deferred financing costs | 0 | 0 | 3,217,000 | ||||||||||||
Interest expense | 6,821,000 | 6,054,000 | 9,245,000 | ||||||||||||
Amortization of stock-based compensation | 9,983,000 | 9,275,000 | 11,427,000 | ||||||||||||
Amortization of intangibles | 21,020,000 | 21,595,000 | 18,320,000 | ||||||||||||
Depreciation | 9,379,000 | 10,561,000 | 11,927,000 | ||||||||||||
Estimated contract settlement costs | 0 | 444,000 | 6,351,000 | ||||||||||||
Settlement of intellectual property litigation | 0 | 0 | (3,204,000) | ||||||||||||
Acquisition plan expenses | 100,292,000 | 20,754,000 | 5,871,000 | ||||||||||||
Restructuring costs | 2,782,000 | 1,373,000 | |||||||||||||
COVID-19 related costs | 1,046,000 | 0 | 0 | ||||||||||||
Strategic emerging technology costs | 315,000 | ||||||||||||||
Adjusted EBITDA | 76,519,000 | 77,803,000 | 93,472,000 | ||||||||||||
Purchases of property, plant and equipment | 16,037,000 | 7,225,000 | 8,785,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 47,958,000 | 38,451,000 | 60,693,000 | ||||||||||||
Total assets | $ 993,111,000 | 929,647,000 | 887,711,000 | 993,111,000 | 929,647,000 | 887,711,000 | |||||||||
Incremental interest expense on financing commitment letter | $ 1,178,000 | ||||||||||||||
Chandler, Arizona | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Area of property (in sq ft) | ft² | 146,000 | 146,000 | |||||||||||||
Commercial Solutions | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | $ 360,146,000 | 353,730,000 | 357,293,000 | ||||||||||||
Government Solutions | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 221,549,000 | 262,985,000 | 314,504,000 | ||||||||||||
Operating Segments | Commercial Solutions | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 360,146,000 | 353,730,000 | 357,293,000 | ||||||||||||
Operating income (loss) | 41,064,000 | 34,820,000 | 36,053,000 | ||||||||||||
Net income (loss) | 39,200,000 | 34,414,000 | 35,888,000 | ||||||||||||
(Benefit from) provision for income taxes | 1,794,000 | 410,000 | 19,000 | ||||||||||||
Interest (income) and other | 68,000 | (31,000) | 75,000 | ||||||||||||
Write-off of deferred financing costs | 0 | ||||||||||||||
Interest expense | 2,000 | 27,000 | 71,000 | ||||||||||||
Amortization of stock-based compensation | 0 | 0 | 0 | ||||||||||||
Amortization of intangibles | 17,054,000 | 17,325,000 | 14,944,000 | ||||||||||||
Depreciation | 7,451,000 | 8,347,000 | 9,265,000 | ||||||||||||
Estimated contract settlement costs | 444,000 | 6,351,000 | |||||||||||||
Settlement of intellectual property litigation | 0 | ||||||||||||||
Acquisition plan expenses | (1,052,000) | 751,000 | 0 | ||||||||||||
Restructuring costs | 1,804,000 | 0 | 0 | ||||||||||||
COVID-19 related costs | 0 | ||||||||||||||
Strategic emerging technology costs | 0 | ||||||||||||||
Adjusted EBITDA | 66,321,000 | 61,687,000 | 66,613,000 | ||||||||||||
Purchases of property, plant and equipment | 10,899,000 | 5,281,000 | 6,293,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 45,515,000 | 6,060,000 | 60,693,000 | ||||||||||||
Total assets | $ 738,095,000 | 647,964,000 | 662,580,000 | 738,095,000 | 647,964,000 | 662,580,000 | |||||||||
Operating Segments | Government Solutions | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 221,549,000 | 262,985,000 | 314,504,000 | ||||||||||||
Operating income (loss) | 8,402,000 | 19,988,000 | 28,997,000 | ||||||||||||
Net income (loss) | 9,553,000 | 20,232,000 | 29,029,000 | ||||||||||||
(Benefit from) provision for income taxes | (1,376,000) | (100,000) | 0 | ||||||||||||
Interest (income) and other | 161,000 | (169,000) | (41,000) | ||||||||||||
Write-off of deferred financing costs | 0 | ||||||||||||||
Interest expense | 64,000 | 25,000 | 9,000 | ||||||||||||
Amortization of stock-based compensation | 0 | 0 | 0 | ||||||||||||
Amortization of intangibles | 3,966,000 | 4,270,000 | 3,376,000 | ||||||||||||
Depreciation | 1,586,000 | 1,446,000 | 1,891,000 | ||||||||||||
Estimated contract settlement costs | 0 | 0 | |||||||||||||
Settlement of intellectual property litigation | 0 | ||||||||||||||
Acquisition plan expenses | 0 | 0 | 0 | ||||||||||||
Restructuring costs | 978,000 | 1,373,000 | |||||||||||||
COVID-19 related costs | 1,046,000 | ||||||||||||||
Strategic emerging technology costs | 315,000 | ||||||||||||||
Adjusted EBITDA | 16,293,000 | 25,704,000 | 35,637,000 | ||||||||||||
Purchases of property, plant and equipment | 5,055,000 | 1,617,000 | 1,902,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 2,443,000 | 32,391,000 | 0 | ||||||||||||
Total assets | 232,763,000 | 232,052,000 | 186,438,000 | 232,763,000 | 232,052,000 | 186,438,000 | |||||||||
Unallocated | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | 0 | 0 | 0 | ||||||||||||
Operating income (loss) | (117,764,000) | (39,634,000) | (23,643,000) | ||||||||||||
Net income (loss) | (122,233,000) | (47,626,000) | (39,876,000) | ||||||||||||
(Benefit from) provision for income taxes | (1,918,000) | 1,980,000 | 3,850,000 | ||||||||||||
Interest (income) and other | (368,000) | 10,000 | 1,000 | ||||||||||||
Write-off of deferred financing costs | 3,217,000 | ||||||||||||||
Interest expense | 6,755,000 | 6,002,000 | 9,165,000 | ||||||||||||
Amortization of stock-based compensation | 9,275,000 | 11,427,000 | |||||||||||||
Amortization of intangibles | 0 | 0 | 0 | ||||||||||||
Depreciation | 342,000 | 768,000 | 771,000 | ||||||||||||
Estimated contract settlement costs | 0 | 0 | |||||||||||||
Settlement of intellectual property litigation | (3,204,000) | ||||||||||||||
Acquisition plan expenses | 101,344,000 | 20,003,000 | 5,871,000 | ||||||||||||
Restructuring costs | 0 | 0 | |||||||||||||
COVID-19 related costs | 0 | ||||||||||||||
Strategic emerging technology costs | 0 | ||||||||||||||
Adjusted EBITDA | (6,095,000) | (9,588,000) | (8,778,000) | ||||||||||||
Purchases of property, plant and equipment | 83,000 | 327,000 | 590,000 | ||||||||||||
Long-lived assets acquired in connection with acquisitions | 0 | 0 | 0 | ||||||||||||
Total assets | $ 22,253,000 | $ 49,631,000 | $ 38,693,000 | 22,253,000 | 49,631,000 | 38,693,000 | |||||||||
Intersegment Eliminations | Commercial Solutions | |||||||||||||||
Segment Reporting Information, Profit (Loss) | |||||||||||||||
Net sales | $ 3,481,000 | $ 9,837,000 | $ 17,371,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Other Matters | 1 Months Ended | |
Apr. 30, 2021USD ($) | Mar. 31, 2021USD ($)transaction | |
Loss Contingencies [Line Items] | ||
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 | 3 | |
Aggregate value of international shipments that man not have been fully in compliance with Export Administration Regulations (less than) | $ | $ 154,000 | |
Amount awarded | $ | $ 122,000 |
Goodwill (Details)
Goodwill (Details) | 12 Months Ended | |
Jul. 31, 2021USD ($)operating_segment | Aug. 01, 2021$ / shares | |
Goodwill [Roll Forward] | ||
Balance as of July 31, 2020 | $ 330,519,000 | |
Balance as of July 31, 2021 | $ 347,698,000 | |
Number of operating segments | operating_segment | 2 | |
Subsequent Event | Common Stock | ||
Goodwill [Roll Forward] | ||
Share price (in dollars per share) | $ / shares | $ 24.97 | |
CGC | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | $ 2,222,000 | |
Solacom | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | 1,052,000 | |
UHP | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | 13,905,000 | |
Balance as of July 31, 2021 | 13,905,000 | |
Commercial Solutions | ||
Goodwill [Roll Forward] | ||
Balance as of July 31, 2020 | 255,432,000 | |
Balance as of July 31, 2021 | 270,389,000 | |
Commercial Solutions | Subsequent Event | ||
Goodwill [Roll Forward] | ||
Percentage of fair value in excess of carrying amount for reporting unit | 22.70% | |
Commercial Solutions | CGC | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | 0 | |
Commercial Solutions | Solacom | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | 1,052,000 | |
Commercial Solutions | UHP | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | 13,905,000 | |
Government Solutions | ||
Goodwill [Roll Forward] | ||
Balance as of July 31, 2020 | 75,087,000 | |
Balance as of July 31, 2021 | 77,309,000 | |
Government Solutions | Subsequent Event | ||
Goodwill [Roll Forward] | ||
Percentage of fair value in excess of carrying amount for reporting unit | 94.10% | |
Government Solutions | CGC | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | 2,222,000 | |
Government Solutions | Solacom | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | 0 | |
Government Solutions | UHP | ||
Goodwill [Roll Forward] | ||
Change related to acquisitions | $ 0 |
Intangible Assets (Intangible A
Intangible Assets (Intangible Assets with Finite Lives) (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 449,933,000 | $ 418,233,000 | |
Accumulated Amortization | 181,234,000 | 160,214,000 | |
Net Carrying Amount | 268,699,000 | 258,019,000 | |
Amortization of intangibles | $ 21,020,000 | $ 21,595,000 | $ 18,320,000 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 20 years 2 months 12 days | 20 years 4 months 24 days | |
Gross Carrying Amount | $ 302,058,000 | $ 286,058,000 | |
Accumulated Amortization | 93,215,000 | 79,534,000 | |
Net Carrying Amount | $ 208,843,000 | $ 206,524,000 | |
Technologies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 14 years 9 months 18 days | 14 years | |
Gross Carrying Amount | $ 114,949,000 | $ 99,349,000 | |
Accumulated Amortization | 70,924,000 | 65,398,000 | |
Net Carrying Amount | $ 44,025,000 | $ 33,951,000 | |
Trademarks and other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period | 16 years 8 months 12 days | 16 years 7 months 6 days | |
Gross Carrying Amount | $ 32,926,000 | $ 32,826,000 | |
Accumulated Amortization | 17,095,000 | 15,282,000 | |
Net Carrying Amount | $ 15,831,000 | $ 17,544,000 |
Intangible Assets (Estimated Am
Intangible Assets (Estimated Amortization Expense) (Details) | Jul. 31, 2021USD ($) |
Finite-Lived Intangible Assets, Net [Abstract] | |
2022 | $ 21,781,000 |
2023 | 21,781,000 |
2024 | 21,154,000 |
2025 | 21,041,000 |
2026 | $ 19,888,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Nov. 12, 2021 | Sep. 27, 2021 | Aug. 20, 2021 | Jun. 08, 2021 | May 21, 2021 | Mar. 11, 2021 | Feb. 19, 2021 | Dec. 09, 2020 | Oct. 27, 2020 | Sep. 29, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | Sep. 22, 2021 | Mar. 03, 2021 | Dec. 06, 2018 |
Class of Stock [Line Items] | ||||||||||||||||
Shelf registration authorized amount | $ 400,000,000 | |||||||||||||||
Stock Repurchase Program | ||||||||||||||||
Shares acquired (in shares) | 0 | 0 | ||||||||||||||
Dividends | ||||||||||||||||
Dividends declared (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.40 | $ 0.40 | $ 0.40 | |||||||||
Dividends paid (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | |||||||||||||
Selling Stockholder | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shelf registration authorized shares | 1,381,567 | |||||||||||||||
Scenario, Forecast | ||||||||||||||||
Dividends | ||||||||||||||||
Dividends paid (in dollars per share) | $ 0.10 | |||||||||||||||
Subsequent Event | ||||||||||||||||
Stock Repurchase Program | ||||||||||||||||
Maximum amount authorized by the board of directors for the repurchase of shares of the company's common stock | $ 100,000,000 | |||||||||||||||
Dividends | ||||||||||||||||
Dividends declared (in dollars per share) | $ 0.10 | |||||||||||||||
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, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||||||
Net sales | $ 145,809,000 | $ 139,376,000 | $ 161,292,000 | $ 135,218,000 | $ 149,673,000 | $ 135,121,000 | $ 161,654,000 | $ 170,267,000 | $ 176,372,000 | $ 170,448,000 | $ 164,133,000 | $ 160,844,000 | $ 581,695,000 | $ 616,715,000 | $ 671,797,000 |
Gross profit | 55,054,000 | 53,016,000 | 55,680,000 | 50,208,000 | 49,663,000 | 53,001,000 | 60,602,000 | 63,567,000 | 64,010,000 | 64,416,000 | 61,245,000 | 57,769,000 | 213,958,000 | 226,833,000 | 247,440,000 |
Net (loss) income | $ 7,363,000 | $ 792,000 | $ 4,205,000 | $ (85,840,000) | $ 1,126,000 | $ (3,989,000) | $ 3,495,000 | $ 6,388,000 | $ 6,135,000 | $ 7,612,000 | $ 7,826,000 | $ 3,468,000 | $ (73,480,000) | $ 7,020,000 | $ 25,041,000 |
Diluted income (loss) per share (in dollars per share) | $ 0.28 | $ 0.03 | $ 0.17 | $ (3.39) | $ 0.04 | $ (0.16) | $ 0.14 | $ 0.26 | $ 0.25 | $ 0.31 | $ 0.32 | $ 0.14 | $ (2.86) | $ 0.28 | $ 1.03 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts and Reserves (Details) - USD ($) | 12 Months Ended | |||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2018 | |
Allowance for doubtful accounts receivable | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | $ 1,648,000 | $ 1,769,000 | $ 1,867,000 | $ 1,761,000 |
Charged to cost and expenses | (18,000) | 45,000 | 1,136,000 | |
Charged to other accounts | 215,000 | 0 | 0 | |
Transfers (deductions) | (318,000) | (143,000) | (1,030,000) | |
Balance at end of period | 1,648,000 | 1,769,000 | 1,867,000 | |
Inventory reserves | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | 20,229,000 | 19,076,000 | 19,696,000 | 17,427,000 |
Charged to cost and expenses | 4,364,000 | 1,647,000 | 6,015,000 | |
Charged to other accounts | 0 | 0 | 0 | |
Transfers (deductions) | (3,211,000) | (2,267,000) | (3,746,000) | |
Balance at end of period | 20,229,000 | 19,076,000 | 19,696,000 | |
Valuation allowance for deferred tax assets | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | 28,384,000 | 11,471,000 | 12,568,000 | $ 11,854,000 |
Charged to cost and expenses | 17,750,000 | 750,000 | 58,000 | |
Charged to other accounts | 0 | 0 | 656,000 | |
Transfers (deductions) | (837,000) | (1,847,000) | 0 | |
Balance at end of period | $ 28,384,000 | $ 11,471,000 | $ 12,568,000 |