Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2023 | Oct. 16, 2023 | Jan. 31, 2023 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --07-31 | ||
Document Period End Date | Jul. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-35319 | ||
Entity Registrant Name | Steel Connect, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 04-2921333 | ||
Entity Address, Address Line One | 590 Madison Ave. | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10022 | ||
City Area Code | 914 | ||
Local Phone Number | 461-1276 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 80.2 | ||
Entity Common Stock, Shares Outstanding | 6,267,230 | ||
Documents Incorporated by Reference | Unless earlier included in an amendment to this Annual Report on Form 10-K, portions of the registrant's definitive proxy statement to be delivered to stockholders in connection with the Company's 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Entity Central Index Key | 0000914712 | ||
Common Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | STCN | ||
Security Exchange Name | NASDAQ | ||
Series D Preferred Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Rights to Purchase Series D Junior Participating Preferred Stock | ||
No Trading Symbol Flag | true | ||
Security Exchange Name | NASDAQ |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended |
Jul. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor name | BDO USA, P.C. |
Auditor location | New York, NY |
Auditor firm ID | 243 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 121,372 | $ 53,142 |
Accounts receivable, trade, net of allowance for credit losses of $219 and $44 at July 31, 2023 and 2022, respectively | 28,616 | 40,083 |
Inventories, net | 8,569 | 8,151 |
Funds held for clients | 2,031 | 4,903 |
Prepaid expenses and other current assets | 158,686 | 3,551 |
Total current assets | 319,274 | 109,830 |
Property and equipment, net | 3,698 | 3,534 |
Operating lease right-of-use assets | 27,098 | 19,655 |
Other intangible assets, net | 34,589 | 0 |
Goodwill | 22,785 | 0 |
Other assets | 3,737 | 4,730 |
Total assets | 411,181 | 137,749 |
Current liabilities: | ||
Accounts payable | 26,514 | 30,553 |
Accrued expenses | 26,774 | 28,396 |
Funds held for clients | 1,949 | 4,903 |
Current lease obligations | 7,973 | 6,466 |
Other current liabilities | 4,544 | 13,482 |
Total current liabilities | 67,754 | 83,800 |
Convertible note payable | 12,461 | 11,047 |
Long-term lease obligations | 19,161 | 12,945 |
Other long-term liabilities | 5,442 | 3,983 |
Total long-term liabilities | 37,064 | 27,975 |
Total liabilities | 104,818 | 111,775 |
Commitments and contingencies (Note 13) | ||
Contingently redeemable preferred stock | 237,739 | 35,180 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at July 31, 2023 and 2022; zero shares issued and outstanding at July 31, 2023 and 2022 | 0 | 0 |
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 6,250,493 issued and outstanding shares at July 31, 2023; 6,485,309 issued and outstanding shares at July 31, 2022 | 65 | 65 |
Additional paid-in capital | 61,534 | 7,479,906 |
Accumulated earnings (deficit) | 7,612 | (7,493,317) |
Accumulated other comprehensive (loss) income | (587) | 4,140 |
Total stockholders' equity (deficit) | 68,624 | (9,206) |
Total liabilities, contingently redeemable preferred stock and stockholders' equity | 411,181 | 137,749 |
Series C Contingently Redeemable Preferred Stock | ||
Current liabilities: | ||
Contingently redeemable preferred stock | 35,006 | 35,180 |
Series E Contingently Redeemable Preferred Stock | ||
Current liabilities: | ||
Contingently redeemable preferred stock | $ 202,733 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Accounts receivable, trade, allowance for doubtful accounts | $ 219 | $ 44 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 4,965,000 | 4,965,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,400,000,000 | 1,400,000,000 |
Common stock, shares issued (in shares) | 6,250,493 | 6,485,309 |
Common stock, shares outstanding (in shares) | 6,250,493 | 6,485,309 |
Other intangible assets, net | $ 34,589 | $ 0 |
Series C Contingently Redeemable Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 35,000 | 35,000 |
Preferred stock, shares issued (in shares) | 35,000 | 35,000 |
Preferred stock, shares outstanding (in shares) | 35,000 | 35,000 |
Series E Contingently Redeemable Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | |
Preferred stock, shares authorized (in shares) | 3,500,000 | |
Preferred stock, shares issued (in shares) | 3,500,000 | |
Preferred stock, shares outstanding (in shares) | 3,500,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Income Statement [Abstract] | ||||
Net revenue | $ 40,804 | $ 148,283 | $ 203,272 | |
Cost of revenue | 29,749 | 108,031 | 161,736 | |
Gross profit | 11,055 | 40,252 | 41,536 | |
Operating expenses: | ||||
Selling, general and administrative | 8,523 | 33,463 | 40,373 | |
Amortization | 911 | 0 | 0 | |
Total operating expenses | 9,434 | 33,463 | 40,373 | |
Operating income | 1,621 | 6,789 | 1,163 | |
Other income (expense): | ||||
Interest income | 707 | 928 | 58 | |
Interest expense | (265) | (2,588) | (3,120) | |
Other gains, net | 5,688 | 3,961 | 4,031 | |
Total other income | 6,130 | 2,301 | 969 | |
Income from continuing operations before income taxes | 7,751 | 9,090 | 2,132 | |
Income tax (benefit) expense | (398) | 1,630 | 11,388 | |
Net income (loss) from continuing operations | 8,149 | 7,460 | (9,256) | |
Net loss from discontinued operations | 0 | 0 | (1,712) | |
Net income (loss) | 8,149 | 7,460 | (10,968) | |
Less: Preferred dividends on redeemable preferred stock | (537) | (1,593) | (2,129) | |
Net income (loss) attributable to common stockholders | $ 7,612 | $ 5,867 | $ (13,097) | |
Basic continuing operations (in usd per share) | $ 0.29 | $ 0.91 | $ (1.77) | |
Diluted discontinued operations (in usd per share) | 0 | 0 | (0.27) | |
Basic net income (loss) per share (in usd per share) | 0.29 | 0.91 | (2.04) | |
Diluted continuing operations (in usd per share) | 0.29 | 0.89 | (1.77) | |
Diluted discontinued operations (in usd per share) | 0 | 0 | (0.27) | |
Diluted net income (loss) per share (in usd per share) | $ 0.29 | $ 0.89 | $ (2.04) | |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Weighted-average number of common units outstanding - basic (in shares) | 6,177 | 6,449 | 6,425 | |
Weighted-average number of common units outstanding - diluted (in shares) | 27,960 | 8,417 | 6,425 | |
Financial Designation, Predecessor and Successor [Fixed List] | Successor |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 8,149 | $ 7,460 | $ (10,968) |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustment | (623) | 999 | (3,699) |
Pension liability adjustments, net of tax | 36 | (1,078) | 677 |
Other comprehensive (loss) income | (587) | (79) | (3,022) |
Comprehensive income (loss) | $ 7,562 | $ 7,381 | $ (13,990) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) |
Balance (in shares) at Jul. 31, 2021 | 6,760,660 | ||||
Beginning balance at Jul. 31, 2021 | $ 6,212 | $ 68 | $ 7,479,202 | $ (7,480,220) | $ 7,162 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (10,968) | (10,968) | |||
Preferred dividends | (2,129) | (2,129) | |||
Issuance of common stock pursuant to employee stock purchase plan (in shares) | 53 | ||||
Restricted stock grants (in shares) | 51,382 | ||||
Restricted stock forfeitures (in shares) | (326,786) | ||||
Restricted stock forfeitures | 0 | $ (3) | 3 | ||
Share-based compensation | 701 | 701 | |||
Other comprehensive items | $ (3,022) | (3,022) | |||
Balance (in shares) at Jul. 31, 2022 | 6,485,309 | 6,485,309 | |||
Ending balance at Jul. 31, 2022 | $ (9,206) | $ 65 | 7,479,906 | (7,493,317) | 4,140 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 7,460 | 7,460 | |||
Preferred dividends | (1,593) | (1,593) | |||
Restricted stock grants (in shares) | 44,240 | ||||
Share-based compensation | 529 | 529 | |||
Other comprehensive items | (79) | (79) | |||
Balance (in shares) at Apr. 30, 2023 | 6,529,549 | ||||
Ending balance at Apr. 30, 2023 | $ (2,889) | $ 65 | 7,480,435 | (7,487,450) | 4,061 |
Balance (in shares) at Jul. 31, 2022 | 6,485,309 | 6,485,309 | |||
Beginning balance at Jul. 31, 2022 | $ (9,206) | $ 65 | 7,479,906 | (7,493,317) | 4,140 |
Balance (in shares) at Jul. 31, 2023 | 6,250,493 | 6,250,493 | |||
Ending balance at Jul. 31, 2023 | $ 68,624 | $ 65 | 61,534 | 7,612 | (587) |
Balance (in shares) at Apr. 30, 2023 | 6,529,549 | ||||
Beginning balance at Apr. 30, 2023 | (2,889) | $ 65 | 7,480,435 | (7,487,450) | 4,061 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Effect of exchange transaction (in shares) | 0 | ||||
Effect of exchange transaction | 66,540 | $ 0 | (7,416,849) | 7,487,450 | (4,061) |
Balance (in shares) at May. 01, 2023 | 6,529,549 | ||||
Ending balance at May. 01, 2023 | 63,651 | $ 65 | 63,586 | 0 | 0 |
Balance (in shares) at Apr. 30, 2023 | 6,529,549 | ||||
Beginning balance at Apr. 30, 2023 | (2,889) | $ 65 | 7,480,435 | (7,487,450) | 4,061 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 8,149 | ||||
Preferred dividends | (537) | ||||
Other comprehensive items | $ (587) | ||||
Balance (in shares) at Jul. 31, 2023 | 6,250,493 | 6,250,493 | |||
Ending balance at Jul. 31, 2023 | $ 68,624 | $ 65 | 61,534 | 7,612 | (587) |
Balance (in shares) at May. 01, 2023 | 6,529,549 | ||||
Beginning balance at May. 01, 2023 | 63,651 | $ 65 | 63,586 | 0 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 8,149 | 8,149 | |||
Preferred dividends | (537) | (537) | |||
Reverse/forward stock split settlement (in shares) | (299,069) | ||||
Reverse/forward stock split settlement | (2,288) | (2,288) | |||
Restricted stock grants (in shares) | 20,013 | ||||
Share-based compensation | 236 | 236 | |||
Other comprehensive items | $ (587) | (587) | |||
Balance (in shares) at Jul. 31, 2023 | 6,250,493 | 6,250,493 | |||
Ending balance at Jul. 31, 2023 | $ 68,624 | $ 65 | $ 61,534 | $ 7,612 | $ (587) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Cash flows from operating activities: | |||
Net loss | $ 8,149 | $ 7,460 | $ (10,968) |
Loss from discontinued operations, net of tax | 0 | 0 | 1,712 |
Net income (loss) from continuing operations | 8,149 | 7,460 | (9,256) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation | 456 | 1,427 | 2,220 |
Amortization of intangible assets | 911 | 0 | 0 |
Amortization of deferred financing costs | 0 | 36 | 102 |
Accretion of debt discount | 0 | 1,688 | 1,704 |
Share-based compensation | 236 | 529 | 701 |
Deferred taxes | (250) | 0 | 9,041 |
Non-cash lease expense | 2,208 | 6,760 | 9,425 |
Bad debt expense (recovery) | (297) | 1,136 | (5) |
Other gains, net | (5,687) | (3,962) | (4,087) |
Non-cash impact of application of pushdown accounting | 8,079 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 8,409 | 2,933 | (5,251) |
Inventories, net | (1,567) | 1,440 | 323 |
Prepaid expenses and other current assets | 905 | (1,237) | 1,065 |
Accounts payable and accrued expenses | (1,690) | (3,886) | 801 |
Refundable and accrued income taxes, net | (214) | (829) | (471) |
Other assets and liabilities | (11,125) | (4,495) | (9,446) |
Net cash provided by (used in) operating activities | 8,523 | 9,000 | (3,134) |
Cash flows from investing activities: | |||
Additions to property and equipment | (807) | (1,311) | (1,485) |
Proceeds from the disposition of property and equipment | 1 | 166 | 0 |
Proceeds from the sale of securities | 53,644 | 1,881 | 0 |
Net cash provided by (used in) investing activities | 52,838 | 736 | (1,485) |
Cash flows from financing activities: | |||
Series C redeemable preferred stock dividend payments | (537) | (1,593) | (2,129) |
Payment of deferred financing costs | 0 | (149) | (95) |
Repayments on capital lease obligations | 0 | (38) | (73) |
Repayments on debt | (1,000) | (1,000) | 0 |
Payments for fractional shares resulting from the Reverse/Forward stock split | (2,288) | 0 | 0 |
Net cash used in financing activities | (3,825) | (2,780) | (2,297) |
Net effect of exchange rate changes on cash and cash equivalents | (29) | 895 | (1,368) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 57,507 | 7,851 | (8,284) |
Cash, cash equivalents and restricted cash, beginning of period | 65,896 | 58,045 | 66,329 |
Cash, cash equivalents and restricted cash, end of period | 123,403 | 65,896 | 58,045 |
Cash flows from discontinued operations: | |||
Operating activities | 0 | 0 | (6,738) |
Investing activities | 0 | 0 | 625 |
Financing activities | 0 | 0 | 4,230 |
Net cash (used in) provided by discontinued operations | $ 0 | $ 0 | $ (1,883) |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Jul. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Steel Connect, Inc., (the "Company" or "Steel Connect"), is a holding company which operates through its wholly-owned subsidiary ModusLink Corporation ("ModusLink" or "Supply Chain"). ModusLink is a supply chain business process management company serving clients in markets such as consumer electronics, communications, computing, medical devices, software and retail. ModusLink designs and executes elements in its clients' global supply chains to improve speed to market, product customization, flexibility, cost, quality and service. The Company also produces and licenses an entitlement management solution for activation, provisioning, entitlement subscription and data collection from physical goods (connected products) and digital products. Steel Partners and Steel Connect Exchange Transaction On April 30, 2023, Steel Partners Holdings L.P., (“Steel Holdings”) and the Company executed a series of agreements in which Steel Holdings and certain of its affiliates (the “Steel Partners Group”) agreed to transfer certain marketable securities held by the Steel Partners Group to the Company in exchange for 3.5 million shares of Series E Convertible Preferred Stock of the Company (the “Series E Convertible Preferred Stock”, and, such transfer and related transactions, the “Exchange Transaction”). Following approval on June 6, 2023 by the Company's stockholders, pursuant to NASDAQ Marketplace Rules, the Series E Convertible Preferred Stock is convertible into an aggregate of 19.8 million shares of the Company's common stock, par value $0.01 per share (the “common stock” or “Common Stock”), and will vote together with the Company's common stock and participate in any dividends paid on the Company's common stock, in each case on an as-converted basis. Upon conversion of the Series E Convertible Preferred Stock, the Steel Partners Group would hold approximately 84.0% of the outstanding equity interests of the Company. The Exchange Transaction closed on May 1, 2023, which is the date that the consideration was exchanged between Steel Holdings and the Company. Predecessor/Successor Reporting On May 1, 2023, the Exchange Transaction resulted in Steel Holdings obtaining control of the Company for financial statement consolidation purposes. Steel Holdings does not consolidate the Company for Federal income tax purposes because the ownership in the Company is dispersed between different federal tax consolidation groups within Steel Holdings. The Company elected pushdown accounting in which it uses Steel Holdings' basis of accounting, which reflects the fair market value of the Company’s assets and liabilities at the date of the Exchange Transaction. As a result, the Company has reflected the required pushdown accounting adjustments in its consolidated financial statements. Due to the application of pushdown accounting, the Company’s consolidated financial statements and certain footnote disclosures include a black line division between the two distinct periods to indicate the application of two different bases of accounting, which may not be comparable, between the periods presented. The pre- exchange period through April 30, 2023 is referred to as the "Predecessor" period. The post-exchange period, May 1, 2023 through July 31, 2023, includes the impact of pushdown accounting and is referred to as the "Successor" period. See Note 3 - "Exchange Transaction" for further information regarding the Exchange Transaction and the application of pushdown accounting. Disposition of Interest in Aerojet Shares As a result of the Exchange Transaction, the Company recorded $202.7 million to investments, which represents the fair value of the Aerojet common stock transferred to Steel Connect. As of July 31, 2023, the Company had disposed of all its interest in Aerojet common stock. The majority of Aerojet common stock was purchased when L3 Harris closed its merger with Aerojet. As of July 31, 2023, the Company received $53.3 million in cash and had a receivable of $154.5 million for proceeds receivable, which was received in August 2023. The Company received total net proceeds of $207.8 million in exchange for all of its Aerojet shares. Disposition of IWCO Direct On February 25, 2022, the Company entered into a transaction agreement (the “Transaction Agreement”) with (a) IWCO Direct Holding Inc. (''IWCO Direct" or "Direct Marketing") and its indirect subsidiaries, (b) Cerberus Business Finance, LLC, in its capacities as collateral agent and administrative agent under a financing agreement (in such capacities, the “Agent”), dated as of December 15, 2017, between IWCO Direct, IWCO Direct’s direct and indirect subsidiaries, the Agent and the lenders party thereto (the “Lenders”) (the “Financing Agreement”), (c) the Lenders, (d) the Lenders or their respective designees listed on the signature pages to the Transaction Agreement under the caption “Participating Lender Purchasers” (the “Participating Lender Purchasers”), (e) SPH Group Holdings LLC (the “Sponsor”) and (f) Instant Web Holdings, LLC (the “Buyer”), an entity owned by the Participating Lender Purchasers. On the Effective Date (as defined in the Transaction Agreement) and pursuant to the terms of the Transaction Agreement, the Company transferred all of its interests in IWCO Direct to the Buyer as part of a negotiated restructuring of the capital structure and certain financial obligations of IWCO Direct under the Financing Agreement as contemplated by the Transaction Agreement. The assets and liabilities and results of operations of the IWCO Direct business are reported as discontinued operations for all periods presented. See Note 4 - "Discontinued Operations" for additional information. All references made to financial data in this Annual Report are to the Company's continuing operations, unless otherwise specifically noted. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jul. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain significant accounting policies described below. Principles of Consolidation The accompanying consolidated financial statements of the Company include the results of its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company accounts for investments in businesses in which it owns between 20% and 50% of the voting interest using the equity method, if the Company has the ability to exercise significant influence over the investee company. All other investments in privately held businesses over which the Company does not have the ability to exercise significant influence, or for which there is not a readily determinable market value, are accounted for under the cost method of accounting. Reverse/Forward Stock Split At the special stockholders meeting held on June 6, 2023, the stockholders approved proposals to amend the Company’s restated certificate of incorporation (the “Charter”), to effect a 1-for-3,500 reverse stock split of the common stock (the “Reverse Stock Split”), followed immediately by a 375-for-1 forward stock split of the common stock (the “Forward Stock Split,” and, together with the Reverse Stock Split, the “Reverse/Forward Stock Split”). On June 7, 2023, the Board approved the Reverse/Forward Stock Split, and as such, the Board directed the Company to file with the State of Delaware certificates of amendment to our Charter to effectuate the Reverse/Forward Stock Split. The Reverse/Forward Stock Split was effective on June 21, 2023 (the “Effective Date”). The Company’s common stock began trading on a Reverse/Forward Stock Split-adjusted basis on the Nasdaq Capital Market when the market opened on June 22, 2023. The trading symbol for the Company’s common stock remains “STCN.” No fractional shares were issued in connection with the Reverse/Forward Stock Split. Shares held by stockholders who held fewer than 3,500 of the Company’s common stock immediately prior to the Reverse Stock Split were converted into the right to receive a payment in cash (without interest) equal to the fair value of such shares as of the time when those entitled to receive such payments were determined, which shall be an amount equal to such number of shares of Company’s common stock held multiplied by the average of the closing sales prices of the Company’s common stock on Nasdaq for the five consecutive trading days immediately preceding the effective date of the Reverse Stock Split, and each share of Company’s common stock held by a stockholder of record owning 3,500 shares or more immediately prior to the effective time of the Reverse Stock Split were converted into a new number of shares of Company’s common stock based on a ratio of 375 shares of the Company’s common stock for each share of the Company’s common stock owned immediately following the Reverse Stock Split, including any fractional shares owned following the Reverse Stock Split; however, with respect to any fractions of a share of Company Common Stock that may be held as a result of the Forward Stock Split, stockholders received a payment in cash (without interest) equal to the fair value of such fractions as of the time when those entitled to receive such fractions are determined, which was an amount equal to such fractions multiplied by the average of the closing sales prices of the Company’s common stock on Nasdaq for the five consecutive trading days immediately preceding the effective date of the Reverse/Forward Stock Split (with such average closing sales prices being adjusted to give effect to the Reverse/Forward Stock Split). The Company made payments of $2.3 million related to fractional shares as a result of the Reverse/Forward Stock Split, which were recorded to additional paid-in capital on the consolidated balance sheets for the fiscal year ended July 31, 2023. The number of shares of authorized Company’s common stock did not change as a result of the Reverse/Forward Stock Split; however, the number of shares of outstanding Company’s common stock decreased as a result of the Reverse/Forward Stock Split. Accordingly, all share and per-share amounts for the current period and prior periods have been adjusted to reflect the Reverse/Forward Stock Split. The number of shares of Company’s common stock issuable upon the exercise of Series C Preferred Stock and the Series E Preferred Stock immediately prior to the Reverse/Forward Stock Split were proportionately decreased and the conversion price of the Series C Preferred Stock and the Series E Preferred Stock were proportionately increased, effective as of June 21, 2023, the close of business on the date of such Reverse/Forward Stock Split. Our authorized preferred stock was not affected by the reverse stock split and continues to be 3,535,000 shares of preferred stock, with a par value of $0.01 per share. Use of Estimates The preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to: (1) revenue recognition; (2) valuation allowances for trade and other receivables; (3) the valuation of long-lived assets; (4) contingencies, including litigation reserves; (5) restructuring charges and related severance expenses; (6) income taxes; (7) pension obligations; (8) business combinations; and (9) incremental borrowing rate to determine present value of lease payments. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. Revenue Recognition The Company recognizes revenue from its contracts with customers primarily from the sale of supply chain management services. Revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For ModusLink's supply chain management services arrangements, the goods and services are considered to be transferred over time as they are performed. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Supply Chain Management Services ModusLink's revenue primarily comes from the sale of supply chain management services to its clients. Amounts billed to customers under these arrangements include revenue attributable to the services performed as well as for materials procured on the customer's behalf as part of its service to them. The majority of these arrangements consist of two distinct performance obligations (i.e., warehousing/inventory management service and a separate kitting/packaging/assembly service), revenue related to each of which is recognized over time as services are performed using an input method based on the level of efforts expended. Other Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, and fees for professional services in ModusLink's e-Business operations. Revenue related to these arrangements is recognized on a straight-line basis over the term of the agreement or over the term of the agreement in proportion to the costs incurred in satisfying the obligations under the contract. Performance Obligations and Standalone Selling Price The Company's contracts with customers may include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require certain judgment. For arrangements with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company generally determines standalone selling prices based on the prices charged to customers and uses a range of amounts to estimate standalone selling prices when we sell each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative standalone selling prices of the various products and services. The Company typically has more than one range of standalone selling prices for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the type of customer and geographic region in determining the range of standalone selling prices. Variable Consideration The Company may provide credits or incentives to customers, which are accounted for as variable consideration when estimating the transaction price of the contract and amounts of revenue to recognize. The amount of variable consideration to include in the transaction price is estimated at contract inception using either the estimated value method or the most likely amount method based on the nature of the variable consideration. These estimates are updated at the end of each reporting period as additional information becomes available and revenue is recognized only to the extent that it is probable that a significant reversal of any amounts of variable consideration included in the transaction price will not occur. Principal Versus Agent Revenue Recognition For revenue generated from contracts with customers involving another party, the Company considers whether it maintains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment and discretion in establishing price. Revenues are recognized on a gross basis if the Company is acting in the capacity of a principal and on a net basis if its acting in the capacity of an agent. Contract Balances Timing of revenue recognition may differ from timing of invoicing to customers. The Company records contract assets and liabilities related to its contracts with customers as follows: • Accounts receivable when revenue is recognized prior to receipt of cash payments and if the right to such amounts is unconditional and solely based on the passage of time. • Contract assets when the Company recognizes revenue based on efforts expended but the right to such amount is conditional upon satisfaction of another performance obligation. Contract assets are primarily comprised of fees related to supply chain management services. The Company's contract assets are all short-term in nature and are included in prepaid expenses and other current assets in the Company's consolidated balance sheets. • Deferred revenue when cash payments are received or due in advance of performance. Deferred revenue is primarily comprised of fees related to supply chain management services, cloud-based software subscriptions and software maintenance and support service contracts, which are generally billed in advance. Deferred revenue also includes other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The deferred revenue balance is classified as a component of other current liabilities and other long-term liabilities on the Company's consolidated balance sheets. Accounts Receivable and Allowance for Expected Credit Losses The Company's unsecured accounts receivable are stated at original invoice amount less an estimate made for expected credit losses based on a monthly review of all outstanding amounts. Management determines the allowance for expected credit losses by regularly evaluating individual customer receivables and considering each customer's financial condition, credit history, current economic conditions, whether any amounts are currently past due and the length of time accounts may be past due. The Company writes off accounts receivable when management deems them uncollectible and records recoveries of accounts receivable previously written off when received. When accounts receivable are considered past due, the Company generally does not charge interest on past due balances. The allowance for expected credit losses consisted of the following: Successor Predecessor May 1 to July 31, 2023 August 1, 2022 to April 30, 2023 July 31, 2022 (In thousands) Balance at beginning of period $ 1,180 $ 44 $ 49 Application of pushdown accounting (a) (1,180) — — Provisions charged to expense 219 1,136 — Accounts written off — — Recovered — — (5) Balance at end of period $ 219 $ 1,180 $ 44 (a) As part of pushdown accounting, the allowance for expected credit losses balance was eliminated to establish the new cost basis in the Company's accounts receivables as of May 1, 2023. Foreign Currency Translation All assets and liabilities of the Company's foreign subsidiaries, whose functional currency is the local currency, are translated to U.S. dollars at the rates in effect at the balance sheet date. All amounts in the consolidated statements of operations are translated using the average exchange rates in effect during the year. Resulting translation adjustments are reflected in the accumulated other comprehensive income (loss) component of stockholders' equity. Settlement of receivables and payables in a foreign currency that is not the functional currency result in foreign currency transaction gains and losses. Foreign currency transaction gains and losses are included in "Other gains (losses), net" in the consolidated statements of operations. Cash, Cash Equivalents and Short-term Investments Cash equivalents consist of highly liquid investments with an original maturity of three months or less at the time of purchase. Investments with maturities greater than three months to twelve months at the time of purchase are considered short-term investments. Cash and cash equivalents consisted of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Cash and bank deposits $ 90,282 $ 21,386 Money market funds 31,090 31,756 $ 121,372 $ 53,142 Fair Value Measurements The Company measures certain assets and liabilities at fair value (see Note 23 - "Fair Value Measurements"). Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values of assets and liabilities are determined based on a three-level measurement input hierarchy. Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Level 2 inputs are other than quoted market prices that are observable, either directly or indirectly, for an asset or liability. Level 2 inputs can include quoted prices in active markets for similar assets or liabilities, quoted prices in a market that is not active for identical assets or liabilities, or other inputs that can be corroborated by observable market data. Level 3 inputs are unobservable for the asset or liability when there is little, if any, market activity for the asset or liability. Level 3 inputs are based on the best information available and may include data developed by the Company. Funds Held for Clients Funds held for clients represent cash that is restricted for use solely for the purposes of satisfying the obligations to remit clients' customer funds to the Company's clients. These funds are classified as a current asset and a corresponding current liability on the Company's consolidated balance sheets. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined by both moving averages and the first-in, first-out methods. A provision for excess or obsolete inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns and future sales expectations. Accounting for Impairment of Long-Lived Assets The Company tests long-lived assets or group of assets for recoverability whenever events or changes in circumstances indicate that the Company may not be able to recover the asset's carrying amount. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company evaluates recoverability generally by determining whether the undiscounted cash flows expected to result from the use and eventual disposition of that asset or group cover the carrying value at the evaluation date. If the undiscounted cash flows are not sufficient to recover the carrying value, the Company measures an impairment loss as the excess of the carrying amount of the long-lived asset or group over its fair value. Management may use third-party valuation experts to assist in its determination of fair value. Property and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Depreciation and amortization is computed by applying the straight-line method to the estimated useful lives of the respective assets. Changes in estimated useful lives and salvage values of the Company’s assets and the related depreciation and amortization expense are accounted for prospectively. The Company capitalizes certain computer software development costs when incurred in connection with developing or obtaining computer software for internal use. The estimated useful lives are as follows: Category Useful Lives Machinery and equipment 5 years Leasehold improvements Shorter of the lease term or the estimated useful life of the asset Software 5 years Computer hardware 3 years Other 5 years Leases The Company leases office space, warehouse facilities, equipment and automobiles under operating leases. These leases may also include rent escalation clauses or lease incentives in the form of construction allowances and rent reduction. In determining the lease term used in the lease right-of-use ("ROU") asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease ROU asset and lease liability. The Company is typically required to make fixed minimum rent payments, variable rent payments primarily based on performance, or a combination thereof, directly related to its ROU asset. The Company is also often required, by the lease, to pay for certain other costs including real estate taxes, insurance, common area maintenance fees and/or certain other costs, which may be fixed or variable, depending upon the terms of the respective lease agreement. To the extent these payments are fixed, the Company has included them in calculating the lease ROU assets and lease liabilities. The Company calculates lease ROU assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date. When discount rates implicit in leases cannot be readily determined, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. The determination of incremental borrowing rates involves judgment by management. The weighted average interest rate used for operating leases for the year ended July 31, 2023 and July 31, 2022 was 5.2% and 3.9%, respectively. The weighted average interest rate used for finance leases for the year ended July 31, 2022 was 3.9%. There were no finance leases as of the year ended July 31, 2023. For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term and are not recognized on the consolidated balance sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. Restructuring Costs Restructuring and other exit costs may include employee separation costs, asset impairment charges, contract exit costs and costs of facility consolidation and closure. The Company records restructuring and other exit costs at their fair value when incurred. In accordance with existing benefit arrangements, employee termination costs are accrued when the restructuring actions are probable and estimable. Employee separation costs may also include one-time termination benefits recognized as a liability at estimated fair value, at the time of communication to employees, unless future service is required beyond the minimum retention period, in which case the costs are recognized ratably over the future service period. Income Taxes Income taxes are accounted for using the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. This methodology is subjective and requires significant estimates and judgments in the determination of the recoverability of deferred tax assets and in the calculation of certain tax liabilities. Income tax accounting standards prescribe: (1) a minimum recognition threshold that an income tax benefit arising from an uncertain income tax position taken, or expected to be taken, on an income tax return is required to meet before being recognized in the financial statements and (2) the measurement of the income tax benefits recognized from such positions. The Company's accounting policy is to classify uncertain income tax positions that are not expected to be resolved in one year as non-current income tax liabilities and to classify potential interest and penalties on uncertain income tax positions as elements of the provision for income taxes in its financial statements. See Note 18 - "Income Taxes," for additional information. Pension Plans The Company sponsors defined benefit pension plans covering certain of its employees in the Netherlands and Japan. In accordance with accounting standards for employee pension benefits, the Company recognizes on a plan-by-plan basis the unfunded status of its pension plans in the consolidated financial statements and measures its pension plan assets and benefit obligations as of July 31. The obligation for the Company's pension plans and the related annual costs of employee benefits are calculated based on several long-term assumptions, including discount rates and expected mortality for employee benefit liabilities, rates of return on plan assets and expected annual rates for salary increases for employee participants. Share-Based Compensation Plans All share-based payment awards to employees and directors are measured based upon their grant date fair values and expensed over the period during which the employee or director is required to provide service in exchange for the award (the vesting period). The Company accounts for forfeitures in the period in which they occur. Acquisition Accounting The Exchange Transaction with Steel Holdings was accounted for as a business combination under the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”) with Steel Holdings being the accounting acquirer. The Company elected to apply pushdown accounting. As required by ASC 805, assets acquired and liabilities assumed in a business combination are recorded at their respective fair values as of the business combination date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Significant judgement is required in determining the acquisition date fair value of the assets acquired and liabilities assumed predominantly with respect to debt and intangible assets. We use available information to make these fair value determinations and, when necessary, engage an independent valuation specialist to assist in the fair value determination of the acquired long-lived assets. Significant judgment may be used to determine these fair values, including the use of appraisals, discounted cash flow models, market value for similar purchases or other methods applicable to the circumstances. The assumptions and judgments made by the Company when recording business combinations will have an impact on reported results of operations in the future. During the measurement period, which is not to exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Earnings per Common Share The Company calculates earnings (loss) per common share using the two-class method required for participating securities. Accordingly, the Company's Series E Convertible Preferred Stock, which the holders of are entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends or other distributions on the shares of Common Stock, are included as participating securities in the calculation of earnings (loss) per common share ("EPS") pursuant to the two-class method. The two-class method provides for an allocation of net income (loss) between common stock and other participating securities based on their respective participation rights to share in dividends. Basic EPS is calculated by dividing net income available to common stockholders for the period by the weighted-average number of common shares outstanding during the period. Net income available to common stockholders for the period includes dividends paid to common stockholders during the period plus a proportionate share of undistributed net income allocable to common stockholders for the period; the proportionate share of undistributed net income allocable to common stockholders for the period is based on the proportionate share of total weighted-average common shares and participating securities outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential common shares consist of restricted common stock (calculated based on the treasury stock method) and shares issuable upon debt or preferred stock conversion (calculated using an as-if converted method), using the more dilutive of either the two-class method or as-converted stock method. Major Clients and Concentration of Credit Risk For the fiscal years ended July 31, 2023 and 2022, the Company's 10 largest clients accounted for approximately 83% and 78% of consolidated net revenue from continuing operations, respectively. Two customers accounted for approximately 41% and 13% of the Company's consolidated net revenue from continuing operations for the fiscal year ended July 31, 2023, and two customers accounted for 31% and 12% of the Company's consolidated net revenue from continuing operations for the fiscal year ended July 31, 2022. No other customers accounted for greater than 10% of consolidated net revenue in these periods. Four clients, associated with the Supply Chain segment, accounted for greater than 10% of the Company's consolidated net accounts receivables as of July 31, 2023. The first, second, third, and fourth client accounted for approximately 28%, 14%, 12%, and 10%, respectively, of the Company's consolidated net accounts receivable balance as of July 31, 2023. Three clients, associated with the Supply Chain segment, accounted for greater than 10% of the Company's consolidated net accounts receivables as of July 31, 2022. The first, second, and third client accounted for approximately 31%, 18%, and 17%, respectively, of the Company's consolidated net accounts receivable balance as of July 31, 2022. Financial instruments which potentially subject the Company to concentrations of credit risk are cash, cash equivalents and accounts receivable. The Company's cash equivalent portfolio is diversified and consists primarily of short-term investment grade securities placed with high credit quality financial institutions. Cash and cash equivalents are maintained at accredited financial institutions, and the balances associated with funds held for clients are at times without and in excess of federally insured limits. The Company has never experienced any losses related to these balances and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with financial institutions. Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Loses on Financial Instruments , an ASU that requires measurement and recognition of expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. As a result of the Exchange Transaction, the Company elected to early adopt ASU 2016-13 as of the date of the Exchange Transaction, or May 1, 2023, in order to conform with Steel Holdings' accounting policies. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company did not identify any other accounting standards that would require early adoption in order to conform to Steel Holdings' accounting policies. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance . The ASU requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This guidance is effective for all entities for annual periods beginning after December 15, 2021 and early adoption is permitted. The new guidance was effective for the Company's fiscal year ended July 31, 2023 (Fiscal Year 2023). The adoption of this new guidance did not have any impact on the Company's consolidated financial statements and disclosures. Accounting Standards Issued and Not Yet Implemented In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40) . The amendment in this update simplifies the accounting for convertible |
EXCHANGE TRANSACTION
EXCHANGE TRANSACTION | 12 Months Ended |
Jul. 31, 2023 | |
Related Party Transactions [Abstract] | |
EXCHANGE TRANSACTION | EXCHANGE TRANSACTION Steel Partners and Steel Connect Exchange Transaction On April 30, 2023, the Company and Steel Holdings executed a series of agreements, in which Steel Holdings and the Steel Partners Group transferred an aggregate of 3.6 million shares of common stock, par value $0.10 per share, of Aerojet Rocketdyne Holdings, Inc. ("Aerojet") held by the Steel Partners Group to the Company in exchange for 3.5 million shares of newly created Series E Convertible Preferred Stock of Steel Connect (the “Series E Convertible Preferred Stock” and such transfer and related transactions, the "Exchange Transaction"). Following approval by the Company's stockholders pursuant to the rules of The Nasdaq Stock Market LLC at a special meeting of stockholders held on June 6, 2023, the Series E Convertible Preferred Stock is convertible into an aggregate of 19.8 million shares of the Company's common stock, par value $0.01 per share (the “common stock” or “Common Stock”), and votes together with the Company's common stock and participates in any dividends paid on the Company's common stock, in each case on an as-converted basis. Upon conversion of the Series E Convertible Preferred Stock, the Steel Partners Group would hold approximately 84.0% of the outstanding equity interests of the Company, and the Company became a consolidated subsidiary of Steel Holdings for financial statement purposes. The Company is not consolidated by Steel Holdings for Federal income tax purposes because Steel Holdings' ownership in the Company is dispersed between different federal tax consolidation groups. The Exchange Transaction closed on May 1, 2023, the date that the consideration was exchanged between the Company and Steel Holdings. The Company's assets and liabilities have been included in Steel Holdings' consolidated balance sheet as of May 1, 2023, with a related noncontrolling interest of 16.0% of the Company's common stock. Prior to May 1, 2023, Steel Holdings held a 49.6% ownership interest in the Company and accounted for its investment in the Company in accordance with the equity method of accounting. Steel Holdings remeasured the previously held equity method investment to its fair value based upon a valuation of the Company, as of the date of the Exchange Transaction. The Exchange Transaction accomplishes Steel Holdings' objective, which is to increase ownership in the Company in order to benefit from future earnings and growth and strengthens the Company's balance sheet to permit it to do acquisitions. The Exchange Transaction was accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations , and, accordingly, the Company's results of operations were consolidated in Steel Holdings' financial statements on the date of the Exchange Transaction. Steel Holdings recorded a preliminary allocation of the Exchange Transaction to assets acquired and liabilities assumed based on their estimated fair values as of May 1, 2023. The final Exchange Transaction allocation, which is expected to be completed by December 31, 2023, will be based on final appraisals and other analysis of fair values of acquired assets and liabilities. Steel Holdings does not expect that differences between the preliminary and final Exchange Transaction allocation will have a material impact on its results of operations or financial position. As discussed in Note 1 - "Nature of Operations, the Company elected pushdown accounting in which it uses Steel Holdings' basis of accounting, which reflects the fair market value of the Company’s assets and liabilities at the date of the Exchange Transaction. The following table summarizes the total Exchange Transaction consideration: (in thousands) May 1, 2023 Fair value of Aerojet common stock $ 202,733 Fair value of Steel Holdings' previously held interests in Steel Connect and Steel Holdings' noncontrolling interest 111,816 Less: cash acquired from Steel Connect (65,896) Total estimated consideration, less cash acquired $ 248,653 The following represents the preliminary calculation of goodwill and fair value amounts recognized: (in thousands) May 1, 2023 Assets Accounts receivable, trade $ 36,900 Inventories, net 6,900 Prepaid expenses and other current assets 4,957 Other intangible assets 35,500 Other assets 3,900 Property and equipment, net 3,400 Operating lease right-of-use assets 29,250 Investments 202,733 Estimated fair value of total assets acquired by Steel Holdings 323,540 Liabilities Accounts payable 26,300 Accrued expenses 29,100 Current lease obligations 7,994 Other current liabilities 7,236 Long-term lease obligations 21,300 Other long-term liabilities 5,742 Estimated fair value of total liabilities assumed by Steel Holdings 97,672 Fair value of identifiable net assets 225,868 Goodwill attributable to Steel Connect $ 22,785 The following table summarizes the significant adjustments recognized by the Company as of the Exchange date for each major class of assets and liabilities as a result of pushdown accounting: Exchange Date Carrying Value Adjustments Exchange Date Fair Value (in thousands) Goodwill $ — 22,785 $ 22,785 Other intangible assets $ — 35,500 $ 35,500 Operating lease right-of-use assets $ 28,900 350 $ 29,250 Prepaid and other current assets $ 5,000 (43) $ 4,957 Convertible note payable $ (11,586) (1,420) $ (13,006) Other current liabilities $ (16,671) 9,435 $ (7,236) Other long-term liabilities $ (5,500) (242) $ (5,742) As part of pushdown accounting, the Company calculated the amount of goodwill recognized based on the excess of the Exchange Transaction consideration over the fair value of net identifiable assets acquired and liabilities assumed. Goodwill is primarily attributable to expected synergies and the assembled workforce of the Company. The goodwill recognized will not be deductible for income tax purposes. The recorded identifiable intangible assets at their estimated fair value as of the date of the Exchange Transaction. The fair value of the trade name asset was determined using the relief-from-royalty method and the fair value of the customer relationships asset was determined using the excess earnings method. These income-based approaches included assumptions such as the amount and timing of projected cash flows, growth rates, customer attrition rates, discount rates, and the assessment of the asset’s life cycle. The estimated fair value and estimated remaining useful lives of identifiable intangible assets as of the Exchange Transaction date were as follows: (in thousands) Useful Life (Years) Amount Customer relationships 7 $ 25,000 Trade name Indefinite 10,500 Estimated fair value of identifiable intangible assets $ 35,500 The Company recorded a $0.4 million favorable adjustment to operating lease right-of-use assets for the favorable leasehold interest asset identified as part of purchase accounting. The fair value of the favorable leasehold interest asset was determined by analyzing any favorable or unfavorable leasehold interest inherent in the lease contracts, and comparing the annual lease contract rent over the remaining contractual term to a market rental rate cash flow stream in applying the income approach to estimate any favorable or unfavorable leasehold interest. The difference between the contractual and market-based cash flows was then discounted to present value to estimate the fair value of the favorable leasehold interest asset. The Company wrote off the remaining $43.4 thousand related to deferred financing costs for the Umpqua Revolver in other current assets as part of pushdown accounting. The carrying value of the SPHG Note was increased by $1.4 million to reflect its fair value at the Exchange Date. The value of the SPHG Note was calculated using the Goldman Sachs Binomial Lattice Model. Other current liabilities was decreased by $9.4 million related to the accrued pricing liability. The accrued pricing liability was reduced to zero to reflect its fair value at the Exchange Date. Refer to Note 9 - "Accrued Expenses and Other Current Liabilities" for further information. Other non-current liabilities was increased by net $0.2 million. The Company booked $0.8 million deferred tax liability related to the ModusLink trade name intangible. This was partially offset by $0.5 million decrease to the non-current pension liability as a result of the fair value measurement of the Company's defined benefit plans as of the Exchange Date. The Company recorded $202.7 million to investments, which represents the fair value of the Aerojet common stock transferred to Steel Connect as part of the Exchange Transaction. As of July 31, 2023, the Company had disposed of all its interest in Aerojet common stock. The majority of Aerojet common stock was purchased when L3 Harris closed its merger with Aerojet. The Company received total net proceeds of $207.8 million in exchange for all of its Aerojet shares, and recorded a gain of $5.1 million to Other gains, net in the Consolidated Statements of Operations in the Successor Period. See Note 16 - "Other gains, net" |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Jul. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS As discussed in Note 1 - "Nature of Operations", on February 25, 2022, the Company completed the disposition of IWCO Direct. The Company received no cash consideration for the disposition (the entire transaction being referred to as the “IWCO Direct Disposal”). As of the Disposal Date and subject to the terms and conditions of the Transaction Agreement, the parties entered into certain mutual releases as fully set forth in the Transaction Agreement. In addition, as part of the overall transaction, the Buyer issued a note in the principal amount of $6.9 million payable to the Company as consideration for intercompany obligations owed by IWCO Direct to the Company (the “Subordinated Note”). The Subordinated Note is subordinated to the obligations under the Financing Agreement (including any amendments or other modifications thereto) and matures on the date that is the earlier of (a) the later of (i) August 25, 2027 and (ii) the date that is six months after the maturity of the Financing Agreement, or (b) the date that is six months after repayment in full of the obligations under the Financing Agreement. Due to the subordinated nature of the Subordinated Note and the assessment of collectability, the Company determined the fair value of the Subordinated Note was zero. The Company deconsolidated IWCO Direct as of the Disposal Date as the Company no longer held a controlling financial interest in IWCO Direct as of that date. The Company did not have any amounts included in accumulated other comprehensive loss associated with IWCO Direct at the time of deconsolidation. The disposal of IWCO Direct represents a strategic shift to exit the direct marketing business and its results are reported as discontinued operations for all periods presented. A summary of the results of the discontinued operations is as follows: Fiscal Year Ended July 31, 2022 Net revenue $ 165,542 Cost of revenue 156,697 Gross profit 8,845 Operating expenses: Selling, general and administrative 30,744 Amortization of intangible assets (a) 9,303 Total operating expenses 40,047 Operating loss (31,202) Other income (expense): Gain upon deconsolidation of IWCO Direct 35,457 Interest expense (16,111) Total other income (expense), net 19,346 Loss from discontinued operations before income taxes (11,856) Income tax benefit 10,144 Loss from discontinued operations, net of tax $ (1,712) (a) During the fiscal year ended July 31, 2022, the Company recorded $9.3 million of amortization expense for the former Direct Marketing reporting unit. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Jul. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETSPrepaid expenses and other current assets, net consisted of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Aerojet common stock proceeds receivable $ 154,500 $ — Prepaid expenses 2,217 2,085 Other current assets 1,969 1,466 $ 158,686 $ 3,551 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jul. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories, net consisted of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Raw materials $ 4,805 $ 7,330 Work-in-process 239 124 Finished goods 3,525 697 $ 8,569 $ 8,151 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended |
Jul. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET In connection with the application of pushdown accounting, the Company recorded intangible assets for goodwill, customer relationships and tradenames. There were no indicators of impairment of goodwill and other intangible assets during the Successor period. A reconciliation of the change in the carrying amount of goodwill by reportable segment is as follows: Supply Chain Balance at May 1, 2023 (Successor) Application of pushdown accounting (a) $ 22,785 Balance at July 31, 2023 (Successor) Gross goodwill 22,785 Accumulated impairments — Net goodwill $ 22,785 (a) Related to the Exchange Transaction with Steel Holdings. See Note 3 - "Exchange Transaction" for further details. A summary of Other intangible assets, net is as follows: Successor July 31, 2023 Gross Carrying Amount Accumulated Amortization Net Customer relationships $ 25,000 $ 911 $ 24,089 Trade name 10,500 — 10,500 Total $ 35,500 $ 911 $ 34,589 The trade name intangible asset has an indefinite useful life. Customer relationships are amortized on a straight-line basis. Amortization expense related to intangible assets was $0.9 million for the fiscal year ended July 31, 2023. The Exchange Transaction closed on May 1, 2023, and as such, there was no intangible assets or related amortization expense for the fiscal year ended July 31, 2022. Based on gross carrying amounts at July 31, 2023, the Company's estimate of amortization expense for each of the five succeeding years and thereafter is as follows: Fiscal Year Ending July 31, 2024 2025 2026 2027 2028 Thereafter Estimated amortization expense $ 3,555 $ 3,571 $ 3,571 $ 3,571 $ 3,571 $ 6,250 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jul. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment at cost, consists of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Machinery and equipment 1,388 12,632 Leasehold improvements 606 9,994 Software 1,133 34,161 Computer hardware 400 5,317 Other 627 2,475 4,154 64,579 Less: accumulated depreciation and amortization (456) (61,045) Property and equipment, net $ 3,698 $ 3,534 As part of pushdown accounting, the accumulated depreciation of property and equipment balances were eliminated to establish the new cost basis in the Company’s property and equipment as of May 1, 2023. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Jul. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following tables reflect the components of "Accrued expenses" and "Other current liabilities": Successor Predecessor July 31, 2023 July 31, 2022 Accrued Expenses (In thousands) Accrued compensation $ 6,891 $ 5,099 Accrued audit, tax and legal 5,696 4,564 Accrued taxes 2,811 3,344 Accrued price concessions 2,981 4,549 Accrued occupancy costs 1,412 1,671 Accrued IT costs 831 1,108 Accrued other 6,152 8,061 Total accrued expenses $ 26,774 $ 28,396 Successor Predecessor July 31, 2023 July 31, 2022 Other Current Liabilities (In thousands) Accrued pricing liabilities $ — $ 9,435 Deferred revenue - current 2,574 2,705 Other 1,970 1,342 Total other current liabilities $ 4,544 $ 13,482 As of July 31, 2022, the Company had accrued pricing liabilities of approximately $9.4 million. As previously reported by the Company, several principal adjustments were made to its historic financial statements for periods ended on or before January 31, 2012, the most significant of which related to the treatment of vendor rebates in its pricing policies. Where the retention of a rebate or a mark-up was determined to have been inconsistent with a client contract, the Company concluded that these amounts were not properly recorded as revenue. Accordingly, revenue was reduced by an equivalent amount for the period that the rebate was estimated to have been affected. A corresponding liability for the same amount was recorded in that period (referred to as accrued pricing liabilities). The Company’s historical practice has been to derecognize the accrued pricing liabilities by customer depending upon which state the customer or former customer is located in and that state’s applicable statutes of limitations and escheatment laws. The amounts previously derecognized were recorded in Other gains, net in the Company’s consolidated statements of operations. In connection with the Exchange Transaction discussed in Note 1 - "Nature of Operations", Steel Holdings recognized the Company's assets and liabilities acquired at fair value in accordance with ASC 805. As of the acquisition date, Steel Holdings determined the fair value of the accrued pricing liability to be zero as Steel Holdings believes it is remote there would be any potential payments to the Company's customers or former customers for the rebates. As such, as of July 31, 2023, the balance of accrued pricing liabilities was reduced to zero with a corresponding offset to goodwill recognized in connection with pushdown accounting. |
DEBT
DEBT | 12 Months Ended |
Jul. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBTThe components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Unsecured 7.50% Convertible Senior Note due September 1, 2024 $ 12,461 $ 14,940 Credit Facilities Umpqua Revolver — — Less: unamortized discounts and issuance costs (a)(b) — (3,972) Total debt, net $ 12,461 $ 10,968 (a) As of May 1, 2023, the Company will account for the SPHG Note under the fair value option. (b) Amounts include deferred debt issuance costs related to credit facilities of $79 thousand as of July 31, 2022, which are presented in Other Assets. 7.50% Convertible Senior Note On February 28, 2019, the Company entered into a 7.50% Convertible Senior Note Due 2024 Purchase Agreement (the "SPHG Note Purchase Agreement") with SPH Group Holdings LLC ("SPHG Holdings"), whereby SPHG Holdings agreed to loan the Company $14.9 million in exchange for a 7.50% Convertible Senior Note due 2024 (the "SPHG Note"). On March 9, 2023 (the "Amendment Date"), the Company and SPHG Holdings entered into an amendment to the SPHG Note (the “SPHG Note Amendment”). Pursuant to the SPHG Note Amendment, the maturity date of the SPHG Note was extended six months from March 1, 2024 to September 1, 2024. In addition, the Company repaid $1.0 million in principal amount of the SPHG Note on the Amendment Date, and repaid an additional $1.0 million principal amount of the note on June 9, 2023. In connection with the SPHG Note Amendment, the Company paid SPHG Holdings a cash amendment fee of $0.1 million, and derecognized $0.2 million of the debt discount in proportion to the reduction of the principal balance in the third quarter of fiscal 2023. No other changes were made to the terms of the SPHG Note besides the items discussed. SPHG Holdings has the right, at its option, prior to the close of business on the business day immediately preceding the maturity date of the SPHG Note, to convert the SPHG Note or a portion thereof that is $1,000 or an integral multiple thereof, into shares of common stock (if the Company has not received a required stockholder approval) or cash, shares of common stock or a combination of cash and shares of common stock, as applicable (if the Company has received a required stockholder approval), at an initial conversion rate of 45.1356 shares of common stock, which is equivalent to an initial conversion price of approximately $22.16 per share (subject to adjustment as provided in the SPHG Note) per $1,000 principal amount of the SPHG Note, subject to, and in accordance with, the settlement provisions of the SPHG Note. As of July 31, 2023, the if-converted value of the SPHG Note did not exceed the principal value of the SPHG Note. The below discusses the components of the SPHG Note as of July 31, 2023 and July 31, 2022: On May 1, 2023, as a result of pushdown accounting related to the Exchange Transaction, the carrying value of the SPHG Note was remeasured to $13.0 million, which represents its fair value. As of May 1, 2023, the Company will now account for the SPHG Note under the fair value option in order to conform with Steel Holdings' basis of accounting, with changes in fair value recognized in earnings. Refer to Note 3 - "Exchange Transaction" and Note 23 - "Fair Value Measurements" for further information. As of July 31, 2023, the principal amount of the SPHG note was $12.9 million. The fair value of the SPHG note was $12.5 million. As of July 31, 2022, the principal amount of the SPHG note was $14.9 million and the net carrying value of the SPHG note was $11.0 million. As of July 31, 2022, the effective interest rate on the SPHG Note, including accretion of the discount, was 27.8%, which was the effective interest rate prior to the SPHG Note Amendment. The effective interest rate subsequent to the SPHG Note Amendment was 23.0%. Predecessor July 31, 2022 Carrying amount of equity component $ 8,200 Principal amount of note $ 14,940 Unamortized debt discount (3,893) Net carrying amount $ 11,047 Below is a reconciliation of interest expense related to the SPHG Note to total interest expense: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Interest expense related to contractual interest coupon on the SPHG Note $ 261 $ 844 $ 1,136 Interest expense related to accretion of the discount on the SPHG Note — 1,688 1,704 Interest expense related to revolving credit facilities (see below) — 36 212 Other 4 20 68 Total interest expense $ 265 $ 2,588 $ 3,120 Umpqua Revolver On March 16, 2022, ModusLink, as borrower, entered into a new credit agreement with Umpqua Bank as lender and as agent. The Umpqua Revolver provides for a maximum credit commitment of $12.5 million and a sublimit of $5.0 million for letters of credit and expires on March 31, 2025. Concurrent with signing the Umpqua Revolver ModusLink submitted a notice of termination to MidCap Financial Trust for its $12.5 million revolving credit facility (the “MidCap Credit Facility”), which was set to expire on December 31, 2022. There was no balance outstanding on the Midcap Credit Facility at the time of its termination. On March 13, 2023, ModusLink and Umpqua Bank entered into an amendment to the Umpqua Revolver (the "Umpqua Revolver Amendment") to extend the expiration date of the facility from March 16, 2024 to March 31, 2025. There were no fees associated with the extension. As of April 30, 2023, there were $43.4 thousand of unamortized debt issuance costs recorded to other current assets, which were written off with the application of pushdown accounting. Refer to Note 3 - "Exchange Transaction" for further details. As of July 31, 2023, ModusLink was in compliance with the Umpqua Revolver's covenants, and believes it will remain in compliance with the Umpqua Revolver’s covenants for the next twelve months. As of July 31, 2023, ModusLink had available borrowing capacity of $11.9 million and there was $0.6 million outstanding for letters of credit. |
LEASES
LEASES | 12 Months Ended |
Jul. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating and finance leases for office space, office equipment, warehouse space and automobiles. The leases have remaining terms of up to six years, some of which include options to purchase, extend or terminate the leases, and management has assessed such terms when determining the lease term for accounting purposes. The Company's current lease arrangements expire through fiscal year 2029. The Company's leases do not include any residual value guarantees, and therefore none were considered in the calculation of the operating ROU and operating lease liability balances. The Company has leases that contain variable payments, most commonly in the form of common area maintenance charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the operating ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. For leases with terms greater than 12 months, the Company records the related operating ROU assets and operating lease liabilities at the present value of lease payments over the lease terms. For leases with an initial term of 12 months or less (with purchase options or extension options that are not reasonably certain to be exercised), the Company does not record them on the balance sheet, but instead recognizes lease expense on a straight-line basis over the terms of the leases. Lease Expense The components of the Company's lease expense are presented below: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Operating lease cost $ 2,565 $ 7,538 $ 9,973 Short-term lease expense 444 1,269 1,488 Sublease income (171) (786) (748) Variable lease cost — 7 24 Interest on finance lease liabilities — — 3 $ 2,838 $ 8,028 $ 10,740 Lease Commitments The Company's future minimum lease payments required under operating leases that have commenced as of July 31, 2023 were as follows: Operating Leases (In thousands) 2024 $ 9,256 2025 8,054 2026 5,630 2027 4,298 2028 2,088 Thereafter 544 Total lease payments 29,870 Less: imputed interest 2,736 Present value of lease payments 27,134 Less: current lease obligations 7,973 Long-term lease obligations $ 19,161 In order to calculate the operating ROU asset and operating lease liability for a lease, a lessee is required to apply a discount rate equal to the rate implicit in the lease whenever that rate is readily determinable. The Company's lease agreements generally do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors and, therefore, the Company determines an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value. Additional Lease Information Additional information related to the Company's leases as of July 31, 2023 was as follows: Weighted average remaining lease term: Operating leases 3.7 years Weighted average discount rate: Operating leases 5.2% Supplemental Cash Flow Information Supplemental cash flow information related to the cash paid for amounts included in measurement of lease liabilities during the fiscal year ended July 31, 2023 and 2022 was as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Operating cash flows from operating leases $ 2,494 $ 7,224 $ 9,653 Operating cash flows from finance leases $ — $ — $ 3 Financing cash flows from finance leases $ — $ 38 $ 73 |
LEASES | LEASES The Company has operating and finance leases for office space, office equipment, warehouse space and automobiles. The leases have remaining terms of up to six years, some of which include options to purchase, extend or terminate the leases, and management has assessed such terms when determining the lease term for accounting purposes. The Company's current lease arrangements expire through fiscal year 2029. The Company's leases do not include any residual value guarantees, and therefore none were considered in the calculation of the operating ROU and operating lease liability balances. The Company has leases that contain variable payments, most commonly in the form of common area maintenance charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the operating ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. For leases with terms greater than 12 months, the Company records the related operating ROU assets and operating lease liabilities at the present value of lease payments over the lease terms. For leases with an initial term of 12 months or less (with purchase options or extension options that are not reasonably certain to be exercised), the Company does not record them on the balance sheet, but instead recognizes lease expense on a straight-line basis over the terms of the leases. Lease Expense The components of the Company's lease expense are presented below: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Operating lease cost $ 2,565 $ 7,538 $ 9,973 Short-term lease expense 444 1,269 1,488 Sublease income (171) (786) (748) Variable lease cost — 7 24 Interest on finance lease liabilities — — 3 $ 2,838 $ 8,028 $ 10,740 Lease Commitments The Company's future minimum lease payments required under operating leases that have commenced as of July 31, 2023 were as follows: Operating Leases (In thousands) 2024 $ 9,256 2025 8,054 2026 5,630 2027 4,298 2028 2,088 Thereafter 544 Total lease payments 29,870 Less: imputed interest 2,736 Present value of lease payments 27,134 Less: current lease obligations 7,973 Long-term lease obligations $ 19,161 In order to calculate the operating ROU asset and operating lease liability for a lease, a lessee is required to apply a discount rate equal to the rate implicit in the lease whenever that rate is readily determinable. The Company's lease agreements generally do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors and, therefore, the Company determines an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value. Additional Lease Information Additional information related to the Company's leases as of July 31, 2023 was as follows: Weighted average remaining lease term: Operating leases 3.7 years Weighted average discount rate: Operating leases 5.2% Supplemental Cash Flow Information Supplemental cash flow information related to the cash paid for amounts included in measurement of lease liabilities during the fiscal year ended July 31, 2023 and 2022 was as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Operating cash flows from operating leases $ 2,494 $ 7,224 $ 9,653 Operating cash flows from finance leases $ — $ — $ 3 Financing cash flows from finance leases $ — $ 38 $ 73 |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 12 Months Ended |
Jul. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING ACTIVITIES | RESTRUCTURING ACTIVITIES ModusLink Restructuring Activities During the fiscal year ended July 31, 2021, ModusLink implemented a strategic plan to reorganize its sales function and the e-Business operations. The restructuring charges associated with this plan were primarily composed of employee termination costs. In November 2021, ModusLink amended its strategic plan to include reorganizing its supply chain operations and recorded a restructuring charge of approximately $0.9 million during the three months ended January 31, 2022. In July 2022, ModusLink reorganized its supply chain operations in Ireland and recorded a restructuring charge of approximately $0.6 million during the three months ended July 31, 2022. The restructuring charges recorded in fiscal year ended July 31, 2022 were primarily composed of employee termination costs. In February 2023, ModusLink reorganized its call center operations in the United States and recorded a restructuring charge of approximately $0.1 million during the three months ended April 30, 2023. The restructuring charges recorded in three months ended April 30, 2023 were primarily composed of employee termination costs. In the three months ended July 2023, ModusLink completed its Ireland and United States strategic reorganization plan and reversed approximately $0.1 million of restructuring accrual. The reversal of unused restructuring charges recorded in the three months ended July 31, 2023 were primarily related to employee termination costs. The table below summarizes restructuring charges in the statements of operations for employee termination costs: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, (in thousands) 2023 2023 2022 Cost of revenue (62) 97 $ 1,200 Selling, general and administrative — — 313 (62) 97 $ 1,513 Changes to the restructuring liability during the fiscal year ended July 31, 2023 were as follows: (in thousands) Balance as of July 31, 2022 $ 892 Costs incurred 35 Cash payments (925) Change in estimates (2) Balance as of July 31, 2023 $ — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jul. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Donald Reith v. Warren G. Lichtenstein, et al. On April 13, 2018, a purported shareholder, Donald Reith, filed a verified complaint, Reith v. Lichtenstein, et al., 2018-277 (Del. Ch.) in the Delaware Court of Chancery (the “Reith litigation”). The complaint alleges class and derivative claims for breach of fiduciary duty and/or aiding and abetting breach of fiduciary duty and unjust enrichment against the Board of Directors, Warren G. Lichtenstein, Glen M. Kassan, William T. Fejes, Jack L. Howard, Jeffrey J. Fenton, Philip E. Lengyel and Jeffrey S. Wald; and stockholders Steel Holdings, Steel Partners, Ltd., SPHG Holdings, Handy & Harman Ltd. and WHX CS Corp. (collectively, the "Steel Parties") in connection with the acquisition of $35.0 million of the Series C Convertible Preferred Stock by SPHG Holdings and equity grants made to Messrs. Lichtenstein, Howard and Fejes on December 15, 2017 (collectively, the "Challenged Transactions"). The Company is named as a nominal defendant. The complaint alleges that although the Challenged Transactions were approved by a Special Committee consisting of the independent members of the Board of Directors (Messrs. Fenton, Lengyel and Wald), the Steel Parties dominated and controlled the Special Committee, who approved the Challenged Transactions in breach of their fiduciary duty. Plaintiff alleges that the Challenged Transactions unfairly diluted stockholders and therefore unjustly enriched Steel Holdings, SPHG Holdings and Messrs. Lichtenstein, Howard and Fejes. The complaint also alleges that the Board of Directors made misleading disclosures in the Company's proxy statement for the 2017 Annual Meeting of Stockholders in connection with seeking approval to amend the 2010 Incentive Award Plan to authorize the issuance of additional shares to accommodate certain shares underlying the equity grants. Remedies requested include rescission of the Series C Convertible Preferred Stock and equity grants, disgorgement of any unjustly obtained property or compensation and monetary damages. On June 8, 2018, defendants moved to dismiss the complaint for failure to plead demand futility and failure to state a claim. On June 28, 2019, the Court denied most of the motion to dismiss allowing the matter to proceed. The defendants answered the complaint on September 6, 2019, denying all liability. On August 13, 2021, the Company, together with certain of its current and former directors of the Board, Warren Lichtenstein, Glen Kassan, William Fejes, Jr., Jack Howard, Jeffrey Fenton and Jeffrey Wald, as well as other named defendants (collectively, the “Defendants”), entered into a memorandum of understanding (the “MOU”) with Donald Reith (the “Plaintiff”) in connection with the settlement of the Reith v. Lichtenstein, et al., C.A. No. 2018-0277-MTZ (Del. Ch. 2018) class and derivative action. A definitive Stipulation of Settlement (the “Stipulation”) incorporating the terms of the MOU was filed with the Court on February 18, 2022. Pursuant to the MOU and Stipulation, and contingent on approval of the terms by the court, the Defendants agreed to cause their directors’ and officers’ liability insurance carriers to pay to the Company $2.75 million in cash. Additionally, under the MOU and separate letter agreements between the Company and such individuals (the “Surrender Agreements”), Messrs. Lichtenstein, Howard and Fejes agreed to surrender to the Company an aggregate 3.3 million shares that they had initially received in December 2017 in consideration for services to the Company. The surrenders and cancellations are in the following amounts: for Mr. Lichtenstein, 1,833,333 vested shares and 300,000 unvested shares; for Mr. Howard, 916,667 vested shares and 150,000 unvested shares; and for Mr. Fejes, 100,000 vested shares. On August 17, 2021, Mr. Lichtenstein and Mr. Howard surrendered the shares required under the MOU, the Stipulation and their respective Surrender Agreements, and in December 2021 Mr. Fejes did the same. All such shares were subsequently cancelled. Pursuant to the MOU and Stipulation, the Company also agreed to pay the Plaintiff’s counsel legal fees for this matter in an amount up to $2.05 million, if approved by the court. After the parties filed papers in support of court approval of the settlement, and an objector filed papers in opposition to approval of the settlement, and after hearings held on August 12 and August 18, 2022, the parties submitted an amendment to the Stipulation: (i) increasing the proposed total contribution of the insurers to $3.0 million, (ii) reducing Plaintiff’s counsel’s fee request to $1.6 million, and (iii) providing that if the then pending proposed Merger was consummated, the $3.0 million, minus fees awarded to Plaintiff’s counsel and costs of distribution of up to $125,000, would be distributed to the holders of eligible shares of Common Stock (as defined in the Merger Agreement governing the Merger), other than the Defendants; provided, however, that no distribution would be required to be made to any holder whose proportionate share of the distribution would be less than $1.00. On September 23, 2022, the court ruled that it was denying approval of the settlement. On September 12, 2023, the court approved a stipulated pretrial and trial schedule culminating in a trial scheduled for September 2024. The possible liability, if any, with respect to this dispute cannot be determined. On June 6, 2023, the Company received a books and records demand from Reith under Delaware General Corporation Law Section 220 which requests an array of documents for the purported purposes of investigating potential wrongdoing in connection with the April 30, 2023 transaction between Steel Holdings and Steel Connect. The Company is responding to this demand. The possible liability, if any, with respect to this dispute cannot be determined. Mohammad Ladjevardian v. Warren G. Lichtenstein, et al. On September 1, 2023, a purported stockholder, Mohammad Ladjevardian, filed a verified complaint alleging a single direct claim for breach of fiduciary duty against members of Steel Connect’s Board of Directors, Steel Holdings, Steel Excel, Inc., and WebFinancial Corporation in connection with the Exchange Transaction. Directors named in the complaint are Warren Lichtenstein, Glen Kassan, and Jack Howard. The complaint alleges that although the challenged transaction was approved by the independent Strategic Planning Committee, the committee failed to obtain a “control premium” or to consider the dilutive effect that the Series E issuance had on the plaintiff’s holdings. Remedies requested include rescission of the Series E shares and a judicially imposed requirement that all future transactions involving Steel Holdings and its affiliates be subject to minority stockholder approval. On September 27, 2023, the entity defendants moved to dismiss the complaint. On October 5, 2023, the individual defendants moved to dismiss the complaint. The possible liability, if any, with respect to this dispute cannot be determined as of this date. |
DEFINED BENEFIT PENSION PLANS
DEFINED BENEFIT PENSION PLANS | 12 Months Ended |
Jul. 31, 2023 | |
Retirement Benefits [Abstract] | |
DEFINED BENEFIT PENSION PLANS | DEFINED BENEFIT PENSION PLANS The Company sponsors two defined benefit pension plans covering certain of ModusLink's employees in its Netherlands facility and one unfunded defined benefit pension plan covering certain of its employees in Japan. Pension costs are actuarially determined. During the year ended July 31, 2020, the Netherlands defined benefit plan was amended so active participants no longer accrued benefits as of January 1, 2020 which resulted in a pre-tax curtailment gain of $2.4 million recognized in accumulated other comprehensive income. The plan assets of the two defined benefit plans associated with the ModusLink's Netherlands facility consist of an insurance contract that guarantees the payment of the funded pension entitlements. Insurance contract assets are recorded at fair value, which is determined based on the cash surrender value of the insured benefits which is the present value of the guaranteed funded benefits. Insurance contracts are valued using unobservable inputs, primarily by discounting expected future cash flows relating to benefits paid from a notional investment portfolio in order to determine the cash surrender value of the policy. The following table presents the plan assets measured at fair value on a recurring basis as of July 31, 2023 and 2022, classified by fair value hierarchy: Successor Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2023 Asset Level 1 Level 2 Level 3 Insurance contract $ 14,926 97 % $ — $ — $ 14,926 Other investments 388 3 % — — 388 $ 15,314 100 % $ — $ — $ 15,314 Predecessor Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2022 Asset Level 1 Level 2 Level 3 Insurance contract $ 17,560 98 % $ — $ — $ 17,560 Other investments 416 2 % — — 416 $ 17,976 100 % $ — $ — $ 17,976 The following table summarizes the changes in benefit obligation, plan assets and funded status for these plans: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 21,103 $ 33,584 Adjustment related to unconditional indexation of benefits 1,077 — Service cost 10 11 Interest cost 679 462 Actuarial gain (4,885) (8,674) Benefits and administrative expenses paid (275) (227) Settlements (109) — Currency translation 1,519 (4,053) Benefit obligation at end of year $ 19,119 $ 21,103 Change in plan assets Fair value of plan assets at beginning of year $ 17,976 $ 29,223 Actual return on plan assets (3,759) (7,544) Employer contributions, net 225 5 Settlements (108) — Benefits and administrative expenses paid (275) (227) Currency translation 1,255 (3,481) Fair value of plan assets at end of year $ 15,314 $ 17,976 Funded status Current liabilities $ (9) $ (11) Noncurrent liabilities (3,796) (3,116) Net amounts recognized on the consolidated balance sheets $ (3,805) $ (3,127) As discussed above, during the year ended July 31, 2020, a Netherlands defined benefit pension plan was amended such that active participants no longer accrued benefits as of January 1, 2020. At that time, the active plan participants were moved into a new defined benefit contribution pension plan. During the fiscal year ended July 31, 2023, the Company recorded an increase of approximately $1.1 million to accrued pension liabilities for the defined benefit pension plan as it was determined that plan participants are entitled to unconditional indexation of benefits for as long as they remain in active service with the Company. Additionally, as discussed in Note 3 - "Exchange Transaction", the defined benefit pension plan assets were remeasured at fair value as of the date of the Exchange Transaction, which resulted in a $0.5 million decrease to the pension liability, with the offset to goodwill. The incremental decrease of $36.2 thousand to the pension liability was booked to accumulated other comprehensive income in July 2023 based off of the fair value of the defined benefit pension plan assets as of July 31, 2023. Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Projected benefit obligation $ 19,119 $ 21,103 Accumulated benefit obligation $ 19,119 $ 21,103 Fair value of plan assets $ 15,314 $ 17,976 The following table summarizes the components of net periodic pension cost: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Service cost $ 10 $ 11 Interest costs 679 462 Expected return on plan assets (574) (407) Amortization of net actuarial loss 9 4 Net periodic pension costs $ 124 $ 70 Assumptions The table below summarizes the weighted average assumptions used to determine benefit obligations: Successor Predecessor July 31, 2023 July 31, 2022 Discount rate 4.21 % 2.96 % Rate of compensation increase — % — % The table below summarizes weighted average assumptions used to determine net periodic pension cost: Successor Predecessor July 31, 2023 July 31, 2022 Discount rate 3.91 % 2.58 % Expected long-term rate of return on plan assets 3.88 % 2.51 % Rate of compensation increase — % — % The discount rate reflects the Company's best estimate of the interest rate at which pension benefits could be effectively settled as of the valuation date. It is based on the Mercer Yield Curve for the Eurozone as of July 31, 2023 for the appropriate duration of the plan. To develop the expected long-term rate of return on assets assumptions, consideration is given to the current level of expected returns on risk free investments, the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for the future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. Benefit Payments The following table summarizes expected benefit payments from the plans through fiscal year 2032. Actual benefit payments may differ from expected benefit payments. The minimum employer required contributions to the plans are expected to be approximately $0.6 million in fiscal year 2024. Pension Benefit (In thousands) For the fiscal year ending July 31: 2024 $ 340 2025 372 2026 463 2027 444 2028 509 Thereafter 3,451 The current target allocations for plan assets are primarily insurance contracts. Valuation Technique Benefit obligations are computed using the projected unit credit method. Benefits are attributed to service based on the plan's benefit formula. Cumulative gains and losses in excess of 10% of the greater of the pension benefit obligation or market-related value of plan assets are amortized over the expected average remaining lifetime of all inactive participants. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Jul. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregation of Revenue The following table presents the Company's revenues from customers with contracts disaggregated by major good or service line and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments. Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Service Lines Supply chain management services $ 40,467 $ 147,185 $ 201,344 Other 337 1,098 1,928 $ 40,804 $ 148,283 $ 203,272 Timing of Revenue Recognition Services transferred over time $ 40,804 $ 148,283 $ 203,272 $ 40,804 $ 148,283 $ 203,272 The table below presents information for the Company's contract balances: Successor Predecessor July 31, 2023 July 31, 2022 August 1, 2021 (In thousands) Accounts receivable, trade, net $ 28,616 $ 40,083 $ 36,547 Contract assets 439 369 627 Deferred revenue - current $ 2,574 $ 2,705 $ 2,212 Deferred revenue - long-term 144 134 108 Total deferred revenue $ 2,718 $ 2,839 $ 2,320 Remaining Performance Obligations Remaining performance obligations are comprised of deferred revenue. Changes in deferred revenue during the fiscal years ended July 31, 2023 and 2022 were as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Balance at beginning of period $ 3,073 $ 2,839 $ 2,320 Deferral of revenue 245 1,595 2,368 Recognition of deferred amounts upon satisfaction of performance obligation (600) (1,361) (1,849) Balance at end of period $ 2,718 $ 3,073 $ 2,839 The Company expects to recognize approximately $2.6 million of the deferred revenue over the next twelve months and the remaining $0.1 million beyond that time period. |
OTHER GAINS, NET
OTHER GAINS, NET | 12 Months Ended |
Jul. 31, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER GAINS, NET | OTHER GAINS, NET The following table presents the components of "Other gains, net": Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Foreign currency exchange gains (losses), net $ 446 $ (510) $ 2,389 Derecognition of accrued pricing liabilities (a) — — 860 Other gains, net 5,242 4,471 782 $ 5,688 $ 3,961 $ 4,031 (a) Refer to Note 3 - "Exchange Transaction" and Note 9 - "Accrued Expenses and Other Current Liabilities" for information on the derecognition of the accrued pricing liabilities. Other gains, net for the May 1 to July 31, 2023 Successor Period is primarily made up of $5.1 million realized gains recognized on the disposition of the Aerojet shares. See Note 3 - "Exchange Transaction" for more information. Other gains, net for the August 1, 2022 to April 30, 2023 Predecessor Period was primarily due to: (1) $1.9 million gain from proceeds received from the sale of an investment in Tallan, Inc., (2) $1.4 million settlement with a client, and (3) $0.9 million interest income. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Jul. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED PAYMENTS | SHARE-BASED PAYMENTS Share-Based Compensation Plans The Company has adopted share-based compensation plans in order to provide incentives to directors, officers, employees and other individuals providing services to or on behalf of the Company and its subsidiaries. Where applicable, the disclosures below have been adjusted to reflect the Reverse/Forward Stock Split effective June 21, 2023. On June 12, 2020, the Company's Board of Directors adopted, subject to stockholder approval, the Steel Connect, Inc. 2020 Stock Incentive Compensation Plan ("2020 Incentive Plan"), and on July 23, 2020, the 2020 Incentive Plan was approved. The 2020 Incentive Plan provides that the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and other cash based-awards. The 2020 Incentive Plan replaced the 2010 Incentive Award Plan, as amended (the "2010 Incentive Plan"). The Company also has a 2005 Non-Employee Director Plan (the "2005 Director Plan"). As of July 23, 2020, no additional grants may be issued under the 2010 Incentive Plan. Any awards that are outstanding under the 2010 Incentive Plan continue to be subject to the terms and conditions of such plan. Under the 2020 Incentive Plan, the Company may grant up to 529,821 shares of common stock of the Company in addition to (i) 393,015 shares of common stock previously available for issuance under the 2010 Incentive Plan and (ii) up to 113,627 shares of common stock subject to outstanding awards under the 2010 Incentive Plan, which if forfeited or lapse unexercised or are settled in cash and are not issued under the prior plan for any reason, may be issued under the 2020 Incentive Plan. As of July 31, 2023, 808,285 shares were available for future issuance under the 2020 Incentive Plan. The Board of Directors administers all stock plans, approves the individuals to whom options will be granted, and determines the number of shares and exercise price of each option and may delegate this authority to a committee of the Board of Directors or to certain officers of the Company in accordance with Securities and Exchange Commission ("SEC") regulations and applicable Delaware law. During the fiscal year ended July 31, 2023 and 2022, the Company awarded stock-based compensation under the 2020 Incentive Plan. On December 15, 2017, under the 2010 Incentive Plan, the Board, upon the recommendation of the Special Committee and the Company's Compensation Committee, approved 4.0 million restricted stock grants and 1.5 million market based restricted stock grants to non-employee directors of the Company. The 4.0 million restricted stock vested immediately on the grant date. The 1.5 million market based restricted stock grants do not expire and vest upon the attainment of target stock price hurdles. As of July 31, 2020, 1.0 million of the market based restricted stock grants had met the target stock price hurdles. The restricted stock grants and market based restricted stock grants were fully expensed as of July 31, 2021. As discussed in Note 13 - "Commitments and Contingencies", on August 13, 2021 and February 22, 2022, respectively the Company, together with certain of its current and former directors of the Board, entered into a memorandum of understanding and stipulation of settlement with Donald Reith in connection with the settlement of the Reith v. Lichtenstein, et al., C.A. No. 2018-0277-MTZ (Del. Ch. 2018) class and derivative action. Under the MOU, the stipulation and separate letter agreements between the Company and recipients of the 5.5 million restricted stock and market based restricted stock awards granted In December 2017, the non-employee directors surrendered to the Company an aggregate 2.9 million vested shares and 0.5 million unvested shares. For the May 1 to July 31, 2023 Successor Period, $0.2 million of share-based compensation expense was recorded in SG&A expenses in the consolidated statements of operations. For the August 1, 2022 to April 30, 2023 Predecessor Period, and the fiscal year ended July 31, 2022 Predecessor Period, $0.5 million and $0.7 million, respectively, of share-based compensation expense was recorded in SG&A expenses in the consolidated statements of operations. Restricted Stock Restricted stock consists of shares of common stock that are subject to restrictions on transfer and risk of forfeiture until the fulfillment of specified conditions. Restricted stock is expensed ratably over the term of the restriction period, ranging from one A summary of the activity of the Company's restricted stock for the fiscal year ended July 31, 2023, is as follows: Number of Shares Weighted Average (Share amounts in thousands) Nonvested stock outstanding, July 31, 2022 51 $ 13.95 Granted 64 10.97 Vested (61) 13.32 Forfeited — — Nonvested stock outstanding, July 31, 2023 54 $ 10.97 The fair value of restricted shares is determined based on the market price of the Company's common stock on the grant date. The total grant date fair value of restricted stock that vested during the fiscal years ended July 31, 2023 and 2022 was approximately $0.8 million and $0.6 million, respectively. As of July 31, 2023, there was approximately $0.3 million of total unrecognized compensation cost related to restricted stock to be recognized over a weighted average period of 0.7 years. Employee Stock Purchase Plan The Company offers to its employees an Employee Stock Purchase Plan (the "ESPP") under which an aggregate of 64,286 shares of the Company's stock may be issued. Employees who elect to participate in the ESPP instruct the Company to withhold a specified amount through payroll deductions during each quarterly period. On the last business day of each applicable quarterly payment period, the amount withheld is used to purchase the Company's common stock at a purchase price equal to 85% of the lower of the market price on the first or last business day of the quarterly period. During the fiscal year ended July 31, 2023, the Company issued zero shares under the ESPP. During the fiscal year ended July 31, 2022, the Company issued approximately 53 shares under the ESPP. Approximately 8,284 shares are available for future issuance as of July 31, 2023. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jul. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe components of income (loss) before provision for income taxes are as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Income (loss) from operations before income taxes: U.S. $ 9,866 $ 2,021 $ (5,189) Foreign (2,115) 7,069 7,321 Total income (loss) from operations before income taxes $ 7,751 $ 9,090 $ 2,132 The components of income tax expense from operations consist of the following: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Current (benefit) provision: Federal $ 72 $ 487 $ — State (110) 48 429 Foreign (110) 1,095 1,918 (148) 1,630 2,347 Deferred (benefit) provision: Federal — — 8,849 State — — 76 Foreign (250) — 116 (250) — 9,041 Total tax (benefit) provision $ (398) $ 1,630 $ 11,388 As of July 31, 2023, the Company recorded a non-current deferred tax asset of $0.3 and a non-current deferred tax liability of $0.8 million in "Other Assets" and "Other Long-term Liabilities", respectively. As of July 31, 2022, the Company recorded a non-current deferred tax asset of $0.1 million and a non-current deferred tax liability of $0.1 million in "Other Assets" and "Other Long-term Liabilities," respectively. The components of deferred tax assets and liabilities are as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Deferred tax assets: Accruals and reserves $ 2,645 $ 4,295 Tax basis in excess of financial basis for intangible and fixed assets 175 901 Lease liability 3,574 2,288 Interest expense disallowance — 2,357 Credit carry forwards 25 25 Net operating loss and capital loss carry forwards 95,832 474,496 Total gross deferred tax assets 102,251 484,362 Less: valuation allowance (90,436) (481,178) Net deferred tax assets $ 11,815 $ 3,184 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (8,446) $ (69) Right of use asset (3,454) (2,154) Convertible debt (404) (917) Total gross deferred tax liabilities (12,304) (3,140) Net deferred tax liabilities $ (489) $ 44 The net change in the total valuation allowance for the fiscal year ended July 31, 2023 was an decrease of approximately $390.7 million. This decrease is primarily due to the U.S. valuation allowance. A valuation allowance has been recorded against the gross deferred tax asset in the U.S and certain foreign subsidiaries since management believes that after considering all the available objective evidence, both positive and negative, historical and prospective, it is more likely than not that certain assets will not be realized. The net change in the total valuation allowance for the fiscal year ended July 31, 2022 was an increase of approximately $24.6 million. The Company has certain deferred tax benefits, including those generated by net operating losses and certain other tax attributes (collectively, the "Tax Benefits"). The Company's ability to use these Tax Benefits could be substantially limited if it were to experience an "ownership change," as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). In general, an ownership change would occur if there is a greater than 50-percentage point change in ownership of securities by stockholders owning (or deemed to own under Section 382 of the Code) five or more of a corporation's securities over a rolling three year period. The Company determined that the beginning balances related to its deferred tax accounts for both the cumulative net operating loss carryover along with valuation allowance balances needed to be updated due to an immaterial error associated with the return to provision true up. The return to provision true up adjustment related to the calculation of the Company’s stock basis for the IWCO worthless stock deduction. The net impact of the reduction to the beginning balances for the net operating losses and valuation allowances was approximately $4.0 million and did not change any amounts recognized in the consolidated balance sheets or consolidated statements of operations. On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States. Among other provisions, the IRA includes a 15% corporate minimum tax rate applied to certain large corporations and a 1% excise tax on corporate stock repurchases made after December 31, 2022. We do not expect the IRA to have a material impact on our consolidated financial statements. On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security ("CARES") Act into law which is intended to respond to the COVID-19 pandemic and its impact on the economy, public health, state and local governments, individuals and businesses. The CARES Act contains numerous tax provisions including temporary changes to the future limitations on interest deductions related to section 163j. The Company has estimated its fiscal year 2023 global intangible low-taxed income ("GILTI") inclusion based on its current year foreign activity. The foreign entities have minor earnings and profit adjustments that will be factored in as part of the tax return filing. These amounts are not material and will not have a significant impact on the overall tax provision or disclosure. Due to the net operating losses available in the U.S., the Company is not entitled to a Section 250 deduction, which is why the total income amount has been recorded as the GILTI inclusion. The Company has made an accounting policy election, as allowed by the SEC and FASB, to recognize the impact of GILTI within the period incurred. Therefore, no U.S. deferred taxes are provided in GILTI inclusions of future foreign subsidiary earnings. The Company has net operating loss carryforwards for federal and state tax purposes of approximately $369.9 million and $138.8 million, respectively, at July 31, 2023. As of July 31, 2023, approximately $1.7 billion of net operating loss carryforwards for federal and state tax purposes expired. $273.3 million of the company's federal net operating losses will expire from the fiscal year ending July 31, 2024 through the fiscal year ended July 31, 2038 and the remainder federal net operating losses of $96.6 million has an indefinite carryforward period. The state net operating losses will expire from the fiscal year ended July 31, 2024 through the fiscal year ended July 31, 2042. The Company has a foreign net operating loss carryforward of approximately $69.8 million, of which $67.2 million has an indefinite carryforward period. Income tax expense attributable to income from continuing operations differs from the expense computed by applying the U.S. federal income tax rate of 21.0% to (loss) income from continuing operations before income taxes as a result of the following: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Computed "expected" income tax expense (benefit) $ 1,627 $ 1,909 $ 448 Increase (decrease) in income tax expense resulting from: Change in valuation allowance (350,469) (424) 21,703 Foreign tax rate differential (255) (50) 56 Nondeductible expenses 459 — 159 Foreign withholding taxes 245 147 134 Foreign other adjustments (246) — 951 GILTI 1,141 — 4,775 Addition of uncertain tax position reserves (430) 11 58 Worthless stock deduction — — (16,860) State income taxes, net of federal benefit (1,916) 37 (603) Expiration of net operating loss 347,462 — — Deferred true-up 1,786 — 751 Other 198 — (184) Actual income tax (benefit) expense $ (398) $ 1,630 $ 11,388 The calculation of the Company's income tax liabilities involves dealing with uncertainties in the application of complex tax regulations in several tax jurisdictions. The Company is periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves when necessary. Based on the evaluation of current tax positions, the Company believes it has appropriately accrued for exposures. The Company operates in multiple taxing jurisdictions, both within and outside of the United States. At July 31, 2023 and 2022, the total amount of the liability for unrecognized tax benefits, including interest, related to federal, state and foreign taxes was approximately $0.4 million and $0.8 million, respectively. To the extent the unrecognized tax benefits are recognized, the entire amount would impact income tax expense. The Company expects that there will be a $0.3 million reduction of the unrecognized tax benefits in the next twelve months related to the U.S. state income tax exposure as a result of a lapse in the applicable statute of limitations. The Company files income tax returns in the U.S., various states and in foreign jurisdictions. The federal and state income tax returns are generally subject to tax examinations for the tax years ended July 31, 2020 through July 31, 2023. To the extent the Company has tax attribute carryforwards, the tax year in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period. In addition, a number of tax years remain subject to examination by the appropriate government agencies for certain countries in the Europe and Asia regions. In Europe, the Company's 2015 through 2022 tax years remain subject to examination in most locations while the Company's 2011 through 2022 tax years remain subject to examination in most Asia locations. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Balance as of beginning of year $ 571 $ 2,140 Additions for current year tax positions — — Currency translation — (4) Reductions for lapses in statute of limitations (297) (67) Reductions for member leaving consolidated group — (1,498) Balance as of end of year $ 274 $ 571 In accordance with the Company's accounting policy, interest related to income taxes is included in the provision for income taxes line of the consolidated statements of operations. For the fiscal years ended July 31, 2023 and 2022, the Company has not recognized any material interest expense related to uncertain tax positions. As of July 31, 2023 and 2022, the Company had recorded liabilities for increases in interest expense related to uncertain tax positions for an immaterial amount. The Company expects $0.3 million of unrecognized tax benefits and related interest will reverse in the next twelve months. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Jul. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Earnings (Loss) Per Share As discussed in Note 2 - "Summary of Significant Accounting Policies", the Reverse/Forward Stock Split was effective on June 21, 2023. The Company’s shares of outstanding common stock and earnings (loss) per share amounts have been retroactively restated for all periods presented for the Reverse/Forward Stock Split. The following table reconciles net income (loss) per share for the periods below: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands, except per share data) Reconciliation of net income (loss) to net income (loss) attributable to common stockholders after assumed conversions: Net income (loss) from continuing operations $ 8,149 $ 7,460 $ (9,256) Loss from discontinued operations — — (1,712) Net income (loss) 8,149 7,460 (10,968) Less: Preferred dividends on Series C preferred stock (537) (1,593) (2,129) Net income (loss) available to common stockholders 7,612 5,867 (13,097) Less: Undistributed earnings allocated to participating securities (5,803) — — Net income (loss) attributable to common stockholders $ 1,809 $ 5,867 $ (13,097) Effect of dilutive securities: Dividends on Series C preferred stock 537 1,593 — Undistributed earnings allocated to Series E preferred stock 5,803 — — Net income (loss) attributable to common stockholders - assuming dilution $ 8,149 $ 7,460 $ (13,097) Net income (loss) per common share - basic Net income (loss) from continuing operations $ 0.29 $ 0.91 $ (1.77) Net loss from discontinued operations — — (0.27) Net income (loss) attributable to common stockholders $ 0.29 $ 0.91 $ (2.04) Net income (loss) per common share - diluted Net income (loss) from continuing operations $ 0.29 $ 0.89 $ (1.77) Net loss from discontinued operations — — (0.27) Net income (loss) attributable to common stockholders $ 0.29 $ 0.89 $ (2.04) Weighted average common shares outstanding - basic 6,177 6,449 6,425 Effect of dilutive securities: Common stock equivalents - Restricted stock and restricted stock shares 60 55 — Common stock equivalents - Series C Preferred Stock 1,913 1,913 — Common stock equivalents - Series E Preferred Stock 19,810 — — Weighted average common shares outstanding - diluted 27,960 8,417 6,425 As of July 31, 2023, the Company calculates basic and diluted net income (loss) per common share using the two-class method, as the Series E Convertible Preferred Stock issued in the Exchange Transaction meets the definition of a participating security. The two-class method is an allocation formula that determines net income (loss) per common share for each share of common stock and Series E Convertible Preferred Stock, a participating security, according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and Series E Convertible Preferred Stock based on their respective rights to receive dividends. The holders of Series E Convertible Preferred Stock are entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends or other distributions on the shares of Common Stock as if, immediately prior to each record date for payment of dividends or other distributions on the Common Stock, shares of Series E Preferred Stock then outstanding were converted into shares of Common Stock. Basic net income (loss) per common share is computed by dividing net income (loss) allocated to common stockholders for the period by the weighted average number of common shares outstanding for the period. Net income (loss) available to common stockholders for the period includes dividends paid to common stockholders during the period plus a proportionate share of undistributed net income (loss) allocable to common stockholders for the period; the proportionate share of undistributed net income allocable to common stockholders for the period is based on the proportionate share of total weighted-average common shares and participating securities outstanding during the period. Diluted net income (loss) per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential common shares consist of restricted common stock (calculated based on the treasury stock method) and shares issuable upon debt or preferred stock conversion (calculated using an as-if converted method), using the more dilutive of either the two-class method or as-converted stock method. The Company was not required to apply the two-class method during the Predecessor Period as there were no participating securities, and as such, there were no changes to the Predecessor Period other than the retroactive restatement for the Reverse/Forward Stock Split discussed previously. For the fiscal year ended July 31, 2022 Predecessor Period during which the Company recorded a net loss, diluted net loss per share is equal to basic net loss per share because the effect of dilutive securities outstanding is anti-dilutive. The below details certain exclusions from the calculation of diluted net income per share for the May 1 to July 31, 2023 Successor Period and the August 1, 2022 to April 30, 2023 Predecessor Period as their inclusion would have been antidilutive: For the May 1 to July 31, 2023 Successor Period, $0.2 million of interest expense, net of tax impact related to the SPHG Note was excluded from the numerator in the calculation of diluted net income per share as their inclusion would have been antidilutive. For the August 1, 2022 to April 30, 2023 Predecessor Period, $2.3 million of interest expense, net of tax impact related to the SPHG Note were excluded from the numerator in the calculation of diluted net income per share as their inclusion would have been antidilutive. For the May 1 to July 31, 2023 Successor Period, 0.6 million common stock equivalent shares (including those related to the SPHG Note) were excluded from the denominator in the calculation of diluted net income per share as their inclusion would have been antidilutive. For the August 1, 2022 to April 30, 2023 Predecessor Period, 0.6 million common stock equivalent shares (including those related to the SPHG Note) were excluded from the denominator in the calculation of diluted net income per share as their inclusion would have been antidilutive. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Jul. 31, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) represents the cumulative other comprehensive income (loss) items that are reported separate from net income and detailed on the Consolidated Statements of Comprehensive Income (Loss). As discussed in Note 1, "Nature of Operations", we have elected to apply push-down accounting as of the Exchange Transaction date, May 1, 2023. As part of this election, the Company's accumulated other comprehensive income (loss) was reset to zero at the Exchange Transaction date. The components of accumulated other comprehensive income, net of income taxes, are as follows: Foreign Pension Total (In thousands) Accumulated other comprehensive income (loss) at July 31, 2021 (Predecessor) $ 9,762 $ (2,600) $ 7,162 Foreign currency translation adjustment (3,699) — (3,699) Pension liability adjustments — 677 677 Net current-period other comprehensive (loss) income (3,699) 677 (3,022) Accumulated other comprehensive income (loss) at July 31, 2022 (Predecessor) 6,063 (1,923) 4,140 Foreign currency translation adjustment 999 — 999 Pension liability adjustments — (1,078) (1,078) Net current-period other comprehensive income (loss) 999 (1,078) (79) Accumulated other comprehensive income (loss) at April 30, 2023 (Predecessor) 7,062 (3,001) 4,061 Application of pushdown accounting (7,062) 3,001 (4,061) Accumulated other comprehensive income (loss) at May 1, 2023 (Successor) — — — Foreign currency translation adjustment (623) — (623) Pension liability adjustments — 36 36 Net current-period other comprehensive (loss) income (623) 36 (587) Accumulated other comprehensive income (loss) at July 31, 2023 (Successor) $ (623) $ 36 $ (587) In both the fiscal years ended July 31, 2023 and 2022, the Company recorded an immaterial amount in taxes related to other comprehensive income (loss). |
STATEMENT OF CASH FLOWS SUPPLEM
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | 12 Months Ended |
Jul. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION | STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION The amount of cash, cash equivalents and restricted cash as of July 31, 2023 and 2022 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Cash and cash equivalents $ 121,372 $ 53,142 Funds held for clients 2,031 4,903 Cash, cash equivalents and restricted cash $ 123,403 $ 58,045 Cash used for operating activities reflect cash payments for interest and income taxes as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Cash paid for interest $ 9 $ 1,145 $ 1,237 Cash paid for income taxes $ 3,008 $ — $ 2,364 Cash paid for taxes can be lower than income tax expense as shown on the Company's consolidated statements of operations due to the timing of required payments in relation to recorded expense, which can cross fiscal years. Non-Cash Activities Non-cash investing activities during the Successor Period included $154.5 million for unsettled proceeds from the disposition of the Aerojet shares. The proceeds were received in August 2023. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jul. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Preferred Stock The Company's Board of Directors has the authority, subject to any limitations prescribed by Delaware law, to issue shares of preferred stock in one or more series and to fix and determine the designation, privileges, preferences and rights and the qualifications, limitations and restrictions of those shares, including dividend rights, conversion rights, voting rights, redemption rights, terms of sinking funds, liquidation preferences and the number of shares constituting any series or the designation of the series, without any further vote or action by stockholders. Any shares of the Company's preferred stock so issued may have priority over its common stock with respect to dividend, liquidation and other rights. The Board of Directors may authorize the issuance of preferred stock with voting rights or conversion features that could adversely affect the voting power or other rights of the holders of its common stock. Although the issuance of preferred stock could provide us with flexibility in connection with possible acquisitions and other corporate purposes, under some circumstances, it could have the effect of delaying, deferring or preventing a change of control. Series C Preferred Stock On December 15, 2017, the Company entered into a Preferred Stock Purchase Agreement (the "Purchase Agreement") with SPHG Holdings, pursuant to which the Company issued 35,000 shares of the Company's newly created Series C Convertible Preferred Stock, par value $0.01 per share (the "Series C Convertible Preferred Stock"), to SPHG Holdings at a price of $1,000 per share, for an aggregate purchase consideration of $35.0 million (the "Series C Convertible Preferred Stock Transaction"). The terms, rights, obligations and preferences of the Preferred Stock are set forth in a Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of the Company (the "Series C Certificate of Designations"), which has been filed with the Secretary of State of the State of Delaware. Under the Series C Certificate of Designations, each share of Series C Convertible Preferred Stock can be converted into shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), at an initial conversion price equal to $18.29 per share, subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction. Holders of the Series C Convertible Preferred Stock will also receive dividends at 6% per annum payable, at the Company's option, in cash or Common Stock. If at any time the closing bid price of the Company's Common Stock exceeds 170% of the conversion price for at least five consecutive trading days (subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction), the Company has the right to require each holder of Series C Convertible Preferred Stock to convert all, or any whole number, of shares of the Series C Convertible Preferred Stock into Common Stock. Upon the occurrence of certain triggering events such as a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, or the merger or consolidation of the Company or significant subsidiary, or the sale of substantially all of the assets or capital stock of the Company or a significant subsidiary, the holders of the Series C Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Company to the holders of other equity or equity equivalent securities of the Company other than the Series C Convertible Preferred Stock by reason of their ownership thereof, an amount per share in cash equal to the sum of (i) 100% of the stated value per share of Series C Convertible Preferred Stock (initially $1,000 per share) then held by them (as adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transactions with respect to the Series C Convertible Preferred Stock), plus (ii) 100% of all declared but unpaid dividends, and all accrued but unpaid dividends on each such share of Series C Convertible Preferred Stock, in each case as the date of the triggering event. On or after December 15, 2022, each holder of Series C Convertible Preferred Stock can also require the Company to redeem its Series C Convertible Preferred Stock in cash at a price equal to the Liquidation Preference (as defined in Series C Certificate of Designations). Each holder of Series C Convertible Preferred Stock has a vote equal to the number of shares of Common Stock into which its Series C Convertible Preferred Stock would be convertible as of the record date, provided that the number of shares voted is based upon a conversion price which is no less than the greater of the book or market value of the Common Stock on the closing date of the purchase of the Series C Convertible Preferred Stock. In addition, for so long as the Series C Convertible Preferred Stock remains outstanding, the Company will not, directly or indirectly, and including in each case with respect to any significant subsidiary, without the affirmative vote of the holders of a majority of the Series C Convertible Preferred Stock (i) liquidate, dissolve or wind up the Company or any significant subsidiary; (ii) consummate any transaction that would constitute or result in a Liquidation Event (as defined in the Series C Certificate of Designations); (iii) effect or consummate any Prohibited Issuance (as defined in the Series C Certificate of Designations); or (iv) create, incur, assume or suffer to exist any Indebtedness (as defined in the Series C Certificate of Designations) of any kind, other than certain existing Indebtedness of the Company and any replacement financing thereto, unless any such replacement financing is on substantially similar terms as such existing Indebtedness. The Purchase Agreement provides that the Company will use its commercially reasonable efforts to effect the piggyback registration of the Common Stock issuable on the conversion of the Series C Convertible Preferred Stock and any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing, with the SEC in the manner reasonably requested by the holder and the qualification of the securities in all states reasonably requested by the holder, in each case, in accordance with certain enumerated conditions. The Purchase Agreement also contains other representations, warranties and covenants, customary for an issuance of Series C Convertible Preferred Stock in a private placement of this nature. The Series C Convertible Preferred Stock Transaction was approved and recommended to the Board of Directors by the Special Committee of the Board of Directors consisting of independent directors not affiliated with Steel Holdings GP, which controls the power to vote and dispose of the securities held by SPHG Holdings and its affiliates. Series E Preferred Stock On May 1, 2023, the Company and Steel Holdings executed a series of agreements in which the Steel Partners Group agreed to transfer certain marketable securities held by the Steel Partners Group to Steel Connect in exchange for 3.5 million shares of Series E Convertible Preferred Stock of Steel Connect (the “Series E Convertible Preferred Stock”, and, such transfer the “Transfer and Exchange Agreement”). Pursuant to the Transfer and Exchange Agreement, the Company held a special stockholders’ meeting on June 6, 2023 (the “Special Meeting”) to consider and vote upon the rights of the Series E Preferred Stock to vote and receive dividends together with the Common Stock on an as-converted basis and the issuance of the Company's common stock (the "Common Stock") upon conversion of the Series E Preferred Stock by the holders at their option, pursuant to the rules and regulations of Nasdaq (the “Nasdaq Proposal”). Following approval of the Nasdaq Proposal by the Steel Connect stockholders (the “Stockholder Approval”), the Series E Convertible Preferred Stock became convertible into an aggregate of 19.8 million shares of the Common Stock, and votes together with the Common Stock and participates in any dividends paid on the Common Stock, in each case on an as-converted basis. Refer to Note 25 - "Related Party Transactions" for more information on the Voting Agreement. The terms, rights, obligations and preferences of the Series E Convertible Preferred Stock are set forth in a Certificate of Designations, Preferences and Rights of Series E Convertible Preferred Stock of the Company (the “Series E Certificate of Designations”), which are summarized below: Any holder of the Series E Convertible Preferred Stock (“Holder”), may, at its option, convert all or any shares of Series E Convertible Preferred Stock held by such Holder into Common Stock based on a conversion price of $10.27 (the “Conversion Price”) per share, subject to appropriate adjustments for any stock dividend, stock split, stock combination, or similar transaction by delivering to the Company a conversion notice. Holders are entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends or other distributions on the shares of Common Stock as if, immediately prior to each record date for payment of dividends or other distributions on the Common Stock, shares of the Series E Convertible Preferred Stock then outstanding were converted into shares of Common Stock. Dividends or other distributions payable will be payable on the same date that such dividends or other distributions are payable to holders of shares of Common Stock, and no dividends or other distributions will be payable to holders of shares of Common Stock unless dividends or such other distributions are also paid at the same time in respect of the Series E Convertible Preferred Stock. Upon the occurrence of certain triggering events such as a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, any merger or consolidation in which the Company is a constituent party or a Significant Subsidiary is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation such that the stockholders of the Company prior to such merger or consolidation hold less than 50.0% of the aggregate voting securities of the Corporation following such merger or consolidation, or the sale of substantially all of the assets or capital stock of the Company or a significant subsidiary (collectively, or any of these, a “Liquidation Event(s)”), the holders of the Series E Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Company to the holders of Common Stock by reason of their ownership thereof, an amount per share in cash equal to $58.1087 (as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Series E Convertible Preferred Stock (“the Series E Convertible Preferred Stock Liquidation Preference”). In the event that the Series E Convertible Preferred Stock Liquidation Preference is not paid with respect to any shares of Series E Convertible Preferred Stock as required to be paid, such shares shall continue to be entitled to dividends and all such shares shall remain outstanding and entitled to all the rights and preferences provided within the Series E Certificate of Designations. The Company nor the Holder have any rights to redeem the Series E Convertible Preferred Stock. Prior to obtaining the Stockholder Approval, the Series E Convertible Preferred Stock was non-voting and did not have the right to vote on any matters presented to the stockholders of the Company. Following the date on which Stockholder Approval was obtained, which was approved by the Company's stockholders at the special stockholders' meeting held on June 6, 2023, each Holder is now entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company for their action or consideration (whether at a meeting of stockholders of the Company, by written action of stockholders in lieu of a meeting or otherwise), except as provided by law. In any such vote, each Holder is entitled to a number of votes equal to the largest number of whole shares of Common Stock into which all shares of Series E Convertible Preferred Stock held of record by such Holder is convertible as of the record date for such vote or written consent or, if there is no specified record date, as of the date of such vote or written consent. Common Stock Each holder of the Company's common stock is entitled to: • one vote per share on all matters submitted to a vote of the stockholders, subject to the rights of any preferred stock that may be outstanding; • dividends as may be declared by the Company's Board of Directors out of funds legally available for that purpose, subject to the rights of any preferred stock that may be outstanding; and • a pro rata share in any distribution of the Company's assets after payment or providing for the payment of liabilities and the liquidation preference of any outstanding preferred stock in the event of liquidation. Holders of the Company's common stock have no cumulative voting rights, redemption rights or preemptive rights to purchase or subscribe for any shares of its common stock or other securities. All of the outstanding shares of common stock are fully paid and nonassessable. The rights, preferences and privileges of holders of its common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any existing series of preferred stock and any series of preferred stock that the Company may designate and issue in the future. There are no redemption or sinking fund provisions applicable to the Company's common stock. Reverse/Forward Stock Split At the special stockholders meeting held on June 6, 2023, the stockholders approved proposals to amend the Company’s restated certificate of incorporation (the “Charter”), to effect a 1-for-3,500 reverse stock split of the common stock (the “Reverse Stock Split”), followed immediately by a 375-for-1 forward stock split of the common stock (the “Forward Stock Split,” and, together with the Reverse Stock Split, the “Reverse/Forward Stock Split”). On June 7, 2023, the Board approved the Reverse/Forward Stock Split, and as such, the Board directed the Company to file with the State of Delaware certificates of amendment to our Charter to effectuate the Reverse/Forward Stock Split. The Reverse/Forward Stock Split was effective on June 21, 2023 (the “Effective Date”). The Company’s common stock began trading on a Reverse/Forward Stock Split-adjusted basis on the Nasdaq Capital Market when the market opened on June 22, 2023. The trading symbol for the Company’s common stock remains “STCN.” No fractional shares were issued in connection with the Reverse/Forward Stock Split. Shares held by stockholders who held fewer than 3,500 of the Company’s common stock immediately prior to the Reverse Stock Split were converted into the right to receive a payment in cash (without interest) equal to the fair value of such shares as of the time when those entitled to receive such payments were determined, which shall be an amount equal to such number of shares of Company’s common stock held multiplied by the average of the closing sales prices of the Company’s common stock on Nasdaq for the five consecutive trading days immediately preceding the effective date of the Reverse Stock Split, and each share of Company’s common stock held by a stockholder of record owning 3,500 shares or more immediately prior to the effective time of the Reverse Stock Split were converted into a new number of shares of Company’s common stock based on a ratio of 375 shares of the Company’s common stock for each share of the Company’s common stock owned immediately following the Reverse Stock Split, including any fractional shares owned following the Reverse Stock Split; however, with respect to any fractions of a share of Company Common Stock that may be held as a result of the Forward Stock Split, stockholders received a payment in cash (without interest) equal to the fair value of such fractions as of the time when those entitled to receive such fractions are determined, which was an amount equal to such fractions multiplied by the average of the closing sales prices of the Company’s common stock on Nasdaq for the five consecutive trading days immediately preceding the effective date of the Reverse/Forward Stock Split (with such average closing sales prices being adjusted to give effect to the Reverse/Forward Stock Split). The number of shares of authorized Company’s common stock did not change as a result of the Reverse/Forward Stock Split; however, the number of shares of outstanding Company’s common stock decreased as a result of the Reverse/Forward Stock Split. Accordingly, all share and per-share amounts for the current period and prior periods have been adjusted to reflect the Reverse/Forward Stock Split. The number of shares of Company’s common stock issuable upon the exercise of Series C Preferred Stock and the Series E Preferred Stock immediately prior to the Reverse/Forward Stock Split were proportionately decreased and the conversion price of the Series C Preferred Stock and the Series E Preferred Stock were proportionately increased, effective as of June 21, 2023, the close of business on the date of such Reverse/Forward Stock Split. Our authorized preferred stock was not affected by the reverse stock split and continues to be 3,535,000 shares of preferred stock, with a par value of $0.01 per share. For details of the effects of the Exchange Transaction see Note 3, "Exchange Transaction". |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jul. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The following tables present the Company's financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2023 and 2022, classified by fair value hierarchy: Successor Fair Value Measurements at (In thousands) July 31, 2023 Level 1 Level 2 Level 3 Assets: Money market funds $ 31,090 $ 31,090 $ — $ — Liabilities: SPHG Note $ 12,461 $ — $ — $ 12,461 Predecessor Fair Value Measurements at (In thousands) July 31, 2022 Level 1 Level 2 Level 3 Assets: Money market funds $ 31,756 $ 31,756 $ — $ — There were no transfers between Levels 1, 2 or 3 during any of the periods presented. When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are determined using pricing models, and the inputs to those pricing models are based on observable market inputs. The inputs to the pricing models are typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis The Company reviews the carrying amounts of these assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized when the carrying amount of the asset group or reporting unit is not recoverable and exceeds its fair value. The Company estimates the fair values of assets subject to impairment based on the Company's own judgments about the assumptions that market participants would use in pricing the assets and on observable market data, when available. Fair Value of Financial Instruments The Company's financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, customer deposits, accounts payable, restricted cash and debt, and are reflected in the consolidated financial statements at carrying value. Carrying value approximates fair value for these items due to their short-term maturities or expected settlement dates of these instruments. As of July 31, 2022, the Company did not measure the fair value of the SPHG Note on a recurring basis, as the assumption was that the carrying value of the liability component of the SPHG Note approximated fair value because the stated interest rate of this debt was consistent with current market rates. In conjunction with the application of pushdown accounting, the Company will now measure the fair value of the SPHG on a recurring basis. Refer to Note 3 - "Exchange Transaction" and Note 10 - "Debt" for further details. The Company estimates the value of the SPHG Note using a Binomial Lattice Model. Key inputs in the valuation include the trading price and volatility of Steel Connect's common stock, the risk-free rate of return, as well as the dividend rate, conversion price, and maturity date. The Company recognized $0.5 million in unrealized losses in Other gains, net within the consolidated statements of operations for the Successor Period as a result of the fair value measurement performed at July 31, 2023. Following is a summary of changes in the SPHG Note measured using Level 3 inputs: Balance as of May 1, 2023 (Successor): $ 13,006 Principal repayment (1,000) Unrealized losses 455 Balance as of July 31, 2023 (Successor) $ 12,461 Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets are money market funds. These are valued at quoted market prices in active markets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jul. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Subsequent to the Company’s disposition of the Direct Marketing reportable segment in the IWCO Direct Disposal, the Company has one reportable segment: Supply Chain. The Company also has Corporate-level activity, which consists primarily of costs associated with certain corporate administrative functions such as legal, finance and share-based compensation, which are not allocated to the Company's reportable segment. The Corporate-level balance sheet information includes cash and cash equivalents, debt and other assets and liabilities which are not identifiable to the operations of the Company's operating segment. All significant intra-segment amounts have been eliminated. Management evaluates segment performance based on segment net revenue and operating income (loss). Management evaluates segment performance based on segment net revenue, operating income (loss) and "adjusted operating income (loss)," which is defined as the operating income (loss) excluding net charges related to depreciation, amortization of long-lived asset impairment, share-based compensation and restructuring. These items are excluded because they may be considered to be of a non-operational or non-cash nature. Historically, the Company has recorded significant impairment and restructuring charges, and therefore management uses adjusted operating income (loss) to assist in evaluating the performance of the Company's core operations. Summarized financial information of the Company's continuing operations by operating segment is as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Net revenue: Supply Chain $ 40,804 $ 148,283 $ 203,272 Total segment net revenue $ 40,804 $ 148,283 $ 203,272 Operating income: Supply Chain 3,328 16,488 11,318 Total segment operating income 3,328 16,488 11,318 Corporate-level activity (1,707) (9,699) (10,155) Total operating (loss) income 1,621 6,789 1,163 Total other income 6,130 2,301 969 Income before income taxes $ 7,751 $ 9,090 $ 2,132 Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Total assets: Supply Chain $ 146,614 $ 101,637 Corporate 264,567 36,112 Total assets $ 411,181 $ 137,749 Summarized financial information of the Company's capital expenditures and depreciation expense for the Supply Chain reportable segment is as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Capital expenditures $ 807 $ 1,311 $ 1,485 Depreciation expense 456 1,427 2,220 Summarized financial information of the Company's net revenue by geographic location is as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Mainland China $ 14,649 $ 48,049 $ 72,210 United States 8,800 38,262 50,426 Netherlands 5,774 15,149 24,483 Singapore 4,448 14,940 19,903 Czech 3,336 19,497 16,342 Other 3,797 12,386 19,908 Total consolidated net revenue $ 40,804 $ 148,283 $ 203,272 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jul. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As of July 31, 2023, SPHG Holdings and its affiliates, including Steel Holdings, HNH and SPL, beneficially owned approximately 85.9% of our outstanding capital stock, including the if-converted value of the SPHG Note and shares of Series C Convertible Preferred Stock and Series E Convertible Preferred Stock that vote on an as-converted basis together with our Common Stock. Warren G. Lichtenstein, our Interim Chief Executive Officer and the Executive Chairman of our Board, is also the Executive Chairman of Steel Holdings GP. Glen Kassan, our Vice Chairman of the Board of Directors and former Chief Administrative Officer, is an employee of Steel Services. Jack L. Howard, the President and a director of Steel Holdings GP, is also a director. Upon closing of the Exchange Transaction on May 1, 2023, the Company became a consolidated subsidiary of Steel Holdings as described in Note 1 - "Nature of Operations" and Note 3 - "Exchange Transaction". After May 1, 2023, transactions between Steel Holdings and the Company are eliminated in consolidation by Steel Holdings. SPHG Note Transaction On February 28, 2019, the Company entered into that certain SPHG Note Purchase Agreement with SPHG Holdings, whereby SPHG Holdings agreed to loan the Company $14.9 million in exchange for a 7.50% Convertible Senior Note due March 1, 2024. On March 9, 2023 (the "Amendment Date"), the Company and SPHG Holdings entered into an amendment to the SPHG Note. Pursuant to the SPHG Note Amendment, the maturity date of the SPHG Note was extended six months from March 1, 2024 to September 1, 2024. The Company repaid $1.0 million in principal amount of the SPHG Note on the Amendment Date, and repaid an additional $1.0 million principal amount of the note on June 9, 2023. In connection with the SPHG Note Amendment, the Company also paid SPHG Holdings a cash amendment fee of $0.1 million, and derecognized $0.2 million of the debt discount in proportion to the reduction of the principal balance on the Amendment Date in the fiscal third quarter. No other changes were made to the terms of the SPHG Note besides the items discussed. As of July 31, 2023, SPHG Holdings held $12.9 million principal amount of the SPHG Note, compared to $14.9 million principal amount at July 31, 2022. As of July 31, 2023 and 2022, the net carrying value of the SPHG Note was $12.5 million and $11.0 million, respectively. Refer to Note 10 – “Debt” and Note 23 - "Fair Value Measurements" for further information. During the May 1 to July 31, 2023 Successor Period, the Company recognized interest expense of $0.3 million associated with the SPHG Note. During the August 1, 2022 to April 30, 2023 Predecessor Period, and the fiscal year ended July 31, 2022 Predecessor Period, the Company recognized interest expense of $2.5 million and $2.8 million, respectively, associated with the SPHG Note. Preferred Stock Transactions Refer to Note 22 – “Stockholders’ Equity” for information on the Series C Preferred Stock Purchase Agreement with SPHG Holdings. During each of the fiscal years ended July 31, 2023 and 2022, the Company paid dividends of $2.1 million and $2.1 million, respectively, associated with the Series C Convertible Preferred Stock. Refer to Note 22 – “Stockholders’ Equity” for information on the Transfer and Exchange Agreement with the Steel Partners Group, where the Company exchanged 3.5 million shares of Series E Convertible Preferred Stock of Steel Connect for certain marketable securities held by the Steel Partners Group. Stockholders' Agreement Concurrently with the execution of the Transfer and Exchange Agreement, the Company, Steel Holdings, Steel Excel, WebFinancial, WHX CS, LLC, WF Asset Corp., Steel Partners Ltd., Warren G. Lichtenstein and Jack L. Howard (together, the "SP Investors") entered into a Stockholders' Agreement dated as of April 30, 2023 (the "Stockholders' Agreement"). Pursuant to the Stockholders' Agreement, the parties agreed to certain aspects of the Company's governance, including the maintenance of the Board size at seven directors and the creation of an Independent Audit Committee or Disinterested Audit Committee (as defined therein). The Stockholders' Agreement further provides that (a) prior to September 1, 2025 the prior approval of the Independent Audit Committee or the Disinterested Audit Committee, as applicable, is required for the following: (i) a voluntary delisting of the common stock from the applicable stock exchange or a transaction (including a merger, recapitalization, stock split or otherwise) which results in the delisting of the common stock, Steel Connect ceasing to be an SEC reporting company, or Steel Connect filing a Form 25 or Form 15 or any similar form with the SEC; (ii) an amendment to the terms of the Management Services Agreement (the "Services Agreement") dated June 14, 2019, by and between Steel Connect and Steel Services Ltd.; and (iii) any related party transaction between Steel Connect and the SP Investors and their subsidiaries and affiliates; (b) prior to September 1, 2028, the prior approval of the Independent Audit Committee or the Disinterested Audit Committee, as applicable, is required for the Board to approve a going private transaction pursuant to which Steel Holdings or its subsidiaries or affiliates acquires the outstanding shares of common stock they do not own (or any alternative transaction that would have the same impact); and (c) until the Final Sunset Date, the prior approval of the Independent Audit Committee or the Disinterested Audit Committee, as applicable, is required (i) for the Board to approve a short-form or squeeze-out merger between Steel Connect and the SP Investors; or (ii) prior to any transfer of equity interests in Steel Connect by the members of the SP Group (as defined in the Stockholders' Agreement) if such transfers would result in 80% of the voting power and value of the equity interests in Steel Connect that are held by the members of the SP Group being held by one corporate entity. The Stockholders' Agreement also provides that 70% of the net proceeds received by the Company upon resolution of the Reith litigation will be distributed to the Company’s stockholders with the SP Investors agreeing to waive their portion of any such distribution to the extent of any shares of common stock held as of the date of the Stockholders’ Agreement or issuable upon conversion of the Series E Convertible Preferred Stock held by the SP Investors and the Series C Convertible Preferred Stock of Steel Connect, and the SPHG Note. Any amendment to the Stockholders’ Agreement by the Company prior to the date that any person or group of related persons owns 100% of the equity securities of the Company requires the prior approval of the Independent Audit Committee or the Disinterested Audit Committee, as applicable. Voting Agreement Concurrently with the execution of the Transfer and Exchange Agreement, the SP Investors and the Company entered into a Voting Agreement, dated as of April 30, 2023 (the “Voting Agreement”). Pursuant to the terms and conditions set forth in the Voting Agreement, each SP Investor agreed to (i) vote, or cause to be voted, all securities of the Company beneficially owned by each such SP Investor for the approval of the Nasdaq Proposal and against any transaction or proposal that may delay, impair or nullify the approval of the Nasdaq Proposal; (ii) not enter into an agreement to vote in a manner inconsistent with the foregoing; and (iii) not transfer such Shares of common stock and Subject Shares (as defined in the Stockholders' Agreement), without the prior consent of the Company’s audit committee, subject to certain standard exceptions. As the SP Investors already owned more than a majority of the voting power of the Company when they signed the Voting Agreement, approval of the Nasdaq Proposal was assured, and approval was received at a special meeting of stockholders held on June 6, 2023. The Steel Connect Board, acting on the unanimous recommendation of a strategic planning committee of the Steel Connect Board consisting solely of independent and disinterested directors of Steel Connect , approved the Transaction. Refer to Note 22 – “Stockholders’ Equity” for more information on the Transfer and Exchange Agreement with the Steel Partners Group. Management Services Agreement On June 14, 2019, the Company entered into an agreement (the "Management Services Agreement") with Steel Services Ltd. ("Steel Services"), an indirect wholly-owned subsidiary of Steel Holdings. The Management Services Agreement was effective as of June 1, 2019. Pursuant to this agreement, SP Corporate provided the Company and its subsidiaries with the services of certain employees, including certain executive officers and other corporate services. In connection with the IWCO Direct Disposal, the monthly fee under the Management Services Agreement was reduced effective on the Disposal Date primarily for the portion of the fee attributable to IWCO Direct. Total expenses incurred related to the management services agreement for the Successor and Predecessor periods are below and are recorded within the consolidated statements of operations to Selling, general and administrative expense: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Management services agreement expenses $ 617 $ 1,736 $ 3,008 As of July 31, 2023 and 2022, amounts due to Steel Services were $0.7 million and $1.0 million, respectively and are recorded within the consolidated balance sheets as a component of Accounts payable. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jul. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements of the Company include the results of its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company accounts for investments in businesses in which it owns between 20% and 50% of the voting interest using the equity method, if the Company has the ability to exercise significant influence over the investee company. All other investments in privately held businesses over which the Company does not have the ability to exercise significant influence, or for which there is not a readily determinable market value, are accounted for under the cost method of accounting. |
Use of Estimates | Use of Estimates The preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to: (1) revenue recognition; (2) valuation allowances for trade and other receivables; (3) the valuation of long-lived assets; (4) contingencies, including litigation reserves; (5) restructuring charges and related severance expenses; (6) income taxes; (7) pension obligations; (8) business combinations; and (9) incremental borrowing rate to determine present value of lease payments. Accounting estimates are based on historical experience and various assumptions that are considered reasonable under the circumstances. However, because these estimates inherently involve judgments and uncertainties, actual results could differ materially from those estimated. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from its contracts with customers primarily from the sale of supply chain management services. Revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For ModusLink's supply chain management services arrangements, the goods and services are considered to be transferred over time as they are performed. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Supply Chain Management Services ModusLink's revenue primarily comes from the sale of supply chain management services to its clients. Amounts billed to customers under these arrangements include revenue attributable to the services performed as well as for materials procured on the customer's behalf as part of its service to them. The majority of these arrangements consist of two distinct performance obligations (i.e., warehousing/inventory management service and a separate kitting/packaging/assembly service), revenue related to each of which is recognized over time as services are performed using an input method based on the level of efforts expended. Other Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, and fees for professional services in ModusLink's e-Business operations. Revenue related to these arrangements is recognized on a straight-line basis over the term of the agreement or over the term of the agreement in proportion to the costs incurred in satisfying the obligations under the contract. Performance Obligations and Standalone Selling Price The Company's contracts with customers may include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require certain judgment. For arrangements with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company generally determines standalone selling prices based on the prices charged to customers and uses a range of amounts to estimate standalone selling prices when we sell each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative standalone selling prices of the various products and services. The Company typically has more than one range of standalone selling prices for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the type of customer and geographic region in determining the range of standalone selling prices. Variable Consideration The Company may provide credits or incentives to customers, which are accounted for as variable consideration when estimating the transaction price of the contract and amounts of revenue to recognize. The amount of variable consideration to include in the transaction price is estimated at contract inception using either the estimated value method or the most likely amount method based on the nature of the variable consideration. These estimates are updated at the end of each reporting period as additional information becomes available and revenue is recognized only to the extent that it is probable that a significant reversal of any amounts of variable consideration included in the transaction price will not occur. Principal Versus Agent Revenue Recognition For revenue generated from contracts with customers involving another party, the Company considers whether it maintains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment and discretion in establishing price. Revenues are recognized on a gross basis if the Company is acting in the capacity of a principal and on a net basis if its acting in the capacity of an agent. Contract Balances Timing of revenue recognition may differ from timing of invoicing to customers. The Company records contract assets and liabilities related to its contracts with customers as follows: • Accounts receivable when revenue is recognized prior to receipt of cash payments and if the right to such amounts is unconditional and solely based on the passage of time. • Contract assets when the Company recognizes revenue based on efforts expended but the right to such amount is conditional upon satisfaction of another performance obligation. Contract assets are primarily comprised of fees related to supply chain management services. The Company's contract assets are all short-term in nature and are included in prepaid expenses and other current assets in the Company's consolidated balance sheets. • Deferred revenue when cash payments are received or due in advance of performance. Deferred revenue is primarily comprised of fees related to supply chain management services, cloud-based software subscriptions and software maintenance and support service contracts, which are generally billed in advance. Deferred revenue also includes other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The deferred revenue balance is classified as a component of other current liabilities and other long-term liabilities on the Company's consolidated balance sheets. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Expected Credit Losses The Company's unsecured accounts receivable are stated at original invoice amount less an estimate made for expected credit losses based on a monthly review of all outstanding amounts. Management determines the allowance for expected credit losses by regularly evaluating individual customer receivables and considering each customer's financial condition, credit history, current economic conditions, whether any amounts are currently past due and the length of time accounts may be past due. The Company writes off accounts receivable when management deems them uncollectible and records recoveries of accounts receivable previously written off when received. When accounts receivable are considered past due, the Company generally does not charge interest on past due balances. |
Foreign Currency Translation | Foreign Currency Translation All assets and liabilities of the Company's foreign subsidiaries, whose functional currency is the local currency, are translated to U.S. dollars at the rates in effect at the balance sheet date. All amounts in the consolidated statements of operations are translated using the average exchange rates in effect during the year. Resulting translation adjustments are reflected in the accumulated other comprehensive income (loss) component of stockholders' equity. Settlement of receivables and payables in a foreign currency that is not the functional currency result in foreign currency transaction gains and losses. Foreign currency transaction gains and losses are included in "Other gains (losses), net" in the consolidated statements of operations. |
Cash, Cash Equivalents and Short-term Investments | Cash, Cash Equivalents and Short-term InvestmentsCash equivalents consist of highly liquid investments with an original maturity of three months or less at the time of purchase. Investments with maturities greater than three months to twelve months at the time of purchase are considered short-term investments. |
Fair Value Measurements | Fair Value Measurements The Company measures certain assets and liabilities at fair value (see Note 23 - "Fair Value Measurements"). Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values of assets and liabilities are determined based on a three-level measurement input hierarchy. Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Level 2 inputs are other than quoted market prices that are observable, either directly or indirectly, for an asset or liability. Level 2 inputs can include quoted prices in active markets for similar assets or liabilities, quoted prices in a market that is not active for identical assets or liabilities, or other inputs that can be corroborated by observable market data. Level 3 inputs are unobservable for the asset or liability when there is little, if any, market activity for the asset or liability. Level 3 inputs are based on the best information available and may include data developed by the Company. |
Funds Held for Clients | Funds Held for Clients Funds held for clients represent cash that is restricted for use solely for the purposes of satisfying the obligations to remit clients' customer funds to the Company's clients. These funds are classified as a current asset and a corresponding current liability on the Company's consolidated balance sheets. |
Inventories | InventoriesInventories are stated at the lower of cost or net realizable value. Cost is determined by both moving averages and the first-in, first-out methods. A provision for excess or obsolete inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns and future sales expectations. |
Accounting for Impairment of Long-Lived Assets | Accounting for Impairment of Long-Lived Assets The Company tests long-lived assets or group of assets for recoverability whenever events or changes in circumstances indicate that the Company may not be able to recover the asset's carrying amount. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company evaluates recoverability generally by determining whether the undiscounted cash flows expected to result from the use and eventual disposition of that asset or group cover the carrying value at the evaluation date. If the undiscounted cash flows are not sufficient to recover the carrying value, the Company measures an impairment loss as the excess of the carrying amount of the long-lived asset or group over its fair value. Management may use third-party valuation experts to assist in its determination of fair value. |
Property and Equipment | Property and EquipmentProperty, plant and equipment are stated at cost, less accumulated depreciation. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Depreciation and amortization is computed by applying the straight-line method to the estimated useful lives of the respective assets. Changes in estimated useful lives and salvage values of the Company’s assets and the related depreciation and amortization expense are accounted for prospectively. The Company capitalizes certain computer software development costs when incurred in connection with developing or obtaining computer software for internal use. |
Leases | Leases The Company leases office space, warehouse facilities, equipment and automobiles under operating leases. These leases may also include rent escalation clauses or lease incentives in the form of construction allowances and rent reduction. In determining the lease term used in the lease right-of-use ("ROU") asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease ROU asset and lease liability. The Company is typically required to make fixed minimum rent payments, variable rent payments primarily based on performance, or a combination thereof, directly related to its ROU asset. The Company is also often required, by the lease, to pay for certain other costs including real estate taxes, insurance, common area maintenance fees and/or certain other costs, which may be fixed or variable, depending upon the terms of the respective lease agreement. To the extent these payments are fixed, the Company has included them in calculating the lease ROU assets and lease liabilities. The Company calculates lease ROU assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date. When discount rates implicit in leases cannot be readily determined, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. The determination of incremental borrowing rates involves judgment by management. The weighted average interest rate used for operating leases for the year ended July 31, 2023 and July 31, 2022 was 5.2% and 3.9%, respectively. The weighted average interest rate used for finance leases for the year ended July 31, 2022 was 3.9%. There were no finance leases as of the year ended July 31, 2023. For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term and are not recognized on the consolidated balance sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. |
Restructuring Costs | Restructuring Costs Restructuring and other exit costs may include employee separation costs, asset impairment charges, contract exit costs and costs of facility consolidation and closure. The Company records restructuring and other exit costs at their fair value when incurred. In accordance with existing benefit arrangements, employee termination costs are accrued when the restructuring actions are probable and estimable. Employee separation costs may also include one-time termination benefits recognized as a liability at estimated fair value, at the time of communication to employees, unless future service is required beyond the minimum retention period, in which case the costs are recognized ratably over the future service period. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. This methodology is subjective and requires significant estimates and judgments in the determination of the recoverability of deferred tax assets and in the calculation of certain tax liabilities. Income tax accounting standards prescribe: (1) a minimum recognition threshold that an income tax benefit arising from an uncertain income tax position taken, or expected to be taken, on an income tax return is required to meet before being recognized in the financial statements and (2) the measurement of the income tax benefits recognized from such positions. The Company's accounting policy is to classify uncertain income tax positions that are not expected to be resolved in one year as non-current income tax liabilities and to classify potential interest and penalties on uncertain income tax positions as elements of the provision for income taxes in its financial statements. See Note 18 - "Income Taxes," for additional information. |
Pension Plans | Pension Plans The Company sponsors defined benefit pension plans covering certain of its employees in the Netherlands and Japan. In accordance with accounting standards for employee pension benefits, the Company recognizes on a plan-by-plan basis the unfunded status of its pension plans in the consolidated financial statements and measures its pension plan assets and benefit obligations as of July 31. The obligation for the Company's pension plans and the related annual costs of employee benefits are calculated based on several long-term assumptions, including discount rates and expected mortality for employee benefit liabilities, rates of return on plan assets and expected annual rates for salary increases for employee participants. |
Share-Based Compensation Plans | Share-Based Compensation Plans All share-based payment awards to employees and directors are measured based upon their grant date fair values and expensed over the period during which the employee or director is required to provide service in exchange for the award (the vesting period). The Company accounts for forfeitures in the period in which they occur. |
Acquisition Accounting | Acquisition Accounting The Exchange Transaction with Steel Holdings was accounted for as a business combination under the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”) with Steel Holdings being the accounting acquirer. The Company elected to apply pushdown accounting. As required by ASC 805, assets acquired and liabilities assumed in a business combination are recorded at their respective fair values as of the business combination date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Significant judgement is required in determining the acquisition date fair value of the assets acquired and liabilities assumed predominantly with respect to debt and intangible assets. We use available information to make these fair value determinations and, when necessary, engage an independent valuation specialist to assist in the fair value determination of the acquired long-lived assets. Significant judgment may be used to determine these fair values, including the use of appraisals, discounted cash flow models, market value for similar purchases or other methods applicable to the circumstances. The assumptions and judgments made by the Company when recording business combinations will have an impact on reported results of operations in the future. During the measurement period, which is not to exceed one year from the acquisition date, |
Earnings per Common Share | Earnings per Common Share The Company calculates earnings (loss) per common share using the two-class method required for participating securities. Accordingly, the Company's Series E Convertible Preferred Stock, which the holders of are entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends or other distributions on the shares of Common Stock, are included as participating securities in the calculation of earnings (loss) per common share ("EPS") pursuant to the two-class method. The two-class method provides for an allocation of net income (loss) between common stock and other participating securities based on their respective participation rights to share in dividends. Basic EPS is calculated by dividing net income available to common stockholders for the period by the weighted-average number of common shares outstanding during the period. Net income available to common stockholders for the period includes dividends paid to common stockholders during the period plus a proportionate share of undistributed net income allocable to common stockholders for the period; the proportionate share of undistributed net income allocable to common stockholders for the period is based on the proportionate share of total weighted-average common shares and participating securities outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential common shares consist of restricted common stock (calculated based on the treasury stock method) and shares issuable upon debt or preferred stock conversion (calculated using an as-if converted method), using the more dilutive of either the two-class method or as-converted stock method. |
Major Clients and Concentration of Credit Risk | Major Clients and Concentration of Credit RiskFinancial instruments which potentially subject the Company to concentrations of credit risk are cash, cash equivalents and accounts receivable. The Company's cash equivalent portfolio is diversified and consists primarily of short-term investment grade securities placed with high credit quality financial institutions. Cash and cash equivalents are maintained at accredited financial institutions, and the balances associated with funds held for clients are at times without and in excess of federally insured limits. The Company has never experienced any losses related to these balances and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with financial institutions. |
Adoption of New Accounting Standards and Accounting Standards Issued and Not Yet Implemented | Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Loses on Financial Instruments , an ASU that requires measurement and recognition of expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. As a result of the Exchange Transaction, the Company elected to early adopt ASU 2016-13 as of the date of the Exchange Transaction, or May 1, 2023, in order to conform with Steel Holdings' accounting policies. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company did not identify any other accounting standards that would require early adoption in order to conform to Steel Holdings' accounting policies. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance . The ASU requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This guidance is effective for all entities for annual periods beginning after December 15, 2021 and early adoption is permitted. The new guidance was effective for the Company's fiscal year ended July 31, 2023 (Fiscal Year 2023). The adoption of this new guidance did not have any impact on the Company's consolidated financial statements and disclosures. Accounting Standards Issued and Not Yet Implemented In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40) . The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity's financial statements and information about events, conditions and circumstances that can affect how to assess the amount or timing of an entity's future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning in our fiscal year ending July 31, 2025, with early adoption permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. Other new pronouncements issued but not effective until after July 31, 2023 are not expected to have a material impact on our financial condition, results of operations or liquidity. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The allowance for expected credit losses consisted of the following: Successor Predecessor May 1 to July 31, 2023 August 1, 2022 to April 30, 2023 July 31, 2022 (In thousands) Balance at beginning of period $ 1,180 $ 44 $ 49 Application of pushdown accounting (a) (1,180) — — Provisions charged to expense 219 1,136 — Accounts written off — — Recovered — — (5) Balance at end of period $ 219 $ 1,180 $ 44 (a) As part of pushdown accounting, the allowance for expected credit losses balance was eliminated to establish the new cost basis in the Company's accounts receivables as of May 1, 2023. |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Cash and bank deposits $ 90,282 $ 21,386 Money market funds 31,090 31,756 $ 121,372 $ 53,142 The amount of cash, cash equivalents and restricted cash as of July 31, 2023 and 2022 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Cash and cash equivalents $ 121,372 $ 53,142 Funds held for clients 2,031 4,903 Cash, cash equivalents and restricted cash $ 123,403 $ 58,045 |
Estimated Useful Lives of Property and Equipment | The estimated useful lives are as follows: Category Useful Lives Machinery and equipment 5 years Leasehold improvements Shorter of the lease term or the estimated useful life of the asset Software 5 years Computer hardware 3 years Other 5 years |
EXCHANGE TRANSACTION (Tables)
EXCHANGE TRANSACTION (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Exchange Transaction Consideration | The following table summarizes the total Exchange Transaction consideration: (in thousands) May 1, 2023 Fair value of Aerojet common stock $ 202,733 Fair value of Steel Holdings' previously held interests in Steel Connect and Steel Holdings' noncontrolling interest 111,816 Less: cash acquired from Steel Connect (65,896) Total estimated consideration, less cash acquired $ 248,653 |
Summary of Preliminary Fair Value of Assets Acquired and Liabilities Assumed | The following represents the preliminary calculation of goodwill and fair value amounts recognized: (in thousands) May 1, 2023 Assets Accounts receivable, trade $ 36,900 Inventories, net 6,900 Prepaid expenses and other current assets 4,957 Other intangible assets 35,500 Other assets 3,900 Property and equipment, net 3,400 Operating lease right-of-use assets 29,250 Investments 202,733 Estimated fair value of total assets acquired by Steel Holdings 323,540 Liabilities Accounts payable 26,300 Accrued expenses 29,100 Current lease obligations 7,994 Other current liabilities 7,236 Long-term lease obligations 21,300 Other long-term liabilities 5,742 Estimated fair value of total liabilities assumed by Steel Holdings 97,672 Fair value of identifiable net assets 225,868 Goodwill attributable to Steel Connect $ 22,785 |
Summary of Pushdown Accounting | The following table summarizes the significant adjustments recognized by the Company as of the Exchange date for each major class of assets and liabilities as a result of pushdown accounting: Exchange Date Carrying Value Adjustments Exchange Date Fair Value (in thousands) Goodwill $ — 22,785 $ 22,785 Other intangible assets $ — 35,500 $ 35,500 Operating lease right-of-use assets $ 28,900 350 $ 29,250 Prepaid and other current assets $ 5,000 (43) $ 4,957 Convertible note payable $ (11,586) (1,420) $ (13,006) Other current liabilities $ (16,671) 9,435 $ (7,236) Other long-term liabilities $ (5,500) (242) $ (5,742) |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Exchange Transaction | The estimated fair value and estimated remaining useful lives of identifiable intangible assets as of the Exchange Transaction date were as follows: (in thousands) Useful Life (Years) Amount Customer relationships 7 $ 25,000 Trade name Indefinite 10,500 Estimated fair value of identifiable intangible assets $ 35,500 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | A summary of the results of the discontinued operations is as follows: Fiscal Year Ended July 31, 2022 Net revenue $ 165,542 Cost of revenue 156,697 Gross profit 8,845 Operating expenses: Selling, general and administrative 30,744 Amortization of intangible assets (a) 9,303 Total operating expenses 40,047 Operating loss (31,202) Other income (expense): Gain upon deconsolidation of IWCO Direct 35,457 Interest expense (16,111) Total other income (expense), net 19,346 Loss from discontinued operations before income taxes (11,856) Income tax benefit 10,144 Loss from discontinued operations, net of tax $ (1,712) (a) During the fiscal year ended July 31, 2022, the Company recorded $9.3 million of amortization expense for the former Direct Marketing reporting unit. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expense and Other Current Assets | Prepaid expenses and other current assets, net consisted of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Aerojet common stock proceeds receivable $ 154,500 $ — Prepaid expenses 2,217 2,085 Other current assets 1,969 1,466 $ 158,686 $ 3,551 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net consisted of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Raw materials $ 4,805 $ 7,330 Work-in-process 239 124 Finished goods 3,525 697 $ 8,569 $ 8,151 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | A reconciliation of the change in the carrying amount of goodwill by reportable segment is as follows: Supply Chain Balance at May 1, 2023 (Successor) Application of pushdown accounting (a) $ 22,785 Balance at July 31, 2023 (Successor) Gross goodwill 22,785 Accumulated impairments — Net goodwill $ 22,785 (a) Related to the Exchange Transaction with Steel Holdings. See Note 3 - "Exchange Transaction" for further details. |
Schedule of Indefinite-Lived Intangible Assets | A summary of Other intangible assets, net is as follows: Successor July 31, 2023 Gross Carrying Amount Accumulated Amortization Net Customer relationships $ 25,000 $ 911 $ 24,089 Trade name 10,500 — 10,500 Total $ 35,500 $ 911 $ 34,589 |
Schedule of Estimated Future Amortization Expense of Intangible Assets | Based on gross carrying amounts at July 31, 2023, the Company's estimate of amortization expense for each of the five succeeding years and thereafter is as follows: Fiscal Year Ending July 31, 2024 2025 2026 2027 2028 Thereafter Estimated amortization expense $ 3,555 $ 3,571 $ 3,571 $ 3,571 $ 3,571 $ 6,250 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment at Cost | Property and equipment at cost, consists of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Machinery and equipment 1,388 12,632 Leasehold improvements 606 9,994 Software 1,133 34,161 Computer hardware 400 5,317 Other 627 2,475 4,154 64,579 Less: accumulated depreciation and amortization (456) (61,045) Property and equipment, net $ 3,698 $ 3,534 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expenses | The following tables reflect the components of "Accrued expenses" and "Other current liabilities": Successor Predecessor July 31, 2023 July 31, 2022 Accrued Expenses (In thousands) Accrued compensation $ 6,891 $ 5,099 Accrued audit, tax and legal 5,696 4,564 Accrued taxes 2,811 3,344 Accrued price concessions 2,981 4,549 Accrued occupancy costs 1,412 1,671 Accrued IT costs 831 1,108 Accrued other 6,152 8,061 Total accrued expenses $ 26,774 $ 28,396 |
Components of Other Current Liabilities | Successor Predecessor July 31, 2023 July 31, 2022 Other Current Liabilities (In thousands) Accrued pricing liabilities $ — $ 9,435 Deferred revenue - current 2,574 2,705 Other 1,970 1,342 Total other current liabilities $ 4,544 $ 13,482 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Components of Debt and Reconciliation to Carrying Amount | The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Unsecured 7.50% Convertible Senior Note due September 1, 2024 $ 12,461 $ 14,940 Credit Facilities Umpqua Revolver — — Less: unamortized discounts and issuance costs (a)(b) — (3,972) Total debt, net $ 12,461 $ 10,968 (a) As of May 1, 2023, the Company will account for the SPHG Note under the fair value option. (b) Amounts include deferred debt issuance costs related to credit facilities of $79 thousand as of July 31, 2022, which are presented in Other Assets. |
Summary of Debt | Predecessor July 31, 2022 Carrying amount of equity component $ 8,200 Principal amount of note $ 14,940 Unamortized debt discount (3,893) Net carrying amount $ 11,047 |
Summary of Interest Expense Related to Convertible Notes | Below is a reconciliation of interest expense related to the SPHG Note to total interest expense: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Interest expense related to contractual interest coupon on the SPHG Note $ 261 $ 844 $ 1,136 Interest expense related to accretion of the discount on the SPHG Note — 1,688 1,704 Interest expense related to revolving credit facilities (see below) — 36 212 Other 4 20 68 Total interest expense $ 265 $ 2,588 $ 3,120 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Leases [Abstract] | |
Lease Cost | The components of the Company's lease expense are presented below: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Operating lease cost $ 2,565 $ 7,538 $ 9,973 Short-term lease expense 444 1,269 1,488 Sublease income (171) (786) (748) Variable lease cost — 7 24 Interest on finance lease liabilities — — 3 $ 2,838 $ 8,028 $ 10,740 Supplemental cash flow information related to the cash paid for amounts included in measurement of lease liabilities during the fiscal year ended July 31, 2023 and 2022 was as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Operating cash flows from operating leases $ 2,494 $ 7,224 $ 9,653 Operating cash flows from finance leases $ — $ — $ 3 Financing cash flows from finance leases $ — $ 38 $ 73 |
Future Minimum Lease Payments Under Operating Leases | The Company's future minimum lease payments required under operating leases that have commenced as of July 31, 2023 were as follows: Operating Leases (In thousands) 2024 $ 9,256 2025 8,054 2026 5,630 2027 4,298 2028 2,088 Thereafter 544 Total lease payments 29,870 Less: imputed interest 2,736 Present value of lease payments 27,134 Less: current lease obligations 7,973 Long-term lease obligations $ 19,161 |
Future Minimum Lease Payments Under Financing Leases | The Company's future minimum lease payments required under operating leases that have commenced as of July 31, 2023 were as follows: Operating Leases (In thousands) 2024 $ 9,256 2025 8,054 2026 5,630 2027 4,298 2028 2,088 Thereafter 544 Total lease payments 29,870 Less: imputed interest 2,736 Present value of lease payments 27,134 Less: current lease obligations 7,973 Long-term lease obligations $ 19,161 |
Additional Lease Information | Additional information related to the Company's leases as of July 31, 2023 was as follows: Weighted average remaining lease term: Operating leases 3.7 years Weighted average discount rate: Operating leases 5.2% |
RESTRUCTURING ACTIVITIES (Table
RESTRUCTURING ACTIVITIES (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The table below summarizes restructuring charges in the statements of operations for employee termination costs: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, (in thousands) 2023 2023 2022 Cost of revenue (62) 97 $ 1,200 Selling, general and administrative — — 313 (62) 97 $ 1,513 Changes to the restructuring liability during the fiscal year ended July 31, 2023 were as follows: (in thousands) Balance as of July 31, 2022 $ 892 Costs incurred 35 Cash payments (925) Change in estimates (2) Balance as of July 31, 2023 $ — |
DEFINED BENEFIT PENSION PLANS (
DEFINED BENEFIT PENSION PLANS (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Retirement Benefits [Abstract] | |
Plan Assets Measured at Fair Value on Recurring Basis Classified by Fair Value Hierarchy | The following table presents the plan assets measured at fair value on a recurring basis as of July 31, 2023 and 2022, classified by fair value hierarchy: Successor Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2023 Asset Level 1 Level 2 Level 3 Insurance contract $ 14,926 97 % $ — $ — $ 14,926 Other investments 388 3 % — — 388 $ 15,314 100 % $ — $ — $ 15,314 Predecessor Fair Value Measurements at Reporting Date Using (In thousands) July 31, 2022 Asset Level 1 Level 2 Level 3 Insurance contract $ 17,560 98 % $ — $ — $ 17,560 Other investments 416 2 % — — 416 $ 17,976 100 % $ — $ — $ 17,976 |
Aggregate Change in Benefit Obligation and Plan Assets | The following table summarizes the changes in benefit obligation, plan assets and funded status for these plans: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Change in benefit obligation Benefit obligation at beginning of year $ 21,103 $ 33,584 Adjustment related to unconditional indexation of benefits 1,077 — Service cost 10 11 Interest cost 679 462 Actuarial gain (4,885) (8,674) Benefits and administrative expenses paid (275) (227) Settlements (109) — Currency translation 1,519 (4,053) Benefit obligation at end of year $ 19,119 $ 21,103 Change in plan assets Fair value of plan assets at beginning of year $ 17,976 $ 29,223 Actual return on plan assets (3,759) (7,544) Employer contributions, net 225 5 Settlements (108) — Benefits and administrative expenses paid (275) (227) Currency translation 1,255 (3,481) Fair value of plan assets at end of year $ 15,314 $ 17,976 Funded status Current liabilities $ (9) $ (11) Noncurrent liabilities (3,796) (3,116) Net amounts recognized on the consolidated balance sheets $ (3,805) $ (3,127) |
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets | Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Projected benefit obligation $ 19,119 $ 21,103 Accumulated benefit obligation $ 19,119 $ 21,103 Fair value of plan assets $ 15,314 $ 17,976 |
Components of Net Periodic Pension Cost | The following table summarizes the components of net periodic pension cost: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Service cost $ 10 $ 11 Interest costs 679 462 Expected return on plan assets (574) (407) Amortization of net actuarial loss 9 4 Net periodic pension costs $ 124 $ 70 |
Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost | The table below summarizes the weighted average assumptions used to determine benefit obligations: Successor Predecessor July 31, 2023 July 31, 2022 Discount rate 4.21 % 2.96 % Rate of compensation increase — % — % The table below summarizes weighted average assumptions used to determine net periodic pension cost: Successor Predecessor July 31, 2023 July 31, 2022 Discount rate 3.91 % 2.58 % Expected long-term rate of return on plan assets 3.88 % 2.51 % Rate of compensation increase — % — % |
Summary of Expected Benefit Payments from the Plans through Fiscal 2026 | The following table summarizes expected benefit payments from the plans through fiscal year 2032. Actual benefit payments may differ from expected benefit payments. The minimum employer required contributions to the plans are expected to be approximately $0.6 million in fiscal year 2024. Pension Benefit (In thousands) For the fiscal year ending July 31: 2024 $ 340 2025 372 2026 463 2027 444 2028 509 Thereafter 3,451 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Reconciliation of the Disaggregated Revenue | The following table presents the Company's revenues from customers with contracts disaggregated by major good or service line and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments. Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Service Lines Supply chain management services $ 40,467 $ 147,185 $ 201,344 Other 337 1,098 1,928 $ 40,804 $ 148,283 $ 203,272 Timing of Revenue Recognition Services transferred over time $ 40,804 $ 148,283 $ 203,272 $ 40,804 $ 148,283 $ 203,272 |
Summary of Changes in Deferred Revenue | The table below presents information for the Company's contract balances: Successor Predecessor July 31, 2023 July 31, 2022 August 1, 2021 (In thousands) Accounts receivable, trade, net $ 28,616 $ 40,083 $ 36,547 Contract assets 439 369 627 Deferred revenue - current $ 2,574 $ 2,705 $ 2,212 Deferred revenue - long-term 144 134 108 Total deferred revenue $ 2,718 $ 2,839 $ 2,320 Remaining Performance Obligations Remaining performance obligations are comprised of deferred revenue. Changes in deferred revenue during the fiscal years ended July 31, 2023 and 2022 were as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Balance at beginning of period $ 3,073 $ 2,839 $ 2,320 Deferral of revenue 245 1,595 2,368 Recognition of deferred amounts upon satisfaction of performance obligation (600) (1,361) (1,849) Balance at end of period $ 2,718 $ 3,073 $ 2,839 |
OTHER GAINS, NET (Tables)
OTHER GAINS, NET (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Components of Other Gains, Net | The following table presents the components of "Other gains, net": Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Foreign currency exchange gains (losses), net $ 446 $ (510) $ 2,389 Derecognition of accrued pricing liabilities (a) — — 860 Other gains, net 5,242 4,471 782 $ 5,688 $ 3,961 $ 4,031 (a) Refer to Note 3 - "Exchange Transaction" and Note 9 - "Accrued Expenses and Other Current Liabilities" for information on the derecognition of the accrued pricing liabilities. |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Activity of Nonvested Stock | A summary of the activity of the Company's restricted stock for the fiscal year ended July 31, 2023, is as follows: Number of Shares Weighted Average (Share amounts in thousands) Nonvested stock outstanding, July 31, 2022 51 $ 13.95 Granted 64 10.97 Vested (61) 13.32 Forfeited — — Nonvested stock outstanding, July 31, 2023 54 $ 10.97 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Components of Loss from Continuing Operations before Provision for Income Taxes | The components of income (loss) before provision for income taxes are as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Income (loss) from operations before income taxes: U.S. $ 9,866 $ 2,021 $ (5,189) Foreign (2,115) 7,069 7,321 Total income (loss) from operations before income taxes $ 7,751 $ 9,090 $ 2,132 |
Components of Income Tax Expense from Operations | The components of income tax expense from operations consist of the following: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Current (benefit) provision: Federal $ 72 $ 487 $ — State (110) 48 429 Foreign (110) 1,095 1,918 (148) 1,630 2,347 Deferred (benefit) provision: Federal — — 8,849 State — — 76 Foreign (250) — 116 (250) — 9,041 Total tax (benefit) provision $ (398) $ 1,630 $ 11,388 |
Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Deferred tax assets: Accruals and reserves $ 2,645 $ 4,295 Tax basis in excess of financial basis for intangible and fixed assets 175 901 Lease liability 3,574 2,288 Interest expense disallowance — 2,357 Credit carry forwards 25 25 Net operating loss and capital loss carry forwards 95,832 474,496 Total gross deferred tax assets 102,251 484,362 Less: valuation allowance (90,436) (481,178) Net deferred tax assets $ 11,815 $ 3,184 Deferred tax liabilities: Financial basis in excess of tax basis for intangible and fixed assets $ (8,446) $ (69) Right of use asset (3,454) (2,154) Convertible debt (404) (917) Total gross deferred tax liabilities (12,304) (3,140) Net deferred tax liabilities $ (489) $ 44 |
Reconciliation of Income Tax Expense Attributable to Income from Continuing Operations | Income tax expense attributable to income from continuing operations differs from the expense computed by applying the U.S. federal income tax rate of 21.0% to (loss) income from continuing operations before income taxes as a result of the following: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Computed "expected" income tax expense (benefit) $ 1,627 $ 1,909 $ 448 Increase (decrease) in income tax expense resulting from: Change in valuation allowance (350,469) (424) 21,703 Foreign tax rate differential (255) (50) 56 Nondeductible expenses 459 — 159 Foreign withholding taxes 245 147 134 Foreign other adjustments (246) — 951 GILTI 1,141 — 4,775 Addition of uncertain tax position reserves (430) 11 58 Worthless stock deduction — — (16,860) State income taxes, net of federal benefit (1,916) 37 (603) Expiration of net operating loss 347,462 — — Deferred true-up 1,786 — 751 Other 198 — (184) Actual income tax (benefit) expense $ (398) $ 1,630 $ 11,388 |
Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Balance as of beginning of year $ 571 $ 2,140 Additions for current year tax positions — — Currency translation — (4) Reductions for lapses in statute of limitations (297) (67) Reductions for member leaving consolidated group — (1,498) Balance as of end of year $ 274 $ 571 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Earnings Per Share [Abstract] | |
Reconciliation of Net Income (Loss) Per Share | The following table reconciles net income (loss) per share for the periods below: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands, except per share data) Reconciliation of net income (loss) to net income (loss) attributable to common stockholders after assumed conversions: Net income (loss) from continuing operations $ 8,149 $ 7,460 $ (9,256) Loss from discontinued operations — — (1,712) Net income (loss) 8,149 7,460 (10,968) Less: Preferred dividends on Series C preferred stock (537) (1,593) (2,129) Net income (loss) available to common stockholders 7,612 5,867 (13,097) Less: Undistributed earnings allocated to participating securities (5,803) — — Net income (loss) attributable to common stockholders $ 1,809 $ 5,867 $ (13,097) Effect of dilutive securities: Dividends on Series C preferred stock 537 1,593 — Undistributed earnings allocated to Series E preferred stock 5,803 — — Net income (loss) attributable to common stockholders - assuming dilution $ 8,149 $ 7,460 $ (13,097) Net income (loss) per common share - basic Net income (loss) from continuing operations $ 0.29 $ 0.91 $ (1.77) Net loss from discontinued operations — — (0.27) Net income (loss) attributable to common stockholders $ 0.29 $ 0.91 $ (2.04) Net income (loss) per common share - diluted Net income (loss) from continuing operations $ 0.29 $ 0.89 $ (1.77) Net loss from discontinued operations — — (0.27) Net income (loss) attributable to common stockholders $ 0.29 $ 0.89 $ (2.04) Weighted average common shares outstanding - basic 6,177 6,449 6,425 Effect of dilutive securities: Common stock equivalents - Restricted stock and restricted stock shares 60 55 — Common stock equivalents - Series C Preferred Stock 1,913 1,913 — Common stock equivalents - Series E Preferred Stock 19,810 — — Weighted average common shares outstanding - diluted 27,960 8,417 6,425 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income, Net of Income Taxes | The components of accumulated other comprehensive income, net of income taxes, are as follows: Foreign Pension Total (In thousands) Accumulated other comprehensive income (loss) at July 31, 2021 (Predecessor) $ 9,762 $ (2,600) $ 7,162 Foreign currency translation adjustment (3,699) — (3,699) Pension liability adjustments — 677 677 Net current-period other comprehensive (loss) income (3,699) 677 (3,022) Accumulated other comprehensive income (loss) at July 31, 2022 (Predecessor) 6,063 (1,923) 4,140 Foreign currency translation adjustment 999 — 999 Pension liability adjustments — (1,078) (1,078) Net current-period other comprehensive income (loss) 999 (1,078) (79) Accumulated other comprehensive income (loss) at April 30, 2023 (Predecessor) 7,062 (3,001) 4,061 Application of pushdown accounting (7,062) 3,001 (4,061) Accumulated other comprehensive income (loss) at May 1, 2023 (Successor) — — — Foreign currency translation adjustment (623) — (623) Pension liability adjustments — 36 36 Net current-period other comprehensive (loss) income (623) 36 (587) Accumulated other comprehensive income (loss) at July 31, 2023 (Successor) $ (623) $ 36 $ (587) |
STATEMENT OF CASH FLOWS SUPPL_2
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Cash and bank deposits $ 90,282 $ 21,386 Money market funds 31,090 31,756 $ 121,372 $ 53,142 The amount of cash, cash equivalents and restricted cash as of July 31, 2023 and 2022 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Cash and cash equivalents $ 121,372 $ 53,142 Funds held for clients 2,031 4,903 Cash, cash equivalents and restricted cash $ 123,403 $ 58,045 |
Schedule of Restrictions on Cash and Cash Equivalents | The amount of cash, cash equivalents and restricted cash as of July 31, 2023 and 2022 in the consolidated statements of cash flows is reconciled to the Company's consolidated balance sheets as follows: Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Cash and cash equivalents $ 121,372 $ 53,142 Funds held for clients 2,031 4,903 Cash, cash equivalents and restricted cash $ 123,403 $ 58,045 |
Schedule of Cash Flow, Supplemental Disclosure | Cash used for operating activities reflect cash payments for interest and income taxes as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended 2023 2023 2022 (In thousands) Cash paid for interest $ 9 $ 1,145 $ 1,237 Cash paid for income taxes $ 3,008 $ — $ 2,364 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on Recurring Basis and Classified by Fair Value Hierarchy | The following tables present the Company's financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2023 and 2022, classified by fair value hierarchy: Successor Fair Value Measurements at (In thousands) July 31, 2023 Level 1 Level 2 Level 3 Assets: Money market funds $ 31,090 $ 31,090 $ — $ — Liabilities: SPHG Note $ 12,461 $ — $ — $ 12,461 Predecessor Fair Value Measurements at (In thousands) July 31, 2022 Level 1 Level 2 Level 3 Assets: Money market funds $ 31,756 $ 31,756 $ — $ — |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Following is a summary of changes in the SPHG Note measured using Level 3 inputs: Balance as of May 1, 2023 (Successor): $ 13,006 Principal repayment (1,000) Unrealized losses 455 Balance as of July 31, 2023 (Successor) $ 12,461 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Segment Reporting [Abstract] | |
Summarized Financial Information of Continuing Operations by Operating Segment and Corporate-Level Activity | Summarized financial information of the Company's continuing operations by operating segment is as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Net revenue: Supply Chain $ 40,804 $ 148,283 $ 203,272 Total segment net revenue $ 40,804 $ 148,283 $ 203,272 Operating income: Supply Chain 3,328 16,488 11,318 Total segment operating income 3,328 16,488 11,318 Corporate-level activity (1,707) (9,699) (10,155) Total operating (loss) income 1,621 6,789 1,163 Total other income 6,130 2,301 969 Income before income taxes $ 7,751 $ 9,090 $ 2,132 Summarized financial information of the Company's capital expenditures and depreciation expense for the Supply Chain reportable segment is as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Capital expenditures $ 807 $ 1,311 $ 1,485 Depreciation expense 456 1,427 2,220 |
Total Assets of Continuing Operations | Successor Predecessor July 31, 2023 July 31, 2022 (In thousands) Total assets: Supply Chain $ 146,614 $ 101,637 Corporate 264,567 36,112 Total assets $ 411,181 $ 137,749 |
Summarized Financial Information of Net Revenue from External Customers by Group of Services | Summarized financial information of the Company's net revenue by geographic location is as follows: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Mainland China $ 14,649 $ 48,049 $ 72,210 United States 8,800 38,262 50,426 Netherlands 5,774 15,149 24,483 Singapore 4,448 14,940 19,903 Czech 3,336 19,497 16,342 Other 3,797 12,386 19,908 Total consolidated net revenue $ 40,804 $ 148,283 $ 203,272 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Jul. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule Of Management Service Agreement Expense | Total expenses incurred related to the management services agreement for the Successor and Predecessor periods are below and are recorded within the consolidated statements of operations to Selling, general and administrative expense: Successor Predecessor May 1 to July 31, August 1, 2022 to April 30, Fiscal Year Ended July 31, 2023 2023 2022 (In thousands) Management services agreement expenses $ 617 $ 1,736 $ 3,008 |
NATURE OF OPERATIONS - (Detail)
NATURE OF OPERATIONS - (Detail) - USD ($) | 12 Months Ended | |||||
Feb. 25, 2022 | Jul. 31, 2023 | Jun. 06, 2023 | May 01, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Proceeds from divestiture of businesses | $ 0 | |||||
SPLP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Investments | $ 202,733,000 | |||||
Steel Partners Group | Steel Connect, Inc. | SPHG Holdings | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity method investment, ownership percentage | 84% | |||||
Series E Preferred Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, convertible, shares issuable (in shares) | 19,800,000 | |||||
Aerojet Share | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 53,300,000 | |||||
Aerojet common stock proceeds receivable | 154,500,000 | $ 0 | ||||
Proceeds from exchange transaction | $ 207,800,000 | |||||
Exchange Transaction Agreement | Steel Partners Group | Series E Preferred Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, shares issued (in shares) | 3,500,000 | 3,500,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 06, 2023 shares | Jul. 31, 2023 USD ($) $ / shares shares | Jul. 31, 2023 $ / shares shares | Jul. 31, 2022 $ / shares shares | Jun. 21, 2023 $ / shares shares | |
Significant Of Accounting Policies [Line Items] | |||||
Stock issued during period, value, reverse stock splits | $ | $ (2,288) | ||||
Preferred stock, shares authorized (in shares) | shares | 4,965,000 | 4,965,000 | 4,965,000 | 3,535,000 | |
Preferred stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |
Highly liquid investment period to be considered cash equivalent | 3 months | ||||
Operating leases | 5.20% | 5.20% | 3.90% | ||
Finance leases | 3.90% | ||||
Common Stock | |||||
Significant Of Accounting Policies [Line Items] | |||||
Reverse stock split, conversion ratio | 0.00029 | ||||
Stockholders' equity note, forward stock split, conversion ratio | 375 | ||||
Stockholders' equity note, reverse stock split, shares owned threshold | shares | 3,500 | ||||
Additional Paid-in Capital | |||||
Significant Of Accounting Policies [Line Items] | |||||
Stock issued during period, value, reverse stock splits | $ | $ (2,288) | ||||
Ten Largest Clients | Sales Revenue, Net | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 83% | 78% | |||
Minimum | |||||
Significant Of Accounting Policies [Line Items] | |||||
Highly liquid investment period to be considered short term investments | 3 months | ||||
Maximum | |||||
Significant Of Accounting Policies [Line Items] | |||||
Highly liquid investment period to be considered short term investments | 12 months | ||||
Supply Chain | Net Accounts Receivable | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 10% | 10% | |||
Supply Chain | One Customer | Sales Revenue, Net | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 41% | 31% | |||
Supply Chain | Two Customer | Sales Revenue, Net | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 13% | 12% | |||
Supply Chain | Client One | Net Accounts Receivable | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 28% | 31% | |||
Supply Chain | Client Two | Net Accounts Receivable | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 14% | 18% | |||
Supply Chain | Client Three | Net Accounts Receivable | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 12% | 17% | |||
Supply Chain | Client Four | Net Accounts Receivable | Customer Concentration Risk | |||||
Significant Of Accounting Policies [Line Items] | |||||
Concentration risk percentage | 10% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of period | $ 1,180 | $ 44 | $ 49 |
Application of pushdown accounting(a) | (1,180) | ||
Provisions charged to expense | 219 | 1,136 | 0 |
Accounts written off | 0 | 0 | |
Recovered | 0 | 0 | (5) |
Balance at end of period | $ 219 | $ 1,180 | $ 44 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Accounting Policies [Abstract] | ||
Cash and bank deposits | $ 90,282 | $ 21,386 |
Money market funds | 31,090 | 31,756 |
Cash and cash equivalents | $ 121,372 | $ 53,142 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property Plant and Equipment (Detail) | Jul. 31, 2023 |
Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Computer hardware | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Other | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
EXCHANGE TRANSACTION - Narrativ
EXCHANGE TRANSACTION - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 01, 2023 | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | Jun. 06, 2023 | |
Related Party Transaction [Line Items] | ||||||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||
Equity ownership, excluding consolidated entity and equity method investee, percentage | 84% | |||||
Ownership percentage, noncontrolling interest, threshold percentage | 16% | |||||
Ownership percentage, prior approval of equity securities, threshold percentage | 49.60% | |||||
Other gains, net | $ 5,242,000 | $ 4,471,000 | $ 782,000 | |||
SPLP | ||||||
Related Party Transaction [Line Items] | ||||||
Measurement period adjustments, operating lease, right-of-use asset | $ 350,000 | |||||
Deferred debt issuance cost, writeoff | 43,400 | |||||
Measurement period adjustments, convertible notes payable | 1,420,000 | |||||
Measurement period adjustments, other liabilities, current | (9,435,000) | |||||
Measurement period adjustments, other liabilities, noncurrent | 242,000 | |||||
Deferred income tax liabilities, net | 800,000 | |||||
Measurement period adjustments, non-current pension liability | (500,000) | |||||
Investments | $ 202,733,000 | |||||
Aerojet Share | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from exchange transaction | $ 207,800,000 | |||||
Other gains, net | 5,100,000 | |||||
Aerojet common stock proceeds receivable | $ 154,500,000 | $ 154,500,000 | $ 0 | |||
Series E Preferred Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Preferred stock, convertible, shares issuable (in shares) | 19,800,000 | |||||
Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock, par value (in usd per share) | $ 0.01 | |||||
Exchange Transaction Agreement | Steel Partners | Aerojet Share | Exchanging Parties | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock, shares exchanged (in shares) | 3,600,000 | |||||
Common stock, par value (in usd per share) | $ 0.10 | |||||
Exchange Transaction Agreement | Steel Partners | Series E Preferred Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Preferred stock, shares issued (in shares) | 3,500,000 |
EXCHANGE TRANSACTION - Schedule
EXCHANGE TRANSACTION - Schedule of Exchange Transaction Consideration (Details) - SPLP $ in Thousands | May 01, 2023 USD ($) |
Related Party Transaction [Line Items] | |
Less: cash acquired from Steel Connect | $ (65,896) |
Total estimated consideration, less cash acquired | 248,653 |
Aerojet Share | |
Related Party Transaction [Line Items] | |
Business combination, consideration transferred, equity interests issued and issuable | 202,733 |
Common Stock | |
Related Party Transaction [Line Items] | |
Business combination, consideration transferred, equity interests issued and issuable | $ 111,816 |
EXCHANGE TRANSACTION - Summary
EXCHANGE TRANSACTION - Summary of Preliminary Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | May 01, 2023 | Apr. 30, 2023 | Jul. 31, 2022 |
Related Party Transaction [Line Items] | ||||
Goodwill | $ 22,785 | $ 0 | ||
SPLP | ||||
Related Party Transaction [Line Items] | ||||
Accounts receivable, trade | $ 36,900 | |||
Inventories, net | 6,900 | |||
Prepaid expenses and other current assets | 4,957 | |||
Other intangible assets | 35,500 | |||
Other assets | 3,900 | |||
Property and equipment, net | 3,400 | |||
Operating lease right-of-use assets | 29,250 | |||
Investments | 202,733 | |||
Estimated fair value of total assets acquired by Steel Holdings | 323,540 | |||
Accounts payable | 26,300 | |||
Accrued expenses | 29,100 | |||
Current lease obligations | 7,994 | |||
Other current liabilities | 7,236 | |||
Long-term lease obligations | 21,300 | |||
Other long-term liabilities | 5,742 | |||
Estimated fair value of total liabilities assumed by Steel Holdings | 97,672 | |||
Fair value of identifiable net assets | 225,868 | |||
Goodwill | $ 22,785 | $ 0 |
EXCHANGE TRANSACTION - Summar_2
EXCHANGE TRANSACTION - Summary of Pushdown Accounting (Details) - USD ($) $ in Thousands | May 01, 2023 | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 |
Related Party Transaction [Line Items] | ||||
Goodwill | $ 22,785 | $ 0 | ||
SPLP | ||||
Related Party Transaction [Line Items] | ||||
Goodwill | $ 22,785 | $ 0 | ||
Measurement period adjustments, goodwill | 22,785 | |||
Other intangible assets | 35,500 | 0 | ||
Measurement period adjustments, other intangible assets | 35,500 | |||
Operating lease right-of-use assets | 29,250 | 28,900 | ||
Measurement period adjustments, operating lease, right-of-use asset | 350 | |||
Prepaid and other current assets | 4,957 | 5,000 | ||
Measurement period adjustments, prepaid and other current assets | (43) | |||
Convertible note payable | (13,006) | (11,586) | ||
Measurement period adjustments, convertible notes payable | (1,420) | |||
Other current liabilities | (7,236) | (16,671) | ||
Measurement period adjustments, other liabilities, current | 9,435 | |||
Other long-term liabilities | (5,742) | $ (5,500) | ||
Measurement period adjustments, other liabilities, noncurrent | $ (242) |
EXCHANGE TRANSACTION - Finite-L
EXCHANGE TRANSACTION - Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Exchange Transaction (Details) - SPLP $ in Thousands | May 01, 2023 USD ($) |
Related Party Transaction [Line Items] | |
Estimated fair value of identifiable intangible assets | $ 35,500 |
Trade name | |
Related Party Transaction [Line Items] | |
Trade name | 10,500 |
Customer relationships | |
Related Party Transaction [Line Items] | |
Other intangible assets | $ 25,000 |
Acquired finite-lived intangible assets, weighted average useful life | 7 years |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) | Feb. 25, 2022 USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |
Proceeds from divestiture of businesses | $ 0 |
Disposal groups, including discontinued operations, notes receivable from divestiture of business | 6,900,000 |
Disposal group, including discontinued operation, accounts, notes and loans receivable, net | $ 0 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of Disposal Groups, Including Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net loss from discontinued operations | $ 0 | $ 0 | $ (1,712) |
Amortization expense | 9,300 | ||
Discontinued Operations, Disposed of by Sale | IWCO Direct Holdings, Inc. | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net revenue | 165,542 | ||
Cost of revenue | 156,697 | ||
Gross profit | 8,845 | ||
Selling, general and administrative | 30,744 | ||
Amortization of intangible assets | 9,303 | ||
Total operating expenses | 40,047 | ||
Operating loss | (31,202) | ||
Gain upon deconsolidation of IWCO Direct | 35,457 | ||
Interest expense | (16,111) | ||
Total other income (expense), net | 19,346 | ||
Loss from discontinued operations before income taxes | (11,856) | ||
Income tax benefit | 10,144 | ||
Net loss from discontinued operations | $ (1,712) |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Schedule of Prepaid Expense and Other Current Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Class of Stock [Line Items] | ||
Prepaid expenses | $ 2,217 | $ 2,085 |
Other current assets | 1,969 | 1,466 |
Prepaid expenses and other current assets | 158,686 | 3,551 |
Aerojet Share | ||
Class of Stock [Line Items] | ||
Aerojet common stock proceeds receivable | $ 154,500 | $ 0 |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Additional Information (Details) - USD ($) $ in Thousands | Jul. 30, 2023 | Jul. 31, 2023 | May 01, 2023 | Jul. 31, 2022 |
Class of Stock [Line Items] | ||||
Common stock, disposal amount | $ 207,800 | |||
SPLP | ||||
Class of Stock [Line Items] | ||||
Investments | $ 202,733 | |||
Aerojet Share | ||||
Class of Stock [Line Items] | ||||
Aerojet common stock proceeds receivable | $ 154,500 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,805 | $ 7,330 |
Work-in-process | 239 | 124 |
Finished goods | 3,525 | 697 |
Inventory, net | $ 8,569 | $ 8,151 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Schedule of Goodwill (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | May 01, 2023 | Apr. 30, 2023 | Jul. 31, 2022 |
Goodwill [Line Items] | ||||
Goodwill | $ 22,785 | $ 0 | ||
Supply Chain | ||||
Goodwill [Line Items] | ||||
Goodwill | 22,785 | |||
Gross goodwill | 22,785 | |||
Accumulated impairments | $ 0 | |||
SPLP | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 22,785 | $ 0 | ||
SPLP | Supply Chain | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 22,785 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Schedule of Indefinite-Lived Intangible Assets (Details) $ in Thousands | Jul. 31, 2023 USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, gross (excluding goodwill) | $ 35,500 |
Accumulated Amortization | 911 |
Total | 34,589 |
Trade name | |
Finite-Lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets (excluding goodwill) | 10,500 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, gross | 25,000 |
Accumulated Amortization | 911 |
Net | $ 24,089 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization | $ 911 | $ 0 | $ 0 |
Amortization of intangible assets | $ 911 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Schedule of Estimated Future Amortization Expense of Intangible Assets (Detail) $ in Thousands | Jul. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 3,555 |
2025 | 3,571 |
2026 | 3,571 |
2027 | 3,571 |
2028 | 3,571 |
Thereafter | $ 6,250 |
PROPERTY AND EQUIPMENT - At Cos
PROPERTY AND EQUIPMENT - At Cost (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 4,154 | $ 64,579 |
Less: accumulated depreciation and amortization | (456) | (61,045) |
Property and equipment, net | 3,698 | 3,534 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 1,388 | 12,632 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 606 | 9,994 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 1,133 | 34,161 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 400 | 5,317 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 627 | $ 2,475 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 6,891 | $ 5,099 |
Accrued audit, tax and legal | 5,696 | 4,564 |
Accrued taxes | 2,811 | 3,344 |
Accrued price concessions | 2,981 | 4,549 |
Accrued occupancy costs | 1,412 | 1,671 |
Accrued IT costs | 831 | 1,108 |
Accrued other | 6,152 | 8,061 |
Total accrued expenses | $ 26,774 | $ 28,396 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 | Aug. 01, 2021 |
Payables and Accruals [Abstract] | |||
Accrued pricing liabilities | $ 0 | $ 9,435 | |
Deferred revenue - current | 2,574 | 2,705 | $ 2,212 |
Other | 1,970 | 1,342 | |
Total other current liabilities | $ 4,544 | $ 13,482 |
ACCRUED EXPENSES AND OTHER CU_5
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued pricing liabilities | $ 0 | $ 9,435 |
DEBT - Summary of the Component
DEBT - Summary of the Components of Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 | Feb. 28, 2019 |
Debt Instrument [Line Items] | |||
Less: unamortized discounts and issuance costs(a)(b) | $ 0 | $ (3,972) | |
Total debt, net | 12,461 | 10,968 | |
Debt issuance costs, net | 79 | ||
Umpqua Revolver | |||
Debt Instrument [Line Items] | |||
Long-term line of credit | 0 | 0 | |
7.50% Convertible Senior Note due September 1, 2024 | |||
Debt Instrument [Line Items] | |||
Principal amount of long term debt | 12,461 | 14,940 | |
7.50% Convertible Senior Note due September 1, 2024 | SPHG Holdings | |||
Debt Instrument [Line Items] | |||
Total debt, net | $ 12,500 | $ 11,047 | |
Debt instrument stated percentage | 7.50% |
DEBT - Additional Information (
DEBT - Additional Information (Details) | 12 Months Ended | ||||||
Mar. 09, 2023 USD ($) | Feb. 28, 2019 USD ($) $ / shares | Jul. 31, 2023 USD ($) | Jul. 31, 2022 USD ($) | May 01, 2023 USD ($) | Mar. 13, 2023 USD ($) | Mar. 16, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||
Issuance of nonvested common stock, value | $ 700,000 | $ 700,000 | |||||
Application of pushdown accounting | $ 13,000,000 | ||||||
Convertible Senior Note | 12,461,000 | 11,047,000 | |||||
Total debt, net | 12,461,000 | 10,968,000 | |||||
Umpqua Revolver | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum credit commitment | $ 12,500,000 | ||||||
Line of credit facility, sublimit borrowing capacity | 5,000,000 | ||||||
Unamortized debt issuance expense | $ 43,400 | ||||||
Revolving credit facility | 600,000 | ||||||
MidCap Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, termination amount | $ 12,500,000 | ||||||
Credit facility, readily available borrowing capacity | 11,900,000 | ||||||
SPHG Holdings | |||||||
Debt Instrument [Line Items] | |||||||
Issuance of nonvested common stock, value | $ 1,000 | ||||||
Conversion ratio (shares) | 0.451356 | ||||||
Initial conversion price (in usd per share) | $ / shares | $ 22.16 | ||||||
7.50% Convertible Senior Note due September 1, 2024 | SPHG Holdings | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument stated percentage | 7.50% | ||||||
Principal amount of note | 12,900,000 | 14,940,000 | |||||
Debt instrument, repaid, principal | $ 1,000,000 | ||||||
Debt instrument, periodic payment, principal | 1,000,000 | ||||||
Long-term debt, cash amendment fee amount | 100,000 | ||||||
Long-term debt, derecognized debt discount amount | $ 200,000 | ||||||
Total debt, net | $ 12,500,000 | $ 11,047,000 | |||||
Debt instrument, interest rate, effective percentage | 23% | 27.80% |
DEBT - Net Carrying Value of th
DEBT - Net Carrying Value of the Notes (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt, net | $ 12,461 | $ 10,968 |
SPHG Holdings | 7.50% Convertible Senior Note due September 1, 2024 | ||
Debt Instrument [Line Items] | ||
Carrying amount of equity component | 8,200 | |
Principal amount of note | 12,900 | 14,940 |
Unamortized debt discount | (3,893) | |
Total debt, net | $ 12,500 | $ 11,047 |
DEBT - Summary of Interest Expe
DEBT - Summary of Interest Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2023 | Apr. 30, 2022 | Jul. 31, 2023 | Jul. 31, 2022 | |
Interest Expense, Debt [Line Items] | ||||
Debt instrument, interest expense | $ 265 | $ 2,588 | $ 3,120 | |
Umpqua Revolver | ||||
Interest Expense, Debt [Line Items] | ||||
Debt instrument, interest expense | 0 | 36 | 212 | |
Other | ||||
Interest Expense, Debt [Line Items] | ||||
Debt instrument, interest expense | 4 | 20 | 68 | |
7.50% Convertible Senior Note due September 1, 2024 | SPHG Holdings | ||||
Interest Expense, Debt [Line Items] | ||||
Debt instrument, interest expense | $ 2,500 | 300 | 2,800 | |
7.50% Convertible Senior Note due September 1, 2024 | SPHG Holdings | Interest expense related to contractual interest coupon on the SPHG Note | ||||
Interest Expense, Debt [Line Items] | ||||
Debt instrument, interest expense | 261 | 844 | 1,136 | |
7.50% Convertible Senior Note due September 1, 2024 | SPHG Holdings | Interest expense related to accretion of the discount on the SPHG Note | ||||
Interest Expense, Debt [Line Items] | ||||
Debt instrument, interest expense | $ 0 | $ 1,688 | $ 1,704 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 12 Months Ended |
Jul. 31, 2023 | |
Leases [Abstract] | |
Remaining lease term | 6 years |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Lease, Cost [Abstract] | |||
Operating lease cost | $ 2,565 | $ 7,538 | $ 9,973 |
Short-term lease expense | 444 | 1,269 | 1,488 |
Sublease income | (171) | (786) | (748) |
Variable lease cost | 0 | 7 | 24 |
Interest on finance lease liabilities | 0 | 0 | 3 |
Total lease cost | $ 2,838 | $ 8,028 | $ 10,740 |
LEASES - Lease Commitments (Det
LEASES - Lease Commitments (Details) $ in Thousands | Jul. 31, 2023 USD ($) |
Operating Leases | |
2024 | $ 9,256 |
2025 | 8,054 |
2026 | 5,630 |
2027 | 4,298 |
2028 | 2,088 |
Thereafter | 544 |
Total lease payments | 29,870 |
Less: imputed interest | 2,736 |
Present value of lease payments | $ 27,134 |
Operating lease, liability, current, statement of financial position | Current lease obligations |
Less: current lease obligations | $ 7,973 |
Operating lease, liability, noncurrent, statement of financial position | Long-term lease obligations |
Long-term lease obligations | $ 19,161 |
LEASES - Lease Information (Det
LEASES - Lease Information (Details) | Jul. 31, 2023 | Jul. 31, 2022 |
Weighted average remaining lease term: | ||
Operating leases | 3 years 8 months 12 days | |
Weighted average discount rate: | ||
Operating leases | 5.20% | 3.90% |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Cash Flow, Lessee [Abstract] | ||||
Operating cash flows from operating leases | $ 2,494 | $ 7,224 | $ 9,653 | |
Operating cash flows from finance leases | 0 | 0 | 3 | |
Financing cash flows from finance leases | $ 0 | $ 38 | $ 38 | $ 73 |
RESTRUCTURING ACTIVITIES - Narr
RESTRUCTURING ACTIVITIES - Narrative (Details) - IWCO Direct's Competitive Improvement Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | Jan. 31, 2022 | Apr. 30, 2023 | Jul. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | $ (62) | $ 100 | $ 97 | $ 1,513 | ||
Change in estimates | $ (100) | |||||
Supply Chain | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | $ 600 | $ 900 |
RESTRUCTURING ACTIVITIES - Sche
RESTRUCTURING ACTIVITIES - Schedule of Restructuring Charges by Type (Details) - IWCO Direct's Competitive Improvement Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2023 | Apr. 30, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Costs incurred | $ (62) | $ 100 | $ 97 | $ 1,513 |
Cost of revenue | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Costs incurred | (62) | 97 | 1,200 | |
Selling, general and administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Costs incurred | $ 0 | $ 0 | $ 313 |
RESTRUCTURING ACTIVITIES - Rest
RESTRUCTURING ACTIVITIES - Restructuring Liability Rollforward (Details) - IWCO Direct's Competitive Improvement Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2023 | Apr. 30, 2023 | Apr. 30, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Restructuring Reserve [Roll Forward] | |||||
Costs incurred | $ (62) | $ 100 | $ 97 | $ 1,513 | |
Change in estimates | 100 | ||||
IWCO Direct Holdings, Inc. | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | $ 892 | $ 892 | |||
Costs incurred | 35 | ||||
Cash payments | (925) | ||||
Change in estimates | (2) | ||||
Ending balance | $ 0 | $ 0 | $ 892 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Aug. 18, 2022 | Feb. 18, 2022 | Aug. 13, 2021 | Dec. 15, 2017 | Jul. 31, 2023 | |
Restricted Stock | |||||
Commitments and Contingencies [Line Items] | |||||
Number of shares surrendered | 0 | ||||
Reith v. Lichtenstein | |||||
Commitments and Contingencies [Line Items] | |||||
Cash paid to plaintiff | $ 2,750,000 | ||||
Legal fees | $ 1,600,000 | $ 2,050,000 | |||
Litigation settlement, amount awarded from other party | 3,000,000 | ||||
Litigation settlement, expense | 125,000 | ||||
Litigation settlement, distribution amount | $ 1 | ||||
Reith v. Lichtenstein | Director | Restricted Stock | |||||
Commitments and Contingencies [Line Items] | |||||
Number of shares surrendered | 3,300,000 | ||||
Reith v. Lichtenstein | Director | Restricted Stock | Warren Lichtenstein | |||||
Commitments and Contingencies [Line Items] | |||||
Number of vested shares surrendered | 1,833,333 | ||||
Number of nonvested shares surrendered | 300,000 | ||||
Reith v. Lichtenstein | Director | Restricted Stock | Jack Howard | |||||
Commitments and Contingencies [Line Items] | |||||
Number of vested shares surrendered | 916,667 | ||||
Number of nonvested shares surrendered | 150,000 | ||||
Reith v. Lichtenstein | Director | Restricted Stock | William Fejes | |||||
Commitments and Contingencies [Line Items] | |||||
Number of vested shares surrendered | 100,000 | ||||
Series C Convertible Preferred Stock | Purchase Agreement | SPHG Holdings | |||||
Commitments and Contingencies [Line Items] | |||||
Proceeds from issuance of preferred stock | $ 35,000,000 |
DEFINED BENEFIT PENSION PLANS -
DEFINED BENEFIT PENSION PLANS - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2023 USD ($) pension_plan | Jul. 31, 2024 USD ($) | Jul. 31, 2023 USD ($) pension_plan | Jul. 31, 2022 USD ($) | Jul. 31, 2020 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Pre-tax curtailment gain | $ 2,400,000 | ||||
Adjustment related to unconditional indexation of benefits | $ 1,077,000 | $ 0 | |||
Adjustment related to offset of goodwill | $ (500,000) | ||||
Adjustment related to accumulated other comprehensive income | $ (36,200) | ||||
Cumulative gains and losses in excess of the greater of the pension benefit obligation | 10% | ||||
Scenario, Forecast | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Minimum required contributions to the plans | $ 600,000 | ||||
Netherlands | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Number of pension plans | pension_plan | 2 | 2 | |||
Unfunded Defined Benefit Pension Plans | Japan | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Number of pension plans | pension_plan | 1 | 1 |
DEFINED BENEFIT PENSION PLANS_2
DEFINED BENEFIT PENSION PLANS - Schedule of Defined Benefit Plan Assets Fair Value Measurements (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 | Jul. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 15,314 | $ 17,976 | $ 29,223 |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 15,314 | $ 17,976 | |
Asset Allocations | 100% | 100% | |
Fair Value, Measurements, Recurring | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 0 | $ 0 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 15,314 | 17,976 | |
Fair Value, Measurements, Recurring | Insurance contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 14,926 | $ 17,560 | |
Asset Allocations | 97% | 98% | |
Fair Value, Measurements, Recurring | Insurance contract | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 0 | $ 0 | |
Fair Value, Measurements, Recurring | Insurance contract | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Insurance contract | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 14,926 | 17,560 | |
Fair Value, Measurements, Recurring | Other investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 388 | $ 416 | |
Asset Allocations | 3% | 2% | |
Fair Value, Measurements, Recurring | Other investments | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 0 | $ 0 | |
Fair Value, Measurements, Recurring | Other investments | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | 0 | 0 | |
Fair Value, Measurements, Recurring | Other investments | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, fair value of plan assets | $ 388 | $ 416 |
DEFINED BENEFIT PENSION PLANS_3
DEFINED BENEFIT PENSION PLANS - Aggregate Change in Benefit Obligation and Plan Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Change in benefit obligation | ||
Benefit obligation at beginning of year | $ 21,103 | $ 33,584 |
Adjustment related to unconditional indexation of benefits | 1,077 | 0 |
Service cost | 10 | 11 |
Interest cost | 679 | 462 |
Actuarial gain | (4,885) | (8,674) |
Benefits and administrative expenses paid | (275) | (227) |
Settlements | (109) | 0 |
Currency translation | 1,519 | (4,053) |
Benefit obligation at end of year | 19,119 | 21,103 |
Change in plan assets | ||
Fair value of plan assets at beginning of year | 17,976 | 29,223 |
Actual return on plan assets | (3,759) | (7,544) |
Employer contributions, net | 225 | 5 |
Settlements | (108) | 0 |
Benefits and administrative expenses paid | (275) | (227) |
Currency translation | 1,255 | (3,481) |
Fair value of plan assets at end of year | 15,314 | 17,976 |
Funded status | ||
Current liabilities | (9) | (11) |
Noncurrent liabilities | (3,796) | (3,116) |
Net amounts recognized on the consolidated balance sheets | $ (3,805) | $ (3,127) |
DEFINED BENEFIT PENSION PLANS_4
DEFINED BENEFIT PENSION PLANS - Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 19,119 | $ 21,103 |
Accumulated benefit obligation | 19,119 | 21,103 |
Fair value of plan assets | $ 15,314 | $ 17,976 |
DEFINED BENEFIT PENSION PLANS_5
DEFINED BENEFIT PENSION PLANS - Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Service cost | $ 10 | $ 11 |
Interest costs | 679 | 462 |
Expected return on plan assets | (574) | (407) |
Amortization of net actuarial loss | 9 | 4 |
Net periodic pension costs | $ 124 | $ 70 |
Defined benefit plan, net periodic benefit cost (credit), interest cost, statement of income or comprehensive income | Selling, general and administrative | Selling, general and administrative |
Defined benefit plan, net periodic benefit cost (credit) excluding service cost, statement of income or comprehensive income | Selling, general and administrative | Selling, general and administrative |
Defined benefit plan, net periodic benefit (cost) credit, amortization of gain (loss), statement of income or comprehensive income | Selling, general and administrative | Selling, general and administrative |
DEFINED BENEFIT PENSION PLANS_6
DEFINED BENEFIT PENSION PLANS - Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) | Jul. 31, 2023 | Jul. 31, 2022 |
Retirement Benefits [Abstract] | ||
Discount rate | 4.21% | 2.96% |
Rate of compensation increase | 0% | 0% |
DEFINED BENEFIT PENSION PLANS_7
DEFINED BENEFIT PENSION PLANS - Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost (Detail) | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Discount rate | 3.91% | 2.58% |
Expected long-term rate of return on plan assets | 3.88% | 2.51% |
Rate of compensation increase | 0% | 0% |
DEFINED BENEFIT PENSION PLANS_8
DEFINED BENEFIT PENSION PLANS - Summary of Expected Benefit Payments from Plans (Detail) $ in Thousands | Jul. 31, 2023 USD ($) |
Retirement Benefits [Abstract] | |
2024 | $ 340 |
2025 | 372 |
2026 | 463 |
2027 | 444 |
2028 | 509 |
Thereafter | $ 3,451 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 40,804 | $ 148,283 | $ 203,272 |
Supply chain management services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 40,467 | 147,185 | 201,344 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 337 | 1,098 | 1,928 |
Services transferred over time | Transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 40,804 | $ 148,283 | $ 203,272 |
REVENUE RECOGNITION REVENUE REC
REVENUE RECOGNITION REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2021 |
Disaggregation of Revenue [Line Items] | |||||
Contract assets | $ 439 | $ 369 | $ 627 | ||
Deferred revenue - current | 2,574 | 2,705 | 2,212 | ||
Deferred revenue - long-term | 144 | 134 | 108 | ||
Total deferred revenue | 2,718 | $ 3,073 | 2,839 | 2,320 | $ 2,320 |
Trade Accounts Receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
Accounts receivable, trade, net | $ 28,616 | $ 40,083 | $ 36,547 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Changes in Deferred Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Change in Deferred Revenue | |||
Balance at beginning of period | $ 3,073 | $ 2,839 | $ 2,320 |
Deferral of revenue | 245 | 1,595 | 2,368 |
Recognition of deferred amounts upon satisfaction of performance obligation | (600) | (1,361) | (1,849) |
Balance at end of period | $ 2,718 | $ 3,073 | $ 2,839 |
REVENUE RECOGNITION - Performan
REVENUE RECOGNITION - Performance Obligations (Details) $ in Millions | Jul. 31, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-08-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unearned revenue | $ 2.6 |
Unearned revenue, timing of satisfaction | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-08-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unearned revenue | $ 0.1 |
Unearned revenue, timing of satisfaction |
OTHER GAINS, NET - Components o
OTHER GAINS, NET - Components of Other Gains, Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Other Income and Expenses [Abstract] | |||
Foreign currency exchange gains (losses), net | $ 446 | $ (510) | $ 2,389 |
Derecognition of accrued pricing liabilities | 0 | 0 | 860 |
Other gains, net | 5,242 | 4,471 | 782 |
Other gains (losses), net | $ 5,688 | $ 3,961 | $ 4,031 |
OTHER GAINS, NET- Additional In
OTHER GAINS, NET- Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other gains, net | $ 5,242 | $ 4,471 | $ 782 |
Proceeds Received from Sale of Investment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other gains, net | 1,900 | ||
Settlement with Client | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other gains, net | 1,400 | ||
Interest Income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other gains, net | $ 900 | ||
Aerojet Share | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other gains, net | $ 5,100 |
SHARE-BASED PAYMENTS - Addition
SHARE-BASED PAYMENTS - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 15, 2017 | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | Jul. 31, 2020 | Jul. 23, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 6,250,493 | 6,250,493 | 6,485,309 | ||||
Grant date fair value of nonvested stock | $ 0.8 | $ 0.8 | $ 0.6 | ||||
Unrecognized compensation cost related to nonvested stock | 0.3 | $ 0.3 | |||||
Selling, general and administrative | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 0.2 | $ 0.5 | $ 0.7 | ||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock shares available for future issuance (in shares) | 8,284 | 8,284 | |||||
Number of shares pursuant to stock options granted (in shares) | 64,286 | ||||||
Common stock purchase price as a percentage of market value (in percentage) | 85% | ||||||
Shares issued under plan (in shares) | 53 | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non vested stock compensation expense | $ 0.8 | $ 0.7 | |||||
Weighted average period of cost expected to be expensed (in years) | 8 months 12 days | ||||||
Restricted Stock | Nonemployee Director | Reith v. Lichtenstein | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of vested shares surrendered | 2,900,000 | ||||||
Number of nonvested shares surrendered | 500,000 | ||||||
Minimum | Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of restriction period (in years) | 1 year | ||||||
Maximum | Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of restriction period (in years) | 5 years | ||||||
2020 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for grant | 529,821 | ||||||
Common stock shares available for future issuance (in shares) | 808,285 | 808,285 | |||||
2010 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock shares available for future issuance (in shares) | 393,015 | ||||||
Common stock, shares outstanding (in shares) | 113,627 | ||||||
2010 Plan | Restricted Stock and Market Performance Based Restricted Stock, Total | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock award granted (in shares) | 5,500,000 | ||||||
2010 Plan | Restricted Stock | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock award granted (in shares) | 4,000,000 | ||||||
Restricted stock award vested (in shares) | 4,000,000 | ||||||
2010 Plan | Market Performance Based Restricted Stock | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock award granted (in shares) | 1,500,000 | ||||||
Restricted stock award vested (in shares) | 1,000,000 |
SHARE-BASED PAYMENTS - Summary
SHARE-BASED PAYMENTS - Summary of Activity of Nonvested Stock (Detail) - Restricted Stock shares in Thousands | 12 Months Ended |
Jul. 31, 2023 $ / shares shares | |
Number of Shares | |
Nonvested stock outstanding, beginning balance (in shares) | shares | 51 |
Granted (in shares) | shares | 64 |
Vested (in shares) | shares | (61) |
Forfeited (in shares) | shares | 0 |
Nonvested stock outstanding, ending balance (in shares) | shares | 54 |
Weighted-Average Grant Date Fair Value | |
Nonvested stock outstanding, beginning balance (in usd per shares) | $ / shares | $ 13.95 |
Granted (in usd per shares) | $ / shares | 10.97 |
Vested (in usd per shares) | $ / shares | 13.32 |
Forfeited (in usd per shares) | $ / shares | 0 |
Nonvested stock outstanding, ending balance (in usd per shares) | $ / shares | $ 10.97 |
INCOME TAXES - Components of Lo
INCOME TAXES - Components of Loss from Continuing Operations before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 9,866 | $ 2,021 | $ (5,189) |
Foreign | (2,115) | 7,069 | 7,321 |
Income from continuing operations before income taxes | $ 7,751 | $ 9,090 | $ 2,132 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense from Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Current (benefit) provision: | |||
Federal | $ 72 | $ 487 | $ 0 |
State | (110) | 48 | 429 |
Foreign | (110) | 1,095 | 1,918 |
Current provision | (148) | 1,630 | 2,347 |
Deferred (benefit) provision: | |||
Federal | 0 | 0 | 8,849 |
State | 0 | 0 | 76 |
Foreign | (250) | 0 | 116 |
Deferred provision | (250) | ||
Deferred provision | (250) | 0 | 9,041 |
Total tax (benefit) provision | $ (398) | $ 1,630 | $ 11,388 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Income Taxes [Line Items] | ||
Net deferred tax assets | $ 11,815 | $ 3,184 |
Deferred tax liability | 489 | |
Change in valuation allowance | $ (390,700) | 24,600 |
Ownership percentage | 5% | |
Stockholder owning ownership on corporation's securities rolling period | 3 years | |
Operating loss carryforwards, valuation allowance | $ 4,000 | |
Unrecognized tax benefits, including interest, related to federal, state and foreign taxes | 400 | 800 |
Expected any unrecognized tax benefits to reverse in the next twelve months | 300 | |
Federal | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 369,900 | |
Federal | Expiration Period July 31, 2023 | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 1,700,000 | |
Federal | Expiration Period From July 31,2023 Through July 31, 2038 | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 273,300 | |
Federal | Indefinite Carryforward Period | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 96,600 | |
State | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 138,800 | |
Foreign | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 69,800 | |
Foreign net operating loss carryforward with indefinite period | 67,200 | |
Other Assets | ||
Income Taxes [Line Items] | ||
Net deferred tax assets | 300 | 100 |
Other Long -term Liabilities | ||
Income Taxes [Line Items] | ||
Deferred tax liability | $ 800 | $ 100 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Deferred tax assets: | ||
Accruals and reserves | $ 2,645 | $ 4,295 |
Tax basis in excess of financial basis for intangible and fixed assets | 175 | 901 |
Lease liability | 3,574 | 2,288 |
Interest expense disallowance | 0 | 2,357 |
Credit carry forwards | 25 | 25 |
Net operating loss and capital loss carry forwards | 95,832 | 474,496 |
Total gross deferred tax assets | 102,251 | 484,362 |
Less: valuation allowance | (90,436) | (481,178) |
Net deferred tax assets | 11,815 | 3,184 |
Deferred tax liabilities: | ||
Financial basis in excess of tax basis for intangible and fixed assets | (8,446) | (69) |
Right of use asset | (3,454) | (2,154) |
Convertible debt | (404) | (917) |
Total gross deferred tax liabilities | (12,304) | (3,140) |
Net deferred tax liabilities | $ (489) | |
Net deferred tax assets | $ 44 |
INCOME TAXES - Difference of In
INCOME TAXES - Difference of Income Tax Expense Attributable to Income from Continuing Operations and Expense Computed using U.S. Federal Income Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Computed "expected" income tax expense (benefit) | $ 1,627 | $ 1,909 | $ 448 |
Increase (decrease) in income tax expense resulting from: | |||
Change in valuation allowance | (350,469) | (424) | 21,703 |
Foreign tax rate differential | (255) | (50) | 56 |
Nondeductible expenses | 459 | 0 | 159 |
Foreign withholding taxes | 245 | 147 | 134 |
Foreign other adjustments | (246) | 0 | 951 |
Tax basis in excess of financial basis for intangible and fixed assets | 1,141 | 0 | 4,775 |
Addition of uncertain tax position reserves | (430) | 11 | 58 |
Worthless stock deduction | 0 | 0 | (16,860) |
State income taxes, net of federal benefit | (1,916) | 37 | (603) |
Expiration of net operating loss | 347,462 | 0 | 0 |
Deferred true-up | 1,786 | 0 | 751 |
Other | 198 | 0 | (184) |
Total tax (benefit) provision | $ (398) | $ 1,630 | $ 11,388 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance as of beginning of year | $ 571 | $ 2,140 |
Additions for current year tax positions | 0 | 0 |
Currency translation | 0 | (4) |
Reductions for lapses in statute of limitations | (297) | (67) |
Reductions for member leaving consolidated group | 0 | (1,498) |
Balance as of end of year | $ 274 | $ 571 |
EARNINGS (LOSS) PER SHARE - Rec
EARNINGS (LOSS) PER SHARE - Reconciliation of Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||||
Net income (loss) from continuing operations | $ 8,149 | $ 7,460 | $ (9,256) | |
Loss from discontinued operations | 0 | 0 | (1,712) | |
Net income (loss) | $ 8,149 | 8,149 | 7,460 | (10,968) |
Less: Preferred dividends on Series C preferred stock | $ 537 | 537 | 1,593 | 2,129 |
Net income (loss) attributable to common stockholders | 7,612 | 5,867 | (13,097) | |
Less: Undistributed earnings allocated to participating securities | (5,803) | 0 | 0 | |
Net income (loss) attributable to common stockholders | 1,809 | 5,867 | (13,097) | |
Dividends on Series C preferred stock | 537 | 1,593 | 0 | |
Undistributed earnings allocated to Series E preferred stock | 5,803 | 0 | 0 | |
Net income (loss) attributable to common stockholders - assuming dilution | $ 8,149 | $ 7,460 | $ (13,097) | |
Basic continuing operations (in usd per share) | $ 0.29 | $ 0.91 | $ (1.77) | |
Diluted discontinued operations (in usd per share) | 0 | 0 | (0.27) | |
Basic net income (loss) per share (in usd per share) | 0.29 | 0.91 | (2.04) | |
Diluted net income (loss) per share (in usd per share) | 0.29 | 0.89 | (2.04) | |
Diluted continuing operations (in usd per share) | 0.29 | 0.89 | (1.77) | |
Diluted discontinued operations (in usd per share) | $ 0 | $ 0 | $ (0.27) | |
Weighted-average number of common units outstanding - basic (in shares) | 6,177 | 6,449 | 6,425 | |
Weighted-average number of common units outstanding - diluted (in shares) | 27,960 | 8,417 | 6,425 | |
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 60 | 55 | 0 | |
Common stock equivalents - Series C Preferred Stock | ||||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (in shares) | 1,913 | 1,913 | 0 | |
Series E Preferred Stock | ||||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (in shares) | 19,810 | 0 | 0 |
EARNINGS (LOSS) PER SHARE - Add
EARNINGS (LOSS) PER SHARE - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | |
Earnings Per Share [Abstract] | ||
Interest expense, debt, excluding amortization | $ 0.2 | $ 2.3 |
Common stock equivalent shares excluded from the denominator in the calculation of diluted loss per share (in shares) | 0.6 | 0.6 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Accumulated Other Comprehensive Income, Net of Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 01, 2023 | Jul. 31, 2023 | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | $ (2,889) | $ 63,651 | $ (2,889) | $ (9,206) | $ 6,212 |
Foreign currency translation adjustment | (623) | (623) | 999 | (3,699) | |
Pension liability adjustments | 36 | 36 | (1,078) | 677 | |
Other comprehensive (loss) income | (587) | (587) | (79) | (3,022) | |
Effect of exchange transaction | 66,540 | ||||
Ending balance | 63,651 | 68,624 | 68,624 | (2,889) | (9,206) |
Accumulated Other Comprehensive Income (Loss) | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | 4,061 | 0 | 4,061 | 4,140 | 7,162 |
Other comprehensive (loss) income | (587) | (79) | (3,022) | ||
Effect of exchange transaction | (4,061) | ||||
Ending balance | 0 | (587) | (587) | 4,061 | 4,140 |
Foreign currency items | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | 7,062 | 0 | 7,062 | 6,063 | 9,762 |
Foreign currency translation adjustment | (623) | 999 | (3,699) | ||
Pension liability adjustments | 0 | 0 | 0 | ||
Other comprehensive (loss) income | (623) | 999 | (3,699) | ||
Effect of exchange transaction | 7,062 | ||||
Ending balance | 0 | (623) | (623) | 7,062 | 6,063 |
Pension items | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (3,001) | 0 | (3,001) | (1,923) | (2,600) |
Foreign currency translation adjustment | 0 | 0 | 0 | ||
Pension liability adjustments | 36 | (1,078) | 677 | ||
Other comprehensive (loss) income | 36 | (1,078) | 677 | ||
Effect of exchange transaction | (3,001) | ||||
Ending balance | $ 0 | $ 36 | $ 36 | $ (3,001) | $ (1,923) |
STATEMENT OF CASH FLOWS SUPPL_3
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION - Reconciliation of Cash (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | Jul. 31, 2021 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 121,372 | $ 53,142 | ||
Funds held for clients | 2,031 | 4,903 | ||
Cash, cash equivalents and restricted cash | $ 123,403 | $ 65,896 | $ 58,045 | $ 66,329 |
STATEMENT OF CASH FLOWS SUPPL_4
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION - Cash Used for Operating Activities Reflect Cash Payments for Interest and Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |||
Cash paid for interest | $ 9 | $ 1,145 | $ 1,237 |
Cash paid for income taxes | $ 3,008 | $ 0 | $ 2,364 |
STATEMENT OF CASH FLOWS SUPPL_5
STATEMENT OF CASH FLOWS SUPPLEMENTAL INFORMATION - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | 12 Months Ended | |||
Jul. 31, 2023 | Jul. 31, 2022 | May 01, 2023 | Apr. 30, 2023 | |
Cash and Cash Equivalents [Line Items] | ||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | $ 237,739,000 | $ 35,180,000 | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Issuance of nonvested common stock ( in shares) | 0.1 | 0.1 | ||
Issuance of nonvested common stock, value | $ 700,000 | $ 700,000 | ||
Share-based payment arrangement, accelerated cost | 57,400 | |||
Aerojet Share | ||||
Cash and Cash Equivalents [Line Items] | ||||
Aerojet common stock proceeds receivable | 154,500,000 | 0 | ||
Aerojet Share | Exchange Transaction Agreement | Steel Partners | Exchanging Parties | ||||
Cash and Cash Equivalents [Line Items] | ||||
Common stock, shares exchanged (in shares) | 3.6 | |||
Common stock, par value (in usd per share) | $ 0.10 | |||
Series E Contingently Redeemable Preferred Stock | ||||
Cash and Cash Equivalents [Line Items] | ||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | $ 202,733,000 | $ 0 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Detail) $ / shares in Units, $ in Millions | Jun. 06, 2023 shares | Dec. 15, 2017 USD ($) vote d $ / shares shares | Jul. 31, 2023 $ / shares shares | Jun. 21, 2023 $ / shares shares | May 01, 2023 shares | Apr. 30, 2023 $ / shares shares | Jul. 31, 2022 $ / shares shares | Feb. 28, 2019 $ / shares |
Equity [Line Items] | ||||||||
Preferred stock, shares issued (in shares) | shares | 0 | 0 | ||||||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common stock, par value (in usd per share) | 0.01 | $ 0.01 | $ 0.01 | |||||
Percentage of declared dividends | 100% | |||||||
Preferred stock, convertible, conversion price (in dollars per share) | $ 58.1087 | |||||||
Number of votes per share | vote | 1 | |||||||
Preferred stock, shares authorized (in shares) | shares | 4,965,000 | 3,535,000 | 4,965,000 | |||||
Steel Connect, Inc. | Steel Connect, Inc. | ||||||||
Equity [Line Items] | ||||||||
Equity method investment, ownership percentage | 50% | |||||||
Common Stock | ||||||||
Equity [Line Items] | ||||||||
Reverse stock split, conversion ratio | 0.00029 | |||||||
Stockholders' equity note, forward stock split, conversion ratio | 375 | |||||||
Stockholders' equity note, reverse stock split, shares owned threshold | shares | 3,500 | |||||||
SPHG Holdings | ||||||||
Equity [Line Items] | ||||||||
Initial conversion price (in usd per share) | $ 22.16 | |||||||
Series C Convertible Preferred Stock | ||||||||
Equity [Line Items] | ||||||||
Common stock, par value (in usd per share) | $ 0.01 | |||||||
Convertible preferred stock conversion price per share (in usd per share) | $ 18.29 | |||||||
Preferred stock, dividend rate, percentage | 6% | |||||||
Percentage threshold closing sale price of common stock higher than conversion price | 170% | |||||||
Trading days | d | 5 | |||||||
Series C Convertible Preferred Stock | Purchase Agreement | SPHG Holdings | ||||||||
Equity [Line Items] | ||||||||
Preferred stock, shares issued (in shares) | shares | 35,000 | |||||||
Preferred stock, par value (in usd per share) | $ 0.01 | |||||||
Price per share (in usd per share) | $ 1,000 | |||||||
Proceeds from issuance of preferred stock | $ | $ 35 | |||||||
Percentage of stated value | 100% | |||||||
Series E Preferred Stock | ||||||||
Equity [Line Items] | ||||||||
Preferred stock, convertible, shares issuable (in shares) | shares | 19,800,000 | |||||||
Initial conversion price (in usd per share) | $ 10.27 | |||||||
Series E Preferred Stock | Exchange Transaction Agreement | Steel Partners Group | ||||||||
Equity [Line Items] | ||||||||
Preferred stock, shares issued (in shares) | shares | 3,500,000 | 3,500,000 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Assets Measured at Fair Value on Recurring Basis and Classified by Fair Value Hierarchy (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
SPHG Note | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | $ 12,461 | |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 31,090 | $ 31,756 |
Level 1 | SPHG Note | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 0 | |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 31,090 | 31,756 |
Level 2 | SPHG Note | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 0 | |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 0 | 0 |
Level 3 | SPHG Note | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 12,461 | |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) $ in Thousands | 3 Months Ended |
Jul. 31, 2023 USD ($) | |
Long-Term Debt | |
Defined Benefit Plan Disclosure [Line Items] | |
Unrealized losses | $ 455 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Long-Term Debt $ in Thousands | 3 Months Ended |
Jul. 31, 2023 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of May 1, 2023 (Successor): | $ 13,006 |
Principal repayment | (1,000) |
Unrealized losses | 455 |
Balance as of July 31, 2023 (Successor) | $ 12,461 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 12 Months Ended |
Jul. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
SEGMENT INFORMATION - Summarize
SEGMENT INFORMATION - Summarized Financial Information of Continuing Operations by Operating Segment and Corporate-Level Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 40,804 | $ 148,283 | $ 203,272 |
Operating (loss) income | 1,621 | 6,789 | 1,163 |
Total other income | 6,130 | 2,301 | 969 |
Income from continuing operations before income taxes | 7,751 | 9,090 | 2,132 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating (loss) income | 3,328 | 16,488 | 11,318 |
Operating Segments | Supply Chain | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 40,804 | 148,283 | 203,272 |
Operating (loss) income | 3,328 | 16,488 | 11,318 |
Corporate-level activity | |||
Segment Reporting Information [Line Items] | |||
Operating (loss) income | $ (1,707) | $ (9,699) | $ (10,155) |
SEGMENT INFORMATION - Total Ass
SEGMENT INFORMATION - Total Assets of Continuing Operations (Detail) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 411,181 | $ 137,749 |
Corporate-level activity | ||
Segment Reporting Information [Line Items] | ||
Total assets | 264,567 | 36,112 |
Supply Chain | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 146,614 | $ 101,637 |
SEGMENT INFORMATION - Summari_2
SEGMENT INFORMATION - Summarized Financial Information of Capital Expenditures, Depreciation, and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 807 | $ 1,311 | $ 1,485 |
Depreciation | 456 | 1,427 | 2,220 |
Operating Segments | Supply Chain | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 807 | 1,311 | 1,485 |
Depreciation | $ 1,427 | $ 2,220 |
SEGMENT INFORMATION - Summari_3
SEGMENT INFORMATION - Summarized Financial Information of Net Revenue by Geographical Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 40,804 | $ 148,283 | $ 203,272 |
Mainland China | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 14,649 | 48,049 | 72,210 |
United States | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 8,800 | 38,262 | 50,426 |
Netherlands | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 5,774 | 15,149 | 24,483 |
Singapore | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 4,448 | 14,940 | 19,903 |
Czech | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 3,336 | 19,497 | 16,342 |
Other | |||
Segment Reporting Information [Line Items] | |||
Net revenue | $ 3,797 | $ 12,386 | $ 19,908 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Detail) $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Apr. 30, 2023 corporateEntity | Mar. 09, 2023 USD ($) | Jul. 31, 2023 USD ($) | Jul. 31, 2023 USD ($) | Apr. 30, 2023 USD ($) corporateEntity | Apr. 30, 2022 USD ($) | Jul. 31, 2023 USD ($) shares | Jul. 31, 2022 USD ($) | May 01, 2023 director | Feb. 28, 2019 USD ($) | |
Related Party Transaction [Line Items] | ||||||||||
Total debt, net | $ 12,461 | $ 12,461 | $ 12,461 | $ 10,968 | ||||||
Accretion of debt discount | 265 | $ 2,588 | 3,120 | |||||||
Redeemable preferred stock dividends | 537 | 537 | $ 1,593 | 2,129 | ||||||
Ownership percentage, prior approval of equity securities, threshold percentage | 49.60% | 49.60% | ||||||||
Series E Contingently Redeemable Preferred Stock | Steel Partners Group | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Conversion of stock, shares converted (in shares) | shares | 3.5 | |||||||||
Stockholders' Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Board of directors, number of directors | director | 7 | |||||||||
Litigation settlement, proceeds required to be distributed to stockholders, percentage | 70% | |||||||||
Ownership percentage, prior approval of equity securities, threshold percentage | 100% | 100% | ||||||||
Management Services Agreement | SP Corporate Services Llc and Steel Services Limited | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Other receivables, net, current | 700 | 700 | $ 700 | 1,000 | ||||||
SPHG Holdings | Purchase Agreement | Series C Convertible Preferred Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Redeemable preferred stock dividends | 2,100 | 2,100 | ||||||||
7.50% Convertible Senior Note due September 1, 2024 | Steel Holdings | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Principal amount of note | $ 14,900 | |||||||||
7.50% Convertible Senior Note due September 1, 2024 | SPHG Holdings | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Principal amount of note | 12,900 | 12,900 | 12,900 | 14,940 | ||||||
Debt instrument stated percentage | 7.50% | |||||||||
Debt instrument, repaid, principal | $ 1,000 | |||||||||
Debt instrument, periodic payment, principal | 1,000 | |||||||||
Long-term debt, cash amendment fee amount | 100 | |||||||||
Long-term debt, derecognized debt discount amount | $ 200 | |||||||||
Total debt, net | $ 12,500 | $ 12,500 | 12,500 | 11,047 | ||||||
Accretion of debt discount | $ 2,500 | $ 300 | $ 2,800 | |||||||
Convertible Senior Unsecured Note | SPHG Holdings | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Debt instrument stated percentage | 7.50% | |||||||||
SPHG Holdings, Steel Holdings, HNH And SPL | 5.25% Convertible Senior Notes | Steel Holdings | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity method investment, ownership percentage | 85.90% | 85.90% | 85.90% | |||||||
Steel Connect, Inc. | Steel Connect, Inc. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity method investment, ownership percentage | 50% | 50% | ||||||||
Steel Connect, Inc. | SP Group | Stockholders' Agreement | Steel Connect, Inc. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage, prior approval required for transfer of equity interests, threshold percentage | 80% | 80% | ||||||||
Number of corporate entity | corporateEntity | 1 | 1 |
RELATED PARTY TRANSACTIONS - Sc
RELATED PARTY TRANSACTIONS - Schedule Of Management Service Agreement Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Related Party | Steel Services Ltd | |||
Related Party Transaction [Line Items] | |||
Management services agreement expenses | $ 617 | $ 1,736 | $ 3,008 |