Derivative Instruments

3 Months Ended

Oct. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company manages exposure to interest rates and foreign currency movements by entering into derivative contracts from time to time, as movements in such markets could impact the Company’s financial results.

The changes in estimated fair values of derivative instruments result from changes in interest rates and foreign currency exchange rates. Such changes serve to offset exposure in related business assets or liabilities. The Company is exposed to credit loss in the event of nonperformance by a counterparty. Certain of the Company’s derivative instruments are subject to master netting agreements. In certain circumstances, this agreement allows the Company to net-settle amounts payable or receivable related to multiple derivative transactions with the same counterparty. The fair values of derivative instruments are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements. Collateral is generally not required of the Company or of the counterparties to the master netting agreements, and no cash collateral was received or pledged under such agreements as of October 31, 2024 or July 31, 2024. The Company does not enter into derivative instruments for trading or speculative purposes. The Company does not apply hedge accounting treatment to derivative instruments.

As of October 31, 2024, the Company held the following interest rate swap agreement, which fixed the interest rate on the applicable notional amount of outstanding variable rate debt:

Notional amount (in thousands)	Interest rate	Effective date	Expiration date
$100,000	3.735%	January 4, 2023	November 4, 2027

The total notional amounts of the Company’s derivative instruments outstanding are as follows:

(in thousands)	October 31, 2024		July 31, 2024
Interest rate swap contract	$	100,000	$	100,000
Foreign currency forward contracts	—		3,792
Total derivative instruments not designated as hedging instruments	$	100,000	$	103,792

The Company manages annual barrel purchases by engaging domestic and foreign cooperages to provide specified barrel quantities on agreed delivery dates. A significant portion of these invoices are paid in Euros. In order to reduce the foreign exchange risk associated with the Euro to U.S. Dollar conversion rate, the Company enters into foreign currency forward contracts, generally aligning settlement dates with expected barrel deliveries and the anticipated timing of payments to various coopers. See Note 10 (Commitments and Contingencies) for additional information related to the Company’s barrel purchase commitments.

Results of period derivative activity

The estimated fair value and classification of derivative instruments on the Condensed Consolidated Statements of Financial Position at October 31, 2024 were as follows:

	Derivative Assets
(in thousands)	Balance Sheet Classification	Fair Value
Interest rate swap contract	Other assets	$	333
Total derivatives not designated as hedging instruments		$	333

The estimated fair value and classification of derivative instruments on the Condensed Consolidated Statements of Financial Position at July 31, 2024 were as follows:

	Derivative Assets
(in thousands)	Balance Sheet Classification	Fair Value
Interest rate swap contract	Other assets	$	465
Foreign currency forward contracts	Prepaid expenses and other current assets	5
Total derivatives not designated as hedging instruments		$	470

The amounts and classification of the gains and losses in the Condensed Consolidated Statements of Operations related to derivative instruments not designated as hedging instruments are as follows:

		Three months ended October 31,
(in thousands)	Classification	2024		2023
Interest rate swap contract	Other expense (income), net	$	132	$	(1,965)
Foreign currency forward contracts	Other expense (income), net	5		76
Total loss (gain)		$	137	$	(1,889)