Capital Lease Obligations

9 Months Ended

Apr. 30, 2016

We lease certain equipment under capital leases, the majority of which we assumed in connection with our acquisition of TCS. The net book value of the leased assets which collateralize the capital lease obligation was $9,975,000 as of April 30, 2016, and consisted primarily of machinery and equipment. As of April 30, 2016, our capital lease obligations reflect a blended interest rate of approximately 5.3%. Our capital leases generally contain provisions whereby we can purchase the equipment at the end of the lease for a one dollar buyout. Depreciation of leased assets is included in depreciation expense.

Future minimum payments under capital lease obligations consisted of the following at April 30, 2016:



Remainder of fiscal 2016	$	1,144,000
Fiscal 2017	3,920,000
Fiscal 2018	2,472,000
Fiscal 2019	1,476,000
Fiscal 2020	305,000
Total minimum lease payments	9,317,000
Less: amounts representing interest	(667,000		)
Present value of net minimum lease payments	8,650,000
Current portion of capital lease obligation	3,770,000
Non-current portion of capital lease obligation	$	4,880,000