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Leases
 12 Months Ended
Jul. 31, 2023
Leases [Abstract]  
Leases Leases
Our leases historically relate to the leasing of facilities and equipment. In accordance with FASB ASC 842 - "Leases" ("ASC 842"), we determine at inception whether an arrangement is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. At lease commencement, we recognize a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the estimated lease term. We have elected to not recognize a ROU asset or lease liability for any leases with terms of twelve months or less. Instead, for such short-term leases, we recognize lease expense on a straight-line basis over the lease term. Certain of our leases include options to extend the term of the lease or to terminate the lease early. When it is reasonably certain that we will exercise a renewal option or will not exercise a termination option, we include the impact of exercising or not exercising such option, respectively, in the estimate of the lease term. As our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate ("IBR") on the commencement date to calculate the present value of future lease payments. Such IBR represents our estimated rate of interest to borrow on a collateralized basis over a term commensurate with the expected lease term.

Some of our leases include payments that are based on the Consumer Price Index ("CPI") or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability using the index as of the lease commencement date. Other variable lease payments, such as common area maintenance, property taxes, and usage-based amounts, are required by ASC 842 to be excluded from the ROU asset and lease liability and expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset would also consider, to the extent applicable, any deferred rent upon adoption, lease pre-payments or initial direct costs of obtaining the lease (e.g., such as commissions).

For all classes of leased assets, we elected the practical expedient to not separate lease components (i.e., the actual item being leased, such as the facility or piece of equipment) from non-lease components (i.e., the distinct elements of a contract not related to securing the use of the leased asset, such as common area maintenance and consumable supplies).

Certain of our facility lease agreements (which are classified as operating leases) contain rent holidays or rent escalation clauses. For rent holidays and rent escalation clauses during the lease term, we record rental expense on a straight-line basis over the term of the lease. As of July 31, 2023, none of our leases contained a residual value guarantee and covenants included in our lease agreements are customary for the types of facilities and equipment being leased.

The components of lease expense are as follows:
Fiscal years ended July 31,
202320222021
Finance lease expense:
Amortization of ROU assets$5,000 13,000 36,000 
Interest on lease liabilities— 1,000 3,000 
Operating lease expense10,439,000 11,658,000 12,152,000 
Short-term lease expense435,000 402,000 819,000 
Variable lease expense4,031,000 4,619,000 4,523,000 
Sublease income(67,000)(67,000)(67,000)
Total lease expense$14,843,000 16,626,000 17,466,000 
Additional information related to leases is as follows:
Fiscal years ended July 31,
202320222021
Cash paid for amounts included in the measurement of lease
     liabilities:
Operating leases - Operating cash outflows$10,604,000 11,864,000 10,868,000 
Finance leases - Operating cash outflows— 1,000 3,000 
Finance leases - Financing cash outflows4,000 15,000 38,000 
ROU assets obtained in the exchange for lease liabilities
     (non-cash):
Operating leases$3,211,000 15,233,000 24,987,000 

The following table is a reconciliation of future cash flows relating to operating lease liabilities presented on our Consolidated Balance Sheet as of July 31, 2023:
Operating
Fiscal 2024$9,478,000 
Fiscal 20258,872,000 
Fiscal 20267,445,000 
Fiscal 20275,351,000 
Fiscal 20284,622,000 
Thereafter21,572,000 
Total future undiscounted cash flows57,340,000 
Less: Present value discount6,932,000 
Lease liabilities$50,408,000 
Weighted-average remaining lease terms (in years)8.31
Weighted-average discount rate3.46 %

In fiscal 2022, we modified our existing lease for a facility in Seattle, Washington, increasing the lease term through October 2033. Accordingly, amounts related to the modified lease are reflected as an operating lease right-of-use asset or related operating lease liability in our Consolidated Balance Sheets as of July 31, 2023 and July 31, 2022.

We lease our Melville, New York production facility from a partnership controlled by our former CEO. Lease payments made during the fiscal year ended July 31, 2023 and 2022 were $688,000 and $675,000, respectively. The current lease provides for our use of the premises as they exist through December 2031. The annual rent of the facility for calendar year 2024 is $691,000 and is subject to customary adjustments. We have a right of first refusal in the event of a sale of the facility.

As of July 31, 2023, we do not have any material rental commitments that have not commenced.
Leases Leases
Our leases historically relate to the leasing of facilities and equipment. In accordance with FASB ASC 842 - "Leases" ("ASC 842"), we determine at inception whether an arrangement is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. At lease commencement, we recognize a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the estimated lease term. We have elected to not recognize a ROU asset or lease liability for any leases with terms of twelve months or less. Instead, for such short-term leases, we recognize lease expense on a straight-line basis over the lease term. Certain of our leases include options to extend the term of the lease or to terminate the lease early. When it is reasonably certain that we will exercise a renewal option or will not exercise a termination option, we include the impact of exercising or not exercising such option, respectively, in the estimate of the lease term. As our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate ("IBR") on the commencement date to calculate the present value of future lease payments. Such IBR represents our estimated rate of interest to borrow on a collateralized basis over a term commensurate with the expected lease term.

Some of our leases include payments that are based on the Consumer Price Index ("CPI") or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability using the index as of the lease commencement date. Other variable lease payments, such as common area maintenance, property taxes, and usage-based amounts, are required by ASC 842 to be excluded from the ROU asset and lease liability and expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset would also consider, to the extent applicable, any deferred rent upon adoption, lease pre-payments or initial direct costs of obtaining the lease (e.g., such as commissions).

For all classes of leased assets, we elected the practical expedient to not separate lease components (i.e., the actual item being leased, such as the facility or piece of equipment) from non-lease components (i.e., the distinct elements of a contract not related to securing the use of the leased asset, such as common area maintenance and consumable supplies).

Certain of our facility lease agreements (which are classified as operating leases) contain rent holidays or rent escalation clauses. For rent holidays and rent escalation clauses during the lease term, we record rental expense on a straight-line basis over the term of the lease. As of July 31, 2023, none of our leases contained a residual value guarantee and covenants included in our lease agreements are customary for the types of facilities and equipment being leased.

The components of lease expense are as follows:
Fiscal years ended July 31,
202320222021
Finance lease expense:
Amortization of ROU assets$5,000 13,000 36,000 
Interest on lease liabilities— 1,000 3,000 
Operating lease expense10,439,000 11,658,000 12,152,000 
Short-term lease expense435,000 402,000 819,000 
Variable lease expense4,031,000 4,619,000 4,523,000 
Sublease income(67,000)(67,000)(67,000)
Total lease expense$14,843,000 16,626,000 17,466,000 
Additional information related to leases is as follows:
Fiscal years ended July 31,
202320222021
Cash paid for amounts included in the measurement of lease
     liabilities:
Operating leases - Operating cash outflows$10,604,000 11,864,000 10,868,000 
Finance leases - Operating cash outflows— 1,000 3,000 
Finance leases - Financing cash outflows4,000 15,000 38,000 
ROU assets obtained in the exchange for lease liabilities
     (non-cash):
Operating leases$3,211,000 15,233,000 24,987,000 

The following table is a reconciliation of future cash flows relating to operating lease liabilities presented on our Consolidated Balance Sheet as of July 31, 2023:
Operating
Fiscal 2024$9,478,000 
Fiscal 20258,872,000 
Fiscal 20267,445,000 
Fiscal 20275,351,000 
Fiscal 20284,622,000 
Thereafter21,572,000 
Total future undiscounted cash flows57,340,000 
Less: Present value discount6,932,000 
Lease liabilities$50,408,000 
Weighted-average remaining lease terms (in years)8.31
Weighted-average discount rate3.46 %

In fiscal 2022, we modified our existing lease for a facility in Seattle, Washington, increasing the lease term through October 2033. Accordingly, amounts related to the modified lease are reflected as an operating lease right-of-use asset or related operating lease liability in our Consolidated Balance Sheets as of July 31, 2023 and July 31, 2022.

We lease our Melville, New York production facility from a partnership controlled by our former CEO. Lease payments made during the fiscal year ended July 31, 2023 and 2022 were $688,000 and $675,000, respectively. The current lease provides for our use of the premises as they exist through December 2031. The annual rent of the facility for calendar year 2024 is $691,000 and is subject to customary adjustments. We have a right of first refusal in the event of a sale of the facility.

As of July 31, 2023, we do not have any material rental commitments that have not commenced.