Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Jul. 31, 2021
Leases Disclosure [Abstract]  

Note 9 - Leases


The Company adopted ASU No. 2016-02 “Leases (Topic 842)”, which requires leases with durations greater than twelve months to be recognized on the balance sheet, using the modified retrospective approach with an effective date of August 1, 2019. We did not apply the new standard to comparative periods and therefore those amounts are not presented below.


The Company determines if an arrangement is or contains a lease at contract inception. The Company leases buildings, office space, patient service centers, and equipment primarily through operating leases, and equipment through a limited number of finance leases. Generally, a right-of-use asset, representing the right to use the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.


The Company primarily uses its incremental borrowing rate in determining the present value of lease payments as the Company’s leases generally do not provide an implicit rate.


The Company has lease agreements with (i) right-of-use asset payments and (ii) non-lease components (i.e. payments related to maintenance fees, utilities, etc.,) which have generally been combined and accounted for as a single lease component.


The Company’s leases have remaining terms of less than 1 year to 8 years, some of which include options to extend the leases for up to 5 years. The Company’s lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised.


Certain of the Company’s lease agreements include rental payments adjusted periodically for inflation or a market rate which are included in the lease liabilities.


Leases   Balance Sheet Classification   July 31,
    July 31,
Operating   Right-of-use assets   $ 17,020     $ 19,916  
Finance   Property, plant and equipment, net (a)     248       385  
Total lease assets       $ 17,268     $ 20,301  
Operating   Current portion of operating lease liabilities   $ 3,419     $ 4,121  
Finance   Finance leases short term     88       201  
Operating   Operating lease liabilities, non-current     14,558       16,679  
Finance   Other liabilities and finance leases long term     110       161  
Total lease liabilities       $ 18,175     $ 21,162  


(a) Accumulated amortization of finance lease assets was approximately $1,100 and $1,000 as of July 31, 2021 and 2020, respectively.


For the years ended July 31, components of lease cost were as follows:


Lease Cost   2021     2020  
Operating lease cost   $ 5,474     $ 5,813  
Finance lease cost:                
Amortization of leased assets     137       251  
Interest on lease liabilities     16       35  
Total lease cost   $ 5,627     $ 6,099  


The maturity of the Company’s lease liabilities as of July 31, 2021 is as follows:


Maturity of lease liabilities, years ending July 31,   Operating
2022   $ 4,326     $ 88     $ 4,414  
2023     3,547       88       3,635  
2024     3,385       37       3,422  
2025     3,158      
2026     3,150      
Thereafter     3,224      
Total lease payments     20,790       213       21,003  
Less: Interest (a)     (2,813 )     (15 )     (2,828 )
Present value of lease liabilities   $ 17,977     $ 198     $ 18,175  


(a) Primarily calculated using the Company’s incremental borrowing rate.


Lease term and discount rate for the years ended July 31 were as follows:


Lease term and discount rate   2021     2020  
Weighted-average remaining lease term (years):            
Operating leases     5.6 years       6.2 years  
Finance leases     2.5 years       2.7 years  
Weighted-average discount rate:                
Operating leases     4.9 %     4.9 %
Finance leases     7.4 %     8.6 %


See Note 4 for cash flow information on cash paid for amounts included in the measurement of lease liabilities for the years ended July 31, 2021 and 2020.