Derivative Instruments

12 Months Ended

Jul. 31, 2023

Derivative Instruments [Abstract]

Derivative Instruments

Note 4—Derivative Instruments

The primary risk managed by the Company using derivative instruments is foreign exchange risk. Foreign exchange forward contracts are entered into as hedges against unfavorable fluctuations in the U.S. Dollar to NOK and EUR exchange rates. The Company is party to a Foreign Exchange Agreement with Western Alliance Bank allowing the Company to enter into foreign exchange contracts under its revolving credit facility with the bank (see Note 16 Revolving Credit Facility). The Company does not apply hedge accounting to these contracts because these are not qualified as hedging accounting pursuant to ASC 815; therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in foreign exchange rates, the Company is exposed to credit risk from the failure of the counterparty to perform under the terms of the contract. The credit or repayment risk is minimized by entering into transactions with high-quality counterparties.

The outstanding contracts at July 31, 2023 were as follows:

Settlement Date	U.S. Dollar Amount		NOK Amount
Aug-23		225,000		2,267,100
Sep-23		225,000		2,263,388
Oct-23		225,000		2,260,238
Nov-23		225,000		2,256,750
Dec-23		225,000		2,253,285
Jan-24		225,000		2,249,730
Feb-24		225,000		2,246,265
Mar-24		225,000		2,242,823
Apr-24		225,000		2,240,550
May-24		225,000		2,237,738
Total		2,250,000		22,517,865

Settlement Date	U.S. Dollar Amount		EUR Amount
Aug-23		225,000		207,852
Sep-23		225,000		207,526
Oct-23		225,000		207,240
Nov-23		225,000		206,935
Dec-23		225,000		206,555
Jan-24		225,000		206,271
Feb-24		225,000		205,893
Mar-24		225,000		205,611
Apr-24		225,000		205,386
May-24		225,000		205,142
Total		2,250,000		2,064,410

The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:

		July 31,
(in thousands)		2023		2022
Assets and Liabilities Derivatives:	Balance Sheet Location
Derivatives not designated or not qualifying as hedging instruments
Foreign exchange forward contracts	Other current assets	$	19	$	-
Foreign exchange forward contracts	Accrued expenses and other current liabilities	$	-	$	141

The effects of derivative instruments on the consolidated statements of (loss) income and comprehensive (loss) income were as follows:

		Fiscal Year Ended July 31,
Amount of Loss Recognized on Derivatives		2023		2022
Derivatives not designated or not qualifying as hedging instruments	Location of income (loss) recognized on derivatives	(in thousands)
Foreign exchange forward contracts	Net income (loss) resulting from foreign exchange transactions		14	$	(368	)