Accrued Expenses and Other Current Liabilities

12 Months Ended

Jul. 31, 2022

Accrued Liabilities, Current [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following at July 31, 2022 and 2021:

	2022		2021
Accrued wages and benefits	$	25,675,000	26,367,000
Accrued warranty obligations	9,420,000		17,600,000
Accrued contract costs	15,921,000		12,750,000
Accrued acquisition-related costs	—		9,222,000
Accrued commissions and royalties	5,697,000		5,342,000
Accrued legal costs	2,514,000		2,854,000
Other	13,435,000		15,466,000
Accrued expenses and other current liabilities	$	72,662,000	89,601,000

Accrued contract costs represent direct and indirect costs on contracts as well as estimates of amounts owed for invoices not yet received from vendors or reflected in accounts payable.

Accrued acquisition-related costs for fiscal 2021 include $8,705,000 of contingent earn-out consideration related to our acquisition of UHP, which was paid in the fourth quarter of fiscal 2022. See Note (2) - “Acquisitions - UHP Networks Inc.” for further discussion.

Accrued warranty obligations as of July 31, 2022 relate to estimated liabilities for assurance type warranty coverage that we provide to our customers. We generally provide warranty coverage for some of our products for a period of at least one year from the date of delivery. We record a liability for estimated warranty expense based on historical claims, product failure rates, consideration of contractual obligations, future costs to resolve software issues and other factors. Some of our product warranties are provided under long-term contracts, the costs of which are incorporated into our estimates of total contract costs.

Changes in our accrued warranty obligations during the fiscal years ended July 31, 2022 and 2021 were as follows:

	2022		2021
Balance at beginning of year	$	17,600,000	15,200,000
(Benefit from) provision for warranty obligations	(1,255,000)		4,360,000
Adjustments for changes in estimates	(2,500,000)		—
Charges incurred	(4,425,000)		(2,710,000)
Additions (in connection with acquisitions)	—		750,000
Balance at end of year	$	9,420,000	17,600,000

During the second quarter of fiscal 2022, we recorded a $2,500,000 benefit to cost of sales in our Terrestrial and Wireless Networks segment due to lower than expected warranty claims associated with previously acquired NG-911 technologies.