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Leases

12 Months Ended

Jul. 31, 2021

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, 2021		July 31, 2020
Assets
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

Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	3,419	$	4,121
Finance	Finance leases short term		88		201

Non-current:
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 leases			Finance leases			Total
2022	$	4,326		$	88		$	4,414
2023		3,547			88			3,635
2024		3,385			37			3,422
2025		3,158			—			3,158
2026		3,150			—			3,150
Thereafter		3,224			—			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.