Leases

9 Months Ended

Apr. 30, 2022

Leases Disclosure [Abstract]

Leases

Note 8 - Leases

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 6 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	April 30, 2022		July 31, 2021
Assets
Operating	Right-of-use assets	$	14,962	$	17,020
Finance	Property, plant and equipment, net (a)		191		248
Total lease assets		$	15,153	$	17,268
Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	3,171	$	3,419
Finance	Finance leases short term		81		88
Non-current:
Operating	Operating lease liabilities, non-current		12,779		14,558
Finance	Finance leases long term and other liabilities		59		110
Total lease liabilities		$	16,090	$	18,175

(a) Accumulated amortization of finance lease assets was approximately $190 and $1,100 as of April 30, 2022 and July 31, 2021, respectively.

Components of lease cost were as follows:

	Three months ended April 30,				Nine months ended April 30,
	2022		2021		2022		2021
Operating lease cost	$	1,085	$	1,271	$	3,372	$	4,265
Finance lease cost:
Amortization of leased assets		19		19		57		118
Interest on lease liabilities		3		3		8		12
Total lease cost	$	1,107	$	1,293	$	3,437	$	4,395

The maturity of the Company’s lease liabilities as of April 30, 2022 is as follows: 

Maturity of lease liabilities, years ending July 31,	Operating leases			Finance leases			Total
2022	$	1,064		$	22		$	1,086
2023		3,735			88			3,823
2024		3,561			37			3,598
2025		3,299			—			3,299
2026		3,150			—			3,150
Thereafter		3,224			—			3,224
Total lease payments		18,033			147			18,180
Less: Interest (a)		(2,083	)		(7	)		(2,090	)
Present value of lease liabilities	$	15,950		$	140		$	16,090

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

Lease term and discount rate for the nine months ended April 30 were as follows: 

Lease term and discount rate	2022			2021
Weighted-average remaining lease term (years):
Operating leases		5.0 years			5.8 years
Finance leases		1.7 years			2.7 years
Weighted-average discount rate:
Operating leases		4.97	%		4.97	%
Finance leases		5.20	%		8.25	%

See Note 4 for cash flow information on cash paid for amounts included in the measurement of lease liabilities for the three months ended April 30, 2022 and 2021.