Derivative Instruments

12 Months Ended

Jul. 31, 2012

Derivative Instruments

8. Derivative Instruments:

Certain of the Company’s foreign operations have revenues and/or expenses transacted in currencies other than the U.S. dollar. In order to mitigate foreign currency exchange risk, the Company uses forward contracts to lock in exchange rates associated with a portion of its forecasted international expenses.

At July 31, 2012, the Company had forward contracts outstanding with notional amounts totaling $5,901 in the Canadian Dollar. These contracts have been designated as cash flow hedges, and the unrealized gains of $43, net of tax, as of July 31, 2012 on these contracts are reported in accumulated other comprehensive income (loss). No significant cash flow hedges were outstanding for periods prior to fiscal year 2012. Realized gains and losses on the cash flow hedges are recognized in income in the period when the payment of expenses is recognized. The Company expects all contracts to settle in the first two quarters of fiscal year 2013 and any amounts in accumulated other comprehensive income (loss) to be reported as an adjustment to operating expenses.