Leases (Notes)

6 Months Ended

Jan. 31, 2024

Leases [Abstract]

Lessee, Operating Leases

LEASES

We have operating leases primarily for real estate properties, including corporate headquarters, customer service and sales offices, manufacturing and packaging facilities, warehouses, and research and development facilities, as well as for rail tracks, railcars and office equipment. Certain of our leases for a shared warehouse and office facility, rail track and railcars have options to extend which we are reasonably certain we will exercise and, accordingly, have been considered in the lease term used to recognize our ROU assets and lease liabilities. To determine the present value of the lease liability, we use an incremental borrowing rate, which is defined as the rate of interest that the Company would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments. Further information about our accounting policy for leases is included in Note 1 of the Notes to the unaudited Condensed Consolidated Financial Statements.

We have no material finance leases, and variable costs for operating leases are immaterial for the three and six months ended January 31, 2024. Operating lease costs are included in Cost of Goods Sold or SG&A expenses based on the nature of the lease. The following table summarizes total lease costs for our operating leases (in thousands):

	For the Three Months Ended January 31,				For the Six Months Ended January 31,
	2024		2023		2024		2023
Operating lease cost	$	1,084	$	687	$	1,630	$	1,383

Supplemental cash flow information related to leases was as follows (in thousands):

	For the Three Months Ended January 31,				For the Six Months Ended January 31,
	2024		2023		2024		2023
Cash paid for amounts included in the measurement of operating lease liabilities:	$	1,062	$	585	$	1,686	$	1,180
Right-of-use assets obtained in exchange for new operating lease liabilities	$	3,699	$	—	$	3,699	$	21

Operating lease ROU assets and operating lease liabilities are separately presented on the unaudited Condensed Consolidated Balance Sheet, excluding leases with an initial term of twelve months or less. Other supplemental balance sheet information related to leases was as follows:

	January 31, 2024	July 31, 2023
Weighted-average remaining lease term - operating leases	6.3 years	7.7 years
Weighted-average discount rate - operating leases	4.84%	4.03%

Lease liability maturities as of January 31, 2024, are as follows (in thousands):

Fiscal year 2024 (remaining six months)	$	1,621
Fiscal year 2025	3,165
Fiscal year 2026	2,845
Fiscal year 2027	2,416
Fiscal year 2028	1,551
Thereafter	4,502
Total	16,100
Less: imputed interest	(2,212)
Net lease obligation	$	13,888