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Derivative Instruments

12 Months Ended

Jul. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 4—Derivative Instruments

The primary risk managed by the Company using derivative instruments is foreign exchange risk. Foreign exchange forward contracts are entered into as hedges against unfavorable fluctuations in the U.S. Dollar to NOK and EUR exchange rates. The Company is party to a Foreign Exchange Agreement with Western Alliance Bank allowing the Company to enter into foreign exchange contracts under its revolving credit facility with the bank (see Note 15). The Company does not apply hedge accounting to these contracts; therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in foreign exchange rates, the Company is exposed to credit risk from the failure of the counterparty to perform under the terms of the contract. The credit or repayment risk is minimized by entering into transactions with high-quality counterparties.

The outstanding contracts at July 31, 2021 were as follows:

Settlement Date		U.S. Dollar Amount				NOK Amount
Aug-21			200,000				1,683,215
Sep-21			200,000				1,683,275
Oct-21			200,000				1,683,515
Nov-21			200,000				1,683,755
Total		$	800,000				6,733,760

Settlement Date		U.S. Dollar Amount				EUR Amount
Aug-21			250,000				206,873
Sep-21			250,000				206,753
Oct-21			250,000				206,616
Nov-21			250,000				206,463
		$	1,000,000				826,705

The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:

July 31, (in thousands)				2021				2020
Assets and Liabilities Derivatives:		Balance Sheet Location
Derivatives not designated or not qualifying as hedging instruments
Foreign exchange forward contracts		Other current assets		$	-			$	10
Foreign exchange forward contracts		Accrued expenses and other current liabilities		$	54			$	-

The effects of derivative instruments on the consolidated statements of Comprehensive Income (Loss) were as follows:

Amount of Loss Recognized on Derivatives Year ended July 31, (in thousands)				2021				2020
Derivatives not designated or not qualifying as hedging instruments		Location of Loss Recognized on Derivatives
Foreign exchange forward contracts		Net loss resulting from foreign exchange transactions		$	(18	)		$	(218	)

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- References

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- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-URI http://asc.fasb.org/topic&trid=2229140

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 5
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008

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