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Derivative Instruments

3 Months Ended

Oct. 31, 2022

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 (USD) to Norwegian Kroner (NOK) and USD to Euro (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 11). The Company does not apply hedge accounting to these contracts, and therefore the changes in fair value are recorded in unaudited condensed consolidated statements of operations and comprehensive income. 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 October 31, 2022, were as follows:

Settlement Date		U.S. Dollar Amount				NOK Amount
Nov-22			225,000				2,000,925
Dec-22			225,000				2,297,948
Jan-23			225,000				2,296,103
Feb-23			225,000				2,294,685
Mar-23			225,000				2,293,065
Apr-23			225,000				2,291,355
May-23			225,000				2,317,545
Total		$	1,575,000				15,791,626

Settlement Date		U.S. Dollar Amount				EUR Amount
Nov-22			225,000				201,848
Dec-22			225,000				222,332
Jan-23			225,000				221,653
Feb-23			225,000				221,195
Mar-23			225,000				220,826
Apr-23			225,000				220,459
May-23			225,000				220,070
Total		$	1,575,000				1,528,383

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

Assets and Liabilities Derivatives:		Balance Sheet Location		October 31, 2022				July 31, 2022
Derivatives not designated or not qualifying as hedging instruments				(in thousands)
Foreign exchange forward contracts		Accrued expenses and other current liabilities		$	101			$	141

The effects of derivative instruments on the condensed consolidated statements of operations and comprehensive (loss) income were as follows:

				Three Months Ended October 31,
Amount of (Loss) Gain Recognized on Derivatives				2022				2021
Derivatives not designated or not qualifying as hedging instruments		Location of Loss Recognized on Derivatives		(in thousands)
Foreign exchange forward contracts		Net loss resulting from foreign exchange transactions		$	(121	)		$	10

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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 https://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 https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008

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