0001628280-21-024955 | 10-Q | XBRL Viewer

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Cover Page - shares	3 Months Ended
Cover Page - shares	Oct. 31, 2021	Dec. 01, 2021
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 31, 2021
Document Transition Report	false
Entity File Number	001-35319
Entity Registrant Name	Steel Connect, Inc.
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000914712
Current Fiscal Year End Date	--07-31
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-2921333
Entity Address, Address Line One	2000 Midway Ln
Entity Address, City or Town	Smyrna
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37167
City Area Code	914
Local Phone Number	461-1276
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		60,437,654
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	STCN
Security Exchange Name	NASDAQ
Series D Preferred Stock
Entity Information [Line Items]
No Trading Symbol	true
Title of 12(b) Security	Rights to Purchase Series D Junior Participating Preferred Stock
Security Exchange Name	NASDAQ

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Current Assets
Cash and cash equivalents	$ 81,330	$ 96,931
Accounts receivable, trade, net of allowance for doubtful accounts of $44 and $49 at October 31, 2021 and July 31, 2021, respectively	74,841	69,805
Inventories, net	18,166	16,228
Funds held for clients	6,531	8,212
Prepaid expenses and other current assets	18,491	22,222
Total current assets	199,359	213,398
Property and equipment, net	54,710	58,862
Goodwill	231,470	231,470
Other intangible assets, net	110,823	115,005
Operating lease right-of-use assets	49,941	50,836
Other assets	6,851	6,810
Total assets	653,154	676,381
Current Liabilities
Accounts payable	51,920	55,517
Accrued expenses	109,382	106,871
Funds held for clients	6,531	8,212
Current portion of long-term debt	5,611	5,602
Current lease obligations	13,259	13,690
Other current liabilities	29,366	28,101
Total current liabilities	216,069	217,993
Convertible note payable	9,729	9,343
Long-term debt, excluding current portion	356,783	358,189
Long-term lease obligations	38,338	38,927
Other long-term liabilities	10,486	10,537
Total long-term liabilities	415,336	416,996
Total liabilities	631,405	634,989
Contingently redeemable preferred stock, $0.01 par value per share. 35,000 shares authorized, issued and outstanding at October 31, 2021 and July 31, 2021	35,180	35,180
Stockholders' equity:
Preferred stock, $0.01 par value per share. 4,965,000 shares authorized at October 31, 2021 and July 31, 2021; zero shares issued and outstanding at October 31, 2021 and July 31, 2021	0	0
Common stock, $0.01 par value per share. Authorized 1,400,000,000 shares; 60,437,654 issued and outstanding shares at October 31, 2021; 63,099,496 issued and outstanding shares at July 31, 2021	605	632
Additional paid-in capital	7,478,855	7,478,638
Accumulated deficit	(7,500,251)	(7,480,220)
Accumulated other comprehensive income	7,360	7,162
Total stockholders' (deficit) equity	(13,431)	6,212
Total liabilities, contingently redeemable preferred stock and stockholders' (deficit) equity	$ 653,154	$ 676,381

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Accounts receivable, trade, allowance for doubtful accounts	$ 44	$ 49
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	4,965,000	4,965,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,400,000,000	1,400,000,000
Common stock, shares issued (in shares)	60,437,654	63,099,496
Common stock, shares outstanding (in shares)	60,437,654	63,099,496
Contingent Redeemable Preferred Stock
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	35,000	35,000
Preferred stock, shares issued (in shares)	35,000	35,000
Preferred stock, shares outstanding (in shares)	35,000	35,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Condensed Income Statements, Captions [Line Items]
Net revenue	$ 125,413	$ 169,934
Cost of revenue	110,133	129,466
Gross profit	15,280	40,468
Operating expenses:
Selling, general and administrative	22,005	26,858
Amortization of intangible assets	4,182	6,535
Total operating expenses	26,187	33,393
Operating (loss) income	(10,907)	7,075
Other income (expense):
Interest income	4	20
Interest expense	(7,795)	(7,823)
Other losses, net	(481)	(2,019)
Total other expense, net	(8,272)	(9,822)
Loss before income taxes	(19,179)	(2,747)
Income tax expense	315	804
Net loss	(19,494)	(3,551)
Less: Preferred dividends on redeemable preferred stock	(537)	(537)
Net loss attributable to common stockholders	$ (20,031)	$ (4,088)
Basic net loss per share attributable to common stockholders (in usd per share)	$ (0.33)	$ (0.07)
Diluted net loss per share attributable to common stockholders (in usd per share)	$ (0.33)	$ (0.07)
Weighted average common shares used in:
Basic loss per share (in shares)	60,307	61,893
Diluted loss per share (in shares)	60,307	61,893
Products
Condensed Income Statements, Captions [Line Items]
Net revenue	$ 81,059	$ 105,708
Cost of revenue	75,185	81,192
Services
Condensed Income Statements, Captions [Line Items]
Net revenue	44,354	64,226
Cost of revenue	$ 34,948	$ 48,274

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Statement of Comprehensive Income [Abstract]
Net loss	$ (19,494)	$ (3,551)
Other comprehensive (loss) income:
Foreign currency translation adjustment	198	2,973
Other comprehensive income	198	2,973
Comprehensive loss	$ (19,296)	$ (578)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income
Beginning balance (in shares) at Jul. 31, 2020		62,787,919
Beginning balance at Jul. 31, 2020	$ 48,818	$ 628	$ 7,478,047	$ (7,433,700)	$ 3,843
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(3,551)			(3,551)
Preferred dividends	(537)			(537)
Issuance of common stock pursuant to employee stock purchase plan (in shares)		6,982
Issuance of common stock pursuant to employee stock purchase plan	3		3
Restricted stock forfeitures, net of issuance (in shares)		(932)
Share-based compensation	188		188
Other comprehensive items	2,973				2,973
Ending balance (in shares) at Oct. 31, 2020		62,793,969
Ending balance at Oct. 31, 2020	$ 47,894	$ 628	7,478,238	(7,437,788)	6,816
Beginning balance (in shares) at Jul. 31, 2021	63,099,496	63,099,496
Beginning balance at Jul. 31, 2021	$ 6,212	$ 632	7,478,638	(7,480,220)	7,162
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(19,494)			(19,494)
Preferred dividends	(537)			(537)
Issuance of common stock pursuant to employee stock purchase plan (in shares)		168
Restricted stock grants (in shares)		87,990
Restricted stock grants	0	$ 1	(1)
Restricted stock forfeitures, net of issuance (in shares)		(2,750,000)
Restricted stock forfeitures	0	$ (28)	28
Share-based compensation	190		190
Other comprehensive items	$ 198				198
Ending balance (in shares) at Oct. 31, 2021	60,437,654	60,437,654
Ending balance at Oct. 31, 2021	$ (13,431)	$ 605	$ 7,478,855	$ (7,500,251)	$ 7,360

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Cash flows from operating activities:
Net loss	$ (19,494)	$ (3,551)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation	8,607	5,780
Amortization of intangible assets	4,182	6,535
Amortization of deferred financing costs	137	148
Accretion of debt discount	386	292
Share-based compensation	190	188
Non-cash lease expense	3,439	3,613
Other losses, net	392	3,622
Changes in operating assets and liabilities:
Accounts receivable, net	(5,059)	12,839
Inventories, net	(1,978)	514
Prepaid expenses and other current assets	3,660	(4,473)
Accounts payable and accrued expenses	(482)	6,416
Refundable and accrued income taxes, net	(268)	503
Other assets and liabilities	(4,137)	(6,699)
Net cash (used in) provided by operating activities	(10,425)	25,727
Cash flows from investing activities:
Additions of property and equipment	(4,742)	(1,059)
Proceeds from the disposition of property and equipment	61	0
Net cash used in investing activities	(4,681)	(1,059)
Cash flows from financing activities:
Long-term debt repayments	(1,500)	(1,500)
Preferred dividend payments	(537)	(537)
Repayments on capital lease obligations	(18)	(17)
Proceeds from issuance of common stock	0	3
Net cash used in financing activities	(2,055)	(2,051)
Net effect of exchange rate changes on cash, cash equivalents and restricted cash	(121)	(269)
Net (decrease) increase in cash, cash equivalents and restricted cash	(17,282)	22,348
Cash, cash equivalents and restricted cash, beginning of period	105,143	94,642
Cash, cash equivalents and restricted cash, end of period	87,861	116,990
Cash and cash equivalents, end of period	81,330	104,522
Funds held for clients, end of period	$ 6,531	$ 12,468

NATURE OF OPERATIONS	3 Months Ended
NATURE OF OPERATIONS	Oct. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS	NATURE OF OPERATIONS Steel Connect, Inc., together with its consolidated subsidiaries (the "Company"), operates through its wholly-owned subsidiaries, IWCO Direct Holdings, Inc. ("IWCO Direct" or "Direct Marketing") and ModusLink Corporation ("ModusLink" or "Supply Chain"). IWCO Direct delivers data-driven marketing solutions for its customers. Its full range of services includes strategy, creative and execution for omnichannel marketing campaigns, along with postal logistics programs for direct mail. Through its Mail-Gard® division, IWCO Direct also offers business continuity and disaster recovery services to protect against unexpected business interruptions, along with providing print and mail outsourcing services. ModusLink is a supply chain business process management company serving clients in markets such as consumer electronics, communications, computing, medical devices, software and retail. ModusLink designs and executes elements in its clients' global supply chains to improve speed to market, product customization, flexibility, cost, quality and service. The Company also produces and licenses an entitlement management solution for activation, provisioning, entitlement subscription and data collection from physical goods (connected products) and digital products. Historically, the Company has financed its operations and met its capital requirements primarily through funds generated from operations, the sale of its securities, borrowings from lending institutions and sale of facilities that were not fully utilized. The Company believes it has access to adequate resources to meet its needs for normal operating costs, capital expenditures, mandatory debt redemptions and working capital for its existing business for at least twelve months from the date of this filing. These resources include current cash and cash equivalents, ModusLink's credit agreement with MidCap Financial Trust ("MidCap"), IWCO's revolving credit facility with Cerberus Business Finance, LLC ("Cerberus"), and cash, if any, provided by operating activities. The Company's expectations regarding its ability to use its existing cash and available credit facilities to continue funding its operations are based on assumptions that may prove to be inaccurate, and the Company may require capital resources sooner than currently expected. While the Company believes it will be able to access this additional liquidity based on existing information, the assumptions underlying this belief may also later prove to be inaccurate. As of October 31, 2021 and July 31, 2021, the Company had cash and cash equivalents of $81.3 million and $96.9 million, respectively. As of October 31, 2021, the Company had a working capital deficit of $16.7 million, which includes accrued pricing liabilities and certain tax related liabilities, which the Company believes will not require a significant cash outlay in the next twelve months. As of October 31, 2021, IWCO Direct had $25.0 million available borrowing capacity under its Cerberus Credit Facility. During the three months ended October 31, 2021, IWCO Direct did not trigger any of the financial covenants in the Cerberus Credit Facility. In order to maintain compliance with the Cerberus Credit Facility’s required liquidity covenant for the next twelve months, the Company has the ability and wherewithal to execute certain actions that may include, but are not limited to, reducing or delaying capital and strategic investments, and deferral of certain operating expenditures. While IWCO Direct currently expects to be in compliance in the next twelve months with all of the financial covenants, there can be no assurance that these covenants will continue to be met if the Company does not achieve its earnings and operating cash flow projections. Certain of IWCO Direct’s lease agreements contain financial covenants that would require IWCO Direct to issue a letter of credit (“LOC”) to the landlord in the event that IWCO Direct incurs debt that on a pro forma basis would result in IWCO Direct's net leverage exceeding 6.00x of IWCO Direct's Adjusted EBITDA. As of October 31, 2021, and through the date of this filing, IWCO Direct was in compliance with the net leverage ratio such that no LOC issuance is currently required. However, based upon IWCO Direct's covenant compliance as of the most recent balance sheet date, if IWCO Direct incurs additional debt, it would be required to issue an LOC of approximately $3.2 million. As of October 31, 2021, ModusLink had readily available borrowing capacity under its revolving credit facility of $8.5 million. The Company believes it will generate sufficient cash to meet its debt covenants under its credit facilities to which certain of its subsidiaries are a party and that it will be able to obtain cash through its current and future credit facilities, if needed. Impact of COVID-19 The ongoing COVID-19 pandemic has adversely impacted, and is likely to further adversely impact, nearly all aspects of our business and markets, including our workforce and the operations of our clients, suppliers, and business partners. Beginning in March 2020, when the World Health Organization categorized COVID-19 as a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency, we experienced impacts to our customers' demand, facility operations, supply chain, availability and productivity of personnel, while also working to comply with rapidly evolving international, federal, state and local restrictions and recommendations on travel and workplace health and safety. We experienced disruptions to our business continuity as a result of temporary closures of certain of ModusLink’s facilities in the third and fourth quarters of fiscal year 2020, as well as the fourth quarter of fiscal year 2021. However, these temporary closures did not have a significant impact on ModusLink’s operations. Additionally, although IWCO Direct operated as an essential business, it had reduced operating levels and labor shifts due to lower sales volume during the third quarter of fiscal year 2020. To help combat these impacts and mitigate the financial impact of the COVID-19 pandemic on our business, during fiscal year 2020 we took proactive measures by initiating cost reduction actions, including the waiver of board fees, hiring freezes, staffing and force reductions, company-wide salary reductions, bonus payment deferrals and temporary 401(k) match suspension. The temporary waiver of board fees and company-wide salary reduction actions taken in the prior fiscal year were fully restored prior to the beginning of fiscal year 2021, and the majority of salary reductions were repaid prior to the fiscal quarter ended January 31, 2021.We continue our focus on cash management and liquidity, which includes aggressive working capital management. In addition, we aim to closely monitor the impact of COVID-19 on all aspects of our business and geographies, including its impact on our clients, employees, suppliers, vendors, business partners and distribution channels. We believe that such impacts could include, but are not limited to, the extent and severity of the impact on our customers and suppliers; the continued disruption to the demand for our businesses' products and services; the impact of the global business and economic environment on liquidity and the availability of capital; delays in payments of outstanding receivables beyond normal payment terms; supply chain disruptions; uncertain demand; and the effect of any initiatives or programs that we may undertake to address financial and operational challenges faced by our customers. The full extent to which the pandemic will directly or indirectly impact our business, results of operations and financial condition, is difficult to predict and will depend on the duration and spread of the ongoing COVID-19 pandemic (including new variants of COVID-19), its severity, the actions to contain the virus or address its impact, the timing, distribution, and efficacy of vaccines and other treatments, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. As of the filing of this Form 10-Q, all of our facilities were open and able to operate at normal capacities. We will evaluate further actions if circumstances warrant while continuing to strategically support the Company’s future growth initiatives (including its Competitive Improvement Plan for IWCO Direct), sales and marketing activities and supply chain solutions and services. Steel Holdings Expression of Interest On November 19, 2020, the Company's Board of Directors (the "Board") received a preliminary, non-binding expression of interest (the "Expression of Interest") from Steel Partners Holdings L.P. ("Steel Holdings") to acquire all of the outstanding shares of common stock not already owned by Steel Holdings or its affiliates for a combination of cash and Steel Holdings 6% Series A Preferred Units, which would imply a value per share of common stock in the range of $0.65 to $0.72 per share. The Board has established a special committee comprised solely of independent directors (the "Acquisition Proposal Special Committee") authorized to retain independent legal and financial advisors and to review, evaluate, negotiate and approve or disapprove the Expression of Interest, and to explore alternative strategies or transactions. The Acquisition Proposal Special Committee announced on January 11, 2021 that it had retained financial advisors and legal counsel. As set forth in the Expression of Interest, the proposed transaction will be subject to the approval of the Acquisition Proposal Special Committee, as well as a non-waivable condition requiring approval of a majority of the shares outstanding of the Company not owned by Steel Holdings and its affiliates and related parties. The Board resolutions establishing the Acquisition Proposal Special Committee expressly provide that the Board will not approve the proposed transaction contemplated by the Expression of Interest or any alternative thereto without a prior favorable recommendation by the Acquisition Proposal Special Committee. The Board has only received a proposal, which it continues to negotiate with Steel Holdings. The proposal under negotiation does not constitute a definitive offer capable of acceptance, and may be withdrawn at any time and in any manner. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that the transaction proposed in the Expression of Interest or any other transaction will be approved or completed. The Company is not obligated to disclose any further developments or updates on the progress of the proposed transaction until either the Company enters into a definitive agreement or the Acquisition Proposal Special Committee determines no such transaction will be approved.

BASIS OF PRESENTATION	3 Months Ended
BASIS OF PRESENTATION	Oct. 31, 2021
Accounting Policies [Abstract]
BASIS OF PRESENTATION	BASIS OF PRESENTATIONThe accompanying condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of a normal recurring nature) considered necessary for fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes for the year ended July 31, 2021 (Fiscal Year 2021), which are contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 29, 2021. The results for the three months ended October 31, 2021 are not necessarily indicative of the results to be expected for the full fiscal year. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. All significant intercompany transactions and balances have been eliminated in consolidation. The Company considers events or transactions that occur after the balance sheet date but before the issuance of financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. For the three months ended October 31, 2021, the Company evaluated subsequent events for potential recognition and disclosure through the date these financial statements were filed. Reclassification Certain reclassifications have been made to the prior year balances to conform with current reporting. On the statement of cash flows for the three months ended October 31, 2021, the Company reclassified the non-cash portion of lease expense which totaled $3.6 million from Other Assets and Liabilities to Non-cash Lease Expense. These reclassifications had no impact on net loss or stockholder’s equity.

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
RECENT ACCOUNTING PRONOUNCEMENTS	Oct. 31, 2021
Accounting Policies [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	RECENT ACCOUNTING PRONOUNCEMENTS Adoption of New Accounting Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The new guidance was effective for the Company's first quarter of the fiscal year ending July 31, 2022 (Fiscal Year 2022). The adoption of this new guidance did not have a material impact on the Company's consolidated financial statements. Accounting Standards Issued and Not Yet Implemented In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Loses on Financial Instruments, an ASU that requires measurement and recognition of expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The ASU will be effective for the Company beginning in the first quarter of the fiscal year ending July 31, 2024 on a modified retrospective basis, which requires a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which is intended to provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate, known as LIBOR, or by another reference rate expected to be discontinued. This optional guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40). The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity's financial statements and information about events, conditions and circumstances that can affect the assessment of the amount or timing of an entity's future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning in our fiscal year ending July 31, 2025, with early adoption permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

INVENTORIES, NET

3 Months Ended

Oct. 31, 2021

Inventory Disclosure [Abstract]

INVENTORIES, NET

The table below presents the components of Inventories, net:


	October 31, 2021		July 31, 2021
	(In thousands)
Raw materials	$	17,206	$	15,484
Work-in-process	175		76
Finished goods	785		668
	$	18,166	$	16,228

GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Oct. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

The Company's goodwill of $231.5 million as of October 31, 2021 and July 31, 2021, respectively, relates to the Company's Direct Marketing reporting unit, which is the only reporting unit in the Direct Marketing reportable segment. The carrying value of goodwill is not amortized, but is tested for impairment annually as of June 30, and, additionally on an interim basis, whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Other intangible assets, net, as of October 31, 2021, include customer relationships. The trademarks and tradenames intangible assets were fully amortized as of January 31, 2021.

A summary of other intangible assets, net are reflected in the table below:


		October 31, 2021						July 31, 2021
	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in years)	(In thousands)
Customer relationships	15	$	192,730	$	81,907	$	110,823	$	192,730	$	77,725	$	115,005
Trademarks and tradenames	3	20,520		20,520		—		20,520		20,520		—
Total		$	213,250	$	102,427	$	110,823	$	213,250	$	98,245	$	115,005

The table below presents amortization expense recorded by the Company for other intangible assets:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Customer relationships	$	4,182	$	4,825
Trademarks and trade names	—		1,710
Total	$	4,182	$	6,535

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

3 Months Ended

Oct. 31, 2021

Payables and Accruals [Abstract]

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIESThe following tables reflect the components of "Accrued expenses" and "Other current liabilities":


	October 31, 2021		July 31, 2021
Accrued Expenses	(In thousands)
Accrued taxes	$	56,509	$	57,152
Accrued compensation	27,458		22,987
Accrued worker's compensation	1,805		1,818
Accrued audit, tax and legal	3,840		3,674
Accrued contract labor	1,119		930
Accrued interest	190		476
Accrued other	18,461		19,834
	$	109,382	$	106,871


	October 31, 2021		July 31, 2021
Other Current Liabilities	(In thousands)
Accrued pricing liabilities	$	10,295	$	10,295
Customer postage deposits	15,370		13,452

Other	3,701		4,354
	$	29,366	$	28,101

As of October 31, 2021 and July 31, 2021, the Company had accrued taxes of $56.5 million and $57.2 million, respectively, which reflected the Company's estimate for certain tax related liabilities. As of both October 31, 2021 and July 31, 2021, the Company had accrued pricing liabilities of approximately $10.3 million. As previously reported by the Company, several principal adjustments were made to its historic financial statements for periods ending on or before January 31, 2012, the most significant of which related to the treatment of vendor rebates in its pricing policies. Where the retention of a rebate or a mark-up was determined to have been inconsistent with a client contract, the Company concluded that these amounts were not properly recorded as revenue. Accordingly, revenue was reduced by an equivalent amount for the period that the rebate was estimated to have been affected. A corresponding liability for the same amount was recorded in that period (referred to as accrued pricing liabilities). The Company believes that it may not ultimately be required to pay all or any of the accrued pricing liabilities based upon the expiration of statutes of limitations, and due in part to the nature of the interactions with its clients. The remaining accrued pricing liabilities as of October 31, 2021 will be derecognized when there is sufficient information for the Company to conclude that such liabilities are not subject to escheatment and have been extinguished, which may occur through payment, legal release, or other legal or factual determination. The Company has not provided for any provision for interest and or penalties related to escheatment as it has concluded that such is not probable to occur, and any potential interest and penalties cannot be reasonably estimated.

RESTRUCTURING

3 Months Ended

Oct. 31, 2021

Restructuring and Related Activities [Abstract]

RESTRUCTURING

IWCO Direct Restructuring Activities

On June 2, 2021, the Board approved a Competitive Improvement Plan (“CIP”) for IWCO Direct, which addresses the changing requirements of its customers and markets it serves, as well as the current competitive landscape. The CIP seeks to expand IWCO Direct’s marketing services capabilities, and upgrade its production platform to new digital and inserting technology, while reducing its overall production costs to enhance its competitive pricing capabilities. The CIP contemplates a total investment of approximately $54 million primarily over a 24-month period. The Company estimates the CIP cost will consist of approximately: (1) $38 million for digital press and insertion equipment, and technology build out cost (of which approximately $34 million in lease/purchase agreements were entered into subsequent to the year ended July 31, 2021), and (2) $16 million for severance, employee retention, facilities optimization, and other implementation costs. In addition, the Company expects to incur approximately $12 million for non-cash accelerated depreciation expense. The cost estimates do not include amounts for potential non-cash asset impairment charges relating to facilities and equipment optimization. The timing and amount of the future costs incurred will depend on a number of factors.

Accelerated depreciation costs primarily relate to operating facilities and equipment to be sold or closed as part of the programs. Accelerated depreciation costs represent the difference between the depreciation expense to be recognized over the

revised useful life of the asset, based upon the anticipated date the site will be closed or divested or the equipment disposed of, and depreciation expense as determined utilizing the useful life prior to the restructuring actions.

As part of the CIP, the Company announced on August 23, 2021 that it will be optimizing its manufacturing footprint by closing IWCO Direct’s Little Falls, Minnesota facility. The facility is expected to close in January of 2022. The Company recognized approximately $6.6 million of cost during the three months ended October 31, 2021 and did not incur any material costs during the fiscal year ended July 31, 2021 associated with these restructuring activities.

ModusLink Restructuring Activities

During the fiscal year ended July 31, 2021, ModusLink implemented a strategic plan to reorganize its sales function and the e-Business operations. The restructuring charges associated with this plan were incurred during the fiscal year ended July 31, 2021 and were primarily composed of employee termination costs. ModusLink did not incur any restructuring charges during the three months ended October 31, 2021. In November 2021, ModusLink amended its strategic plan to include reorganizing its supply chain operations and expects to record a restructuring charge of approximately $1.0 million in the three months ending January 31, 2022.

The tables below present restructuring charges by type of cost for the three months ended October 31, 2021:


(in thousands)	Direct Marketing
Accelerated depreciation	$	4,395
Impairment of long-lived assets	70
Employee termination costs	1,985
Contractual obligations	195
Total restructuring charges	$	6,645


(in thousands)	Direct Marketing
Cost of revenue	$	6,343
Selling, general and administrative	302
	$	6,645

Changes to the restructuring liability during the three months ended October 31, 2021 were as follows:


(in thousands)	Employee Termination Costs		Contractual Obligations		Asset Impairment		Restructuring Liability
Balance as of July 31, 2021	$	1,055	$	—	$	—	$	1,055
Costs incurred	1,985		195		4,465		6,645

Non-cash relief of accrual	—		—		(4,465)		(4,465)
Change in estimates	(14)		—		—		(14)
Balance as of October 31, 2021	$	3,026	$	195	$	—	$	3,221

LEASES

3 Months Ended

Oct. 31, 2021

Leases [Abstract]

LEASES

LEASESThe table below presents the components of the Company's lease expense:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Operating lease cost	$	4,001	$	4,228
Short-term lease expense	349		407
Variable lease cost	11		8

Interest on finance lease liabilities	1		2
	$	4,362	$	4,645

Supplemental Cash Flow Information

Supplemental cash flow information related to the Company's leases was as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	3,930	$	4,239
Operating cash flows from finance leases	$	1	$	2
Financing cash flows from finance leases	$	18	$	17

LEASES

LEASESThe table below presents the components of the Company's lease expense:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Operating lease cost	$	4,001	$	4,228
Short-term lease expense	349		407
Variable lease cost	11		8

Interest on finance lease liabilities	1		2
	$	4,362	$	4,645

Supplemental Cash Flow Information

Supplemental cash flow information related to the Company's leases was as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	3,930	$	4,239
Operating cash flows from finance leases	$	1	$	2
Financing cash flows from finance leases	$	18	$	17

DEBT

3 Months Ended

Oct. 31, 2021

Debt Disclosure [Abstract]

DEBT

The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below:


	October 31, 2021		July 31, 2021
	(In thousands)
Secured
Cerberus Term Loan due December 15, 2022	$	362,830	$	364,330
Unsecured
7.50% Convertible Senior Note due March 1, 2024	14,940		14,940
Credit Facilities
Cerberus Revolving Facility	—		—
MidCap Credit Facility	—		—
Less: unamortized discounts and issuance costs	(5,647)		(6,136)
Total debt, net	372,123		373,134
Less: current portion of debt, net	(5,611)		(5,602)
Total long-term debt, net	$	366,512	$	367,532

7.50% Convertible Senior Note

On February 28, 2019, the Company entered into a 7.50% Convertible Senior Note Due 2024 Purchase Agreement (the "SPHG Note Purchase Agreement") with SPH Group Holdings LLC ("SPHG Holdings"), whereby SPHG Holdings agreed to loan the Company $14.9 million in exchange for a 7.50% Convertible Senior Note due 2024 (the "SPHG Note"). SPHG Holdings has the right, at its option, prior to the close of business on the business day immediately preceding the SPHG Note Maturity Date, to convert the SPHG Note or a portion thereof that is $1,000 or an integral multiple thereof, into shares of common stock (if the Company has not received a required stockholder approval) or cash, shares of common stock or a combination of cash and shares of common stock, as applicable (if the Company has received a required stockholder approval), at an initial conversion rate of 421.2655 shares of common stock, which is equivalent to an initial conversion price of approximately $2.37 per share (subject to adjustment as provided in the SPHG Note) per $1,000 principal amount of the SPHG Note, subject to, and in accordance with, the settlement provisions of the SPHG Note. As of October 31, 2021, the if-converted value of the SPHG Note did not exceed the

principal value of the SPHG Note. As of October 31, 2021, the remaining period over which the unamortized discount will be amortized is 28 months. As of October 31, 2021 and July 31, 2021, the net carrying value of the SPHG Note was $9.7 million and $9.3 million, respectively. The effective interest rate on the SPHG Note, including accretion of the discount, is 27.8%. The following tables reflect the components of the SPHG Note:


	October 31, 2021		July 31, 2021
	(In thousands)
Carrying amount of equity component	$	8,200	$	8,200

Principal amount of note	$	14,940	$	14,940
Unamortized debt discount	(5,211)		(5,597)
Net carrying amount	$	9,729	$	9,343

	Three Months Ended October 31,
	2021		2020
	(In thousands)
Interest expense related to contractual interest coupon	$	286	$	286
Interest expense related to accretion of the discount	386		292
	$	672	$	578

CONTINGENCIES	3 Months Ended
CONTINGENCIES	Oct. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	CONTINGENCIES On April 13, 2018, a purported shareholder, Donald Reith, filed a verified complaint, Reith v. Lichtenstein, et al., 2018-277 (Del. Ch.) in the Delaware Court of Chancery. The complaint alleges class and derivative claims for breach of fiduciary duty and/or aiding and abetting breach of fiduciary duty and unjust enrichment against the Board, Warren G. Lichtenstein, Glen M. Kassan, William T. Fejes, Jack L. Howard, Jeffrey J. Fenton, Philip E. Lengyel and Jeffrey S. Wald; and stockholders Steel Holdings, Steel Partners, Ltd., SPHG Holdings, Handy & Harman Ltd. ("Handy & Harman") and WHX CS Corp. (collectively, the "Steel Parties") in connection with the acquisition of $35.0 million of the Series C Convertible Preferred Stock by SPHG Holdings and equity grants made to Messrs. Lichtenstein, Howard and Fejes on December 15, 2017 (collectively, the "Challenged Transactions"). The Company is named as a nominal defendant. The complaint alleges that although the Challenged Transactions were approved by a Special Committee consisting of the independent members of the Board (Messrs. Fenton, Lengyel and Wald), the Steel Parties dominated and controlled the Special Committee, who approved the Challenged Transactions in breach of their fiduciary duty. Plaintiff alleges that the Challenged Transactions unfairly diluted shareholders and therefore unjustly enriched Steel Holdings, SPHG Holdings and Messrs. Lichtenstein, Howard and Fejes. The complaint also alleges that the Board made misleading disclosures in the Company's proxy statement for the 2017 Annual Meeting of Stockholders in connection with seeking approval to amend the 2010 Incentive Award Plan to authorize the issuance of additional shares to accommodate certain shares underlying the equity grants. Remedies requested include rescission of the Series C Convertible Preferred Stock and equity grants, disgorgement of any unjustly obtained property or compensation and monetary damages. On June 8, 2018, defendants moved to dismiss the complaint for failure to plead demand futility and failure to state a claim. On June 28, 2019, the Court denied most of the motion to dismiss allowing the matter to proceed. On August 13, 2021, the Company, together with certain of its current and former directors of the Board, Warren Lichtenstein, Glen Kassan, William Fejes, Jr., Jack Howard, Jeffrey Fenton and Jeffrey Wald, as well as other named defendants (collectively, the “Defendants”), entered into a memorandum of understanding (the “MOU”) with Donald Reith (the “Plaintiff”) in connection with the settlement of the Reith v. Lichtenstein, et al., C.A. No. 2018-0277-MTZ (Del. Ch. 2018) class and derivative action. Pursuant to the MOU, the Defendants agreed to cause their directors’ and officers’ liability insurance carriers to pay to the Company $2.75 million in cash. The payment shall be paid into an escrow account within 14 business days of the later of (i) the entry of the scheduling order in connection with the stipulation of the settlement; or (ii) the date on which Plaintiff’s counsel provides to the Defendants’ counsel written payment and wire instructions. Additionally, under the MOU and separate letter agreements between the Company and such individuals (the “Surrender Agreements”), Messrs. Lichtenstein, Howard and Fejes agreed to surrender to the Company an aggregate 3.3 million shares which they had initially received in December 2017 in consideration for services to the Company. The surrenders and cancellations are in the following amounts: for Mr. Lichtenstein, 1,833,333 vested shares and 300,000 unvested shares; for Mr. Howard, 916,667 vested shares and 150,000 unvested shares; and for Mr. Fejes, 100,000 vested shares. Such amounts are to be adjusted to give effect to the one-for-ten reverse stock split voted on by the Company’s shareholders at the annual meeting on July 26, 2021 (if such reverse stock split is effected prior to the surrender of such shares). The surrenders and cancellations shall be completed no later than seven calendar days following final approval of the settlement by the court and the exhaustion of any appeals therefrom or the expiration of time to appeal. On August 17, 2021, Mr. Lichtenstein and Mr. Howard surrendered the shares required under their respective Surrender Agreements and all such shares were subsequently cancelled. Pursuant to the MOU, the Company has also agreed to pay the Plaintiff’s counsel legal fees for this matter. The settlement requires court approval, and there can be no assurances that such approval will be granted.

REVENUE RECOGNITION

3 Months Ended

Oct. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

Disaggregation of Revenue

The following table presents the Company's revenues from contracts with customers disaggregated by major good or service line and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments.


	Three Months Ended October 31, 2021						Three Months Ended October 31, 2020
	Direct Marketing		Supply Chain		Consolidated Total		Direct Marketing		Supply Chain		Consolidated Total
	(In thousands)
Major Goods/Service Lines
Marketing solutions offerings	$	81,059	$	—	$	81,059	$	105,708	$	—	$	105,708
Supply chain management services	—		43,942		43,942		—		63,787		63,787
Other	—		412		412		—		439		439
	$	81,059	$	44,354	$	125,413	$	105,708	$	64,226	$	169,934
Timing of Revenue Recognition
Goods transferred over time	$	81,059	$	—	$	81,059	$	105,708	$	—	$	105,708
Services transferred over time	—		44,354		44,354		—		64,226		64,226
	$	81,059	$	44,354	$	125,413	$	105,708	$	64,226	$	169,934

Marketing Solutions Offerings

IWCO's revenue is generated through the provision of data-driven marketing solutions, primarily through providing direct mail products to customers. Revenue related to the majority of IWCO's marketing solutions contracts, which typically consist of a single integrated performance obligation, is recognized over time as the Company performs because the products have no alternative use to the Company.

Supply Chain Management Services

ModusLink's revenue primarily comes from the sale of supply chain management services to its clients. Amounts billed to customers under these arrangements include revenue attributable to the services performed as well as for materials procured on the customer's behalf as part of its service to them. The majority of these arrangements consist of two distinct performance obligations (i.e., warehousing/inventory management service and a separate kitting/packaging/assembly service), revenue related to each of which is recognized over time as services are performed using an input method based on the level of efforts expended.

Other

Other revenue consists of cloud-based software subscriptions, software maintenance and support service contracts, and fees for professional services. Revenue related to these arrangements is recognized on a straight-line basis over the term of the agreement or over the term of the agreement in proportion to the costs incurred in satisfying the obligations under the contract.

Contract Balances

Timing of revenue recognition may differ from timing of invoicing to customers. The Company records contract assets and liabilities related to its contracts with customers as follows:

•Accounts receivable when revenue is recognized prior to receipt of cash payments and if the right to such amounts is unconditional and solely based on the passage of time.

•Contract asset when the Company recognizes revenue based on efforts expended but the right to such amount is conditional upon satisfaction of another performance obligation. Contract assets are primarily comprised of fees related to marketing solutions offerings and supply chain management services. The Company's contract assets are all short-term in nature and are included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

•Deferred revenue when cash payments are received or due in advance of performance. Deferred revenue is primarily comprised of fees related to supply chain management services, cloud-based software subscriptions and software maintenance and support service contracts, which are generally billed in advance. Deferred revenue also includes other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The deferred revenue balance is classified as a component of other current liabilities and other long-term liabilities on the Company's condensed consolidated balance sheets.

The table below presents information for the Company's contract balances:


	October 31, 2021		July 31, 2021
	(In thousands)
Accounts receivable, trade, net	$	74,841	$	69,805
Contract assets	$	11,657	$	14,458

Deferred revenue - current	$	2,735	$	2,562
Deferred revenue - long-term	126		108
Total deferred revenue	$	2,861	$	2,670

Remaining Performance Obligations

Remaining performance obligations are comprised of deferred revenue. Changes in deferred revenue during the three months ended October 31, 2021 and October 31, 2020, were as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Balance at beginning of period	$	2,670	$	2,945
Deferral of revenue	685		1,096
Recognition of deferred amounts upon satisfaction of performance obligation	(494)		(853)
Balance at end of period	$	2,861	$	3,188

We expect to recognize approximately $2.7 million of the deferred revenue over the next twelve months and the remaining $0.1 million beyond that time period.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

INCOME TAXES	3 Months Ended
INCOME TAXES	Oct. 31, 2021
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The Company operates in multiple taxing jurisdictions, both within and outside of the United States. For the three months ended October 31, 2021, the Company was profitable in certain jurisdictions, resulting in an income tax expense using enacted rates in those jurisdictions. As of both October 31, 2021 and July 31, 2021, the total amount of the liability for unrecognized tax benefits related to federal, state and foreign taxes was approximately $2.5 million. On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security ("CARES") Act into law, which is intended to respond to the COVID-19 pandemic and its impact on the economy, public health, state and local governments, individuals and businesses. The CARES Act contains numerous tax provisions, including temporary changes to the future limitations on interest deductions related to Section 163(j) of the U.S. Internal Revenue Code (the “IRC”). The Company elected to defer the employer-paid portion of social security taxes, which is expected to provide the Company with approximately $5.3 million of additional liquidity during the current calendar year, with 50% of the deferral due December 31, 2021 and the remaining 50% due December 31, 2022. The Company does not expect the provisions of the CARES Act to have a significant impact on the income tax provision, income tax payable or deferred income tax positions of the Company. Uncertain Tax Positions In accordance with the Company's accounting policy, interest related to unrecognized tax benefits is included in the income tax expense line of the condensed consolidated statements of operations. As of October 31, 2021 and July 31, 2021, the liabilities for interest expense related to uncertain tax positions were $0.4 million and $0.3 million, respectively. The Company has accrued $0.4 million for penalties related to income tax positions. The Company expects $0.7 million of unrecognized tax benefits and related interest to reverse in the next twelve months. The Company is subject to U.S. federal income tax and various state, local and international income taxes in numerous jurisdictions. The federal and state tax returns are generally subject to tax examinations for the tax years ended July 31, 2018 through July 31, 2021. To the extent the Company has tax attribute carryforwards, the tax year in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period. In addition, a number of tax years remain subject to examination by the appropriate government agencies for certain countries in the Europe and Asia regions. In Europe, the Company's 2013 through 2020 tax years remain subject to examination in most locations, while the Company's 2009 through 2020 tax years remain subject to examination in most Asia locations.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

LOSS PER SHARE

3 Months Ended

Oct. 31, 2021

Earnings Per Share [Abstract]

LOSS PER SHARE

The following table reconciles (loss) earnings per share for the three and three months ended October 31, 2021 and 2020:


	Three Months Ended October 31,
	2021		2020
	(In thousands, except per share data)
Net loss	$	(19,494)	$	(3,551)
Less: Preferred dividends on redeemable preferred stock	(537)		(537)
Net loss attributable to common stockholders	$	(20,031)	$	(4,088)




Weighted average common shares outstanding	60,307		61,893


Basic net loss per share attributable to common stockholders	$	(0.33)	$	(0.07)
Diluted net loss per share attributable to common stockholders	$	(0.33)	$	(0.07)

Basic net loss per common share is calculated using the weighted average number of common shares outstanding during the period. Diluted net earnings per common share, if any, gives effect to diluted stock options (calculated based on the treasury stock method), non-vested restricted stock shares purchased under the employee stock purchase plan and shares issuable upon debt or preferred stock conversion (calculated using an as-if converted method).

For the three months ended October 31, 2021 and 2020, approximately 24.2 million and 24.3 million, respectively, common stock equivalent shares (including those related to convertible debt and preferred stock) were excluded from the denominator in the calculation of diluted net loss per share as their inclusion would have been antidilutive.

COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Oct. 31, 2021

Equity [Abstract]

COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME (LOSS)Comprehensive income (loss) combines net income (loss) and other comprehensive items. Other comprehensive items represent certain amounts that are reported as components of stockholders' equity in the accompanying condensed consolidated balance sheets. Accumulated other comprehensive items consist of the following:


	Foreign Currency Items		Pension Items		Total
	(In thousands)
Accumulated other comprehensive income (loss) as of July 31, 2021	$	9,762	$	(2,600)	$	7,162
Foreign currency translation adjustment	198		—		198


Net current-period other comprehensive income	198		—		198
Accumulated other comprehensive income (loss) as of October 31, 2021	$	9,960	$	(2,600)	$	7,360


	Foreign Currency Items		Pension Items		Total
	(In thousands)
Accumulated other comprehensive income (loss) as of July 31, 2020	$	5,025	$	(1,182)	$	3,843
Foreign currency translation adjustment	2,973		—		2,973


Net current-period other comprehensive income	2,973		—		2,973
Accumulated other comprehensive income (loss) as of October 31, 2020	$	7,998	$	(1,182)	$	6,816

SEGMENT INFORMATION

3 Months Ended

Oct. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

The Company has two operating segments which are the same as its reportable segments: Direct Marketing and Supply Chain. The Company also has Corporate-level activity, which consists primarily of costs associated with certain corporate administrative functions such as legal, finance and share-based compensation, which are not allocated to the Company's reportable segments. The Corporate-level balance sheet information includes cash and cash equivalents, debt and other assets and liabilities which are not identifiable to the operations of the Company's operating segments. All significant intra-segment amounts have been eliminated. Management evaluates segment performance based on segment net revenue and operating income (loss).

Summarized financial information by operating segment is as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Net revenue:
Direct Marketing	$	81,059	$	105,708
Supply Chain	44,354		64,226
	$	125,413	$	169,934
Operating (loss) income:
Direct Marketing	$	(11,478)	$	4,937
Supply Chain	1,973		5,151
Total segment operating (loss) income	(9,505)		10,088
Corporate-level activity	(1,402)		(3,013)
Total operating (loss) income	(10,907)		7,075
Total other expense, net	(8,272)		(9,822)
Loss before income taxes	$	(19,179)	$	(2,747)


	October 31, 2021		July 31, 2021
	(In thousands)
Total assets:
Direct Marketing	$	514,997	$	530,944
Supply Chain	93,395		101,159
Sub-total—segment assets	608,392		632,103
Corporate	44,762		44,278
	$	653,154	$	676,381

Summarized financial information of the Company's net revenue from external customers by group of services is as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Products:
Direct Marketing	$	81,059	$	105,708
Services:
Supply Chain	44,354		64,226
	$	125,413	$	169,934

Summarized financial information of the Company's net revenue by geographic location is as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
United States	$	91,506	$	121,483
China	15,966		19,640
Netherlands	5,649		7,795
Other	12,292		21,016
	$	125,413	$	169,934

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

RELATED PARTY TRANSACTIONS	3 Months Ended
RELATED PARTY TRANSACTIONS	Oct. 31, 2021
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS As of October 31, 2021, SPHG Holdings and its affiliates, including Steel Holdings, Handy & Harman Ltd. and Steel Partners Ltd., beneficially owned approximately 53.4% of our outstanding capital stock, including the if-converted value of the SPHG Note and shares of Series C Convertible Preferred Stock that vote on an as-converted basis together with our common stock. Warren G. Lichtenstein, our Interim Chief Executive Officer and the Executive Chairman of our Board, is also the Executive Chairman of Steel Holdings GP Inc. ("Steel Holdings GP"), the manager of Steel Holdings. Jack L. Howard, the President and a director of Steel Holdings GP, was appointed to the Board upon the closing of the Preferred Stock Transaction described below. SPHG Note Transaction On February 28, 2019, the Company entered into a SPHG Note Purchase Agreement with SPHG Holdings, whereby SPHG Holdings agreed to loan the Company $14.9 million in exchange for the SPHG Note. As of both October 31, 2021 and July 31, 2021, SPHG Holdings held $14.9 million principal amount of the SPHG Note. As of October 31, 2021 and July 31, 2021, the net carrying value of the SPHG Note was $9.7 million and $9.3 million, respectively. Preferred Stock Transaction On December 15, 2017, the Company entered into a Preferred Stock Purchase Agreement with SPHG Holdings, pursuant to which the Company issued 35,000 shares of the Company's newly created Series C Convertible Preferred Stock to SPHG Holdings at a price of $1,000 per share, for an aggregate purchase consideration of $35.0 million. The terms, rights, obligations and preferences of the Series C Convertible Preferred Stock are set forth in the Series C Certificate of Designations, which has been filed with the Secretary of State of the State of Delaware. Management Services Agreement On June 14, 2019, the Company entered into an agreement (the "Management Services Agreement") with Steel Services Ltd. ("Steel Services"), an indirect wholly-owned subsidiary of Steel Holdings. The Management Services Agreement was effective as of June 1, 2019. Total expenses incurred related to the Management Services Agreement for the three months ended October 31, 2021 and 2020 were $0.8 million and $0.8 million, respectively. As of both October 31, 2021 and July 31, 2021, amounts due to Steel Services was $0.9 million.

FAIR VALUE MEASUREMENTS

3 Months Ended

Oct. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

ASC 820 provides that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs

Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the assets or liabilities

The carrying value of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, current liabilities and the revolving line of credit approximate fair value because of the short maturity of these instruments. We believe that the carrying value of our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. The carrying value of capital lease obligations approximates fair value, as estimated by using discounted future cash flows based on the Company's current incremental borrowing rates for similar types of borrowing arrangements.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following tables present the Company's financial assets measured at fair value on a recurring basis as of October 31, 2021 and July 31, 2021, classified by fair value hierarchy:


			Fair Value Measurements at Reporting Date Using
(In thousands)	October 31, 2021		Level 1		Level 2		Level 3
Assets:
Money market funds	$	42,327	$	42,327	$	—	$	—


			Fair Value Measurements at Reporting Date Using
(In thousands)	July 31, 2021		Level 1		Level 2		Level 3
Assets:
Money market funds	$	42,327	$	42,327	$	—	$	—

There were no transfers between Levels 1, 2 or 3 during any of the periods presented.

When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are determined using pricing models, and the inputs to those pricing models are based on observable market inputs. The inputs to the pricing models are typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

The Company reviews the carrying amounts of these assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized when the carrying amount of the asset group or reporting unit is not recoverable and exceeds its fair value. The Company estimates the fair values of assets subject to impairment based on the Company's own judgments about the assumptions that market participants would use in pricing the assets and on observable market data, when available.

Fair Value of Financial Instruments

The Company's financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, customer deposits, accounts payable, restricted cash and debt, and are reflected in the consolidated financial statements at carrying value. With the exception of the SPHG Note and long-term debt, carrying value approximates fair value for these items due to their short-term nature. The Company believes that the carrying value of the liability component of the SPHG Note and our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets are money market funds. These are valued at quoted market prices in active markets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	3 Months Ended
RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	Oct. 31, 2021
Accounting Policies [Abstract]
Basis of Accounting	The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of a normal recurring nature) considered necessary for fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes for the year ended July 31, 2021 (Fiscal Year 2021), which are contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 29, 2021. The results for the three months ended October 31, 2021 are not necessarily indicative of the results to be expected for the full fiscal year. The year-end condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP.
Consolidation	All significant intercompany transactions and balances have been eliminated in consolidation.
Reclassification, Comparability Adjustment	Reclassification Certain reclassifications have been made to the prior year balances to conform with current reporting. On the statement of cash flows for the three months ended October 31, 2021, the Company reclassified the non-cash portion of lease expense which totaled $3.6 million from Other Assets and Liabilities to Non-cash Lease Expense. These reclassifications had no impact on net loss or stockholder’s equity.
Adoption of New Accounting Standards and Accounting Standards Issued and Not Yet Implemented	Adoption of New Accounting Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The new guidance was effective for the Company's first quarter of the fiscal year ending July 31, 2022 (Fiscal Year 2022). The adoption of this new guidance did not have a material impact on the Company's consolidated financial statements. Accounting Standards Issued and Not Yet Implemented In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Loses on Financial Instruments, an ASU that requires measurement and recognition of expected credit losses for financial instruments, including trade receivables, based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The ASU will be effective for the Company beginning in the first quarter of the fiscal year ending July 31, 2024 on a modified retrospective basis, which requires a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which is intended to provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate, known as LIBOR, or by another reference rate expected to be discontinued. This optional guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40). The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity's financial statements and information about events, conditions and circumstances that can affect the assessment of the amount or timing of an entity's future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning in our fiscal year ending July 31, 2025, with early adoption permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.
Fair Value of Financial Instruments	ASC 820 provides that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the assets or liabilities The carrying value of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, current liabilities and the revolving line of credit approximate fair value because of the short maturity of these instruments. We believe that the carrying value of our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. The carrying value of capital lease obligations approximates fair value, as estimated by using discounted future cash flows based on the Company's current incremental borrowing rates for similar types of borrowing arrangements.

INVENTORIES, NET (Tables)

3 Months Ended

Oct. 31, 2021

Inventory Disclosure [Abstract]

Schedule of inventories, net

The table below presents the components of Inventories, net:


	October 31, 2021		July 31, 2021
	(In thousands)
Raw materials	$	17,206	$	15,484
Work-in-process	175		76
Finished goods	785		668
	$	18,166	$	16,228

GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Oct. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of finite-lived intangible assets

A summary of other intangible assets, net are reflected in the table below:


		October 31, 2021						July 31, 2021
	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in years)	(In thousands)
Customer relationships	15	$	192,730	$	81,907	$	110,823	$	192,730	$	77,725	$	115,005
Trademarks and tradenames	3	20,520		20,520		—		20,520		20,520		—
Total		$	213,250	$	102,427	$	110,823	$	213,250	$	98,245	$	115,005

Finite-lived intangible assets amortization expense

The table below presents amortization expense recorded by the Company for other intangible assets:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Customer relationships	$	4,182	$	4,825
Trademarks and trade names	—		1,710
Total	$	4,182	$	6,535

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Oct. 31, 2021

Payables and Accruals [Abstract]

Components of accrued expenses

The following tables reflect the components of "Accrued expenses" and "Other current liabilities":


	October 31, 2021		July 31, 2021
Accrued Expenses	(In thousands)
Accrued taxes	$	56,509	$	57,152
Accrued compensation	27,458		22,987
Accrued worker's compensation	1,805		1,818
Accrued audit, tax and legal	3,840		3,674
Accrued contract labor	1,119		930
Accrued interest	190		476
Accrued other	18,461		19,834
	$	109,382	$	106,871

Components of other current liabilities


	October 31, 2021		July 31, 2021
Other Current Liabilities	(In thousands)
Accrued pricing liabilities	$	10,295	$	10,295
Customer postage deposits	15,370		13,452

Other	3,701		4,354
	$	29,366	$	28,101

RESTRUCTURING (Tables)

3 Months Ended

Oct. 31, 2021

Restructuring and Related Activities [Abstract]

Schedule of restructuring and related costs

The tables below present restructuring charges by type of cost for the three months ended October 31, 2021:


(in thousands)	Direct Marketing
Accelerated depreciation	$	4,395
Impairment of long-lived assets	70
Employee termination costs	1,985
Contractual obligations	195
Total restructuring charges	$	6,645


(in thousands)	Direct Marketing
Cost of revenue	$	6,343
Selling, general and administrative	302
	$	6,645

Changes to the restructuring liability during the three months ended October 31, 2021 were as follows:


(in thousands)	Employee Termination Costs		Contractual Obligations		Asset Impairment		Restructuring Liability
Balance as of July 31, 2021	$	1,055	$	—	$	—	$	1,055
Costs incurred	1,985		195		4,465		6,645

Non-cash relief of accrual	—		—		(4,465)		(4,465)
Change in estimates	(14)		—		—		(14)
Balance as of October 31, 2021	$	3,026	$	195	$	—	$	3,221

LEASES (Tables)

3 Months Ended

Oct. 31, 2021

Leases [Abstract]

Lease cost

The table below presents the components of the Company's lease expense:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Operating lease cost	$	4,001	$	4,228
Short-term lease expense	349		407
Variable lease cost	11		8

Interest on finance lease liabilities	1		2
	$	4,362	$	4,645

Supplemental cash flow information related to the Company's leases was as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	3,930	$	4,239
Operating cash flows from finance leases	$	1	$	2
Financing cash flows from finance leases	$	18	$	17

DEBT (Tables)

3 Months Ended

Oct. 31, 2021

Debt Disclosure [Abstract]

Components of debt and reconciliation

The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below:


	October 31, 2021		July 31, 2021
	(In thousands)
Secured
Cerberus Term Loan due December 15, 2022	$	362,830	$	364,330
Unsecured
7.50% Convertible Senior Note due March 1, 2024	14,940		14,940
Credit Facilities
Cerberus Revolving Facility	—		—
MidCap Credit Facility	—		—
Less: unamortized discounts and issuance costs	(5,647)		(6,136)
Total debt, net	372,123		373,134
Less: current portion of debt, net	(5,611)		(5,602)
Total long-term debt, net	$	366,512	$	367,532

Net carrying value of SPG note

The following tables reflect the components of the SPHG Note:


	October 31, 2021		July 31, 2021
	(In thousands)
Carrying amount of equity component	$	8,200	$	8,200

Principal amount of note	$	14,940	$	14,940
Unamortized debt discount	(5,211)		(5,597)
Net carrying amount	$	9,729	$	9,343

	Three Months Ended October 31,
	2021		2020
	(In thousands)
Interest expense related to contractual interest coupon	$	286	$	286
Interest expense related to accretion of the discount	386		292
	$	672	$	578

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

REVENUE RECOGNITION (Tables)

3 Months Ended

Oct. 31, 2021

Revenue from Contract with Customer [Abstract]

Summary of reconciliation of the disaggregated revenue


	Three Months Ended October 31, 2021						Three Months Ended October 31, 2020
	Direct Marketing		Supply Chain		Consolidated Total		Direct Marketing		Supply Chain		Consolidated Total
	(In thousands)
Major Goods/Service Lines
Marketing solutions offerings	$	81,059	$	—	$	81,059	$	105,708	$	—	$	105,708
Supply chain management services	—		43,942		43,942		—		63,787		63,787
Other	—		412		412		—		439		439
	$	81,059	$	44,354	$	125,413	$	105,708	$	64,226	$	169,934
Timing of Revenue Recognition
Goods transferred over time	$	81,059	$	—	$	81,059	$	105,708	$	—	$	105,708
Services transferred over time	—		44,354		44,354		—		64,226		64,226
	$	81,059	$	44,354	$	125,413	$	105,708	$	64,226	$	169,934

Summary of changes in deferred revenue

The table below presents information for the Company's contract balances:


	October 31, 2021		July 31, 2021
	(In thousands)
Accounts receivable, trade, net	$	74,841	$	69,805
Contract assets	$	11,657	$	14,458

Deferred revenue - current	$	2,735	$	2,562
Deferred revenue - long-term	126		108
Total deferred revenue	$	2,861	$	2,670

Remaining Performance Obligations

Remaining performance obligations are comprised of deferred revenue. Changes in deferred revenue during the three months ended October 31, 2021 and October 31, 2020, were as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Balance at beginning of period	$	2,670	$	2,945
Deferral of revenue	685		1,096
Recognition of deferred amounts upon satisfaction of performance obligation	(494)		(853)
Balance at end of period	$	2,861	$	3,188

LOSS PER SHARE (Tables)

3 Months Ended

Oct. 31, 2021

Earnings Per Share [Abstract]

Reconciliation of (loss) earnings per share

The following table reconciles (loss) earnings per share for the three and three months ended October 31, 2021 and 2020:


	Three Months Ended October 31,
	2021		2020
	(In thousands, except per share data)
Net loss	$	(19,494)	$	(3,551)
Less: Preferred dividends on redeemable preferred stock	(537)		(537)
Net loss attributable to common stockholders	$	(20,031)	$	(4,088)




Weighted average common shares outstanding	60,307		61,893


Basic net loss per share attributable to common stockholders	$	(0.33)	$	(0.07)
Diluted net loss per share attributable to common stockholders	$	(0.33)	$	(0.07)

COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Oct. 31, 2021

Equity [Abstract]

Accumulated other comprehensive items

Accumulated other comprehensive items consist of the following:


	Foreign Currency Items		Pension Items		Total
	(In thousands)
Accumulated other comprehensive income (loss) as of July 31, 2021	$	9,762	$	(2,600)	$	7,162
Foreign currency translation adjustment	198		—		198


Net current-period other comprehensive income	198		—		198
Accumulated other comprehensive income (loss) as of October 31, 2021	$	9,960	$	(2,600)	$	7,360


	Foreign Currency Items		Pension Items		Total
	(In thousands)
Accumulated other comprehensive income (loss) as of July 31, 2020	$	5,025	$	(1,182)	$	3,843
Foreign currency translation adjustment	2,973		—		2,973


Net current-period other comprehensive income	2,973		—		2,973
Accumulated other comprehensive income (loss) as of October 31, 2020	$	7,998	$	(1,182)	$	6,816

SEGMENT INFORMATION (Tables)

3 Months Ended

Oct. 31, 2021

Segment Reporting [Abstract]

Summarized financial information of continuing operations

Summarized financial information by operating segment is as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Net revenue:
Direct Marketing	$	81,059	$	105,708
Supply Chain	44,354		64,226
	$	125,413	$	169,934
Operating (loss) income:
Direct Marketing	$	(11,478)	$	4,937
Supply Chain	1,973		5,151
Total segment operating (loss) income	(9,505)		10,088
Corporate-level activity	(1,402)		(3,013)
Total operating (loss) income	(10,907)		7,075
Total other expense, net	(8,272)		(9,822)
Loss before income taxes	$	(19,179)	$	(2,747)

Total assets of continuing operations


	October 31, 2021		July 31, 2021
	(In thousands)
Total assets:
Direct Marketing	$	514,997	$	530,944
Supply Chain	93,395		101,159
Sub-total—segment assets	608,392		632,103
Corporate	44,762		44,278
	$	653,154	$	676,381

Summarized financial information of net revenue from external customers by group of services

Summarized financial information of the Company's net revenue from external customers by group of services is as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
Products:
Direct Marketing	$	81,059	$	105,708
Services:
Supply Chain	44,354		64,226
	$	125,413	$	169,934

Summarized financial information of the Company's net revenue by geographic location is as follows:


	Three Months Ended October 31,
	2021		2020
	(In thousands)
United States	$	91,506	$	121,483
China	15,966		19,640
Netherlands	5,649		7,795
Other	12,292		21,016
	$	125,413	$	169,934

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Oct. 31, 2021

Fair Value Disclosures [Abstract]

Financial assets measured at fair value on recurring basis and classified by fair value hierarchy

The following tables present the Company's financial assets measured at fair value on a recurring basis as of October 31, 2021 and July 31, 2021, classified by fair value hierarchy:


			Fair Value Measurements at Reporting Date Using
(In thousands)	October 31, 2021		Level 1		Level 2		Level 3
Assets:
Money market funds	$	42,327	$	42,327	$	—	$	—


			Fair Value Measurements at Reporting Date Using
(In thousands)	July 31, 2021		Level 1		Level 2		Level 3
Assets:
Money market funds	$	42,327	$	42,327	$	—	$	—

NATURE OF OPERATIONS - Nature of Operations (Details) $ / shares in Units, $ in Millions	Oct. 31, 2021 USD ($) $ / shares	Jul. 31, 2021 USD ($) $ / shares	Nov. 19, 2020 $ / shares
Nature Of Operations [Line Items]
Cash and cash equivalents	$ 81.3	$ 96.9
Working capital deficit	$ 16.7
Preferred stock, par value (in usd per share) \| $ / shares	$ 0.01	$ 0.01
Minimum \| Common Stock
Nature Of Operations [Line Items]
Preferred stock, par value (in usd per share) \| $ / shares			$ 0.65
Maximum \| Common Stock
Nature Of Operations [Line Items]
Preferred stock, par value (in usd per share) \| $ / shares			$ 0.72
Cerberus Term Loan due December 15, 2022
Nature Of Operations [Line Items]
Credit facility, readily available borrowing capacity	$ 25.0
Adjusted EBITDA	6.00
Line of credit facility, fair value of amount outstanding	$ 3.2
PNC bank credit facility
Nature Of Operations [Line Items]
Credit facility, readily available borrowing capacity	$ 8.5

BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	3 Months Ended
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Oct. 31, 2020
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Other assets and liabilities	$ (4,137)	$ (6,699)
Non-cash lease expense	3,439	$ 3,613
Revision of prior period, reclassification, adjustment \| Reclassification adjustment to confirm with current reporting
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Other assets and liabilities	3,600
Non-cash lease expense	$ 3,600

INVENTORIES, NET - Components of Inventories (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 17,206	$ 15,484
Work-in-process	175	76
Finished goods	785	668
Inventories, net	$ 18,166	$ 16,228

GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Jul. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 231,470	$ 231,470
Gross Carrying Amount	213,250	213,250
Accumulated Amortization	102,427	98,245
Net Carrying Amount	$ 110,823	115,005
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	15 years
Gross Carrying Amount	$ 192,730	192,730
Accumulated Amortization	81,907	77,725
Net Carrying Amount	$ 110,823	115,005
Trademarks and tradenames
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	3 years
Gross Carrying Amount	$ 20,520	20,520
Accumulated Amortization	20,520	20,520
Net Carrying Amount	0	0
Direct Marketing
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 231,500	$ 231,500

GOODWILL AND INTANGIBLE ASSETS - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 4,182	$ 6,535
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	4,182	4,825
Trademarks and trade names
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 0	$ 1,710

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Accrued Expenses (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Payables and Accruals [Abstract]
Accrued taxes	$ 56,509	$ 57,152
Accrued compensation	27,458	22,987
Accrued worker's compensation	1,805	1,818
Accrued audit, tax and legal	3,840	3,674
Accrued contract labor	1,119	930
Accrued interest	190	476
Accrued other	18,461	19,834
Accrued expenses	$ 109,382	$ 106,871

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Components of Other Current Liabilities (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Payables and Accruals [Abstract]
Accrued pricing liabilities	$ 10,295	$ 10,295
Customer postage deposits	15,370	13,452
Other	3,701	4,354
Other current liabilities	$ 29,366	$ 28,101

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Narrative (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Payables and Accruals [Abstract]
Accrued taxes	$ 56,509	$ 57,152
Accrued pricing liabilities	$ 10,295	$ 10,295

RESTRUCTURING - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
	Jun. 02, 2021	Oct. 31, 2021	Nov. 30, 2021
IWCO Direct's Competitive Improvement Plan
Restructuring Cost and Reserve [Line Items]
Total expected costs of business development	$ 54,000
Expected term of investment	24 months
Costs incurred		$ 6,645
IWCO Direct's Competitive Improvement Plan \| Digital Press and Insertion Equipment
Restructuring Cost and Reserve [Line Items]
Total expected costs of business development	$ 38,000
IWCO Direct's Competitive Improvement Plan \| Lease/Purchase Agreements
Restructuring Cost and Reserve [Line Items]
Total expected costs of business development	34,000
IWCO Direct's Competitive Improvement Plan \| Employee-Related, Facilities Optimization, and Other Implementation Costs
Restructuring Cost and Reserve [Line Items]
Total expected costs of business development	16,000
IWCO Direct's Competitive Improvement Plan \| Accelerated Depreciation
Restructuring Cost and Reserve [Line Items]
Total expected costs of business development	$ 12,000
ModusLink \| Subsequent Event
Restructuring Cost and Reserve [Line Items]
Expected restructuring charges			$ 1,000

RESTRUCTURING - Schedule of Restructuring Charges by Type (Details) - IWCO Direct's Competitive Improvement Plan $ in Thousands	3 Months Ended
	Oct. 31, 2021 USD ($)
Restructuring Cost and Reserve [Line Items]
Costs incurred	$ 6,645
Employee termination costs
Restructuring Cost and Reserve [Line Items]
Costs incurred	1,985
Contractual obligations
Restructuring Cost and Reserve [Line Items]
Costs incurred	195
Direct Marketing
Restructuring Cost and Reserve [Line Items]
Costs incurred	6,645
Direct Marketing \| Cost of revenue
Restructuring Cost and Reserve [Line Items]
Costs incurred	6,343
Direct Marketing \| Selling, general and administrative
Restructuring Cost and Reserve [Line Items]
Costs incurred	302
Direct Marketing \| Accelerated depreciation
Restructuring Cost and Reserve [Line Items]
Costs incurred	4,395
Direct Marketing \| Impairment of long-lived assets
Restructuring Cost and Reserve [Line Items]
Costs incurred	70
Direct Marketing \| Employee termination costs
Restructuring Cost and Reserve [Line Items]
Costs incurred	1,985
Direct Marketing \| Contractual obligations
Restructuring Cost and Reserve [Line Items]
Costs incurred	$ 195

RESTRUCTURING - Restructuring Liability Rollforward (Details) - IWCO Direct's Competitive Improvement Plan $ in Thousands	3 Months Ended
	Oct. 31, 2021 USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 1,055
Costs incurred	6,645
Non-cash relief of accrual	(4,465)
Change in estimates	(14)
Ending balance	3,221
Employee termination costs
Restructuring Reserve [Roll Forward]
Beginning balance	1,055
Costs incurred	1,985
Non-cash relief of accrual	0
Change in estimates	(14)
Ending balance	3,026
Contractual obligations
Restructuring Reserve [Roll Forward]
Beginning balance	0
Costs incurred	195
Non-cash relief of accrual	0
Change in estimates	0
Ending balance	195
Asset Impairment
Restructuring Reserve [Roll Forward]
Beginning balance	0
Costs incurred	4,465
Non-cash relief of accrual	(4,465)
Change in estimates	0
Ending balance	$ 0

LEASES - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended
LEASES - Lease Costs (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Oct. 31, 2020
Lease, Cost [Abstract]
Operating lease cost	$ 4,001	$ 4,228
Short-term lease expense	349	407
Variable lease cost	11	8
Interest on finance lease liabilities	1	2
Total lease cost	$ 4,362	$ 4,645

LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$ 3,930	$ 4,239
Operating cash flows from finance leases	1	2
Financing cash flows from finance leases	$ 18	$ 17

DEBT - Component of Debt and Reconciliation (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Line of Credit Facility [Line Items]
Less: unamortized discounts and issuance costs	$ (5,647)	$ (6,136)
Total debt, net	372,123	373,134
Less: current portion of debt, net	(5,611)	(5,602)
Total long-term debt, net	366,512	367,532
7.50% Convertible Senior Note due March 1, 2024
Line of Credit Facility [Line Items]
Principal amount of long term debt	14,940	14,940
Cerberus Term Loan due December 15, 2022
Line of Credit Facility [Line Items]
Principal amount of long term debt	362,830	364,330
Cerberus Revolving Facility
Line of Credit Facility [Line Items]
Revolving credit facility	0	0
MidCap Credit Facility
Line of Credit Facility [Line Items]
Revolving credit facility	$ 0	$ 0

DEBT - Additional Information (Details)		3 Months Ended
DEBT - Additional Information (Details)	Feb. 28, 2019 USD ($) $ / shares	Oct. 31, 2021 USD ($)	Jul. 31, 2021 USD ($)
Debt Instrument [Line Items]
Long-term debt		$ 372,123,000	$ 373,134,000
Debt instrument, interest rate, effective percentage		27.80%
SPHG Holdings
Debt Instrument [Line Items]
Conversion to common stock	$ 1,000
Conversion ratio (shares)	0.4212655
Initial conversion price (in usd per share) \| $ / shares	$ 2.37
SPHG Holdings \| 7.50% Convertible Senior Note due March 1, 2024
Debt Instrument [Line Items]
Debt instrument, stated interest rate	7.50%
Principal amount of note	$ 14,900,000	$ 14,940,000	14,940,000
Debt instrument amortization period		28 months
Long-term debt		$ 9,729,000	$ 9,343,000

DEBT - Net Carrying Value of the Notes (Details) - USD ($)	Oct. 31, 2021	Jul. 31, 2021	Feb. 28, 2019
Debt Instrument [Line Items]
Carrying amount of equity component	$ 8,200,000	$ 8,200,000
Total debt, net	372,123,000	373,134,000
SPHG Holdings \| 7.50% Convertible Senior Note due March 1, 2024
Debt Instrument [Line Items]
Principal amount of note	14,940,000	14,940,000	$ 14,900,000
Unamortized debt discount	(5,211,000)	(5,597,000)
Total debt, net	$ 9,729,000	$ 9,343,000

DEBT - Summary of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Interest Expense, Debt [Line Items]
Debt instrument, interest expense	$ 672	$ 578
SPHG Holdings \| Interest expense related to contractual interest coupon
Interest Expense, Debt [Line Items]
Debt instrument, interest expense	286	286
SPHG Holdings \| Interest expense related to accretion of the discount
Interest Expense, Debt [Line Items]
Debt instrument, interest expense	$ 386	$ 292

CONTINGENCIES - Additional Information (Details) - USD ($) $ in Thousands		1 Months Ended
	Dec. 15, 2017	Aug. 31, 2021
Reith v. Lichtenstein
Contingencies [Line Items]
Cash paid to plaintiff		$ 2,750
Reith v. Lichtenstein \| Director \| Restricted Stock
Contingencies [Line Items]
Number of shares surrendered		3,300,000
Reith v. Lichtenstein \| Director \| Restricted Stock \| Warren Lichtenstein
Contingencies [Line Items]
Number of vested shares surrendered		1,833,333
Number of nonvested shares surrendered		300,000
Reith v. Lichtenstein \| Director \| Restricted Stock \| Jack Howard
Contingencies [Line Items]
Number of vested shares surrendered		916,667
Number of nonvested shares surrendered		150,000
Reith v. Lichtenstein \| Director \| Restricted Stock \| William Fejes
Contingencies [Line Items]
Number of vested shares surrendered		100,000
Purchase agreement \| SPHG Holdings \| Series C convertible preferred stock
Contingencies [Line Items]
Proceeds from issuance of preferred stock	$ 35,000

REVENUE RECOGNITION - Disaggregated Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Disaggregation of Revenue [Line Items]
Net revenue	$ 125,413	$ 169,934
Marketing solutions offerings
Disaggregation of Revenue [Line Items]
Net revenue	81,059	105,708
Supply chain management services
Disaggregation of Revenue [Line Items]
Net revenue	43,942	63,787
Other
Disaggregation of Revenue [Line Items]
Net revenue	412	439
Products
Disaggregation of Revenue [Line Items]
Net revenue	81,059	105,708
Products \| Transferred over time
Disaggregation of Revenue [Line Items]
Net revenue	81,059	105,708
Services
Disaggregation of Revenue [Line Items]
Net revenue	44,354	64,226
Services \| Transferred over time
Disaggregation of Revenue [Line Items]
Net revenue	44,354	64,226
Direct Marketing
Disaggregation of Revenue [Line Items]
Net revenue	81,059	105,708
Direct Marketing \| Marketing solutions offerings
Disaggregation of Revenue [Line Items]
Net revenue	81,059	105,708
Direct Marketing \| Supply chain management services
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Direct Marketing \| Other
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Direct Marketing \| Products \| Transferred over time
Disaggregation of Revenue [Line Items]
Net revenue	81,059	105,708
Direct Marketing \| Services \| Transferred over time
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Supply Chain
Disaggregation of Revenue [Line Items]
Net revenue	44,354	64,226
Supply Chain \| Marketing solutions offerings
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Supply Chain \| Supply chain management services
Disaggregation of Revenue [Line Items]
Net revenue	43,942	63,787
Supply Chain \| Other
Disaggregation of Revenue [Line Items]
Net revenue	412	439
Supply Chain \| Products \| Transferred over time
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Supply Chain \| Services \| Transferred over time
Disaggregation of Revenue [Line Items]
Net revenue	$ 44,354	$ 64,226

REVENUE RECOGNITION - Additional Information (Detail) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021	Oct. 31, 2020	Jul. 31, 2020
Revenue from Contract with Customer [Abstract]
Accounts receivable, trade, net	$ 74,841	$ 69,805
Contract assets	11,657	14,458
Deferred revenue - current	2,735	2,562
Deferred revenue - long-term	126	108
Total deferred revenue	$ 2,861	$ 2,670	$ 3,188	$ 2,945

REVENUE RECOGNITION - Summary of Changes in Deferred Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Change in Deferred Revenue
Balance at beginning of period	$ 2,670	$ 2,945
Deferral of revenue	685	1,096
Recognition of deferred amounts upon satisfaction of performance obligation	(494)	(853)
Balance at end of period	$ 2,861	$ 3,188

REVENUE RECOGNITION - Performance Obligations (Details) $ in Millions	Oct. 31, 2021 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-11-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 2.7
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-11-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 0.1
Revenue, remaining performance obligation, expected timing of satisfaction, period

INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions	Oct. 31, 2021	Jul. 31, 2021
Income Tax Disclosure [Abstract]
Unrecognized tax benefits related to federal, state and foreign taxes	$ 2.5	$ 2.5
Deferred employer-paid portion of social security taxes	5.3
Liabilities for interest expense related to uncertain tax positions	0.4	$ 0.3
Income tax penalties accrued	0.4
Expected unrecognized tax benefits to reverse in the next twelve months	$ 0.7

LOSS PER SHARE - Reconciliation of (Loss) Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Earnings Per Share [Abstract]
Net loss	$ (19,494)	$ (3,551)
Less: Preferred dividends on redeemable preferred stock	(537)	(537)
Net loss attributable to common stockholders	$ (20,031)	$ (4,088)
Weighted average common shares outstanding (in shares)	60,307	61,893
Basic net loss per share attributable to common stockholders (in usd per share)	$ (0.33)	$ (0.07)
Diluted net loss per share attributable to common stockholders (in usd per share)	$ (0.33)	$ (0.07)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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+ Details

LOSS PER SHARE - Additional Information (Details) - shares shares in Millions	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Earnings Per Share [Abstract]
Common stock equivalent shares excluded from the denominator in the calculation of diluted loss per share (in shares)	24.2	24.3

COMPREHENSIVE INCOME (LOSS) - Accumulated Other Comprehensive Income Items (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 6,212	$ 48,818
Foreign currency translation adjustment	198	2,973
Other comprehensive income	198	2,973
Ending balance	(13,431)	47,894
Accumulated Other Comprehensive Income
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	7,162	3,843
Foreign currency translation adjustment	198	2,973
Other comprehensive income	198	2,973
Ending balance	7,360	6,816
Foreign Currency Items
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	9,762	5,025
Foreign currency translation adjustment	198	2,973
Other comprehensive income	198	2,973
Ending balance	9,960	7,998
Pension Items
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(2,600)	(1,182)
Foreign currency translation adjustment	0	0
Other comprehensive income	0	0
Ending balance	$ (2,600)	$ (1,182)

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

SEGMENT INFORMATION - Additional Information (Details)	3 Months Ended
SEGMENT INFORMATION - Additional Information (Details)	Oct. 31, 2021 segment
Segment Reporting [Abstract]
Number of operating segments	2
Number of reportable segments	2

SEGMENT INFORMATION - Summarized Financial Information of Continuing Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Segment Reporting Information [Line Items]
Revenue from contracts with customers	$ 125,413	$ 169,934
Operating (loss) income	(10,907)	7,075
Total other expense, net	(8,272)	(9,822)
Loss before income taxes	(19,179)	(2,747)
Direct Marketing
Segment Reporting Information [Line Items]
Revenue from contracts with customers	81,059	105,708
Supply Chain
Segment Reporting Information [Line Items]
Revenue from contracts with customers	44,354	64,226
Operating segments
Segment Reporting Information [Line Items]
Operating (loss) income	(9,505)	10,088
Operating segments \| Direct Marketing
Segment Reporting Information [Line Items]
Revenue from contracts with customers	81,059	105,708
Operating (loss) income	(11,478)	4,937
Operating segments \| Supply Chain
Segment Reporting Information [Line Items]
Revenue from contracts with customers	44,354	64,226
Operating (loss) income	1,973	5,151
Corporate
Segment Reporting Information [Line Items]
Operating (loss) income	$ (1,402)	$ (3,013)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

SEGMENT INFORMATION - Total Assets of Continuing Operations (Details) - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Segment Reporting Information [Line Items]
Total assets	$ 653,154	$ 676,381
Operating segments
Segment Reporting Information [Line Items]
Total assets	608,392	632,103
Operating segments \| Direct Marketing
Segment Reporting Information [Line Items]
Total assets	514,997	530,944
Operating segments \| Supply Chain
Segment Reporting Information [Line Items]
Total assets	93,395	101,159
Corporate
Segment Reporting Information [Line Items]
Total assets	$ 44,762	$ 44,278

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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+ Details

SEGMENT INFORMATION - Summarized Financial Information of Net Revenue from External Customers by Group of Services (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue from contracts with customers	$ 125,413	$ 169,934
United States
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue from contracts with customers	91,506	121,483
China
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue from contracts with customers	15,966	19,640
Netherlands
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue from contracts with customers	5,649	7,795
Other
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue from contracts with customers	12,292	21,016
Direct Marketing
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue from contracts with customers	81,059	105,708
Supply Chain
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue from contracts with customers	$ 44,354	$ 64,226

- Definition

+ References

+ Details

RELATED PARTY TRANSACTIONS (Details) - USD ($)		3 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Dec. 15, 2017	Oct. 31, 2021	Oct. 31, 2020	Jul. 31, 2021	Feb. 28, 2019
Related Party Transaction [Line Items]
Long-term debt		$ 372,123,000		$ 373,134,000
Preferred stock, shares issued (in shares)		0		0
SPHG Holdings \| 7.50% Convertible Senior Note due March 1, 2024
Related Party Transaction [Line Items]
Principal amount convertible senior notes held of		$ 14,940,000		$ 14,940,000	$ 14,900,000
Long-term debt		9,729,000		9,343,000
Steel Holdings \| Convertible debt
Related Party Transaction [Line Items]
Principal amount convertible senior notes held of		14,900,000		14,900,000	$ 14,900,000
SPHG Holdings \| Purchase agreement \| Series C convertible preferred stock
Related Party Transaction [Line Items]
Preferred stock, shares issued (in shares)	35,000
Price per share (in usd per share)	$ 1,000
Proceeds from issuance of preferred stock	$ 35,000,000
Steel Services Ltd. \| Management Services Agreement
Related Party Transaction [Line Items]
Total expenses incurred related to Management Services Agreement and Transfer Agreement		800,000	$ 800,000
SP Corporate Services Llc and Steel Services Limited \| Management Services Agreement
Related Party Transaction [Line Items]
Amount due to related parties		$ 900,000		$ 900,000
Steel Connect, Inc. \| SPHG Holdings
Related Party Transaction [Line Items]
Ownership percentage in capital stock		53.40%

FAIR VALUE MEASUREMENTS - Financial Assets Measured at Fair Value on Recurring Basis and Classified by Fair Value Hierarchy (Details) - Fair value, measurements, recurring - Money market funds - USD ($) $ in Thousands	Oct. 31, 2021	Jul. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value disclosure, recurring	$ 42,327	$ 42,327
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value disclosure, recurring	42,327	42,327
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value disclosure, recurring	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value disclosure, recurring	$ 0	$ 0