Commitments and Contingencies
 9 Months Ended
Apr. 30, 2017
Commitments and Contingencies  
Commitments and Contingencies

 

Note 13.Commitments and Contingencies

 

Long-Term Contractual Obligations

 

As of April 30, 2017, aggregate annual required payments over the remaining fiscal year, the next four years and thereafter under our contractual obligations that have long-term components are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

Year Ending July 31,

 

 

 

Ending July 31,

 

(Amounts in thousands)

 

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

Thereafter

 

Total

 

Maturity of the credit facility

 

$

 —

 

$

 —

 

$

145,000

 

$

 —

 

$

 —

 

$

 —

 

$

145,000

 

Expected interest payments under the credit facility (1)

 

 

877

 

 
3,509

 

 

2,047

 

 

 —

 

 

 —

 

 

 —

 

 

6,433

 

Minimum commitments under noncancelable operating leases

 

 

1,791

 

 

5,965

 

 

5,056

 

 

3,681

 

 

2,625

 

 

3,652

 

 

22,770

 

Compensation agreements

 

 

1,775

 

 

6,034

 

 

1,149

 

 

498

 

 

377

 

 

583

 

 

10,416

 

Assumed contingent liability (2)

 

 

19

 

 

93

 

 

188

 

 

246

 

 

280

 

 

439

 

 

1,265

 

Other long-term obligations

 

 

88

 

 

267

 

 

101

 

 

12

 

 

 3

 

 

 —

 

 

471

 

Total contractual obligations

 

$

4,550

 

$

15,868

 

$

153,541

 

$

4,437

 

$

3,285

 

$

4,674

 

$

186,355

 

(1)

The expected interest payments under our credit facility reflect an interest rate of 2.42%, which was our weighted average interest rate on outstanding borrowings at April 30, 2017.

 

(2)

These future potential payments of an assumed contingent liability relate to the Jet Prep Acquisition, as further described in Note 7 to the Condensed Consolidated Financial Statements, and are reflected in the April 30, 2017 Condensed Consolidated Balance Sheet at its net present value of $1,138,000 using a discount rate of 2.5%.

 

Operating Leases

 

Minimum commitments under operating leases include minimum rental commitments for our leased manufacturing facilities, warehouses, office space and equipment.

 

Compensation Agreements

 

We have previously entered into various severance contracts with executives of the Company, including our corporate executive officers and certain of our subsidiary Presidents, which define certain compensation arrangements relating to various employment termination scenarios, and multi-year employment agreements with certain executive officers of businesses we have acquired. 

 

Other Long-Term Obligations

 

In relation to the acquisition of our business in Italy on November 3, 2014, we assumed an $843,000 liability to the Bank of Italy as part of funding provided by an Italian government agency, of which $187,000 and $656,000 were recorded in accrued expenses and other long-term liabilities, respectively. Such amount was a portion of the financial support obtained from the Italian government’s Ministry of Education, Universities and Research to fund research and development activity relating to the business’s automated endoscope reprocessors. The liability is payable in semi-annual installments, bears interest at 0.25% per annum and has a maturity date of January 1, 2019. At April 30, 2017, $323,000 is outstanding, of which $161,000 is recorded in accrued expense and $162,000 is recorded in other long-term liabilities. Additionally, other long-term obligations include various long-term purchase commitments and capital lease obligations.