Group 1 - Graham (GHM) is currently outperforming the Industrial Products sector with a year-to-date return of 10.1%, compared to the sector's average gain of 7.5% [4] - The Zacks Rank for Graham is 1 (Strong Buy), indicating strong analyst sentiment and an improving earnings outlook, with a 20.3% increase in the consensus estimate for full-year earnings over the past quarter [3] - Graham is part of the Manufacturing - General Industrial industry, which ranks 35 in the Zacks Industry Rank, and has outperformed the average industry gain of 8.2% this year [6] Group 2 - Gates Industrial (GTES) is another stock in the Industrial Products sector that has outperformed, with a year-to-date return of 24.4% [4] - Gates Industrial also holds a Zacks Rank of 1 (Strong Buy), with a 5.6% increase in the consensus EPS estimate for the current year over the past three months [5]

Costco's customers pay for the privilege of shopping at its stores. The membership fees the retailer collects create an annuity-like income stream thanks to a roughly 90% customer retention rate. That gives Costco a huge amount of business flexibility, effectively allowing it to offer the lowest prices while also providing great service, thanks to strong employee relations. Costco is a great business, but even great businesses can be bad investments if you pay too much. Which is why this cheap stock is bett ...

Group 1 - The article highlights Paul Franke's extensive experience in trading and investment, emphasizing his successful track record as a stock picker and his development of a system called "Victory Formation" for identifying investment opportunities [1] - Franke's investment strategy includes a contrarian stock selection style, focusing on supply and demand imbalances indicated by stock price and volume movements [1] - The "Bottom Fishing Club" articles are dedicated to identifying deep value stocks or those showing significant positive technical momentum reversals [1] Group 2 - Franke recommends a diversified investment approach, suggesting that investors hold at least 50 well-positioned stocks to achieve consistent outperformance in the stock market [1] - The "Volume Breakout Report" articles discuss stocks that are experiencing positive trend changes supported by strong trading volume and price action [1]

Core Points - Gray Media and Graham Media Group's joint fundraiser, Together for Texas, has raised over $1,104,000 for communities affected by flooding in Central Texas and the Hill Country [1] - The campaign was launched in response to the flooding on July 4, with Gray stations in 113 markets and Graham Media Group's KSAT and KPRC encouraging donations for The Salvation Army's relief efforts [1][2] - Donations are being used to provide essential supplies such as food, water, and emotional support, as well as recovery needs like clean-up supplies and assistance for small businesses [3][4] Company Overview - Gray Media, Inc. is the largest owner of local television stations in the U.S., reaching approximately 37% of U.S. television households across 113 markets [6] - The company operates 78 markets with top-rated television stations and has the largest Telemundo Affiliate group with 44 markets [6] - Graham Media Group consists of seven local media outlets and offers a range of digital media tools and advertising solutions, operating in multiple states [7]

Core Viewpoint - Graham reported a significant improvement in profitability for Q1 FY2026, with non-GAAP EPS of $0.45 exceeding analyst estimates, but GAAP revenue fell short of expectations at $55.5 million [1][2]. Financial Performance - Non-GAAP EPS increased by 36% year-over-year, from $0.33 in Q1 FY2025 to $0.45 in Q1 FY2026 [2][6]. - GAAP revenue was $55.5 million, which was below the expected $63.4 million, despite an 11% year-over-year increase [2][5]. - Gross margin improved to 26.5%, up 1.7 percentage points from the previous year, while operating margin rose to 8.9% compared to 6.5% in Q1 FY2025 [2][5]. - Adjusted EBITDA climbed 33% to $6.8 million [2][6]. Orders and Backlog - The total order figure reached $125.9 million, more than doubling compared to the same quarter last year, resulting in a record book-to-bill ratio of 2.3x [7][11]. - Backlog increased by 22% year-over-year to $482.9 million, with approximately 87% tied to Defense projects [7][11]. Business Strategy - Graham focuses on expanding into new markets, innovation, and deepening ties to U.S. defense programs while maintaining financial discipline [4][3]. - The integration of P3 Technologies has enhanced capabilities in turbomachinery, allowing for novel project pursuits [12]. Future Guidance - The company maintains its FY2026 guidance, projecting net sales between $225 million and $235 million and adjusted EBITDA of $22 million to $28 million [14]. - Capital expenditures for FY2026 are planned between $15 million and $18 million, targeting 8-10% annual organic revenue growth [14].

Graham shares have added about 29.1% since the beginning of the year versus the S&P 500's gain of 7.6%. Graham (GHM) came out with quarterly earnings of $0.45 per share, beating the Zacks Consensus Estimate of $0.25 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of +80.00%. A quarter ago, it was expected that this maker of vacuum and heat-transfer equipment would post earnings of $ ...

Core Insights - Graham Holdings is described as a diversified company with multiple business segments including Education, Broadcasting, Healthcare, Manufacturing, and Restaurants [1] Group 1: Business Segments - The Education segment includes Kaplan, which is a significant part of the company's operations [1] - Broadcasting operations consist of 7 TV stations, contributing to the company's media presence [1] - The Healthcare division is represented by Graham Healthcare Group, indicating a focus on health services [1] - Manufacturing includes brands such as Dekko and Hoover, showcasing the company's involvement in consumer goods [1] - The company also operates a restaurant, further diversifying its business portfolio [1]

[Overall Financial Performance and Corporate Developments](index=1&type=section&id=Overall%20Financial%20Performance%20and%20Corporate%20Developments) The company reported revenue growth and improved operating income in Q2 and H1 2025, driven by education and healthcare, alongside strategic divestitures, acquisitions, and a strong liquidity position [Second Quarter and First Half 2025 Performance Summary](index=1&type=section&id=Second%20Quarter%20and%20First%20Half%202025%20Performance%20Summary) Graham Holdings Company reported revenue growth in both the second quarter and first half of 2025, primarily driven by the education and healthcare segments. Operating income significantly improved year-over-year, largely due to the absence of a 2024 goodwill impairment charge. Net income attributable to common shares reversed to a profit of $36.7 million in Q2 2025 from a loss in Q2 2024, though H1 2025 net income declined compared to the prior year Q2 2025 vs Q2 2024 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1,215.8M | $1,185.3M | +3% | | Operating Income | $72.8M | $25.9M | +181% | | Adjusted Operating Cash Flow (non-GAAP) | $111.3M | $98.5M | +13% | H1 2025 vs H1 2024 Key Financial Metrics | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $2,381.7M | $2,337.9M | +2% | | Operating Income | $120.2M | $61.4M | +96% | | Adjusted Operating Cash Flow (non-GAAP) | $199.4M | $181.3M | +10% | - The significant improvement in operating income for both Q2 and H1 2025 is largely attributed to the absence of goodwill and other long-lived asset impairment charges at World of Good Brands (WGB) that were recorded in Q2 2024[4](index=4&type=chunk)[5](index=5&type=chunk) Net Income (Loss) and EPS Attributable to Common Shares | Period | Net Income (Loss) | Diluted EPS | | :--- | :--- | :--- | | **Q2 2025** | $36.7M | $8.35 | | **Q2 2024** | ($21.0M) | ($4.79) | | **H1 2025** | $60.6M | $13.81 | | **H1 2024** | $103.3M | $23.11 | [Corporate Activities and Financial Position](index=1&type=section&id=Corporate%20Activities%20and%20Financial%20Position) During the first half of 2025, the company divested its World of Good Brands (WGB) businesses and acquired Arconic Architectural Products. Key management changes occurred at Graham Healthcare Group (GHG). As of June 30, 2025, the company maintained a solid liquidity position with over $1.1 billion in cash and marketable securities, while continuing its Class B common stock repurchase program - The company completed the sale of various websites and businesses of World of Good Brands (WGB) in H1 2025, with remaining operations expected to shut down by the end of Q3 2025[6](index=6&type=chunk) - On July 15, 2025, the company's subsidiary Hoover acquired Arconic Architectural Products, assuming approximately **$105 million** in net pension obligations as part of the purchase price[7](index=7&type=chunk) - David Curtis and Justin DeWitte, co-CEOs of Graham Healthcare Group (GHG), have stepped down from their leadership roles[8](index=8&type=chunk) Financial Position as of June 30, 2025 | Item | Amount | | :--- | :--- | | Borrowings Outstanding | $816.4M | | Average Interest Rate | 6.0% | | Cash, marketable equity securities, etc. | $1,127.5M | - The company repurchased **3,978 shares** of Class B common stock for **$3.5 million** in the first six months of 2025. The remaining authorization allows for the purchase of **462,482** more shares[11](index=11&type=chunk) [Consolidated Statements of Operations](index=3&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company's consolidated operations in Q2 and H1 2025 demonstrated revenue growth and improved operating income, with Q2 net income reversing to a profit and H1 net income impacted by reduced gains on marketable securities [Three Months Ended June 30](index=3&type=section&id=Three%20Months%20Ended%20June%2030) For the second quarter of 2025, the company's revenue grew 3% to $1.22 billion. A significant decrease in interest expense, primarily due to fair value adjustments of mandatorily redeemable noncontrolling interest, and the absence of 2024's impairment charges, led to a net income of $36.7 million, a stark reversal from the $21.0 million net loss in the same period last year Q2 2025 vs Q2 2024 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $1,215,772 | $1,185,280 | 3% | | Operating Income | $72,751 | $25,911 | 181% | | Interest Expense | ($18,106) | ($91,383) | -80% | | Impairment of Goodwill | $0 | $26,287 | N/A | | Net Income (Loss) Attributable to GHC | $36,749 | ($21,040) | N/A | | Diluted EPS | $8.35 | ($4.79) | N/A | [Six Months Ended June 30](index=4&type=section&id=Six%20Months%20Ended%20June%2030) For the first six months of 2025, revenue increased by 2% to $2.38 billion, and operating income nearly doubled to $120.2 million. However, a significant decrease in gains on marketable equity securities compared to the prior year led to a 41% decline in net income attributable to common stockholders, which fell to $60.6 million H1 2025 vs H1 2024 Statement of Operations Highlights (in thousands) | Line Item | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $2,381,687 | $2,337,942 | 2% | | Operating Income | $120,224 | $61,353 | 96% | | Gain on marketable equity securities, net | $32,258 | $123,780 | -74% | | Net Income Attributable to GHC | $60,643 | $103,340 | -41% | | Diluted EPS | $13.81 | $23.11 | -40% | [Segment Performance Analysis](index=6&type=section&id=BUSINESS%20DIVISION%20INFORMATION) The company's Q2 2025 segment performance was characterized by strong revenue and operating income growth in Healthcare and Education, offsetting declines in Television Broadcasting, Manufacturing, and Automotive, with the Education division showing broad-based sub-segment improvements [Business Division Overview](index=6&type=section&id=Business%20Division%20Overview) In Q2 2025, revenue growth was driven by Healthcare (+37%) and Education (+3%), which offset declines in Television Broadcasting (-8%), Manufacturing (-7%), and Automotive (-8%). Operating income saw significant improvements in Healthcare (+97%), Manufacturing (+77%), and Education (+31%), while Television Broadcasting and Automotive segments experienced declines Q2 2025 Revenue by Business Division (in thousands) | Division | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Education | $436,813 | $422,899 | 3% | | Healthcare | $202,219 | $147,528 | 37% | | Television broadcasting | $105,984 | $115,478 | -8% | | Manufacturing | $96,218 | $103,626 | -7% | | Automotive | $285,572 | $308,814 | -8% | Q2 2025 Operating Income (Loss) by Business Division (in thousands) | Division | Q2 2025 Op. Income | Q2 2024 Op. Income | % Change | | :--- | :--- | :--- | :--- | | Healthcare | $25,097 | $12,737 | 97% | | Manufacturing | $7,566 | $4,265 | 77% | | Education | $46,185 | $35,277 | 31% | | Automotive | $9,293 | $10,203 | -9% | | Television broadcasting | $27,940 | $31,128 | -10% | H1 2025 Adjusted Operating Cash Flow (non-GAAP) by Division (in thousands) | Division | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Education | $113,848 | $98,692 | 15% | | Manufacturing | $24,995 | $19,430 | 29% | | Healthcare | $52,150 | $32,948 | 58% | | Television broadcasting | $63,262 | $72,264 | -12% | | Automotive | $19,280 | $23,346 | -17% | [Education Division Deep Dive](index=9&type=section&id=EDUCATION%20DIVISION%20INFORMATION) The Education division's revenue increased by 3% in Q2 2025, driven by growth in Supplemental Education (+10%) and Higher Education (+5%). Operating income for the division grew by 31% to $46.2 million, with all sub-segments contributing to the improvement. Adjusted operating cash flow for the division also saw a healthy 15% increase Q2 2025 Education Division Revenue by Sub-segment (in thousands) | Sub-segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Supplemental education | $80,161 | $73,133 | 10% | | Higher education | $84,738 | $81,041 | 5% | | Kaplan international | $272,171 | $267,026 | 2% | Q2 2025 Education Division Operating Income by Sub-segment (in thousands) | Sub-segment | Q2 2025 Op. Income | Q2 2024 Op. Income | % Change | | :--- | :--- | :--- | :--- | | Supplemental education | $7,406 | $5,672 | 31% | | Higher education | $17,972 | $14,354 | 25% | | Kaplan international | $29,937 | $25,824 | 16% | [Non-GAAP Financial Information](index=11&type=section&id=NON-GAAP%20FINANCIAL%20INFORMATION) The company presents non-GAAP financial measures, including adjusted net income, to provide a clearer view of core operational performance by excluding certain non-recurring or non-cash items, demonstrating improved adjusted net income for both Q2 and H1 2025 [Reconciliation of Net Income](index=11&type=section&id=Reconciliation%20of%20Net%20Income) The company provides non-GAAP net income to offer a clearer view of its core operational performance by excluding items like gains/losses on marketable securities and fair value adjustments of mandatorily redeemable noncontrolling interest. For Q2 2025, adjusted net income was $63.1 million ($14.33 per share), up from $56.9 million ($12.70 per share) in Q2 2024. For H1 2025, adjusted net income was $114.1 million ($25.98 per share), compared to $107.3 million ($23.99 per share) in H1 2024 - Management believes non-GAAP measures provide useful information for period-to-period comparisons and identifying underlying business trends by excluding items not directly related to core performance, such as changes in fair value of marketable securities and certain interest expenses[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) GAAP vs. Non-GAAP Net Income and EPS | Period | GAAP Net Income | Adjusted Net Income (non-GAAP) | GAAP Diluted EPS | Adjusted Diluted EPS (non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Q2 2025** | $36.7M | $63.1M | $8.35 | $14.33 | | **Q2 2024** | ($21.0M) | $56.9M | ($4.79) | $12.70 | | **H1 2025** | $60.6M | $114.1M | $13.81 | $25.98 | | **H1 2024** | $103.3M | $107.3M | $23.11 | $23.99 | - Major adjustments to reconcile GAAP to non-GAAP net income in Q2 2025 included adding back net losses on marketable securities (**$8.6 million**), net non-operating impairment losses (**$9.5 million**), and charges related to incentive programs (**$4.5 million**)[33](index=33&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, and 2024. It includes the statements of operations, comprehensive income, balance sheets, cash flows, and changes in stockholders' equity, accompanied by detailed notes that provide further explanation on accounting policies, segment performance, and other financial details [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company's total operating revenues increased to $1.22 billion in Q2 2025 from $1.19 billion in Q2 2024. Net income attributable to common stockholders showed a significant turnaround, shifting from a net loss of $21.0 million in Q2 2024 to a net income of $36.7 million in Q2 2025. For the first six months, revenue grew slightly, but net income decreased from $103.3 million in 2024 to $60.6 million in 2025 Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenues** | $1,215,772 | $1,185,280 | $2,381,687 | $2,337,942 | | **Income from Operations** | $72,751 | $25,911 | $120,224 | $61,353 | | **Net Income (Loss) Attributable to GHC** | $36,749 | $(21,040) | $60,643 | $103,340 | | **Diluted net income (loss) per share** | $8.35 | $(4.79) | $13.81 | $23.11 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $7.62 billion, a slight decrease from $7.68 billion at the end of 2024. Total liabilities decreased to $3.18 billion from $3.35 billion, primarily due to a reduction in long-term debt and mandatorily redeemable noncontrolling interest. Consequently, total equity increased to $4.38 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $2,009,706 | $2,098,624 | | **Total Assets** | $7,619,032 | $7,677,205 | | **Total Current Liabilities** | $1,579,468 | $1,199,799 | | **Total Liabilities** | $3,184,609 | $3,346,569 | | **Total Equity** | $4,384,554 | $4,286,815 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities significantly increased to $140.8 million from $53.1 million in the prior year period. Net cash used in financing activities rose sharply to $188.5 million, driven by large distributions to noncontrolling interests. This resulted in a net decrease in cash and cash equivalents of $68.5 million Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $140,810 | $53,108 | | **Net Cash Used in Investing Activities** | $(31,317) | $(41,784) | | **Net Cash Used in Financing Activities** | $(188,512) | $(21,261) | | **Net Decrease in Cash** | $(68,505) | $(14,276) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial data. Key events include the acquisition of Arconic Architectural Products, the settlement of a $205 million mandatorily redeemable noncontrolling interest, and a goodwill impairment charge of $26.3 million in Q2 2024. The company's operations are diversified across education, broadcasting, manufacturing, healthcare, automotive, and other businesses - The company is a diversified holding company with operations in educational services (Kaplan), television broadcasting, manufacturing, healthcare, automotive dealerships, and other businesses like restaurants and media[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - On February 25, 2025, the company settled a significant portion of its mandatorily redeemable noncontrolling interest for **$205 million**, consisting of **$186.25 million** in cash and **$18.75 million** in Class B common stock. This resulted in a **$66.2 million** increase to the obligation, recorded as interest expense[38](index=38&type=chunk)[39](index=39&type=chunk) - In Q2 2024, the company recorded goodwill and amortized intangible asset impairment charges totaling **$26.3 million** related to its World of Good Brands (WGB) reporting unit due to digital advertising revenue declines and operating losses[58](index=58&type=chunk) Goodwill by Segment (Net, in thousands) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Education | $850,709 | $815,184 | | Television Broadcasting | $190,815 | $190,815 | | Manufacturing | $152,931 | $152,931 | | Healthcare | $135,038 | $135,038 | | Automotive | $129,280 | $129,280 | | Other Businesses | $76,788 | $76,788 | | **Total** | **$1,535,561** | **$1,500,036** | [Management's Discussion and Analysis of Results of Operations and Financial Condition](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Results%20of%20Operations%20and%20Financial%20Condition) Management discusses the financial results, highlighting a 3% revenue increase in Q2 2025 and a shift to net income of $36.7 million from a net loss of $21.0 million in Q2 2024. The improvement was driven by growth in education and healthcare, offsetting declines in broadcasting and automotive. The analysis covers divisional performance, liquidity, capital resources, and significant transactions, including a major settlement of noncontrolling interest and recent acquisitions [Results of Operations](index=38&type=section&id=Results%20of%20Operations) In Q2 2025, the company's revenue grew 3% to $1.22 billion, and operating income surged to $72.8 million from $25.9 million in Q2 2024. The significant increase in net income was largely due to the absence of a $26.3 million impairment charge taken in 2024 and lower interest expense related to fair value adjustments. For the first six months of 2025, revenue increased 2% to $2.38 billion, and operating income nearly doubled to $120.2 million - Q2 2025 net income was **$36.7 million**, compared to a net loss of **$21.0 million** in Q2 2024. The prior year's loss included a **$26.3 million** goodwill impairment charge and **$73.5 million** in interest expense to adjust the fair value of mandatorily redeemable noncontrolling interest[146](index=146&type=chunk)[148](index=148&type=chunk) - H1 2025 net income was **$60.6 million**, down from **$103.3 million** in H1 2024. The decrease is primarily attributable to significantly lower net gains on marketable equity securities (**$32.3 million** in 2025 vs. **$123.8 million** in 2024)[147](index=147&type=chunk)[149](index=149&type=chunk)[152](index=152&type=chunk) [Division Results](index=39&type=section&id=Division%20Results) The Education division saw a 3% revenue increase and a 31% operating income increase in Q2 2025, driven by Higher Education and Supplemental Education. Television Broadcasting revenue fell 8% due to lower political advertising. Manufacturing operating income grew 77% despite a 7% revenue decline. Healthcare was a strong performer, with revenue up 37% and operating income nearly doubling. Automotive revenue and operating income both declined by 8-9% Education Division Operating Results (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | Q2 2025 Operating Income | Q2 2024 Operating Income | | :--- | :--- | :--- | :--- | :--- | | Kaplan International | $272,171 | $267,026 | $29,937 | $25,824 | | Higher Education | $84,738 | $81,041 | $17,972 | $14,354 | | Supplemental Education | $80,161 | $73,133 | $7,406 | $5,672 | | **Total Education** | **$436,813** | **$422,899** | **$46,185** | **$35,277** | - Television Broadcasting revenue decreased **8%** in Q2 2025 due to a **$4.5 million** drop in political advertising and a **$2.6 million** decrease in retransmission revenue[159](index=159&type=chunk) - Healthcare revenue grew **37%** in Q2 2025, with operating income up **97%**, largely due to significant growth at CSI Pharmacy from an expansion of infusion treatment offerings and patient service areas[165](index=165&type=chunk) - Automotive revenue decreased **8%** in Q2 2025, driven by declines in new and used vehicle sales and finance and insurance product offerings[168](index=168&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary source of liquidity is cash from operations. As of June 30, 2025, the company held $176.2 million in cash and $898.1 million in marketable securities, against total debt of $816.4 million. Cash decreased by $84.6 million in the first half of 2025, largely due to a $186.25 million cash payment to settle a mandatorily redeemable noncontrolling interest. The company maintains a $300 million revolving credit facility with $156.4 million available Liquidity Position (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $176,223 | $260,852 | | Investments in marketable equity securities | $898,148 | $858,743 | | Total debt | $816,375 | $748,192 | - A significant use of cash in H1 2025 was the settlement of a mandatorily redeemable noncontrolling interest for a total of **$205 million**, which included approximately **$186.25 million** in cash[206](index=206&type=chunk)[216](index=216&type=chunk) - The company's working capital decreased to **$430.2 million** from **$898.8 million** at year-end 2024, partly because its **$400 million** senior notes due June 2026 are now classified as a current liability[203](index=203&type=chunk) - The Board of Directors has authorized the repurchase of up to **500,000 shares** of Class B common stock, with **462,482 shares** remaining under this authorization as of June 30, 2025[195](index=195&type=chunk)[219](index=219&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks stem from equity price fluctuations in its marketable securities portfolio, interest rate changes affecting its debt and cash, and foreign exchange rate volatility from its international operations. No significant changes to these risk exposures were reported compared to the 2024 year-end Form 10-K - The company is exposed to market risk from equity price risk, interest rate risk, and foreign exchange rate risk. Disclosures have not changed significantly since the 2024 Annual Report[222](index=222&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of June 30, 2025, the company's management, including the CEO and CFO, concluded that its disclosure controls and procedures are effective. There were no material changes to the company's internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[223](index=223&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[224](index=224&type=chunk) [PART II. OTHER INFORMATION](index=53&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section states that during the quarter ended June 30, 2025, none of the company's directors or officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements - During the quarter ended June 30, 2025, no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement[226](index=226&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Form 10-Q report. These include the company's certificate of incorporation, by-laws, debt indentures, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - The report lists exhibits filed, including corporate governance documents, debt agreements, and required CEO/CFO certifications (Rule 13a-14(a)/15d-14(a) and Section 1350)[228](index=228&type=chunk)

Core Viewpoint - The article focuses on Merck (NYSE: MRK) as a potential investment opportunity amidst a generally overheated US stock market [1]. Group 1: Company Overview - Merck is highlighted as a company of interest for value investment, particularly in the context of large companies that may be undervalued [1]. Group 2: Market Context - The current US stock market is described as overheated, suggesting that many stocks are priced high relative to their intrinsic value [1].