Graham Holdings(GHC) - 2023 Q1 - Quarterly Report

Financial Performance - The Company reported net income of $52.3 million ($10.88 per share) for Q1 2023, down from $95.6 million ($19.45 per share) in Q1 2022[93]. - Revenue for Q1 2023 was $1,031.5 million, a 13% increase from $914.7 million in Q1 2022, driven by growth in education, healthcare, and automotive sectors[93]. - The Company recorded $18.0 million in net gains on marketable equity securities in Q1 2023, with an after-tax impact of $13.3 million[95]. - The Company recognized net gains on marketable equity securities of $18.0 million in Q1 2023, compared to $46.9 million in Q1 2022[126]. - The effective tax rate for the Company was 26.6% in Q1 2023, slightly down from 26.9% in Q1 2022[128]. Revenue Breakdown - Kaplan's education division revenue increased by 6% to $378.0 million in Q1 2023, with operating income rising to $23.0 million from $20.4 million in Q1 2022[94]. - Automotive revenue surged 54% to $232.6 million in Q1 2023, with operating income improving by 53% to $10.8 million, attributed to recent acquisitions[110]. - Healthcare revenue grew by 52% to $102.1 million in Q1 2023, although operating income fell by 54% to $2.9 million due to increased pension expenses[106]. - Television broadcasting revenue decreased by 9% to $112.9 million in Q1 2023, with operating income declining 28% to $28.6 million, impacted by reduced advertising revenues[103]. - Manufacturing revenue slightly declined by 1% to $114.6 million in Q1 2023, with operating income down 27% to $7.3 million due to lower revenues at key businesses[104]. - Supplemental education revenue fell by 4% in Q1 2023, primarily due to decreased demand for test preparation programs, despite improved operating results[99]. Operating Income and Expenses - Leaf Group reported significant operating losses in Q1 2023, with revenue declines attributed to reduced traffic and marketing spend, leading to a $2.9 million non-operating pension expense[116]. - Clyde's Restaurant Group achieved an operating profit in Q1 2023, a significant improvement from an operating loss in Q1 2022, driven by strong guest traffic[117]. - Net interest expense increased to $13.1 million in Q1 2023 from $10.7 million in Q1 2022, primarily due to higher debt and interest rates[123]. - The Company reported a net non-operating pension and postretirement benefit income of $31.8 million in Q1 2023, down from $50.5 million in Q1 2022[125]. Cash Flow and Investments - Net cash provided by operating activities decreased due to lower net income, net of non-cash adjustments[141]. - Net cash used in investing activities was $(1,954) thousand in Q1 2023, compared to $19,523 thousand in Q1 2022[141]. - Capital expenditures for Q1 2023 were $22.3 million, with an estimated range of $90 million to $100 million for the full year[142]. - Net cash used in financing activities was $(57,802) thousand in Q1 2023, compared to $(64,362) thousand in Q1 2022[143]. - Common stock repurchases totaled approximately $23.4 million for 38,795 shares in Q1 2023, with remaining authorization for 109,626 shares[144]. - Quarterly dividend rate per share increased to $1.65 in Q1 2023 from $1.58 in Q1 2022, with an expected total dividend of $6.60 per share for 2023[145]. Balance Sheet and Receivables - As of March 31, 2023, Kaplan had an outstanding accounts receivable balance of $100.9 million from Purdue Global, including a long-term receivable of $19.5 million[98]. - As of March 31, 2023, the Company had $691.1 million in borrowings at an average interest rate of 5.9% and cash and investments totaling $771.1 million[124]. - The Company had a working capital of $514.3 million as of March 31, 2023, compared to $534.1 million at the end of 2022[135]. Market Risks - The company is exposed to market risks including equity price risk, interest rate risk, and foreign exchange rate risk[147]. - Proceeds from sales of marketable equity securities were $29.0 million in Q1 2023, down from $55.7 million in Q1 2022[141].