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8-K
GRAHAM HOLDINGS CO filed this Form 8-K on 05/03/2017
Entire Document
 


Division Results
Education  
Education division revenue totaled $372.9 million for the first quarter of 2017, down 7% from revenue of $401.1 million for the same period of 2016. Kaplan reported operating income of $9.0 million for the first quarter of 2017, compared to $14.5 million for the first quarter of 2016.
A summary of Kaplan’s operating results for the first quarter of 2017 compared to 2016 is as follows:
 
Three Months Ended
 
 
  
March 31
 
  
(in thousands)
2017
 
2016
 
% Change
Revenue
  
 
  
 
  
Higher education
$
144,310

 
$
165,549

 
(13
)
Test preparation
64,568

 
66,462

 
(3
)
Kaplan international
164,562

 
169,287

 
(3
)
Kaplan corporate and other
14

 
125

 
(89
)
Intersegment elimination
(557
)
 
(347
)
 

  
$
372,897

 
$
401,076

 
(7
)
Operating Income (Loss)
  

 
  

 
  

Higher education
$
12,604

 
$
21,306

 
(41
)
Test preparation
(2,864
)
 
(2,310
)
 
(24
)
Kaplan international
7,707

 
4,897

 
57

Kaplan corporate and other
(7,349
)
 
(7,724
)
 
5

Amortization of intangible assets
(1,120
)
 
(1,681
)
 
33

Intersegment elimination
53

 

 

  
$
9,031

 
$
14,488

 
(38
)
KHE includes Kaplan’s domestic postsecondary education businesses, made up of fixed-facility colleges and online postsecondary and career programs. KHE also includes the domestic professional and other continuing education businesses.
In the first quarter of 2017, KHE revenue was down 13%, due to declines in average enrollments at Kaplan University, offset by increased revenues at the domestic professional and other continuing education businesses. KHE operating results declined in the first quarter of 2017 due primarily to lower enrollment at Kaplan University.
New higher education student enrollments at Kaplan University were up 2% in the first quarter of 2017; however, total students at Kaplan University were 32,536 at March 31, 2017, down 13% from March 31, 2016.
Kaplan University enrollments at March 31, 2017 and 2016, by degree and certificate programs, are as follows:
  
 
As of March 31
  
 
2017
 
2016
Certificate
 
8.7
%
 
5.8
%
Associate’s
 
17.7
%
 
22.1
%
Bachelor’s
 
51.0
%
 
50.5
%
Master’s
 
22.6
%
 
21.6
%
  
 
100.0
%
 
100.0
%
Kaplan Test Preparation (KTP) includes Kaplan’s standardized test preparation programs. KTP revenue declined 3% for the first quarter of 2017. Enrollments, excluding the new economy skills training offerings, were down 3% for the first three months of 2017. In comparison to 2016, KTP operating results were down 24% in the first quarter of 2017 due to lower revenues. Operating losses for the new economy skills training programs were $3.8 million and $4.1 million for the first quarter of 2017 and 2016, respectively.
Kaplan International includes English-language programs, and postsecondary education and professional training businesses largely outside the United States. In January and February 2016, Kaplan acquired Mander Portman Woodward, a leading provider of high-quality, bespoke education to UK and international students in London, Cambridge and Birmingham; and Osborne Books, an education publisher of learning resources for accounting qualifications in the UK.
Kaplan International revenue declined 3% for the first quarter of 2017; on a constant currency basis, revenue increased 4% primarily due to growth in Pathways enrollments. Operating income increased in the first quarter of 2017, due largely to the improved Pathways and English-language results, partially offset by a decline in Singapore.

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