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SEC Filings

10-Q
GRAHAM HOLDINGS CO filed this Form 10-Q on 08/02/2017
Entire Document
 


Other Businesses
A summary of Other Businesses’ operating results is as follows:
  
 
Three Months Ended
 
  
 
Six Months Ended
 
  
  
 
June 30
 
%
 
June 30
 
%
(in thousands)
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Operating Revenues
 
  
 
  
 
  
 
  
 
  
 
  
Manufacturing
 
$
120,672

 
$
58,026

 

 
$
182,570

 
$
114,701

 
59

Healthcare
 
38,220

 
36,498

 
5

 
75,119

 
72,378

 
4

SocialCode
 
14,855

 
13,126

 
13

 
27,429

 
23,781

 
15

Other
 
9,739

 
5,619

 
73

 
16,692

 
11,125

 
50

  
 
$
183,486

 
$
113,269

 
62

 
$
301,810

 
$
221,985

 
36

Operating Expenses
 
  

 
  

 
  

 
  

 
  

 
  

Manufacturing
 
$
124,847

 
$
55,177

 

 
$
183,080

 
$
110,715

 
65

Healthcare
 
37,836

 
37,544

 
1

 
75,661

 
70,905

 
7

SocialCode
 
12,251

 
14,581

 
(16
)
 
29,333

 
28,206

 
4

Other
 
17,470

 
11,029

 
58

 
33,218

 
22,951

 
45

  
 
$
192,404

 
$
118,331

 
63

 
$
321,292

 
$
232,777

 
38

Operating Income (Loss)
 
  

 
  

 
  
 
  

 
  

 
  
Manufacturing
 
$
(4,175
)
 
$
2,849

 

 
$
(510
)
 
$
3,986

 

Healthcare
 
384

 
(1,046
)
 

 
(542
)
 
1,473

 

SocialCode
 
2,604

 
(1,455
)
 

 
(1,904
)
 
(4,425
)
 
57

Other
 
(7,731
)
 
(5,410
)
 
(43
)
 
(16,526
)
 
(11,826
)
 
(40
)
  
 
$
(8,918
)
 
$
(5,062
)
 
(76
)
 
$
(19,482
)
 
$
(10,792
)
 
(81
)
Depreciation
 
  

 
 
 
  
 
  

 
  

 
  
Manufacturing
 
$
2,404

 
$
1,906

 
26

 
$
3,912

 
$
3,779

 
4

Healthcare
 
1,194

 
666

 
79

 
2,263

 
1,403

 
61

SocialCode
 
251

 
213

 
18

 
497

 
442

 
12

Other
 
415

 
288

 
44

 
776

 
476

 
63

  
 
$
4,264

 
$
3,073

 
39

 
$
7,448

 
$
6,100

 
22

Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
 
  

 
 
 
  
 
  

 
  

 
  
Manufacturing
 
$
15,734

 
$
2,816

 

 
$
18,811

 
$
5,633

 

Healthcare
 
1,644

 
1,674

 
(2
)
 
3,298

 
3,355

 
(2
)
SocialCode
 
84

 

 

 
167

 

 

Other
 

 
21

 

 

 
41

 

  
 
$
17,462

 
$
4,511

 

 
$
22,276

 
$
9,029

 

Pension Expense
 
  

 
  

 
  
 
  

 
  

 
  
Manufacturing
 
$
22

 
$
20

 
10

 
$
47

 
$
38

 
24

Healthcare
 
166

 

 

 
332

 

 

SocialCode
 
142

 
147

 
(3
)
 
296

 
271

 
9

Other
 
85

 
139

 
(39
)
 
223

 
251

 
(11
)
  
 
$
415

 
$
306

 
36

 
$
898

 
$
560

 
60

Manufacturing includes four businesses: Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies; Joyce/Dayton Corp., a Dayton, OH-based manufacturer of screw jacks and other linear motion systems; Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications; and Hoover Treated Wood Products, Inc., a Thomson, GA-based supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications that the Company acquired in April 2017. In September 2016, Dekko acquired Electri-Cable Assemblies (ECA), a Shelton, CT-based manufacturer of power, data and electrical solutions for the office furniture industry.
In the second quarter of 2017, the Company recorded a $9.2 million goodwill and other long-lived asset impairment charge at Forney, due to lower than expected revenues resulting from sluggish overall demand for its energy products. Excluding this impairment charge, manufacturing revenues and operating income increased in the first six months of 2017 due to the Hoover acquisition and growth and improved results at Dekko, including the ECA acquisition.
The Graham Healthcare Group (GHG) provides home health and hospice services in three states. In June 2016, the Company acquired the outstanding 20% redeemable noncontrolling interest in Residential Healthcare (Residential). Also in June 2016, Celtic Healthcare (Celtic) and Residential combined their business operations and the Company now owns 90% of the combined entity, known as GHG. Healthcare revenues increased 4% in the first six months of 2017, while operating results were down, due largely to increased bad debt expense and higher

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