Notes from the 2026 Goodheart-Wilcox (GWOX) annual meeting
It’s been some time since my last post. That is because this summer I was working at Gate City Capital. Due to this, I haven’t had much time or flexibility to write, but that should pick back up now. I learned a lot working with Michael Melby and his team. I am very grateful for the experience, and I’ve come out of it a much better investor.
While in Chicago, I attended Goodheart-Wilcox annual meeting on July 14th, where I spoke with management and met 2 other public shareholders.
Here are my notes from the meeting:
413,384 shares voted by proxy and in person out of 446,100 outstanding.
Revenue $58.8M, down 3.3%, attributed to softer demand in the school channel “driven in part by funding uncertainty.”
Operating expenses $41.4M, up 5.7% due to “deliberate investments in our long term strategy.”
$20.75 dividend presented as evidence of “commitment to shareholder value.
Admits a reduction from record performance that also reflects “disciplined choices to invest in the future.”
NetSuite ERP implementation ongoing. Delivered with minimal customer disruption through the summer and back-to-school peak. “This platform will remain a key area of investment as we optimize its capabilities.”
Go forward strategy is a focus on product development, digital transformation, customer success, market responsiveness.
Expanded digital assets: videos, simulations, hands-on activities, animations
Continued rollout of a new assessment platform with focus shifted from launch to adoption.
A dedicated customer success team established, covering presale through implementation, support, and renewal.
Headwinds include funding uncertainty, evolving state and national requirements, and changes in distribution models in the postsecondary market.
Adoption lumpiness: state adoption cycles have historically driven revenue variability, “more pronounced as we participate in health adoptions with substantially larger enrollments.” Expanding CTE disciplines in open territories and in postsecondary channels is a stated cross-functional priority.
Board member Dr. Thomas Choice departed the board. His educator perspective will be replaced by educator focus groups and advisory boards. The Company will have three outside directors.
Auditor Plante Moran transition described as smooth.
Spoke highly of the ESOP: framed as a competitive advantage for retention and long term thinking.
Capital allocation: a “balance reinvestment into the business, shareholder returns, and long-term obligations, including our ESOP commitment.” A strong balance sheet “provides flexibility.”
What’s notable
The K-12 decline is end market demand, not market share loss. “Funding uncertainty” is consistent with the recent distruptions at the Department of Education. That’s cyclical and recoverable.
ERP costs won’t normalize. “Will remain a key area of investment” tells us elevated SG&A persists into FY2027.
They led with net margin, not operating margin. 21.5% of revenue includes $3.7M of investment income. Operating margin was 19.9%, the weakest since FY2022.
Notably they did not mention.
The dividend was cut 29% from $29.25 - presented as a commitment to shareholders with no acknowledgment of the reduction.
The $8.1M share purchase from the ESOP - the largest capital allocation action of the year.
The 2028 ESOP loan maturity.