Graham Holdings Company (NYSE: GHC) today reported its financial
results for the first quarter of 2024. The Company also filed its
Form 10-Q today for the quarter ended March 31, 2024 with the
Securities and Exchange Commission.
Division Operating
Results
Revenue for the first quarter of 2024 was $1,152.7 million, up
12% from $1,031.5 million in the first quarter of 2023. Revenues
increased at education, healthcare and automotive, partially offset
by declines at manufacturing and other businesses. The Company
reported operating income of $35.4 million for the first quarter of
2024, compared to $27.7 million for the first quarter of 2023. The
improvement in operating results is due to increases at education,
television broadcasting and healthcare, and reduced losses at other
businesses, partially offset by declines at manufacturing and
automotive. The Company reported adjusted operating cash flow
(non-GAAP) for 2024 of $82.8 million for the first quarter of 2024,
compared to $71.6 million for the first quarter of 2023. Adjusted
operating cash flow improved at education, television broadcasting,
healthcare and other businesses, partially offset by declines at
manufacturing and automotive. Capital expenditures totaled $21.5
million and $22.3 million for the first quarter of 2024 and 2023,
respectively.
Acquisitions and Dispositions of
Businesses
There were no significant business acquisitions or dispositions
during the first quarter of 2024.
Debt, Cash and Marketable Equity
Securities
At March 31, 2024, the Company had $815.6 million in borrowings
outstanding at an average interest rate of 6.4%, including $108.1
million outstanding on its $300 million revolving credit facility.
Cash, marketable equity securities and other investments totaled
$981.9 million at March 31, 2024.
Overall, the Company recognized $104.2 million and $18.0 million
in net gains on marketable equity securities in the first quarter
of 2024 and 2023, respectively.
Common Stock Repurchases
During the first quarter of 2024, the Company purchased a total
of 28,606 shares of its Class B common stock at a cost of $20.0
million. At March 31, 2024, there were 4,450,593 shares
outstanding. On May 4, 2023, the Board of Directors authorized the
Company to acquire up to 500,000 shares of its Class B common
stock; the Company has remaining authorization for 207,797 shares
as of March 31, 2024.
Overall Company Results
The Company reported net income attributable to common shares of
$124.4 million ($27.72 per share) for the first quarter of 2024,
compared to $52.3 million ($10.88 per share) for the first quarter
of 2023.
The results for the first quarter of 2024 and 2023 were affected
by a number of items as described in the Non-GAAP Financial
Information schedule attached to this release. Excluding these
items, net income attributable to common shares was $50.4 million
($11.24 per share) for the first quarter of 2024, compared to $40.2
million ($8.36 per share) for the first quarter of 2023.
* * * * * * * * * * * *
Forward-Looking
Statements
All public statements made by the Company and its
representatives that are not statements of historical fact,
including certain statements in this press release, in the
Company’s Annual Report on Form 10-K and in the Company’s 2023
Annual Report to Stockholders, are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are based on expectations,
forecasts, and assumptions by the Company’s management and involve
a number of risks, uncertainties, and other factors that could
cause actual results to differ from those stated, including,
without limitation, comments about expectations related to
acquisitions or dispositions or related business activities, the
Company’s business strategies and objectives, the prospects for
growth in the Company’s various business operations, the Company’s
future financial performance, and the risks and uncertainties
described in Item 1A of the Company’s Annual Report on Form 10-K.
Accordingly, undue reliance should not be placed on any
forward-looking statement made by or on behalf of the Company. The
Company assumes no obligation to update any forward-looking
statement after the date on which such statement is made, even if
new information subsequently becomes available.
GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31
%
(in thousands, except per share
amounts)
2024
2023
Change
Operating revenues
$
1,152,662
$
1,031,546
12
Operating expenses
1,083,942
969,176
12
Depreciation of property, plant and
equipment
22,527
20,025
12
Amortization of intangible assets
10,751
13,944
(23
)
Impairment of long-lived assets
—
745
—
Operating income
35,442
27,656
28
Equity in earnings of affiliates, net
2,331
4,661
(50
)
Interest income
2,178
1,204
81
Interest expense
(19,328
)
(14,294
)
35
Non-operating pension and postretirement
benefit income, net
42,417
31,845
33
Gain on marketable equity securities,
net
104,152
18,022
—
Other income, net
1,647
3,083
(47
)
Income before income taxes
168,839
72,177
—
Provision for income taxes
43,500
19,200
—
Net income
125,339
52,977
—
Net income attributable to
noncontrolling interests
(959
)
(705
)
36
Net Income Attributable to Graham
Holdings Company Common Stockholders
$
124,380
$
52,272
—
Per Share Information Attributable to
Graham Holdings Company Common Stockholders
Basic net income per common share
$
27.87
$
10.91
—
Basic average number of common shares
outstanding
4,432
4,759
Diluted net income per common share
$
27.72
$
10.88
—
Diluted average number of common shares
outstanding
4,457
4,776
GRAHAM HOLDINGS COMPANY
BUSINESS
DIVISION INFORMATION
(Unaudited)
Three Months Ended
March 31
%
(in thousands)
2024
2023
Change
Operating Revenues
Education
$
422,598
$
378,041
12
Television broadcasting
113,058
112,877
0
Manufacturing
101,903
114,584
(11
)
Healthcare
128,201
102,059
26
Automotive
303,840
232,561
31
Other businesses
83,298
92,008
(9
)
Corporate office
576
—
—
Intersegment elimination
(812
)
(584
)
—
$
1,152,662
$
1,031,546
12
Operating Expenses
Education
$
392,011
$
355,001
10
Television broadcasting
83,425
84,294
(1
)
Manufacturing
98,834
107,256
(8
)
Healthcare
122,110
99,123
23
Automotive
294,188
221,718
33
Other businesses
112,252
123,009
(9
)
Corporate office
15,212
14,073
8
Intersegment elimination
(812
)
(584
)
—
$
1,117,220
$
1,003,890
11
Operating Income (Loss)
Education
$
30,587
$
23,040
33
Television broadcasting
29,633
28,583
4
Manufacturing
3,069
7,328
(58
)
Healthcare
6,091
2,936
—
Automotive
9,652
10,843
(11
)
Other businesses
(28,954
)
(31,001
)
7
Corporate office
(14,636
)
(14,073
)
(4
)
$
35,442
$
27,656
28
Amortization of Intangible Assets and
Impairment of Long-Lived Assets
Education
$
2,974
$
4,416
(33
)
Television broadcasting
1,350
1,362
(1
)
Manufacturing
3,120
4,862
(36
)
Healthcare
636
954
(33
)
Automotive
—
—
—
Other businesses
2,671
3,095
(14
)
Corporate office
—
—
—
$
10,751
$
14,689
(27
)
Operating Income (Loss) before
Amortization of Intangible Assets and Impairment of Long-Lived
Assets
Education
$
33,561
$
27,456
22
Television broadcasting
30,983
29,945
3
Manufacturing
6,189
12,190
(49
)
Healthcare
6,727
3,890
73
Automotive
9,652
10,843
(11
)
Other businesses
(26,283
)
(27,906
)
6
Corporate office
(14,636
)
(14,073
)
(4
)
$
46,193
$
42,345
9
Three Months Ended
March 31
%
(in thousands)
2024
2023
Change
Depreciation
Education
$
9,305
$
8,968
4
Television broadcasting
2,868
3,036
(6
)
Manufacturing
2,715
2,282
19
Healthcare
1,594
1,104
44
Automotive
1,713
1,113
54
Other businesses
4,183
3,369
24
Corporate office
149
153
(3
)
$
22,527
$
20,025
12
Pension Expense
Education
$
4,110
$
2,198
87
Television broadcasting
1,639
860
91
Manufacturing
627
275
—
Healthcare
4,758
4,357
9
Automotive
15
5
—
Other businesses
1,940
572
—
Corporate office
945
976
(3
)
$
14,034
$
9,243
52
Adjusted Operating Cash Flow
(non-GAAP)(1)
Education
$
46,976
$
38,622
22
Television broadcasting
35,490
33,841
5
Manufacturing
9,531
14,747
(35
)
Healthcare
13,079
9,351
40
Automotive
11,380
11,961
(5
)
Other businesses
(20,160
)
(23,965
)
16
Corporate office
(13,542
)
(12,944
)
(5
)
$
82,754
$
71,613
16
____________
(1)
Adjusted Operating Cash Flow (non-GAAP) is
calculated as Operating Income (Loss) before Amortization of
Intangible Assets and Impairment of Long-Lived Assets plus
Depreciation Expense and Pension Expense.
GRAHAM HOLDINGS COMPANY
EDUCATION
DIVISION INFORMATION
(Unaudited)
Three Months Ended
March 31
%
(in thousands)
2024
2023
Change
Operating Revenues
Kaplan international
$
269,798
$
227,076
19
Higher education
80,122
78,341
2
Supplemental education
72,122
73,587
(2
)
Kaplan corporate and other
2,588
2,372
9
Intersegment elimination
(2,032
)
(3,335
)
—
$
422,598
$
378,041
12
Operating Expenses
Kaplan international
$
238,486
$
205,775
16
Higher education
74,603
71,258
5
Supplemental education
67,542
69,836
(3
)
Kaplan corporate and other
10,173
7,210
41
Amortization of intangible assets
2,974
3,939
(24
)
Impairment of long-lived assets
—
477
—
Intersegment elimination
(1,767
)
(3,494
)
—
$
392,011
$
355,001
10
Operating Income (Loss)
Kaplan international
$
31,312
$
21,301
47
Higher education
5,519
7,083
(22
)
Supplemental education
4,580
3,751
22
Kaplan corporate and other
(7,585
)
(4,838
)
(57
)
Amortization of intangible assets
(2,974
)
(3,939
)
24
Impairment of long-lived assets
—
(477
)
—
Intersegment elimination
(265
)
159
—
$
30,587
$
23,040
33
Operating Income (Loss) before
Amortization of Intangible Assets and Impairment of Long-Lived
Assets
Kaplan international
$
31,312
$
21,301
47
Higher education
5,519
7,083
(22
)
Supplemental education
4,580
3,751
22
Kaplan corporate and other
(7,585
)
(4,838
)
(57
)
Intersegment elimination
(265
)
159
—
$
33,561
$
27,456
22
Depreciation
Kaplan international
$
7,356
$
6,330
16
Higher education
903
1,102
(18
)
Supplemental education
1,019
1,509
(32
)
Kaplan corporate and other
27
27
0
$
9,305
$
8,968
4
Pension Expense
Kaplan international
$
163
$
80
—
Higher education
1,781
922
93
Supplemental education
1,818
1,024
78
Kaplan corporate and other
348
172
—
$
4,110
$
2,198
87
Adjusted Operating Cash Flow
(non-GAAP)(1)
Kaplan international
$
38,831
$
27,711
40
Higher education
8,203
9,107
(10
)
Supplemental education
7,417
6,284
18
Kaplan corporate and other
(7,210
)
(4,639
)
(55
)
Intersegment elimination
(265
)
159
—
$
46,976
$
38,622
22
____________
(1)
Adjusted Operating Cash Flow (non-GAAP) is
calculated as Operating Income (Loss) before Amortization of
Intangible Assets and Impairment of Long-Lived Assets plus
Depreciation Expense and Pension Expense.
NON-GAAP FINANCIAL INFORMATION GRAHAM HOLDINGS COMPANY
(Unaudited)
In addition to the results reported in accordance with
accounting principles generally accepted in the United States
(GAAP) included in this press release, the Company has provided
information regarding Adjusted Operating Cash Flow and Net income
excluding certain items described below, reconciled to the most
directly comparable GAAP measures. Management believes that these
non-GAAP measures, when read in conjunction with the Company’s GAAP
financials, provide useful information to investors by
offering:
- the ability to make meaningful period-to-period comparisons of
the Company’s ongoing results;
- the ability to identify trends in the Company’s underlying
business; and
- a better understanding of how management plans and measures the
Company’s underlying business.
Adjusted Operating Cash Flow and Net income, excluding certain
items, should not be considered substitutes or alternatives to
computations calculated in accordance with and required by GAAP.
These non-GAAP financial measures should be read only in
conjunction with financial information presented on a GAAP
basis.
The gains and losses on marketable equity securities relate to
the change in the fair value (quoted prices) of its portfolio of
equity securities. The mandatorily redeemable noncontrolling
interest represents the ownership portion of a group of minority
shareholders at a subsidiary of the Company's Healthcare business.
The Company measures the redemption value of this minority
ownership on a quarterly basis with changes in the fair value
recorded as interest expense or income, which is included in net
income for the period. The effect of gains and losses on marketable
equity securities and net interest expense related to fair value
adjustments of the mandatorily redeemable noncontrolling interest
are not directly related to the core performance of the Company’s
business operations since these items do not directly relate to the
sale of the Company’s services or products. The accounting
principles generally accepted in the United States (“GAAP”) require
that the Company include the gains and losses on marketable equity
securities and net interest expense related to fair value
adjustments of the mandatorily redeemable noncontrolling interest
in net income on the Condensed Consolidated Statements of
Operations. The Company excludes the gains and losses on marketable
equity securities and net interest expense related to fair value
adjustments of the mandatorily redeemable noncontrolling interest
from the non-GAAP adjusted net income because these items are
independent of the Company’s core operations and not indicative of
the performance of the Company’s business operations.
The following tables reconcile the non-GAAP financial measures
for Net income, excluding certain items, to the most directly
comparable GAAP measures:
Three Months Ended March
31
2024
2023
Income
Income
before
Income
Net
before
Income
Net
income
Taxes
Income
income
Taxes
Income
(in thousands, except per share
amounts)
taxes
taxes
Amounts attributable to Graham Holdings
Company Common Stockholders
As reported
$
168,839
$
43,500
$
125,339
$
72,177
$
19,200
$
52,977
Attributable to noncontrolling
interests
(959
)
(705
)
Attributable to Graham Holdings Company
Stockholders
124,380
52,272
Adjustments:
Charges related to non-operating
Separation Incentive Programs
418
107
311
4,129
1,062
3,067
Net gains on marketable equity
securities
(104,152
)
(26,668
)
(77,484
)
(18,022
)
(4,744
)
(13,278
)
Net losses (earnings) of affiliates whose
operations are not managed by the Company
1,486
380
1,106
(1,812
)
(477
)
(1,335
)
Non-operating loss (gain) from write-up,
sale and impairment of cost method investments
406
104
302
(2,615
)
(660
)
(1,955
)
Interest expense related to the fair value
adjustment of the mandatorily redeemable noncontrolling
interest
1,876
95
1,781
1,468
75
1,393
Net Income, adjusted (non-GAAP)
$
50,396
$
40,164
Per share information attributable to
Graham Holdings Company Common Stockholders
Diluted income per common share, as
reported
$
27.72
$
10.88
Adjustments:
Charges related to non-operating
Separation Incentive Programs
0.07
0.64
Net gains on marketable equity
securities
(17.27
)
(2.76
)
Net losses (earnings) of affiliates whose
operations are not managed by the Company
0.25
(0.28
)
Non-operating loss (gain) from write-up,
sale and impairment of cost method investments
0.07
(0.41
)
Interest expense related to the fair value
adjustment of the mandatorily redeemable noncontrolling
interest
0.40
0.29
Diluted income per common share, adjusted
(non-GAAP)
$
11.24
$
8.36
The adjusted diluted per share amounts may
not compute due to rounding.
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version on businesswire.com: https://www.businesswire.com/news/home/20240501571011/en/
Wallace R. Cooney (703) 345-6470
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