Skip to main content

Graham Holdings Company Reports Second Quarter Earnings

Graham Holdings Company (NYSE: GHC) today reported its financial results for the second quarter and first six months of 2024. The Company also filed its Form 10-Q today for the quarter ended June 30, 2024 with the Securities and Exchange Commission.

Division Operating Results

Revenue for the second quarter of 2024 was $1,185.3 million, up 7% from $1,105.0 million in the second quarter of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income of $25.9 million for the second quarter of 2024, compared to $58.1 million for the second quarter of 2023. The decrease in operating results is due to goodwill and intangible asset impairment charges at World of Good Brands (WGB) and declines at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. The Company reported adjusted operating cash flow (non-GAAP) of $98.5 million for the second quarter of 2024, compared to $100.0 million for the second quarter of 2023. Adjusted operating cash flow declined at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. Capital expenditures totaled $20.8 million and $22.5 million for the second quarter of 2024 and 2023, respectively.

Revenue for the first six months of 2024 was $2,337.9 million, up 9% from $2,136.5 million in the first six months of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company recorded operated income of $61.4 million for the first six months of 2024, compared to $85.7 million for the first six months of 2023. The decrease in operating results is due to goodwill and intangible asset impairment charges at WGB and declines at television broadcasting, manufacturing, automotive and other businesses, partially offset by increases at education and healthcare. The Company reported adjusted operating cash flow (non-GAAP) of $181.3 million for the first six months of 2024, compared to $171.6 million for the first six months of 2023. Adjusted operating cash flow improved at education, healthcare, automotive and other businesses, partially offset by declines at manufacturing. Capital expenditures totaled $42.2 million and $44.8 million for the first six months of 2024 and 2023, respectively.

Acquisitions and Dispositions of Businesses

There were no significant business acquisitions or dispositions during the first six months of 2024.

Debt, Cash and Marketable Equity Securities

At June 30, 2024, the Company had $834.8 million in borrowings outstanding at an average interest rate of 6.4%, including $132.2 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $1,009.6 million at June 30, 2024.

Overall, the Company recognized $19.6 million and $123.8 million in net gains on marketable equity securities in the second quarter and first six months of 2024, respectively, compared to $78.6 million and $96.7 million in net gains on marketable equity securities in the second quarter and first six months of 2023, respectively.

Common Stock Repurchases

During the second quarter and first six months of 2024, the Company purchased a total of 40,180 and 68,786 shares, respectively, of its Class B common stock at a cost of $29.5 million and $49.5 million, respectively. At June 30, 2024, there were 4,410,542 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 167,617 shares as of June 30, 2024.

Mandatorily Redeemable Noncontrolling Interest

The Company recorded interest expense of $73.5 million and $75.4 million in the second quarter and first six months of 2024, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at Graham Healthcare Group (GHG). The significant adjustment recorded in the first half of 2024 is largely related to a substantial increase in the estimated fair value of CSI Pharmacy Holding Company, LLC (CSI). Refer to Notes 7 and 8 in the Company’s 10-Q filing for the second quarter of 2024 for additional information.

Overall Company Results

The Company reported a net loss attributable to common shares of $21.0 million ($4.79 per share) for the second quarter of 2024, compared to income of $122.8 million ($25.89 per share) for the second quarter of 2023. For the first six months of 2024, the Company recorded net income attributable to common shares of $103.3 million ($23.11 per share), compared to $175.1 million ($36.67 per share) for the first six months of 2023.

The results for the second quarter and first six months 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 $56.9 million ($12.70 per share) for the second quarter of 2024, compared to $61.1 million ($12.88 per share) for the second quarter of 2023. Excluding these items, net income attributable to common shares was $107.3 million ($23.99 per share) for the first six months of 2024, compared to $101.4 million ($21.24 per share) for the first six months 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

 

 

June 30

%

(in thousands, except per share amounts)

2024

 

2023

Change

Operating revenues

$

1,185,280

 

 

$

1,104,999

 

7

 

Operating expenses

 

1,100,851

 

 

 

1,012,537

 

9

 

Depreciation of property, plant and equipment

 

22,173

 

 

 

21,103

 

5

 

Amortization of intangible assets

 

10,058

 

 

 

13,304

 

(24

)

Impairment of goodwill and other long-lived assets

 

26,287

 

 

 

 

 

Operating income

 

25,911

 

 

 

58,055

 

(55

)

Equity in earnings (losses) of affiliates, net

 

2,560

 

 

 

(6,115

)

 

Interest income

 

2,111

 

 

 

1,548

 

36

 

Interest expense

 

(91,383

)

 

 

(11,774

)

 

Non-operating pension and postretirement benefit income, net

 

24,655

 

 

 

29,815

 

(17

)

Gain on marketable equity securities, net

 

19,628

 

 

 

78,648

 

(75

)

Other income, net

 

1,791

 

 

 

15,794

 

(89

)

(Loss) income before income taxes

 

(14,727

)

 

 

165,971

 

 

Provision for income taxes

 

4,100

 

 

 

41,800

 

(90

)

Net (loss) income

 

(18,827

)

 

 

124,171

 

 

Net income attributable to noncontrolling interests

 

(2,213

)

 

 

(1,383

)

60

 

Net (Loss) Income Attributable to Graham Holdings Company Common Stockholders

$

(21,040

)

 

$

122,788

 

 

Per Share Information Attributable to Graham Holdings Company Common Stockholders

 

 

 

 

Basic net (loss) income per common share

$

(4.79

)

 

$

25.96

 

 

Basic average number of common shares outstanding

 

4,401

 

 

 

4,700

 

 

Diluted net (loss) income per common share

$

(4.79

)

 

$

25.89

 

 

Diluted average number of common shares outstanding

 

4,401

 

 

 

4,713

 

 

GRAHAM HOLDINGS COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

Six Months Ended

 

 

June 30

%

(in thousands, except per share amounts)

2024

 

2023

Change

Operating revenues

$

2,337,942

 

 

$

2,136,545

 

9

 

Operating expenses

 

2,184,793

 

 

 

1,981,713

 

10

 

Depreciation of property, plant and equipment

 

44,700

 

 

 

41,128

 

9

 

Amortization of intangible assets

 

20,809

 

 

 

27,248

 

(24

)

Impairment of goodwill and other long-lived assets

 

26,287

 

 

 

745

 

 

Operating income

 

61,353

 

 

 

85,711

 

(28

)

Equity in earnings (losses) of affiliates, net

 

4,891

 

 

 

(1,454

)

 

Interest income

 

4,289

 

 

 

2,752

 

56

 

Interest expense

 

(110,711

)

 

 

(26,068

)

 

Non-operating pension and postretirement benefit income, net

 

67,072

 

 

 

61,660

 

9

 

Gain on marketable equity securities, net

 

123,780

 

 

 

96,670

 

28

 

Other income, net

 

3,438

 

 

 

18,877

 

(82

)

Income before income taxes

 

154,112

 

 

 

238,148

 

(35

)

Provision for income taxes

 

47,600

 

 

 

61,000

 

(22

)

Net income

 

106,512

 

 

 

177,148

 

(40

)

Net income attributable to noncontrolling interests

 

(3,172

)

 

 

(2,088

)

52

 

Net Income Attributable to Graham Holdings Company Common Stockholders

$

103,340

 

 

$

175,060

 

(41

)

Per Share Information Attributable to Graham Holdings Company Common Stockholders

 

 

 

 

Basic net income per common share

$

23.24

 

 

$

36.78

 

(37

)

Basic average number of common shares outstanding

 

4,416

 

 

 

4,729

 

 

Diluted net income per common share

$

23.11

 

 

$

36.67

 

(37

)

Diluted average number of common shares outstanding

 

4,442

 

 

 

4,744

 

 

GRAHAM HOLDINGS COMPANY

BUSINESS DIVISION INFORMATION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

 

June 30

 

%

 

June 30

 

%

(in thousands)

2024

 

2023

 

Change

 

2024

 

2023

 

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

422,899

 

 

$

402,227

 

 

5

 

 

$

845,497

 

 

$

780,268

 

 

8

 

Television broadcasting

 

 

115,478

 

 

 

118,829

 

 

(3

)

 

 

228,536

 

 

 

231,706

 

 

(1

)

Manufacturing

 

 

103,626

 

 

 

120,082

 

 

(14

)

 

 

205,529

 

 

 

234,666

 

 

(12

)

Healthcare

 

 

147,528

 

 

 

113,282

 

 

30

 

 

 

275,729

 

 

 

215,341

 

 

28

 

Automotive

 

 

308,814

 

 

 

260,672

 

 

18

 

 

 

612,654

 

 

 

493,233

 

 

24

 

Other businesses

 

 

86,991

 

 

 

90,449

 

 

(4

)

 

 

170,289

 

 

 

182,457

 

 

(7

)

Corporate office

 

 

575

 

 

 

850

 

 

(32

)

 

 

1,151

 

 

 

850

 

 

35

 

Intersegment elimination

 

 

(631

)

 

 

(1,392

)

 

 

 

 

(1,443

)

 

 

(1,976

)

 

 

 

 

$

1,185,280

 

 

$

1,104,999

 

 

7

 

 

$

2,337,942

 

 

$

2,136,545

 

 

9

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

387,622

 

 

$

372,111

 

 

4

 

 

$

779,633

 

 

$

727,112

 

 

7

 

Television broadcasting

 

 

84,350

 

 

 

85,639

 

 

(2

)

 

 

167,775

 

 

 

169,933

 

 

(1

)

Manufacturing

 

 

99,361

 

 

 

108,100

 

 

(8

)

 

 

198,195

 

 

 

215,356

 

 

(8

)

Healthcare

 

 

134,791

 

 

 

104,905

 

 

28

 

 

 

256,901

 

 

 

204,028

 

 

26

 

Automotive

 

 

298,611

 

 

 

251,212

 

 

19

 

 

 

592,799

 

 

 

472,930

 

 

25

 

Other businesses

 

 

139,953

 

 

 

114,310

 

 

22

 

 

 

252,205

 

 

 

237,319

 

 

6

 

Corporate office

 

 

15,312

 

 

 

12,059

 

 

27

 

 

 

30,524

 

 

 

26,132

 

 

17

 

Intersegment elimination

 

 

(631

)

 

 

(1,392

)

 

 

 

 

(1,443

)

 

 

(1,976

)

 

 

 

 

$

1,159,369

 

 

$

1,046,944

 

 

11

 

 

$

2,276,589

 

 

$

2,050,834

 

 

11

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

35,277

 

 

$

30,116

 

 

17

 

 

$

65,864

 

 

$

53,156

 

 

24

 

Television broadcasting

 

 

31,128

 

 

 

33,190

 

 

(6

)

 

 

60,761

 

 

 

61,773

 

 

(2

)

Manufacturing

 

 

4,265

 

 

 

11,982

 

 

(64

)

 

 

7,334

 

 

 

19,310

 

 

(62

)

Healthcare

 

 

12,737

 

 

 

8,377

 

 

52

 

 

 

18,828

 

 

 

11,313

 

 

66

 

Automotive

 

 

10,203

 

 

 

9,460

 

 

8

 

 

 

19,855

 

 

 

20,303

 

 

(2

)

Other businesses

 

 

(52,962

)

 

 

(23,861

)

 

 

 

 

(81,916

)

 

 

(54,862

)

 

(49

)

Corporate office

 

 

(14,737

)

 

 

(11,209

)

 

(31

)

 

 

(29,373

)

 

 

(25,282

)

 

(16

)

 

 

$

25,911

 

 

$

58,055

 

 

(55

)

 

$

61,353

 

 

$

85,711

 

 

(28

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

2,872

 

 

$

3,984

 

 

(28

)

 

$

5,846

 

 

$

8,400

 

 

(30

)

Television broadcasting

 

 

1,360

 

 

 

1,363

 

 

0

 

 

 

2,710

 

 

 

2,725

 

 

(1

)

Manufacturing

 

 

2,648

 

 

 

4,332

 

 

(39

)

 

 

5,768

 

 

 

9,194

 

 

(37

)

Healthcare

 

 

598

 

 

 

882

 

 

(32

)

 

 

1,234

 

 

 

1,836

 

 

(33

)

Automotive

 

 

5

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

Other businesses

 

 

28,862

 

 

 

2,743

 

 

 

 

 

31,533

 

 

 

5,838

 

 

 

Corporate office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

36,345

 

 

$

13,304

 

 

 

 

$

47,096

 

 

$

27,993

 

 

68

 

Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

38,149

 

 

$

34,100

 

 

12

 

 

$

71,710

 

 

$

61,556

 

 

16

 

Television broadcasting

 

 

32,488

 

 

 

34,553

 

 

(6

)

 

 

63,471

 

 

 

64,498

 

 

(2

)

Manufacturing

 

 

6,913

 

 

 

16,314

 

 

(58

)

 

 

13,102

 

 

 

28,504

 

 

(54

)

Healthcare

 

 

13,335

 

 

 

9,259

 

 

44

 

 

 

20,062

 

 

 

13,149

 

 

53

 

Automotive

 

 

10,208

 

 

 

9,460

 

 

8

 

 

 

19,860

 

 

 

20,303

 

 

(2

)

Other businesses

 

 

(24,100

)

 

 

(21,118

)

 

(14

)

 

 

(50,383

)

 

 

(49,024

)

 

(3

)

Corporate office

 

 

(14,737

)

 

 

(11,209

)

 

(31

)

 

 

(29,373

)

 

 

(25,282

)

 

(16

)

 

 

$

62,256

 

 

$

71,359

 

 

(13

)

 

$

108,449

 

 

$

113,704

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

 

June 30

 

%

 

June 30

 

%

(in thousands)

2024

 

2023

 

Change

 

2024

 

2023

 

Change

Depreciation

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

8,855

 

 

$

9,460

 

 

(6

)

 

$

18,160

 

 

$

18,428

 

 

(1

)

Television broadcasting

 

 

2,870

 

 

 

3,087

 

 

(7

)

 

 

5,738

 

 

 

6,123

 

 

(6

)

Manufacturing

 

 

2,694

 

 

 

2,287

 

 

18

 

 

 

5,409

 

 

 

4,569

 

 

18

 

Healthcare

 

 

1,683

 

 

 

1,287

 

 

31

 

 

 

3,277

 

 

 

2,391

 

 

37

 

Automotive

 

 

1,716

 

 

 

1,148

 

 

49

 

 

 

3,429

 

 

 

2,261

 

 

52

 

Other businesses

 

 

4,204

 

 

 

3,681

 

 

14

 

 

 

8,387

 

 

 

7,050

 

 

19

 

Corporate office

 

 

151

 

 

 

153

 

 

(1

)

 

 

300

 

 

 

306

 

 

(2

)

 

 

$

22,173

 

 

$

21,103

 

 

5

 

 

$

44,700

 

 

$

41,128

 

 

9

 

Pension Expense

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

4,712

 

 

$

2,256

 

 

 

 

$

8,822

 

 

$

4,454

 

 

98

 

Television broadcasting

 

 

1,416

 

 

 

805

 

 

76

 

 

 

3,055

 

 

 

1,665

 

 

83

 

Manufacturing

 

 

292

 

 

 

281

 

 

4

 

 

 

919

 

 

 

556

 

 

65

 

Healthcare

 

 

4,851

 

 

 

2,685

 

 

81

 

 

 

9,609

 

 

 

7,042

 

 

36

 

Automotive

 

 

42

 

 

 

5

 

 

 

 

 

57

 

 

 

10

 

 

 

Other businesses

 

 

1,674

 

 

 

613

 

 

 

 

 

3,614

 

 

 

1,185

 

 

 

Corporate office

 

 

1,084

 

 

 

928

 

 

17

 

 

 

2,029

 

 

 

1,904

 

 

7

 

 

 

$

14,071

 

 

$

7,573

 

 

86

 

 

$

28,105

 

 

$

16,816

 

 

67

 

Adjusted Operating Cash Flow (non-GAAP)(1)

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

51,716

 

 

$

45,816

 

 

13

 

 

$

98,692

 

 

$

84,438

 

 

17

 

Television broadcasting

 

 

36,774

 

 

 

38,445

 

 

(4

)

 

 

72,264

 

 

 

72,286

 

 

0

 

Manufacturing

 

 

9,899

 

 

 

18,882

 

 

(48

)

 

 

19,430

 

 

 

33,629

 

 

(42

)

Healthcare

 

 

19,869

 

 

 

13,231

 

 

50

 

 

 

32,948

 

 

 

22,582

 

 

46

 

Automotive

 

 

11,966

 

 

 

10,613

 

 

13

 

 

 

23,346

 

 

 

22,574

 

 

3

 

Other businesses

 

 

(18,222

)

 

 

(16,824

)

 

(8

)

 

 

(38,382

)

 

 

(40,789

)

 

6

 

Corporate office

 

 

(13,502

)

 

 

(10,128

)

 

(33

)

 

 

(27,044

)

 

 

(23,072

)

 

(17

)

 

 

$

98,500

 

 

$

100,035

 

 

(2

)

 

$

181,254

 

 

$

171,648

 

 

6

 

____________

(1)

Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets plus Depreciation Expense and Pension Expense.

GRAHAM HOLDINGS COMPANY

EDUCATION DIVISION INFORMATION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

 

June 30

 

%

 

June 30

 

%

(in thousands)

 

2024

 

2023

 

Change

 

2024

 

2023

 

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Kaplan international

 

$

267,026

 

 

$

237,663

 

 

12

 

 

$

536,824

 

 

$

464,739

 

 

16

 

Higher education

 

 

81,041

 

 

 

90,291

 

 

(10

)

 

 

161,163

 

 

 

168,632

 

 

(4

)

Supplemental education

 

 

73,133

 

 

 

74,616

 

 

(2

)

 

 

145,255

 

 

 

148,203

 

 

(2

)

Kaplan corporate and other

 

 

2,993

 

 

 

2,887

 

 

4

 

 

 

5,581

 

 

 

5,259

 

 

6

 

Intersegment elimination

 

 

(1,294

)

 

 

(3,230

)

 

 

 

 

(3,326

)

 

 

(6,565

)

 

 

 

 

$

422,899

 

 

$

402,227

 

 

5

 

 

$

845,497

 

 

$

780,268

 

 

8

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Kaplan international

 

$

241,202

 

 

$

216,912

 

 

11

 

 

$

479,688

 

 

$

422,687

 

 

13

 

Higher education

 

 

66,687

 

 

 

72,496

 

 

(8

)

 

 

141,290

 

 

 

143,754

 

 

(2

)

Supplemental education

 

 

67,461

 

 

 

71,104

 

 

(5

)

 

 

135,003

 

 

 

140,940

 

 

(4

)

Kaplan corporate and other

 

 

11,048

 

 

 

10,711

 

 

3

 

 

 

21,221

 

 

 

17,921

 

 

18

 

Amortization of intangible assets

 

 

2,872

 

 

 

3,984

 

 

(28

)

 

 

5,846

 

 

 

7,923

 

 

(26

)

Impairment of long-lived assets

 

 

 

 

 

 

 

 

 

 

 

 

 

477

 

 

 

Intersegment elimination

 

 

(1,648

)

 

 

(3,096

)

 

 

 

 

(3,415

)

 

 

(6,590

)

 

 

 

 

$

387,622

 

 

$

372,111

 

 

4

 

 

$

779,633

 

 

$

727,112

 

 

7

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

Kaplan international

 

$

25,824

 

 

$

20,751

 

 

24

 

 

$

57,136

 

 

$

42,052

 

 

36

 

Higher education

 

 

14,354

 

 

 

17,795

 

 

(19

)

 

 

19,873

 

 

 

24,878

 

 

(20

)

Supplemental education

 

 

5,672

 

 

 

3,512

 

 

62

 

 

 

10,252

 

 

 

7,263

 

 

41

 

Kaplan corporate and other

 

 

(8,055

)

 

 

(7,824

)

 

(3

)

 

 

(15,640

)

 

 

(12,662

)

 

(24

)

Amortization of intangible assets

 

 

(2,872

)

 

 

(3,984

)

 

28

 

 

 

(5,846

)

 

 

(7,923

)

 

26

 

Impairment of long-lived assets

 

 

 

 

 

 

 

 

 

 

 

 

 

(477

)

 

 

Intersegment elimination

 

 

354

 

 

 

(134

)

 

 

 

 

89

 

 

 

25

 

 

 

 

 

$

35,277

 

 

$

30,116

 

 

17

 

 

$

65,864

 

 

$

53,156

 

 

24

 

Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets

 

 

 

 

 

 

 

 

 

 

 

Kaplan international

 

$

25,824

 

 

$

20,751

 

 

24

 

 

$

57,136

 

 

$

42,052

 

 

36

 

Higher education

 

 

14,354

 

 

 

17,795

 

 

(19

)

 

 

19,873

 

 

 

24,878

 

 

(20

)

Supplemental education

 

 

5,672

 

 

 

3,512

 

 

62

 

 

 

10,252

 

 

 

7,263

 

 

41

 

Kaplan corporate and other

 

 

(8,055

)

 

 

(7,824

)

 

(3

)

 

 

(15,640

)

 

 

(12,662

)

 

(24

)

Intersegment elimination

 

 

354

 

 

 

(134

)

 

 

 

 

89

 

 

 

25

 

 

 

 

 

$

38,149

 

 

$

34,100

 

 

12

 

 

$

71,710

 

 

$

61,556

 

 

16

 

Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

Kaplan international

 

$

7,177

 

 

$

6,903

 

 

4

 

 

$

14,533

 

 

$

13,233

 

 

10

 

Higher education

 

 

799

 

 

 

1,071

 

 

(25

)

 

 

1,702

 

 

 

2,173

 

 

(22

)

Supplemental education

 

 

857

 

 

 

1,461

 

 

(41

)

 

 

1,876

 

 

 

2,970

 

 

(37

)

Kaplan corporate and other

 

 

22

 

 

 

25

 

 

(12

)

 

 

49

 

 

 

52

 

 

(6

)

 

 

$

8,855

 

 

$

9,460

 

 

(6

)

 

$

18,160

 

 

$

18,428

 

 

(1

)

Pension Expense

 

 

 

 

 

 

 

 

 

 

 

 

Kaplan international

 

$

166

 

 

$

81

 

 

 

 

$

329

 

 

$

161

 

 

 

Higher education

 

 

2,045

 

 

 

923

 

 

 

 

 

3,826

 

 

 

1,845

 

 

 

Supplemental education

 

 

2,094

 

 

 

1,023

 

 

 

 

 

3,912

 

 

 

2,047

 

 

91

 

Kaplan corporate and other

 

 

407

 

 

 

229

 

 

78

 

 

 

755

 

 

 

401

 

 

88

 

 

 

$

4,712

 

 

$

2,256

 

 

 

 

$

8,822

 

 

$

4,454

 

 

98

 

Adjusted Operating Cash Flow (non-GAAP)(1)

 

 

 

 

 

 

 

 

 

 

 

Kaplan international

 

$

33,167

 

 

$

27,735

 

 

20

 

 

$

71,998

 

 

$

55,446

 

 

30

 

Higher education

 

 

17,198

 

 

 

19,789

 

 

(13

)

 

 

25,401

 

 

 

28,896

 

 

(12

)

Supplemental education

 

 

8,623

 

 

 

5,996

 

 

44

 

 

 

16,040

 

 

 

12,280

 

 

31

 

Kaplan corporate and other

 

 

(7,626

)

 

 

(7,570

)

 

(1

)

 

 

(14,836

)

 

 

(12,209

)

 

(22

)

Intersegment elimination

 

 

354

 

 

 

(134

)

 

 

 

 

89

 

 

 

25

 

 

 

 

 

$

51,716

 

 

$

45,816

 

 

13

 

 

$

98,692

 

 

$

84,438

 

 

17

 

____________

(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 June 30

 

2024

 

2023

(in thousands, except per share amounts)

(Loss)

Income

before

income

taxes

 

Income

Taxes

 

Net

(Loss)

Income

 

Income

before

income

taxes

 

Income

Taxes

 

Net

Income

Amounts attributable to Graham Holdings Company Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

As reported

$

(14,727

)

 

$

4,100

 

 

$

(18,827

)

 

$

165,971

 

 

$

41,800

 

 

$

124,171

 

Attributable to noncontrolling interests

 

 

 

 

 

(2,213

)

 

 

 

 

 

 

(1,383

)

Attributable to Graham Holdings Company Stockholders

 

 

 

 

 

(21,040

)

 

 

 

 

 

 

122,788

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Net credit related to fair value changes in contingent consideration from prior acquisitions

 

 

 

 

 

 

 

 

 

 

(4,797

)

 

 

(144

)

 

 

(4,653

)

Goodwill and intangible asset impairment charges

 

26,287

 

 

 

5,693

 

 

 

20,594

 

 

 

 

 

 

 

 

 

 

Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs

 

16,410

 

 

 

4,201

 

 

 

12,209

 

 

 

5,517

 

 

 

1,419

 

 

 

4,098

 

Interest expense (credit) related to the fair value adjustment of the mandatorily redeemable noncontrolling interest

 

73,539

 

 

 

12,145

 

 

 

61,394

 

 

 

(1,179

)

 

 

(27

)

 

 

(1,152

)

Net gains on marketable equity securities

 

(19,628

)

 

 

(5,026

)

 

 

(14,602

)

 

 

(78,648

)

 

 

(20,704

)

 

 

(57,944

)

Net losses of affiliates whose operations are not managed by the Company

 

1,128

 

 

 

289

 

 

 

839

 

 

 

8,633

 

 

 

2,273

 

 

 

6,360

 

Gain on sale of certain WGB websites

 

(3,483

)

 

 

(760

)

 

 

(2,723

)

 

 

 

 

 

 

 

 

 

Gain on sale of Pinna

 

 

 

 

 

 

 

 

 

 

(10,033

)

 

 

(2,641

)

 

 

(7,392

)

Non-operating loss (gain) from impairment, write-up and sale of cost method investments

 

337

 

 

 

86

 

 

 

251

 

 

 

(1,320

)

 

 

(347

)

 

 

(973

)

Net Income, adjusted (non-GAAP)

 

 

 

 

$

56,922

 

 

 

 

 

 

$

61,132

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share information attributable to Graham Holdings Company Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) income per common share, as reported

 

 

 

 

$

(4.79

)

 

 

 

 

 

$

25.89

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Net credit related to fair value changes in contingent consideration from prior acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

(0.98

)

Goodwill and intangible asset impairment charges

 

 

 

 

 

4.62

 

 

 

 

 

 

 

 

Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs

 

 

 

 

 

2.74

 

 

 

 

 

 

 

0.86

 

Interest expense (credit) related to the fair value adjustment of the mandatorily redeemable noncontrolling interest

 

 

 

 

 

13.77

 

 

 

 

 

 

 

(0.24

)

Net gains on marketable equity securities

 

 

 

 

 

(3.28

)

 

 

 

 

 

 

(12.22

)

Net losses of affiliates whose operations are not managed by the Company

 

 

 

 

 

0.19

 

 

 

 

 

 

 

1.34

 

Gain on sale of certain WGB websites

 

 

 

 

 

(0.61

)

 

 

 

 

 

 

 

Gain on sale of Pinna

 

 

 

 

 

 

 

 

 

 

 

 

(1.56

)

Non-operating loss (gain) from impairment, write-up and sale of cost method investments

 

 

 

 

 

0.06

 

 

 

 

 

 

 

(0.21

)

Diluted income per common share, adjusted (non-GAAP)

 

 

 

 

$

12.70

 

 

 

 

 

 

$

12.88

 

 

 

 

 

 

 

 

 

 

 

 

 

The adjusted diluted per share amounts may not compute due to rounding.

 

Six Months Ended June 30

 

2024

 

2023

(in thousands, except per share amounts)

Income

before

income

taxes

 

Income

Taxes

 

Net

Income

 

Income

before

income

taxes

 

Income

Taxes

 

Net

Income

Amounts attributable to Graham Holdings Company Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

As reported

$

154,112

 

 

$

47,600

 

 

$

106,512

 

 

$

238,148

 

 

$

61,000

 

 

$

177,148

 

Attributable to noncontrolling interests

 

 

 

 

 

(3,172

)

 

 

 

 

 

 

(2,088

)

Attributable to Graham Holdings Company Stockholders

 

 

 

 

$

103,340

 

 

 

 

 

 

$

175,060

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Net credit related to fair value changes in contingent consideration from prior acquisitions

 

 

 

 

 

 

 

 

 

 

(4,688

)

 

 

(143

)

 

 

(4,545

)

Goodwill and intangible asset impairment charges

 

26,287

 

 

 

5,693

 

 

 

20,594

 

 

 

 

 

 

 

 

 

 

Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs

 

16,828

 

 

 

4,308

 

 

 

12,520

 

 

 

9,646

 

 

 

2,481

 

 

 

7,165

 

Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest

 

75,415

 

 

 

12,241

 

 

 

63,174

 

 

 

289

 

 

 

47

 

 

 

242

 

Net gains on marketable equity securities

 

(123,780

)

 

 

(31,693

)

 

 

(92,087

)

 

 

(96,670

)

 

 

(25,448

)

 

 

(71,222

)

Net losses of affiliates whose operations are not managed by the Company

 

2,615

 

 

 

670

 

 

 

1,945

 

 

 

6,820

 

 

 

1,795

 

 

 

5,025

 

Gain on sale of certain WGB websites

 

(3,483

)

 

 

(760

)

 

 

(2,723

)

 

 

 

 

 

 

 

 

 

Gain on sale of Pinna

 

 

 

 

 

 

 

 

 

 

(10,033

)

 

 

(2,641

)

 

 

(7,392

)

Non-operating loss (gain) from impairment, write-up and sales of cost method investments

 

744

 

 

 

191

 

 

 

553

 

 

 

(3,935

)

 

 

(1,008

)

 

 

(2,927

)

Net Income, adjusted (non-GAAP)

 

 

 

 

$

107,316

 

 

 

 

 

 

$

101,406

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share information attributable to Graham Holdings Company Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

Diluted income per common share, as reported

 

 

 

 

$

23.11

 

 

 

 

 

 

$

36.67

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Net credit related to fair value changes in contingent consideration from prior acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

(0.95

)

Goodwill and intangible asset impairment charges

 

 

 

 

 

4.60

 

 

 

 

 

 

 

 

Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs

 

 

 

 

 

2.80

 

 

 

 

 

 

 

1.50

 

Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest

 

 

 

 

 

14.13

 

 

 

 

 

 

 

0.05

 

Net gains on marketable equity securities

 

 

 

 

 

(20.59

)

 

 

 

 

 

 

(14.92

)

Net losses of affiliates whose operations are not managed by the Company

 

 

 

 

 

0.43

 

 

 

 

 

 

 

1.05

 

Gain on sale of certain WGB websites

 

 

 

 

 

(0.61

)

 

 

 

 

 

 

 

Gain on sale of Pinna

 

 

 

 

 

 

 

 

 

 

 

 

(1.55

)

Non-operating loss (gain) from impairment, write-up and sales of cost method investments

 

 

 

 

 

0.12

 

 

 

 

 

 

 

(0.61

)

Diluted income per common share, adjusted (non-GAAP)

 

 

 

 

$

23.99

 

 

 

 

 

 

$

21.24

 

 

 

 

 

 

 

 

 

 

 

 

 

The adjusted diluted per share amounts may not compute due to rounding.

 

Contacts

Wallace R. Cooney

(703) 345-6470

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.