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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Graham Holdings Company | NYSE:GHC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 741.13 | 0 | 09:08:48 |
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:
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501571011/en/
Wallace R. Cooney (703) 345-6470
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