EX-99.1 2 a2024q18-kexhibit991.htm EXHIBIT 99.1

Exhibit 99.1

Contact:

Wallace R. Cooney

For Immediate Release

(703) 345-6470

May 1, 2024

GRAHAM HOLDINGS COMPANY REPORTS

FIRST QUARTER EARNINGS

ARLINGTON, VA - 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.

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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.

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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

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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

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																		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

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(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.

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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

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(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.

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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.

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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
(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			$	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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