ghc-20240501

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 1, 2024

GRAHAM HOLDINGS COMPANY

(Exact name of registrant as specified in its charter)

Delaware

001-06714

53-0182885

(State or other jurisdiction of

incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

1300 North 17th Street, Arlington, Virginia

22209

(Address of principal executive offices)

(Zip Code)

(703) 345-6300

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Class B Common Stock, par value $1.00 per share	GHC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On May 1, 2024, Graham Holdings Company issued a press release announcing the Company’s earnings for the first quarter ended March 31, 2024. A copy of this press release is furnished with this report as an exhibit to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1 Graham Holdings Company Earnings Release Dated May 1, 2024.

Exhibit Index

Exhibit 99.1 Graham Holdings Company Earnings Release dated May 1, 202 4 .

Exhibit 104 Cover Page Interactive Data File, formatted in Inline XBRL and included as Exhibit 101.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


						Graham Holdings Company
						(Registrant)


Date: May 1, 2024						/s/ Wallace R. Cooney
						Wallace R. Cooney, Chief Financial Officer (Principal Financial Officer)

Document

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.

* * * * * * * * * * * *

-more-

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.

-more-


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

-more-


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

-more-


	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.

-more-


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.

-more-

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.

-more-

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.

# # #