Releases
Graham Holdings Company Reports First Quarter Earnings
The results for the first quarter of 2023 and 2022 were affected by a number of items as described in the following paragraphs. Excluding these items, net income attributable to common shares was
Items included in the Company’s net income for the first quarter of 2023:
$4.1 million in expenses related to non-operating Separation Incentive Programs (SIPs) at other businesses (after-tax impact of$3.1 million , or$0.64 per share);$18.0 million in net gains on marketable equity securities (after-tax impact of$13.3 million , or$2.76 per share);$1.8 million in net earnings of affiliates whose operations are not managed by the Company (after-tax impact of$1.3 million , or$0.28 per share);- non-operating gain of
$2.6 million from the write-up and sale of a cost method investment (after-tax impact of$2.0 million , or$0.41 per share); and $1.5 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of$1.4 million , or$0.29 per share).
Items included in the Company’s net income for the first quarter of 2022:
$46.9 million in net gains on marketable equity securities (after-tax impact of$34.7 million , or$7.05 per share);$0.4 million in net earnings of affiliates whose operations are not managed by the Company (after-tax impact of$0.3 million , or$0.05 per share);- Non-operating gain of
$1.7 million from sales of an equity method and cost method investment (after-tax impact of$1.3 million , or$0.26 per share); and $3.4 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of$3.3 million , or$0.67 per share).
Revenue for the first quarter of 2023 was
Division Results
Education
Education division revenue totaled
A summary of Kaplan’s operating results is as follows:
|
|
Three Months Ended |
|
|
|||||||
|
|
|
|
|
|||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Revenue |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
227,076 |
|
|
$ |
204,513 |
|
|
11 |
|
Higher education |
|
|
76,345 |
|
|
|
75,808 |
|
|
1 |
|
Supplemental education |
|
|
73,587 |
|
|
|
76,304 |
|
|
(4 |
) |
Kaplan corporate and other |
|
|
5,375 |
|
|
|
4,345 |
|
|
24 |
|
Intersegment elimination |
|
|
(4,342 |
) |
|
|
(2,958 |
) |
|
— |
|
|
|
$ |
378,041 |
|
|
$ |
358,012 |
|
|
6 |
|
Operating Income (Loss) |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
21,301 |
|
|
$ |
20,564 |
|
|
4 |
|
Higher education |
|
|
6,661 |
|
|
|
5,037 |
|
|
32 |
|
Supplemental education |
|
|
3,751 |
|
|
|
3,371 |
|
|
11 |
|
Kaplan corporate and other |
|
|
(4,416 |
) |
|
|
(4,433 |
) |
|
0 |
|
Amortization of intangible assets |
|
|
(3,939 |
) |
|
|
(4,146 |
) |
|
5 |
|
Impairment of long-lived assets |
|
|
(477 |
) |
|
|
— |
|
|
— |
|
Intersegment elimination |
|
|
159 |
|
|
|
19 |
|
|
— |
|
|
|
$ |
23,040 |
|
|
$ |
20,412 |
|
|
13 |
|
Higher Education includes the results of Kaplan as a service provider to higher education institutions. In the first quarter of 2023, Higher Education revenue and operating results were higher due to a modest increase in the Purdue Global fee recorded. For the first quarter of 2023 and 2022, Kaplan recorded a portion of the fee with Purdue Global based on an assessment of its collectability under the TOSA. Enrollments at Purdue Global for the first quarter of 2023 increased 4% compared to the first quarter of 2022. The Company will continue to assess the collectability of the fee with Purdue Global on a quarterly basis to make a determination as to whether to record all or part of the fee in the future and whether to make adjustments to fee amounts recognized in earlier periods.
Supplemental Education includes Kaplan’s standardized test preparation programs and domestic professional and other continuing education businesses. Supplemental Education revenue declined 4% for the first quarter of 2023 due largely to declines in retail comprehensive test preparation demand. Overall, demand for graduate and pre-college test preparation programs has declined due to the strength of
Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities.
Manufacturing
Manufacturing includes four businesses: Hoover, a supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications; Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies;
Manufacturing revenues decreased 1% in the first quarter of 2023. The revenue decline is due primarily to lower revenues at
Healthcare
In 2022, GHG implemented a new pension credit retention program in order to improve employee retention and utilize the Company’s surplus pension assets. The GHG pilot program offers a pension credit up to
The decline in GHG operating results in the first quarter of 2023 is due to an increase in pension expense related to the new GHG pension credit retention program and an increase in net losses from newly acquired businesses. Excluding pension expense and net losses from newly acquired businesses, GHG operating results increased in the first quarter of 2023 due to improved results in home health and hospice. Adjusted operating cash flow (non-GAAP) at GHG increased to
The Company also holds interests in four home health and hospice joint ventures managed by GHG, whose results are included in equity in earnings of affiliates in the Company’s Condensed Consolidated Statements of Operations. The Company recorded equity in earnings of
Automotive
Automotive includes six automotive dealerships in the
Revenues for the first quarter of 2023 increased significantly due to the acquisitions of the Toyota and CDJR dealerships and sales growth at the Ford, Honda and Lexus dealerships, partially offset by lower revenue at the Jeep dealership due to a decline in new vehicle sales. Additionally, all of the dealerships reported sales growth for services and parts. Operating results for the first quarter of 2023 improved significantly due largely to the Toyota and CDJR acquisitions, and improved results at the Lexus, Ford and Honda dealerships, partially offset by a decline at the Jeep dealership due to lower revenues and margins.
Other Businesses
A summary of revenue by category for other businesses:
|
|
Three Months Ended |
|
|
|||||
|
|
|
|
% |
|||||
(in thousands) |
2023 |
|
2022 |
|
Change |
||||
Operating Revenues |
|
|
|
|
|
|
|||
Retail (1) |
|
$ |
32,397 |
|
$ |
43,089 |
|
(25 |
) |
Media (2) |
|
|
25,404 |
|
|
30,790 |
|
(17 |
) |
Specialty (3) |
|
|
34,207 |
|
|
25,738 |
|
33 |
|
|
|
$ |
92,008 |
|
$ |
99,617 |
|
(8 |
) |
____________
(1) |
|
(2) |
Includes Leaf Media, Code3, Slate, |
(3) |
Includes Clyde’s Restaurant Group, Decile and CyberVista |
Overall, revenue from other businesses declined 8% in the first quarter of 2023. Retail revenue declined due to significantly lower revenue at
Overall, operating results at other businesses were down slightly in the first quarter of 2023 due primarily to increased losses at Leaf,
Revenue for
Clyde’s Restaurant Group
CRG owns and operates 11 restaurants and entertainment venues in the
Other
Other businesses also include Code3, a performance marketing agency focused on driving performance for brands though three core elements of digital success: media, creative and commerce; Slate and
In the first quarter of 2023, Code3 implemented a SIP to reduce the number of employees, which is being funded by the assets of the Company’s pension plan;
Corporate Office
Corporate office includes the expenses of the Company’s corporate office and certain continuing obligations related to prior business dispositions.
Equity in Earnings of Affiliates
At
Net Interest Expense and Related Balances
The Company incurred net interest expense of
At
Non-operating Pension and Postretirement Benefit Income, net
The Company recorded net non-operating pension and postretirement benefit income of
In the first quarter of 2023, the Company recorded
Gain on
Overall, the Company recognized
Other Non-Operating Income
The Company recorded total other non-operating income, net, of
Provision for Income Taxes
The Company’s effective tax rate for the first quarter of 2023 and 2022 was 26.6% and 26.9%, respectively.
Earnings Per Share
The calculation of diluted earnings per share for the first quarter of 2023 was based on 4,775,586 weighted average shares outstanding, compared to 4,885,212 for the first quarter of 2022. At
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 2022 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Other forward-looking statements include comments about expectations related to acquisitions or dispositions or related business activities, including the TOSA, the Company’s business strategies and objectives, the prospects for growth in the Company’s various business operations and the Company’s future financial performance. As with any projection or forecast, forward-looking statements are subject to various risks and uncertainties, including the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K, that could cause actual results or events to differ materially from those anticipated in such statements. 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.
|
|
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
||||||||
(Unaudited) |
|
||||||||
|
|
|
|||||||
|
Three Months Ended |
|
|||||||
|
|
% |
|||||||
(in thousands, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
Change |
|
Operating revenues |
$ |
1,031,546 |
|
|
$ |
914,721 |
|
13 |
|
Operating expenses |
|
969,176 |
|
|
|
840,363 |
|
15 |
|
Depreciation of property, plant and equipment |
|
20,025 |
|
|
|
19,475 |
|
3 |
|
Amortization of intangible assets |
|
13,944 |
|
|
|
14,912 |
|
(6 |
) |
Impairment of long-lived assets |
|
745 |
|
|
|
— |
|
— |
|
Operating income |
|
27,656 |
|
|
|
39,971 |
|
(31 |
) |
Equity in earnings of affiliates, net |
|
4,661 |
|
|
|
2,604 |
|
79 |
|
Interest income |
|
1,204 |
|
|
|
715 |
|
68 |
|
Interest expense |
|
(14,294 |
) |
|
|
(11,417 |
) |
25 |
|
Non-operating pension and postretirement benefit income, net |
|
31,845 |
|
|
|
50,505 |
|
(37 |
) |
Gain on marketable equity securities, net |
|
18,022 |
|
|
|
46,912 |
|
(62 |
) |
Other income, net |
|
3,083 |
|
|
|
2,876 |
|
7 |
|
Income before income taxes |
|
72,177 |
|
|
|
132,166 |
|
(45 |
) |
Provision for income taxes |
|
19,200 |
|
|
|
35,600 |
|
(46 |
) |
Net income |
|
52,977 |
|
|
|
96,566 |
|
(45 |
) |
Net income attributable to noncontrolling interests |
|
(705 |
) |
|
|
(942 |
) |
(25 |
) |
Net Income Attributable to Graham Holdings Company Common Stockholders |
$ |
52,272 |
|
|
$ |
95,624 |
|
(45 |
) |
Per Share Information Attributable to Graham Holdings Company Common Stockholders |
|
|
|
|
|||||
Basic net income per common share |
$ |
10.91 |
|
|
$ |
19.50 |
|
(44 |
) |
Basic average number of common shares outstanding |
|
4,759 |
|
|
|
4,871 |
|
|
|
Diluted net income per common share |
$ |
10.88 |
|
|
$ |
19.45 |
|
(44 |
) |
Diluted average number of common shares outstanding |
|
4,776 |
|
|
|
4,885 |
|
|
|
|
|||||||||||
BUSINESS DIVISION INFORMATION |
|||||||||||
(Unaudited) |
|||||||||||
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
|
|||||||
|
|
|
|
% |
|||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating Revenues |
|
|
|
|
|
|
|||||
Education |
|
$ |
378,041 |
|
|
$ |
358,012 |
|
|
6 |
|
Television broadcasting |
|
|
112,877 |
|
|
|
123,419 |
|
|
(9 |
) |
Manufacturing |
|
|
114,584 |
|
|
|
115,940 |
|
|
(1 |
) |
Healthcare |
|
|
102,059 |
|
|
|
67,255 |
|
|
52 |
|
Automotive |
|
|
232,561 |
|
|
|
150,967 |
|
|
54 |
|
Other businesses |
|
|
92,008 |
|
|
|
99,617 |
|
|
(8 |
) |
Corporate office |
|
|
— |
|
|
|
— |
|
|
— |
|
Intersegment elimination |
|
|
(584 |
) |
|
|
(489 |
) |
|
— |
|
|
|
$ |
1,031,546 |
|
|
$ |
914,721 |
|
|
13 |
|
Operating Expenses |
|
|
|
|
|
|
|||||
Education |
|
$ |
355,001 |
|
|
$ |
337,600 |
|
|
5 |
|
Television broadcasting |
|
|
84,294 |
|
|
|
83,521 |
|
|
1 |
|
Manufacturing |
|
|
107,256 |
|
|
|
105,965 |
|
|
1 |
|
Healthcare |
|
|
99,123 |
|
|
|
60,896 |
|
|
63 |
|
Automotive |
|
|
221,718 |
|
|
|
143,889 |
|
|
54 |
|
Other businesses |
|
|
123,009 |
|
|
|
130,361 |
|
|
(6 |
) |
Corporate office |
|
|
14,073 |
|
|
|
13,007 |
|
|
8 |
|
Intersegment elimination |
|
|
(584 |
) |
|
|
(489 |
) |
|
— |
|
|
|
$ |
1,003,890 |
|
|
$ |
874,750 |
|
|
15 |
|
Operating Income (Loss) |
|
|
|
|
|
|
|||||
Education |
|
$ |
23,040 |
|
|
$ |
20,412 |
|
|
13 |
|
Television broadcasting |
|
|
28,583 |
|
|
|
39,898 |
|
|
(28 |
) |
Manufacturing |
|
|
7,328 |
|
|
|
9,975 |
|
|
(27 |
) |
Healthcare |
|
|
2,936 |
|
|
|
6,359 |
|
|
(54 |
) |
Automotive |
|
|
10,843 |
|
|
|
7,078 |
|
|
53 |
|
Other businesses |
|
|
(31,001 |
) |
|
|
(30,744 |
) |
|
(1 |
) |
Corporate office |
|
|
(14,073 |
) |
|
|
(13,007 |
) |
|
(8 |
) |
|
|
$ |
27,656 |
|
|
$ |
39,971 |
|
|
(31 |
) |
Amortization of Intangible Assets and Impairment of Long-Lived Assets |
|
|
|
|
|
|
|||||
Education |
|
$ |
4,416 |
|
|
$ |
4,146 |
|
|
7 |
|
Television broadcasting |
|
|
1,362 |
|
|
|
1,360 |
|
|
0 |
|
Manufacturing |
|
|
4,862 |
|
|
|
5,163 |
|
|
(6 |
) |
Healthcare |
|
|
954 |
|
|
|
929 |
|
|
3 |
|
Automotive |
|
|
— |
|
|
|
— |
|
|
— |
|
Other businesses |
|
|
3,095 |
|
|
|
3,314 |
|
|
(7 |
) |
Corporate office |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
$ |
14,689 |
|
|
$ |
14,912 |
|
|
(1 |
) |
Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets |
|
|
|
|
|
|
|||||
Education |
|
$ |
27,456 |
|
|
$ |
24,558 |
|
|
12 |
|
Television broadcasting |
|
|
29,945 |
|
|
|
41,258 |
|
|
(27 |
) |
Manufacturing |
|
|
12,190 |
|
|
|
15,138 |
|
|
(19 |
) |
Healthcare |
|
|
3,890 |
|
|
|
7,288 |
|
|
(47 |
) |
Automotive |
|
|
10,843 |
|
|
|
7,078 |
|
|
53 |
|
Other businesses |
|
|
(27,906 |
) |
|
|
(27,430 |
) |
|
(2 |
) |
Corporate office |
|
|
(14,073 |
) |
|
|
(13,007 |
) |
|
(8 |
) |
|
|
$ |
42,345 |
|
|
$ |
54,883 |
|
|
(23 |
) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|||||||
|
|
|
|
% |
|||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Depreciation |
|
|
|
|
|
|
|||||
Education |
|
$ |
8,968 |
|
|
$ |
8,505 |
|
|
5 |
|
Television broadcasting |
|
|
3,036 |
|
|
|
3,289 |
|
|
(8 |
) |
Manufacturing |
|
|
2,282 |
|
|
|
2,428 |
|
|
(6 |
) |
Healthcare |
|
|
1,104 |
|
|
|
410 |
|
|
— |
|
Automotive |
|
|
1,113 |
|
|
|
777 |
|
|
43 |
|
Other businesses |
|
|
3,369 |
|
|
|
3,915 |
|
|
(14 |
) |
Corporate office |
|
|
153 |
|
|
|
151 |
|
|
1 |
|
|
|
$ |
20,025 |
|
|
$ |
19,475 |
|
|
3 |
|
Pension Expense |
|
|
|
|
|
|
|||||
Education |
|
$ |
2,198 |
|
|
$ |
2,536 |
|
|
(13 |
) |
Television broadcasting |
|
|
860 |
|
|
|
926 |
|
|
(7 |
) |
Manufacturing |
|
|
275 |
|
|
|
328 |
|
|
(16 |
) |
Healthcare |
|
|
4,357 |
|
|
|
186 |
|
|
— |
|
Automotive |
|
|
5 |
|
|
|
6 |
|
|
(17 |
) |
Other businesses |
|
|
572 |
|
|
|
520 |
|
|
10 |
|
Corporate office |
|
|
976 |
|
|
|
1,529 |
|
|
(36 |
) |
|
|
$ |
9,243 |
|
|
$ |
6,031 |
|
|
53 |
|
Adjusted Operating Cash Flow (non-GAAP)(1) |
|
|
|
|
|
|
|||||
Education |
|
$ |
38,622 |
|
|
$ |
35,599 |
|
|
8 |
|
Television broadcasting |
|
|
33,841 |
|
|
|
45,473 |
|
|
(26 |
) |
Manufacturing |
|
|
14,747 |
|
|
|
17,894 |
|
|
(18 |
) |
Healthcare |
|
|
9,351 |
|
|
|
7,884 |
|
|
19 |
|
Automotive |
|
|
11,961 |
|
|
|
7,861 |
|
|
52 |
|
Other businesses |
|
|
(23,965 |
) |
|
|
(22,995 |
) |
|
(4 |
) |
Corporate office |
|
|
(12,944 |
) |
|
|
(11,327 |
) |
|
(14 |
) |
|
|
$ |
71,613 |
|
|
$ |
80,389 |
|
|
(11 |
) |
____________
(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. |
|
|||||||||||
EDUCATION DIVISION INFORMATION |
|||||||||||
(Unaudited) |
|||||||||||
|
|
|
|
|
|||||||
|
|
Three Months Ended |
|
|
|||||||
|
|
|
|
% |
|||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating Revenues |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
227,076 |
|
|
$ |
204,513 |
|
|
11 |
|
Higher education |
|
|
76,345 |
|
|
|
75,808 |
|
|
1 |
|
Supplemental education |
|
|
73,587 |
|
|
|
76,304 |
|
|
(4 |
) |
Kaplan corporate and other |
|
|
5,375 |
|
|
|
4,345 |
|
|
24 |
|
Intersegment elimination |
|
|
(4,342 |
) |
|
|
(2,958 |
) |
|
— |
|
|
|
$ |
378,041 |
|
|
$ |
358,012 |
|
|
6 |
|
Operating Expenses |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
205,775 |
|
|
$ |
183,949 |
|
|
12 |
|
Higher education |
|
|
69,684 |
|
|
|
70,771 |
|
|
(2 |
) |
Supplemental education |
|
|
69,836 |
|
|
|
72,933 |
|
|
(4 |
) |
Kaplan corporate and other |
|
|
9,791 |
|
|
|
8,778 |
|
|
12 |
|
Amortization of intangible assets |
|
|
3,939 |
|
|
|
4,146 |
|
|
(5 |
) |
Impairment of long-lived assets |
|
|
477 |
|
|
|
— |
|
|
— |
|
Intersegment elimination |
|
|
(4,501 |
) |
|
|
(2,977 |
) |
|
— |
|
|
|
$ |
355,001 |
|
|
$ |
337,600 |
|
|
5 |
|
Operating Income (Loss) |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
21,301 |
|
|
$ |
20,564 |
|
|
4 |
|
Higher education |
|
|
6,661 |
|
|
|
5,037 |
|
|
32 |
|
Supplemental education |
|
|
3,751 |
|
|
|
3,371 |
|
|
11 |
|
Kaplan corporate and other |
|
|
(4,416 |
) |
|
|
(4,433 |
) |
|
0 |
|
Amortization of intangible assets |
|
|
(3,939 |
) |
|
|
(4,146 |
) |
|
5 |
|
Impairment of long-lived assets |
|
|
(477 |
) |
|
|
— |
|
|
— |
|
Intersegment elimination |
|
|
159 |
|
|
|
19 |
|
|
— |
|
|
|
$ |
23,040 |
|
|
$ |
20,412 |
|
|
13 |
|
Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
21,301 |
|
|
$ |
20,564 |
|
|
4 |
|
Higher education |
|
|
6,661 |
|
|
|
5,037 |
|
|
32 |
|
Supplemental education |
|
|
3,751 |
|
|
|
3,371 |
|
|
11 |
|
Kaplan corporate and other |
|
|
(4,416 |
) |
|
|
(4,433 |
) |
|
0 |
|
Intersegment elimination |
|
|
159 |
|
|
|
19 |
|
|
— |
|
|
|
$ |
27,456 |
|
|
$ |
24,558 |
|
|
12 |
|
Depreciation |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
6,330 |
|
|
$ |
5,755 |
|
|
10 |
|
Higher education |
|
|
996 |
|
|
|
1,020 |
|
|
(2 |
) |
Supplemental education |
|
|
1,509 |
|
|
|
1,639 |
|
|
(8 |
) |
Kaplan corporate and other |
|
|
133 |
|
|
|
91 |
|
|
46 |
|
|
|
$ |
8,968 |
|
|
$ |
8,505 |
|
|
5 |
|
Pension Expense |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
80 |
|
|
$ |
72 |
|
|
11 |
|
Higher education |
|
|
922 |
|
|
|
1,081 |
|
|
(15 |
) |
Supplemental education |
|
|
1,024 |
|
|
|
1,182 |
|
|
(13 |
) |
Kaplan corporate and other |
|
|
172 |
|
|
|
201 |
|
|
(14 |
) |
|
|
$ |
2,198 |
|
|
$ |
2,536 |
|
|
(13 |
) |
Adjusted Operating Cash Flow (non-GAAP)(1) |
|
|
|
|
|
|
|||||
Kaplan international |
|
$ |
27,711 |
|
|
$ |
26,391 |
|
|
5 |
|
Higher education |
|
|
8,579 |
|
|
|
7,138 |
|
|
20 |
|
Supplemental education |
|
|
6,284 |
|
|
|
6,192 |
|
|
1 |
|
Kaplan corporate and other |
|
|
(4,111 |
) |
|
|
(4,141 |
) |
|
1 |
|
Intersegment elimination |
|
|
159 |
|
|
|
19 |
|
|
— |
|
|
|
$ |
38,622 |
|
|
$ |
35,599 |
|
|
8 |
|
____________
(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
(Unaudited)
In addition to the results reported in accordance with accounting principles generally accepted in
- 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 following tables reconcile the non-GAAP financial measures for Net income, excluding certain items, to the most directly comparable GAAP measures:
|
Three Months Ended |
||||||||||||||||||||||
|
2023 |
|
2022 |
||||||||||||||||||||
(in thousands, except per share amounts) |
Income |
|
Income |
|
Net |
|
Income |
|
Income |
|
Net |
||||||||||||
Amounts attributable to Graham Holdings Company Common Stockholders |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As reported |
$ |
72,177 |
|
|
$ |
19,200 |
|
|
$ |
52,977 |
|
|
$ |
132,166 |
|
|
$ |
35,600 |
|
|
$ |
96,566 |
|
Attributable to noncontrolling interests |
|
|
|
|
|
(705 |
) |
|
|
|
|
|
|
(942 |
) |
||||||||
Attributable to Graham Holdings Company Stockholders |
|
|
|
|
|
52,272 |
|
|
|
|
|
|
|
95,624 |
|
||||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Charges related to non-operating Separation Incentive Programs at other businesses |
|
4,129 |
|
|
|
1,062 |
|
|
|
3,067 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net gains on marketable equity securities |
|
(18,022 |
) |
|
|
(4,744 |
) |
|
|
(13,278 |
) |
|
|
(46,912 |
) |
|
|
(12,227 |
) |
|
|
(34,685 |
) |
Net earnings of affiliates whose operations are not managed by the Company |
|
(1,812 |
) |
|
|
(477 |
) |
|
|
(1,335 |
) |
|
|
(357 |
) |
|
|
(93 |
) |
|
|
(264 |
) |
Non-operating gain from write-up and sales of equity and cost method investments |
|
(2,615 |
) |
|
|
(660 |
) |
|
|
(1,955 |
) |
|
|
(1,680 |
) |
|
|
(422 |
) |
|
|
(1,258 |
) |
Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest |
|
1,468 |
|
|
|
75 |
|
|
|
1,393 |
|
|
|
3,423 |
|
|
|
145 |
|
|
|
3,278 |
|
Net income, adjusted (non-GAAP) |
|
|
|
|
$ |
40,164 |
|
|
|
|
|
|
$ |
62,695 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Per share information attributable to Graham Holdings Company Common Stockholders |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted income per common share, as reported |
|
|
|
|
$ |
10.88 |
|
|
|
|
|
|
$ |
19.45 |
|
||||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Charges related to non-operating Separation Incentive Programs at other businesses |
|
|
|
|
|
0.64 |
|
|
|
|
|
|
|
— |
|
||||||||
Net gains on marketable equity securities |
|
|
|
|
|
(2.76 |
) |
|
|
|
|
|
|
(7.05 |
) |
||||||||
Net earnings of affiliates whose operations are not managed by the Company |
|
|
|
|
|
(0.28 |
) |
|
|
|
|
|
|
(0.05 |
) |
||||||||
Non-operating gain from write-up and sales of equity and cost method investments |
|
|
|
|
|
(0.41 |
) |
|
|
|
|
|
|
(0.26 |
) |
||||||||
Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest |
|
|
|
|
|
0.29 |
|
|
|
|
|
|
|
0.67 |
|
||||||||
Diluted income per common share, adjusted (non-GAAP) |
|
|
|
|
$ |
8.36 |
|
|
|
|
|
|
$ |
12.76 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
The adjusted diluted per share amounts may not compute due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230503005047/en/
Wallace R. Cooney
(703) 345-6470
Source: