ARLINGTON, VA - 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.

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.

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

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.

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.

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.

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.

* * * * * * * * * * * * 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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(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

(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: