Graham Holdings Company (NYSE:GHC) today reported a net loss
attributable to common shares of $33.2 million ($6.32 per share)
for the first quarter of 2020, compared to income of $81.7 million
($15.26 per share) for the first quarter of 2019.
The novel coronavirus (COVID-19) pandemic and measures taken to
prevent its spread, such as travel restrictions, shelter in place
orders and mandatory closures, significantly impacted the Company’s
first quarter 2020 results, largely from reduced demand for the
Company’s products and services. This significant adverse impact is
expected to continue in the second and third quarters of 2020, and
through the end of 2020. The Company’s management is taking a
variety of measures to reduce costs and capital expenditures. The
Company cannot predict the severity or duration of the pandemic,
the extent to which demand for the Company’s products and services
will be adversely affected or the degree to which financial and
operating results will be negatively impacted.
The results for the first quarter of 2020 and 2019 were also
affected by a number of items as described in the following
paragraphs. Including these items, loss before income taxes was
$79.3 million for the first quarter of 2020, compared to income
before income taxes of $109.3 million for the first quarter of
2019. Excluding these items, income before income taxes was $41.1
million for the first quarter of 2020, compared to $52.5 million
for the first quarter of 2019. (Refer to the Non-GAAP Financial
Information schedule at the end of this release for additional
details.)
Items included in the Company’s loss before income taxes for the
first quarter of 2020:
- $16.4 million in goodwill and intangible asset impairment
charges;
- $2.1 million in restructuring charges at the education
division;
- a $0.3 million reduction to operating expenses from property,
plant and equipment gains in connection with the spectrum repacking
mandate of the FCC;
- $100.4 million in net losses on marketable equity
securities;
- non-operating losses of $6.1 million from impairments of cost
method and equity method investments; and
- $4.3 million in non-operating foreign currency gains.
Items included in the Company’s income before income taxes for
the first quarter of 2019:
- a $1.8 million reduction to operating expenses from property,
plant and equipment gains in connection with the spectrum repacking
mandate of the FCC;
- $24.1 million in net gains on marketable equity
securities;
- $29.0 million gain from the sale of Gimlet Media;
- non-operating gain, net, of $1.4 million from the write-up of
cost method investments; and
- $0.5 million in non-operating foreign currency gains.
Revenue for the first quarter of 2020 was $732.3 million, up 6%
from $692.2 million in the first quarter of 2019, largely due to
the acquisition of two automotive dealerships in January 2019 and
the acquisition of Clyde’s Restaurant Group (CRG) in July 2019.
Revenues grew at healthcare and television broadcasting, partially
offset by declines in education. The Company reported operating
income of $8.1 million for the first quarter of 2020, compared to
$40.0 million for the first quarter of 2019. The operating income
decline is largely driven by lower earnings in education and other
businesses, partially offset by improvements in manufacturing and
healthcare results and a decline in corporate office expenses.
Division Results
Education
The COVID-19 pandemic adversely impacted Kaplan’s operating
results in the first quarter of 2020. The impact began in February,
accelerated in March, and continues to-date.
Kaplan serves a significant number of students who travel to
other countries to study a second language, prepare for licensure,
or pursue a higher education degree. Government-imposed travel
restrictions and school closures arising from COVID-19 had a
negative impact on the ability of international students to travel
and attend Kaplan’s programs, particularly Kaplan International’s
Language programs. In addition, most licensing bodies and
administrators of standardized exams postponed or canceled
scheduled examinations due to COVID-19 resulting in a significant
number of students deciding to defer their studies. In these
instances, Kaplan extended the life of its courses to be responsive
to the changes in study needs of its students. These program
modifications resulted in longer revenue recognition periods,
adversely affecting the timing of revenue recognition at Kaplan’s
Test Preparation and Professional education divisions. Overall,
this is expected to adversely impact Kaplan's revenues and
operating results for the remainder of 2020, particularly at Kaplan
International Languages.
Most of Kaplan Higher Education’s (KHE) services are delivered
online by staff who have historically worked both virtually and in
office locations. In response to COVID-19 necessitated
“stay-at-home” protocols, KHE transitioned its entire staff to
virtual work arrangements. KHE did not experience a disruption in
its service delivery in the first quarter of 2020, nor did Purdue
Global experience program demand issues.
To help mitigate the negative revenue impact arising from the
COVID-19 disruption, and to re-align its program offerings to
better pursue opportunities arising from the disruption, Kaplan
management is currently developing and implementing a number of
initiatives across its businesses, including: employee salary and
work-hour reductions; temporary furlough and other employee
reductions; reduced discretionary spending; facility restructuring;
reduced capital expenditures; and accelerated development and
promotion of various online programs and solutions.
Education division revenue totaled $356.4 million for the first
quarter of 2020, down 4% from $372.5 million for the same period of
2019. Kaplan reported operating income of $4.7 million for the
first quarter of 2020, compared to $25.6 million for the first
quarter of 2019.
A summary of Kaplan’s operating results is as follows:
Three Months Ended
March 31
(in thousands)
2020
2019
% Change
Revenue
Kaplan international
$
199,615
$
185,756
7
Higher education
73,537
82,780
(11
)
Test preparation
42,839
61,150
(30
)
Professional (U.S.)
38,449
41,214
(7
)
Kaplan corporate and other
3,205
2,302
39
Intersegment elimination
(1,267
)
(748
)
—
$
356,378
$
372,454
(4
)
Operating Income (Loss)
Kaplan international
$
18,980
$
24,285
(22
)
Higher education
(2,020
)
1,915
—
Test preparation
(12,676
)
(454
)
—
Professional (U.S.)
6,126
11,259
(46
)
Kaplan corporate and other
(1,522
)
(7,837
)
81
Amortization of intangible assets
(4,201
)
(3,567
)
(18
)
Intersegment elimination
5
(6
)
—
$
4,692
$
25,595
(82
)
Kaplan International includes English-language programs, and
postsecondary education and professional training businesses
largely outside the United States. In July 2019, Kaplan acquired
Heverald, the owner of ESL Education, Europe’s largest
language-travel agency and Alpadia, a chain of German and French
language schools and junior summer camps. Kaplan International
revenue increased 7% for the first quarter of 2020. Excluding
acquisitions, Kaplan International revenue increased 5% in the
first quarter of 2020. On a constant currency basis, revenue
increased 10% for the first quarter of 2020. The revenue increases
were due to growth at UK Pathways, UK Professional and Australia,
and from the Heverald acquisition, offset by a decline at Languages
and Singapore. Kaplan International reported operating income of
$19.0 million in the first quarter of 2020, compared to $24.3
million in the first quarter of 2019. The decline in operating
results in the first quarter of 2020 is due to declines at
Languages, UK Professional and Singapore, partially offset by
improved results in Australia. Kaplan International Languages first
quarter results were negatively impacted by COVID-19 travel
restrictions and UK Professional results were negatively impacted
by postponements of standardized exam dates.
The Higher Education division includes the results as a service
provider to higher education institutions. In the first quarter of
2020, Higher Education revenue was down 11%, due primarily to a
reduction in expenses incurred by Kaplan Higher Education as
service provider to Purdue Global. In the first quarter of 2020,
the Company did not record an additional fee with Purdue Global
based on an assessment of its collectability under the TOSA. This
resulted in a decline in Higher Education results for the first
quarter of 2020, as the Company recorded a portion of the fee for
Purdue Global for the first quarter of 2019. 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. The first
quarter 2020 operating loss at Higher Education also includes $2.0
million in lease restructuring costs.
Kaplan Test Preparation includes Kaplan’s standardized test
preparation programs. KTP revenue decreased 30% for the first
quarter of 2020 due to reduced demand for KTP’s retail
comprehensive test preparation programs and product-life extensions
related to the postponement of various standardized test dates due
to the COVID-19 pandemic. Overall, product-life extensions resulted
in $7.7 million in lower revenues recognized in the first quarter
of 2020; substantially all of this amount will be recognized over
the remainder of 2020. KTP operating results declined in the first
quarter of 2020 due to these revenue declines.
Kaplan Professional (U.S.) includes the domestic professional
and other continuing education businesses. Kaplan Professional
(U.S.) revenue in the first quarter of 2020 declined 7% due to
declines in CFA, real estate and accountancy programs, partly due
to the postponement of certification exams. Kaplan Professional
(U.S.) operating results declined in the first quarter of 2020,
primarily due to the revenue declines, and increased spending for
sales and marketing.
Kaplan corporate and other represents unallocated expenses of
Kaplan, Inc.’s corporate office, other minor businesses and certain
shared activities. Overall, Kaplan corporate and other expenses
declined in the first quarter of 2020 due to lower incentive
compensation costs.
Television Broadcasting
Revenue at the television broadcasting division increased 7% to
$115.4 million in the first quarter of 2020, from $108.2 million in
the same period of 2019. The revenue increase is due to a $9.7
million increase in political advertising revenue and a $0.6
million increase in retransmission revenues. In the first quarter
of 2020 and 2019, the television broadcasting division recorded
$0.3 million and $1.8 million, respectively, in reductions to
operating expenses related to property, plant and equipment gains
due to new equipment received at no cost in connection with the
spectrum repacking mandate of the FCC. Operating income for the
first quarter of 2020 increased 1% to $35.8 million, from $35.5
million in the same period of 2019, due to increased revenues,
offset by higher network fees and a reduction in property, plant
and equipment gains.
The postponement of the 2020 summer Olympics and overall reduced
advertising demand due to the COVID-19 pandemic are expected to
negatively impact advertising revenue and the operating results at
the television broadcasting division for the remainder of 2020.
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; Joyce/Dayton, a manufacturer
of screw jacks and other linear motion systems; and Forney, a
global supplier of products and systems that control and monitor
combustion processes in electric utility and industrial
applications.
Manufacturing revenues declined 1% in the first quarter of 2020
due primarily to a modest decline at Hoover from reduced demand and
overall lower wood prices. Manufacturing operating income increased
in the first quarter of 2020, due mostly to improved results at
Hoover from reduced operating costs and gains on inventory sales in
the first quarter of 2020.
In the second half of March 2020, certain of Joyce/Dayton, Dekko
and Hoover’s manufacturing plants began operating at reduced levels
due to lower product demand and other jurisdictional factors
related to the COVID-19 pandemic. The manufacturing businesses are
tightly managing expenses and developing cost reduction plans to
mitigate lower product demand. Overall, this is expected to
adversely impact manufacturing revenues and operating results for
the remainder of 2020.
Healthcare
The Graham Healthcare Group (GHG) provides home health and
hospice services in three states. In December 2019, GHG acquired a
75% interest in CSI Pharmacy Holding Company, LLC (CSI), a Wake
Village, TX-based company, which coordinates the prescriptions and
nursing care for patients receiving in-home infusion treatments.
Healthcare revenues increased 22% in the first three months of
2020, due to the CSI acquisition. The improvement in GHG operating
results in the first quarter of 2020 is largely due to operating
income from the CSI acquisition and improved results in hospice
services, offset by a decline in home health services results.
In the second half of March 2020, GHG home health patient
volumes declined, due primarily to the curtailment of elective
procedures by health systems due to the COVID-19 pandemic. GHG
expects lower revenues from reduced demand for home health and
hospice services in the second and third quarters of 2020.
SocialCode
SocialCode is a provider of marketing solutions managing data,
creative, media and marketplaces to accelerate client growth.
SocialCode’s revenue decreased 11% in the first quarter of 2020 due
to reduced marketing spending by advertising clients, particularly
in March 2020 as a result of the recessionary environment from the
COVID-19 pandemic. SocialCode reported operating losses of $3.8
million in the first quarter of 2020, compared to $4.0 million in
the first quarter of 2019. SocialCode is in the process of
developing and implementing cost reduction plans to mitigate the
adverse impact of COVID-19 on advertising demand expected for the
remainder of 2020.
Other Businesses
On July 31, 2019, the Company acquired Clyde’s Restaurant Group
(CRG). CRG owns and operates thirteen restaurants and entertainment
venues in the Washington, DC metropolitan area, including Old
Ebbitt Grill and The Hamilton, two of the top twenty highest
grossing independent restaurants in the United States. As a result
of the COVID-19 pandemic, CRG temporarily closed all of its
restaurants and venues in the second half of March 2020,
maintaining limited operations for delivery and pickup, pursuant to
government orders. CRG has temporarily laid off many of its
employees and is uncertain as to the timing and other details
regarding reopening. Given the uncertain and challenging operating
environment for the restaurant industry, the Company completed a
goodwill and other long-lived assets impairment review of CRG in
the first quarter of 2020, resulting in a $9.7 million goodwill and
intangible assets impairment charge. The pandemic is expected to
adversely impact CRG revenues and operating results for the
remainder of 2020.
On January 31, 2019, the Company acquired two automotive
dealerships, Lexus of Rockville and Honda of Tysons Corner, from
Sonic Automotive. The Company also announced it had entered into an
agreement with Christopher J. Ourisman, a member of the Ourisman
Automotive Group family of dealerships. In the fourth quarter of
2019, the Company and Mr. Ourisman commenced operations at a new
Jeep automotive dealership, which began generating sales in January
2020 as Ourisman Jeep of Bethesda. Mr. Ourisman and his team of
industry professionals operate and manage the dealerships. Graham
Holdings Company holds a 90% stake in all three dealerships. As a
result of the COVID-19 pandemic and the related recessionary
conditions, the Company’s automotive dealerships have experienced
significantly reduced demand for sales and service in March 2020.
Given the uncertain and challenging operating environment for
automotive dealerships, the Company completed a goodwill and other
long-lived assets impairment review of its automotive dealerships
in the first quarter of 2020, resulting in a $6.7 million
intangible assets impairment charge. The pandemic is expected to
adversely impact automotive dealership revenues and operating
results for the remainder of 2020.
Revenues from other businesses increased due mostly to the CRG
and automotive dealership acquisitions. CRG and the automotive
dealerships incurred losses in the first quarter of 2020 due to the
challenging operating conditions that began in March 2020 and the
goodwill and other long-lived asset impairment charges.
Other businesses also includes Slate and Foreign Policy, which
publish online and print magazines and websites; and three
investment stage businesses, Megaphone, Pinna and CyberVista.
Megaphone’s revenues increased significantly in the first quarter
of 2020, as both advertising and platform sales experienced rapid
growth during the period. Slate, Foreign Policy and Pinna also
reported revenue increases in the first three months of 2020.
Losses from each of these five businesses in the first three months
of 2020 adversely affected operating results.
Corporate Office
Corporate office includes the expenses of the Company’s
corporate office and certain continuing obligations related to
prior business dispositions. Corporate Office expenses declined in
the first quarter of 2020 due primarily to lower incentive
compensation costs.
Equity in (Losses) Earnings of
Affiliates
At March 31, 2020, the Company held an approximate 12% interest
in Intersection Holdings, LLC, a company that provides digital
marketing and advertising services and products for cities, transit
systems, airports, and other public and private spaces. The Company
also holds interests in a number of home health and hospice joint
ventures, and several other affiliates. The Company recorded equity
in losses of affiliates of $1.5 million for the first quarter of
2020, compared to earnings of $1.7 million for the first quarter of
2019. For the three months ended March 31, 2020, the Company
recorded $3.6 million in write-downs in equity in earnings of
affiliates related to two of its investments.
Net Interest Expense, Debt
Extinguishment Costs and Related Balances
In connection with the auto dealership acquisition that closed
on January 31, 2019, a subsidiary of the Company borrowed $30
million to finance a portion of the acquisition and entered into an
interest rate swap to fix the interest rate on the debt at 4.7% per
annum. The subsidiary is required to repay the loan over a 10-year
period by making monthly installment payments. In connection with
the CSI acquisition that closed in December 2019, a subsidiary of
GHG borrowed $11.25 million to finance a portion of the
acquisition. The debt bears interest at 4.35% per annum. The GHG
subsidiary is required to repay the loan over a five-year period by
making monthly installment payments.
The Company incurred net interest expense of $6.5 million for
the first quarter of 2020 compared to $5.7 million for the first
quarter of 2019.
At March 31, 2020, the Company had $508.9 million in borrowings
outstanding at an average interest rate of 5.1% and cash,
marketable equity securities and other investments of $653.0
million. The Company’s $300 million revolving credit facility was
undrawn as of March 31, 2020 and remains undrawn as of May 5, 2020.
In management’s opinion, the Company will have sufficient financial
resources to meet its business requirements in the next twelve
months, including working capital requirements, capital
expenditures, interest payments and dividends.
Non-operating Pension and
Postretirement Benefit Income, net
The Company recorded net non-operating pension and
postretirement benefit income of $18.4 million for the first
quarter of 2020 compared to $19.9 million for the first quarter of
2019.
(Loss) Gain on Marketable Equity
Securities, net
Overall, the Company recognized $100.4 million in net losses on
marketable equity securities in the first quarter of 2020, compared
to $24.1 million in net gains on marketable equity securities in
the first quarter of 2019.
Other Non-Operating
Income
The Company recorded total other non-operating income, net, of
$2.7 million for the first quarter of 2020, compared to $29.4
million for the first quarter of 2019. The 2020 amounts included
$4.3 million in foreign currency gains and other items; partially
offset by $2.6 million in impairments on cost method investments.
The 2019 amounts included a $29.0 million gain on the sale of the
Company’s interest in Gimlet Media and $0.5 million in foreign
currency gains, offset by other items.
(Benefit from) Provision for Income
Taxes
The Company’s effective tax rate for the first three months of
2020 was 57.3%, which is generally based on the Company’s estimated
effective tax rate for fiscal year 2020. The Company’s estimated
tax rate for 2020 includes the adverse impacts of the COVID-19
pandemic and losses on marketable equity securities on the
Company’s estimated pre-tax income for 2020, resulting in a
significantly higher overall estimated tax rate, as permanent
differences and increased valuation allowances have a larger impact
on the overall estimated effective tax rate.
The Company’s effective tax rate for the first three months of
2019 was 25.3%. In the first quarter of 2019, the Company recorded
income tax benefits related to stock compensation of $1.7
million.
(Losses) Earnings Per
Share
The calculation of diluted (losses) earnings per share for the
first quarter of 2020 was based on 5,273,651 weighted average
shares outstanding, compared to 5,326,448 for the first quarter of
2019. At March 31, 2020, there were 5,244,718 shares outstanding.
On November 9, 2017, 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 186,344 shares as of March
31, 2020.
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 2019
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, including but not
limited to the duration and severity of the COVID-19 pandemic and
its effects on the Company’s operations, financial results,
liquidity and cash flows. 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, anticipated results of license
renewal applications, 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.
GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
March 31
%
(in thousands, except per share
amounts)
2020
2019
Change
Operating revenues
$
732,257
$
692,199
6
Operating expenses
676,902
625,613
8
Depreciation of property, plant and
equipment
16,704
13,523
24
Amortization of intangible assets
14,165
13,060
8
Impairment of goodwill and intangible
assets
16,401
—
—
Operating income
8,085
40,003
(80
)
Equity in (losses) earnings of affiliates,
net
(1,547
)
1,679
—
Interest income
1,151
1,700
(32
)
Interest expense
(7,678
)
(7,425
)
3
Non-operating pension and postretirement
benefit income, net
18,403
19,928
(8
)
(Loss) gain on marketable equity
securities, net
(100,393
)
24,066
—
Other income, net
2,688
29,351
(91
)
(Loss) income before income
taxes
(79,291
)
109,302
—
(Benefit from) provision for income
taxes
(45,400
)
27,600
—
Net (loss) income
(33,891
)
81,702
—
Net (income) loss attributable to
noncontrolling interests
646
46
—
Net (Loss) Income Attributable to
Graham Holdings Company Common Stockholders
$
(33,245
)
$
81,748
—
Per Share Information Attributable to
Graham Holdings Company Common Stockholders
Basic net (loss) income per common
share
$
(6.32
)
$
15.38
—
Basic average number of common shares
outstanding
5,274
5,284
Diluted net (loss) income per common
share
$
(6.32
)
$
15.26
—
Diluted average number of common shares
outstanding
5,274
5,326
GRAHAM HOLDINGS COMPANY
BUSINESS DIVISION INFORMATION
(Unaudited)
Three Months Ended
March 31
%
(in thousands)
2020
2019
Change
Operating Revenues
Education
$
356,378
$
372,454
(4
)
Television broadcasting
115,448
108,223
7
Manufacturing
113,458
115,157
(1
)
Healthcare
45,994
37,728
22
SocialCode
12,023
13,447
(11
)
Other businesses
89,268
45,230
97
Corporate office
—
—
—
Intersegment elimination
(312
)
(40
)
—
$
732,257
$
692,199
6
Operating Expenses
Education
$
351,686
$
346,859
1
Television broadcasting
79,672
72,683
10
Manufacturing
106,957
111,883
(4
)
Healthcare
42,825
35,399
21
SocialCode
15,812
17,465
(9
)
Other businesses
118,960
53,723
—
Corporate office
8,572
14,224
(40
)
Intersegment elimination
(312
)
(40
)
—
$
724,172
$
652,196
11
Operating Income (Loss)
Education
$
4,692
$
25,595
(82
)
Television broadcasting
35,776
35,540
1
Manufacturing
6,501
3,274
99
Healthcare
3,169
2,329
36
SocialCode
(3,789
)
(4,018
)
6
Other businesses
(29,692
)
(8,493
)
—
Corporate office
(8,572
)
(14,224
)
40
$
8,085
$
40,003
(80
)
Depreciation
Education
$
7,329
$
6,201
18
Television broadcasting
3,343
3,239
3
Manufacturing
2,527
2,433
4
Healthcare
540
610
(11
)
SocialCode
121
152
(20
)
Other businesses
2,669
648
—
Corporate office
175
240
(27
)
$
16,704
$
13,523
24
Amortization of Intangible Assets and
Impairment of Goodwill and Intangible Assets
Education
$
4,201
$
3,567
18
Television broadcasting
1,360
1,408
(3
)
Manufacturing
7,137
6,530
9
Healthcare
1,310
1,398
(6
)
SocialCode
157
157
—
Other businesses
16,401
—
—
Corporate office
—
—
—
$
30,566
$
13,060
—
Pension Expense
Education
$
2,585
$
2,664
(3
)
Television broadcasting
796
731
9
Manufacturing
394
25
—
Healthcare
159
183
(13
)
SocialCode
237
248
(4
)
Other businesses
226
201
12
Corporate office
1,386
1,169
19
$
5,783
$
5,221
11
GRAHAM HOLDINGS COMPANY
EDUCATION DIVISION
INFORMATION
(Unaudited)
Three Months Ended
March 31
%
(in thousands)
2020
2019
Change
Operating Revenues
Kaplan international
$
199,615
$
185,756
7
Higher education
73,537
82,780
(11
)
Test preparation
42,839
61,150
(30
)
Professional (U.S.)
38,449
41,214
(7
)
Kaplan corporate and other
3,205
2,302
39
Intersegment elimination
(1,267
)
(748
)
—
$
356,378
$
372,454
(4
)
Operating Expenses
Kaplan international
$
180,635
$
161,471
12
Higher education
75,557
80,865
(7
)
Test preparation
55,515
61,604
(10
)
Professional (U.S.)
32,323
29,955
8
Kaplan corporate and other
4,727
10,139
(53
)
Amortization of intangible assets
4,201
3,567
18
Intersegment elimination
(1,272
)
(742
)
—
$
351,686
$
346,859
1
Operating Income (Loss)
Kaplan international
$
18,980
$
24,285
(22
)
Higher education
(2,020
)
1,915
—
Test preparation
(12,676
)
(454
)
—
Professional (U.S.)
6,126
11,259
(46
)
Kaplan corporate and other
(1,522
)
(7,837
)
81
Amortization of intangible assets
(4,201
)
(3,567
)
(18
)
Intersegment elimination
5
(6
)
—
$
4,692
$
25,595
(82
)
Depreciation
Kaplan international
$
4,578
$
3,882
18
Higher education
723
597
21
Test preparation
826
805
3
Professional (U.S.)
1,113
865
29
Kaplan corporate and other
89
52
71
$
7,329
$
6,201
18
Pension Expense
Kaplan international
$
112
$
117
(4
)
Higher education
1,070
1,163
(8
)
Test preparation
823
866
(5
)
Professional (U.S.)
262
348
(25
)
Kaplan corporate and other
318
170
87
$
2,585
$
2,664
(3
)
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 (Loss) income before income taxes, 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.
The Company has provided this non-GAAP information on a
pre-income tax basis in order to facilitate a meaningful
period-to-period comparison of income in light of the difference in
applicable income tax rates for the first quarter of 2020 and the
first quarter of 2019.
(Loss) income before income taxes, 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 following table reconciles the non-GAAP financial measures to
the most directly comparable GAAP measures:
Three Months Ended March
31
(in thousands)
2020
2019
(Loss) income before income taxes, as
reported
$
(79,291
)
$
109,302
Adjustments:
Goodwill and intangible asset impairment
charge
16,401
—
Restructuring charges
2,069
—
Reduction to operating expenses in
connection with the broadcast spectrum repacking
(291
)
(1,788
)
Net losses (gains) on marketable equity
securities
100,393
(24,066
)
Non-operating loss (gain), net, from
impairments and write-ups of cost and equity method investments
6,131
(1,411
)
Gain on sale of Gimlet Media
—
(28,994
)
Foreign currency gain
(4,290
)
(514
)
Income before income taxes, adjusted
(non-GAAP)
$
41,122
$
52,529
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200505005143/en/
Wallace R. Cooney (703) 345-6470
Graham (NYSE:GHC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Graham (NYSE:GHC)
Historical Stock Chart
From Apr 2023 to Apr 2024
