Boston Omaha(BOC) - 2020 Q3 - Quarterly Report

Revenue Performance - Billboard business revenues decreased by 0.8% for the quarter ended September 30, 2020, compared to the same quarter in 2019[148] - Total revenues for the third quarter of fiscal 2020 were $11,606,836, an increase of 7.2% compared to$ 10,822,808 in the third quarter of fiscal 2019[174] - Billboard rentals decreased by 0.8% to $7,121,957, accounting for 61.3% of total revenues, reflecting reduced rental and occupancy rates due to COVID-19[175] - Broadband services revenue was$ 1,144,343, reflecting the acquisition of the broadband services business in March 2020[176] - Total operating revenues declined by 8.2% to $3,340,536 in Q3 2020 compared to Q3 2019, impacted by COVID-19[224] - Total revenues for the first nine months of fiscal 2020 were$ 34,509,580, an increase of 14.8% compared to $30,073,094 in the same period of fiscal 2019[193] - Billboard rentals for the first nine months of fiscal 2020 were$ 20,991,755, a decrease of 0.6% from the same period in fiscal 2019[234] - Total operating revenues increased by 22.1% in the first nine months of fiscal 2020, primarily due to a 28.3% increase in premiums earned[240] Expenses and Costs - Total costs and expenses decreased from $14,611,907 in the third quarter of fiscal 2019 to$ 12,327,459 in the third quarter of fiscal 2020, with total costs as a percentage of total revenues improving from 135.0% to 106.2%[182] - Employee costs increased to $3,311,885, accounting for 28.5% of total revenues, slightly up from 28.7% in the prior year[181] - Cost of billboard revenues was$ 2,780,359, representing 24.0% of total revenues, a decrease from 26.4% in the previous year[181] - General and administrative expenses increased by 6.8% from $1,445,859 in the third quarter of fiscal 2019 to$ 1,544,334 in the third quarter of fiscal 2020[188] - Cost of insurance revenues decreased by $266,869, or 13.2%, in the third quarter of fiscal 2020, primarily due to lower commissions paid[184] - Employee costs decreased as a percentage of revenue to 32.1% in Q3 2020 from 35.6% in Q3 2019[228] - Professional fees decreased to$ 2,582,961, or 7.5% of total revenues, down from $3,005,543, or 10.0% in the prior year[205] - General and administrative expenses decreased by 13.9% in the first nine months of fiscal 2020 compared to the same period in fiscal 2019[237] Income and Loss - Net income attributable to common stockholders in the third quarter of fiscal 2020 was$ 3,463,671, or $0.13 per share, compared to$ 634,999, or $0.03 per share, in the third quarter of fiscal 2019[191] - Net loss from operations improved to$ 720,623, or 6.2% of total revenues, in the third quarter of fiscal 2020, compared to a net loss of $3,789,099, or 35.0% of total revenues, in the same quarter of fiscal 2019[189] - Net loss attributable to common stockholders was$ 17,868,259, or a loss per share of $0.71, compared to a loss of$ 5,557,735, or $0.25 per share in the prior year[213] - Segment loss from insurance operations improved to$ (100,811) in Q3 2020 from $(595,974) in Q3 2019, mainly due to lower operating expenses[224] - Net income attributable to common stockholders for Q3 2020 was$ 1,673,056, compared to a loss of $(427,250) in Q3 2019[224] Cash Flow and Financing - The company holds$ 42.3 million in unrestricted cash and $63.8 million in marketable equity securities as of September 30, 2020[166] - Net cash provided by operating activities was$ 3,492,006 for the first nine months of fiscal 2020, down from $5,035,455 in the same period of fiscal 2019[251] - Net cash used in investing activities was$ 38,885,920 for the first nine months of fiscal 2020, compared to $59,515,863 in the same period of fiscal 2019[252] - Net cash provided by financing activities was$ 61,673,659 during the first nine months of fiscal 2020, up from $46,364,780 in the same period of fiscal 2019[253] - The net increase in cash, cash equivalents, and restricted cash was$ 26,279,745, compared to a decrease of $(8,115,628) in the prior year[255] - The company raised approximately$ 58.9 million from a public offering of 3,680,000 shares at a price of $16.00 per share to fund expansion and acquisitions[262] - The company entered into a Credit Agreement allowing for borrowing up to$ 40 million, with an initial term loan of $18,060,000 at a fixed interest rate of 4.25%[263] Investments and Acquisitions - The company invested$ 10 million in Dream Finders Holdings LLC, a national home builder, and an additional $12 million in preferred units[141] - The company provided DFH with a$ 20 million unsecured short-term loan to support its acquisition of a homebuilding business[157] - The company aims to continue acquiring billboard assets at attractive prices relative to other opportunities[137] - The company may seek additional capital through long-term debt borrowings or the sale of securities if significant acquisition opportunities arise[268] Market and Economic Conditions - The impact of COVID-19 has created economic uncertainties likely to negatively affect net income and surplus[148] - Losses and loss adjustment expense as a percentage of insurance revenues increased from 13.4% in Q3 2019 to 24.4% in Q3 2020[227] - Losses and loss adjustment expense as a percentage of insurance revenues increased from 14.1% in the first nine months of fiscal 2019 to 20.5% in the first nine months of fiscal 2020[244] Accounting and Estimates - The preparation of consolidated financial statements requires estimates that affect reported amounts of assets, liabilities, revenue, and expenses, influenced by historical results and assumptions including the impact of the COVID-19 pandemic[279] - Actual results may differ from estimates made regarding the carrying values of assets and liabilities[279] - Critical accounting policies that could significantly affect reported results are detailed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2019[279] - As of September 30, 2020, there has been no material change to the critical accounting information previously disclosed[279]