Boston Omaha(BOC) - 2024 Q3 - Quarterly Report

Business Operations - As of September 30, 2024, the company operates approximately 4,000 billboards with about 7,600 advertising faces, having increased from approximately 2,900 billboards since 2015[187]. - The broadband services segment has approximately 45,600 broadband customers, including 14,000 fiber subscribers, and 37,200 fiber passings completed as of September 30, 2024[189]. - The company has expanded its surety insurance business to all 50 states and the District of Columbia, increasing its market reach significantly[188]. - The company aims to expand its geographic reach and market share in outdoor advertising and broadband services, with a focus on acquisitions and sustainable earnings[198]. - Future expansions may include additional services in the insurance sector and potential acquisitions in other sectors, emphasizing growth in existing business lines[198]. Financial Performance - Total revenues for the third quarter of fiscal 2024 were $27,700,936, representing a 12.8% increase from$ 24,548,101 in the same quarter of fiscal 2023[203]. - Net billboard rentals increased by 5.6% to $11,503,915, accounting for 41.5% of total revenues in the third quarter of fiscal 2024[204]. - Revenue from broadband services rose by 7.4% to$ 9,664,074, making up 34.9% of total revenues[205]. - Premiums earned from the UCS insurance subsidiary surged by 45.6% to $5,425,052, representing 19.6% of total revenues[206]. - The company reported total revenues of$ 80,341,450 for the first nine months of fiscal 2024, representing a 12.2% increase from $71,580,280 in the same period of fiscal 2023[223]. Costs and Expenses - Total costs and expenses for the third quarter of fiscal 2024 were$ 28,440,958, with a decrease in total costs as a percentage of total revenues from 107.9% to 102.7%[209]. - Employee costs decreased to $8,311,882, or 30.0% of total revenues, down from 32.9% in the same quarter of fiscal 2023[212]. - Total costs and expenses for the first nine months of fiscal 2024 were$ 87,536,368, up from $78,142,705 in the same period of fiscal 2023[230]. - Employee costs rose to$ 28,764,730, or 35.8% of total revenues, primarily due to one-time severance and bonus payments[233]. Net Income and Loss - Net loss from operations improved to $740,022, or 2.7% of total revenues, compared to a net loss of$ 1,942,729, or 7.9% of total revenues in the prior year[217]. - The net loss attributable to common stockholders for Q3 fiscal 2024 was $1,595,136, consistent with a loss per share of$ 0.05[221]. - Net loss from operations for the first nine months of fiscal 2024 was $7,194,918, or 9.0% of total revenues, compared to a loss of$ 6,562,425, or 9.2% in the prior year[238]. - The net loss attributable to common stockholders for the first nine months of fiscal 2024 was $6,638,436, or a loss per share of$ 0.21, compared to a net loss of $3,422,048, or a loss per share of$ 0.11 in the same period of fiscal 2023[242]. Investments - The company invested approximately $5 million in cash and stock to acquire 100% of the membership interests in 24th Street, enhancing its asset management capabilities[190]. - The investment in Crescent Bank represents 15.6% of its outstanding common stock, focusing on subprime automobile lending across the U.S.[192]. - The company invested approximately$ 55 million in Sky Harbour, converting this investment into 5,500,000 shares of Class A common stock upon the business combination completion[195]. - Investment and other income increased to $1,852,354 in the first nine months of fiscal 2024, up from$ 1,576,963 in the same period of fiscal 2023[228]. Cash Flow and Financing - Net cash provided by operating activities was $12,117,191 for the first nine months of fiscal 2024, down from$ 12,241,695 in fiscal 2023[284]. - Net cash provided by investing activities was $29,893,384 in fiscal 2024, a significant improvement from net cash used of$ 48,959,016 in fiscal 2023[285]. - Net cash used in financing activities was $48,879,743 in fiscal 2024, compared to net cash provided of$ 34,115,891 in fiscal 2023[286]. - The company plans to finance future acquisitions and investments through cash, debt, and seller or third-party financing[287]. Debt and Equity - As of September 30, 2024, long-term debt included Link's Term Loan borrowings of $26,731,376, with$ 9,600,000 related to the revolving line of credit[305]. - The Term Loan has a fixed interest rate of 4.00% per annum and is payable in full on December 6, 2028[304]. - The company registered for a shelf registration statement allowing it to raise up to $500 million for future acquisitions and investments[290]. - A share repurchase program was authorized for up to$ 20 million of Class A common stock, effective August 15, 2024[288]. Market and Risk Factors - The company anticipates continued growth in the outdoor billboard and broadband service markets due to technological advancements and increased demand[199]. - Existing credit facilities impose restrictions that could limit the company's flexibility in responding to economic changes, including limits on incurring additional indebtedness and making acquisitions[321]. - The company operates entirely within the U.S., resulting in no significant exposure to foreign currency exchange rate risk[328]. - The preparation of financial statements requires estimates that may differ from actual results, impacting reported amounts of assets and liabilities[329].