Boston Omaha(BOC) - 2019 Q2 - Quarterly Report

Financial Performance - Total revenues for the second quarter of fiscal 2019 reached $10,139,561, representing a 239.1% increase compared to $2,989,759 in the second quarter of fiscal 2018[145] - Total revenues for the first half of fiscal 2019 reached $19,250,286, a 231.2% increase from $5,812,703 in the first half of fiscal 2018[166] - Total operating revenues for the first half of fiscal 2019 increased by 107.5% compared to the first half of fiscal 2018, driven by a 343.9% increase in premiums earned[213] - Total operating revenues for the first half of 2019 reached $13,930,382, compared to $3,249,459 in the first half of 2018[199] - Total operating revenues amounted to $5,319,904, up from $2,563,244 in the prior year[211] Revenue Sources - Net billboard rentals increased by $5,450,723, or 320.8%, from the second quarter of fiscal 2018, primarily due to acquisitions of billboard businesses in July and August 2018[146] - Premiums earned amounted to $2,487,557, a 390.5% increase from $507,045 in the second quarter of fiscal 2018, driven by improved marketing efforts and the ability to issue surety bonds in California[145] - Premiums earned from UCS insurance subsidiary increased by 390.6% to $4,369,899 in Q2 2019 compared to $984,349 in Q2 2018[148] - Billboard revenues in the first half of fiscal 2019 were $13,930,382, reflecting a 328.7% increase from $3,249,459 in the first half of fiscal 2018[167] Expenses and Losses - Total costs and expenses in Q2 2019 were $13,342,200, up from $5,493,450 in Q2 2018, with a percentage of total revenues decreasing from 183.7% to 131.6%[152] - Net loss from operations in Q2 2019 was $3,202,639, or 31.6% of total revenues, compared to a net loss of $2,503,691, or 83.7% of total revenues, in Q2 2018[160] - Net loss from operations for the first half of fiscal 2019 was $7,990,589, or 41.5% of total revenues, compared to a net loss of $5,246,082, or 90.3% in the first half of fiscal 2018[181] - Net loss attributable to common stockholders was $2,114,348 in Q2 2019, compared to a loss of $1,598,097 in Q2 2018, with a per share loss of $0.09[162] - Net loss attributable to common stockholders was $6,192,734 in the first half of fiscal 2019, with a per share loss of $0.28 based on 22,320,114 weighted average shares outstanding[183] Cost Management - Employee costs increased by $1,102,775 in Q2 2019, but as a percentage of revenues decreased to 29.3% from 62.3% in Q2 2018[155] - General and administrative expenses rose to $1,671,480 in Q2 2019, a 96.9% increase from $848,942 in Q2 2018, but decreased as a percentage of total revenues from 28.3% to 16.5%[158] - Total expenses increased to $4,659,577, representing 87.6% of total revenues, compared to $4,333,519 (169.1%) in the previous year[211] - Employee costs decreased to 48.8% of revenue, down from 93.1% in the first half of fiscal 2018[218] Investments and Acquisitions - The company plans to continue acquiring additional billboard assets and expanding its geographic reach in the outdoor advertising market[137] - The company has made significant investments in Dream Finders Holdings LLC and Crescent Bank & Trust, anticipating growth in these sectors[134][135] - The company plans to continue acquiring billboard locations and insurance businesses, financing future acquisitions with cash, debt, and equity securities[226] - The company expects to continue investing excess capital in publicly traded equity securities and bonds, subject to market conditions[200] Market Expansion - The surety insurance business is now licensed to issue bonds in all 50 states and the District of Columbia, expanding its market reach[132] - The company operates approximately 2,900 billboards with about 5,400 advertising faces as of August 1, 2019, following significant acquisitions[131] Financial Position and Risk Management - The company had approximately $12 million in unrestricted cash and $85 million in U.S. Treasury securities available for sale as of June 30, 2019[226] - The company is negotiating a credit facility for up to $40 million, secured by all assets of Link and its subsidiaries[232] - The Board of Directors has not adopted a policy limiting the total amount of debt that the company may incur, allowing for flexible leverage decisions[233] - The company does not have any off-balance sheet financing arrangements, transactions, or special purpose entities, except for normal operating leases[236] - The company’s operations are currently conducted entirely within the U.S., resulting in no significant exposure to foreign currency exchange rate risk[238]