Boston Omaha(US:BOC)2025-05-14 20:09Business Operations - As of March 31, 2025, the company operates approximately 4,000 billboards with about 7,600 advertising faces, having increased its billboard count from approximately 2,900 since 2015[189] - The broadband services segment has approximately 47,900 broadband customers, including 17,100 fiber subscribers, and 42,100 fiber passings completed as of March 31, 2025[191] - The company has expanded its surety insurance business to operate in all 50 states and the District of Columbia, enhancing its market reach[190] - The company aims to grow its outdoor billboard advertising business through acquisitions of additional billboard assets[189] - The company plans to continue expanding its broadband services in Arizona, Florida, Nevada, Utah, and other locations[191] Financial Performance - Total revenues for the first quarter of fiscal 2025 were $27,730,494, an increase of 8.5% compared to $25,552,731 in the first quarter of fiscal 2024[204] - Billboard rentals generated $10,764,475, accounting for 38.8% of total revenues, while broadband services contributed $10,320,130, representing 37.2% of total revenues[204] - Premiums earned from the UCS insurance subsidiary increased by 39.0% to $5,563,773 in the first quarter of fiscal 2025 compared to $4,003,059 in the first quarter of fiscal 2024[204] - Net loss from operations for the first quarter of fiscal 2025 was $797,403, or 2.9% of total revenues, a significant improvement from a net loss of $2,058,281, or 8.1% of total revenues, in the first quarter of fiscal 2024[209] - The net loss attributable to common stockholders for Q1 fiscal 2025 was $669,285, or a loss per share of $0.02, compared to a net loss of $2,808,081, or a loss per share of $0.09 in Q1 fiscal 2024[213] Investment Activities - The acquisition of 24th Street Asset Management LLC was completed for a total consideration of $5,016,494, including $2,759,072 in cash at closing and 45,644 shares of Class A common stock[194] - The company invested $10 million in common units of Dream Finders Homes, which resulted in gross proceeds of approximately $81 million from the sale of shares post-IPO[195] - The company invested approximately $19 million in Crescent Bank, representing 15.6% of its outstanding common stock[195] - The company invested approximately $55 million into Sky Harbour, converting into 5,500,000 shares of Class A common stock upon the business combination completion[199] - The company invested approximately $3 million in MyBundle, a company in the broadband industry, in July 2023[199] Cost Management - Total costs and expenses for the first quarter of fiscal 2025 were $28,527,897, with a decrease in total costs as a percentage of total revenues from 108.1% in the first quarter of fiscal 2024 to 102.9%[206] - Employee costs were $8,810,110, or 31.8% of total revenues, down from $8,631,911, or 33.8% of total revenues, in the first quarter of fiscal 2024[207] - Professional fees decreased to $741,278, or 2.7% of total revenues in Q1 fiscal 2025, down from $1,137,148, or 4.4% in Q1 fiscal 2024[214] - General and administrative expenses were $3,779,862, or 13.6% of total revenues in Q1 fiscal 2025, compared to $4,058,405, or 15.9% in Q1 fiscal 2024[214] Cash Flow and Financing - Net cash provided by operating activities was $2,555,668 in Q1 2025, an increase from $2,415,294 in Q1 2024, attributed to improved cash flow generation in the broadband business[225] - Net cash used in investing activities was $11,226,609 in Q1 2025, compared to net cash provided of $22,884,604 in Q1 2024, primarily due to capital expenditures in broadband[226] - Net cash provided by financing activities was $6,825,958 in Q1 2025, contrasting with net cash used of $4,646,567 in Q1 2024, mainly from collateral received and borrowings[227] - The Company approved a share repurchase program to buy back up to $20 million of its Class A common stock, with 111,323 shares repurchased for approximately $1.6 million to date[230] Debt and Leverage - As of March 31, 2025, long-term debt includes approximately $26.3 million under Link's Term Loan and $6.8 million under BOB's credit facility[238][246] - The Company has a consolidated leverage ratio requirement of not greater than 3.50 to 1.00, which will decrease to 3.00 to 1.00 by December 31, 2027[239][244] - The BOB Credit Agreement allows borrowing up to $20 million for capital expenditures, with term loans amortized over 10 years[242][243] - The Term Loan has a fixed interest rate of 4.00% per annum, with principal payments commencing on January 1, 2022[236] Regulatory and Compliance Risks - The company may face risks related to being deemed an inadvertent investment company, which could lead to significant regulatory consequences[252] - The company’s ability to comply with loan covenants may be affected by factors beyond its control, risking default under credit agreements[250] - Existing credit facilities impose restrictions that could limit the company's flexibility in responding to adverse economic conditions, including limits on incurring additional indebtedness and making acquisitions[250] Future Outlook - The company plans to continue acquiring billboard locations, insurance businesses, and broadband service providers, financing future acquisitions with cash, debt, and equity securities[229] - The company may need to seek additional capital through long-term debt borrowings or the sale of securities if significant acquisition opportunities arise beyond current cash and marketable securities[250] - The company intends to use net proceeds from future securities sales for general corporate purposes, including business expansion and acquisitions[234]