Boston Omaha(BOC) - 2021 Q2 - Quarterly Report

Billboard Operations - As of June 30, 2021, the company operates approximately 3,200 billboards with about 6,000 advertising faces, having increased its billboard count from approximately 2,900 through acquisitions[180] - Billboard revenues in the first half of fiscal 2021 increased by 8.9% compared to the same period in 2020, indicating a recovery from earlier pandemic-related declines[192] - The company plans to continue expanding its billboard operations and broadband services, as well as exploring acquisitions in other sectors[188] - Billboard rentals net revenue increased by 19.5% in the second quarter of fiscal 2021 compared to the same period in fiscal 2020[207] - In Q2 2021, net billboard revenues increased by 19.5% compared to Q2 2020, attributed to improved rental and occupancy rates post-COVID-19 and the acquisition of billboards from Thomas, contributing approximately 3.6% to revenues[246] - Billboard rentals increased by 8.9% in the first half of fiscal 2021 compared to the first half of fiscal 2020, with net revenues reaching $15,106,517[263] Broadband Services - The broadband services business serves over 17,000 customers across Arizona and Utah, with continued expansion planned in these regions[181] - Revenue from broadband services rose to $3,760,454 in the second quarter of fiscal 2021, up from $1,164,082 in the second quarter of fiscal 2020, primarily due to the UBB acquisition[208] - Broadband revenues reached $7,555,491, a significant increase compared to $1,431,333 in the previous year[278] - Net income attributable to common stockholders in the broadband segment was $369,367 in Q2 2021, up from $298,284 in Q2 2020[260] Insurance Operations - Surety insurance revenues decreased by 37.9%, or approximately $2.9 million, in the first half of fiscal 2021 compared to the first half of fiscal 2020 due to the cessation of rental insurance bonds[193] - The surety insurance business has expanded its licensing to all 50 states and the District of Columbia, enhancing its market reach[188] - Premiums earned from the UCS insurance subsidiary decreased by 45.8% in the second quarter of fiscal 2021 compared to the same period in fiscal 2020[208] - Total operating revenues for the insurance segment declined by 32.9% in Q2 2021 compared to Q2 2020, primarily due to the suspension of UCS's rental guarantee bond program[252] - Total operating revenues for the insurance segment declined by 37.9% in the first half of fiscal 2021 compared to the first half of fiscal 2020, totaling $4,722,892[269] - Insurance commissions increased by 88.3% in Q2 2021 compared to Q2 2020, driven by the ACS acquisition completed in April 2021[253] Financial Performance - The company generated positive cash flow from operating activities of approximately $5.3 million in the first half of fiscal 2021, up from $1.3 million in the same period in fiscal 2020[196] - Total revenues for the second quarter of fiscal 2021 were $14,179,881, a 23.4% increase from $11,492,564 in the second quarter of fiscal 2020[206] - Total revenues for the first half of fiscal 2021 were $27,384,900, representing a 19.6% increase from $22,902,744 in the first half of fiscal 2020[226] - Net income attributable to common stockholders for the second quarter of fiscal 2021 was $8,637,563, or $0.29 per share, compared to $3,402,308, or $0.14 per share, in the second quarter of fiscal 2020[223] - Net income attributable to common stockholders for the first half of fiscal 2021 was $93,075,190, or $3.26 per share, compared to a net loss of $21,331,930, or a loss of $0.89 per share, in the first half of fiscal 2020[243] Investments and Acquisitions - The company holds a 30% stake in Logic and approximately 49.9% in 24th Street Holding Co., with investments totaling $6 million in 24th Street Fund I and II[182] - The investment in Dream Finders Homes, which completed its IPO in January 2021, has shown increased business activity during the pandemic[195] - The company has invested approximately $19 million in CB&T Holding Corporation, focusing on subprime automobile lending, indicating a strategic investment in the financial services sector[184] - The company raised $58.6 million in gross proceeds from a public offering of Class A common stock in April 2021[197] - The company is resuming acquisition activities and capital project spending as business activity improves post-pandemic[199] Cash and Debt Management - The company had approximately $57 million in unrestricted cash and $132 million in U.S. Treasury trading securities as of June 30, 2021[286] - The company plans to finance future acquisitions and investments through cash, debt, and equity securities[286] - As of June 30, 2021, long-term debt included borrowings of $22,470,934, with $1,207,502 classified as current[289] - The company was in compliance with financial covenants, including a consolidated leverage ratio not greater than 3.50 to 1.00 as of June 30, 2021[290] - The existing credit facility imposes restrictions that could limit the company's ability to incur additional indebtedness, make acquisitions, or pay dividends, which may increase vulnerability to adverse economic conditions[301] Operational Costs - Total costs and expenses for the second quarter of fiscal 2021 were $15,273,353, an increase from $12,357,873 in the second quarter of fiscal 2020[212] - Employee costs increased by $1,428,234 in the second quarter of fiscal 2021, mainly due to the UBB acquisition[215] - Total costs and expenses for the first half of fiscal 2021 were $29,964,150, an increase of 20.4% from $24,948,025 in the first half of fiscal 2020[232] - Employee costs rose by $2,537,236, driven by acquisitions, increasing from $6,230,960 in the first half of fiscal 2020 to $8,768,196 in the first half of fiscal 2021[235] Market Risks and Compliance - The company held no significant derivative instruments as of June 30, 2021, indicating minimal exposure to market risks related to interest rates, foreign currency, or commodity prices[308] - The company is at risk of being deemed an investment company under the Investment Company Act if a significant portion of its assets consists of investments in companies where it holds less than a majority interest[302] - The preparation of financial statements requires estimates that may differ from actual results, influenced by factors such as the COVID-19 pandemic[310]