Boston Omaha Corp. Reports Q2 2024 Financial Results: A Mixed Bag Amid Growth
Boston Omaha Corp. (NASDAQ: BOMN), a diversified holding company based in Omaha, Nebraska, has released its financial results for the second quarter of fiscal 2024. The company, engaged primarily in outdoor billboard advertising, broadband services, surety insurance, and asset management, reported a mixed performance with an increase in revenues but a notable net loss.
1. Revenue Growth Across Segments
For the second quarter of fiscal 2024, Boston Omaha reported total revenues of $27,087,783, reflecting an 11.9% increase compared to the same period in fiscal 2023. The revenue growth was attributed to strong performances across its various business segments:
- Billboard Business: The billboard segment generated revenues of $12,311,319, with a gross profit of $5,441,219. The company operates approximately 4,000 billboards, demonstrating its commitment to expanding its advertising reach.
- Broadband Services: The broadband segment reported revenues of $8,441,319 and a gross profit of $2,441,219. The segment has grown its customer base, serving approximately 44,500 broadband customers as of June 30, 2024.
- Surety Insurance: This segment saw revenues of $4,441,319, with a gross profit of $1,441,219. The surety insurance subsidiary, GIG, has expanded its licensing to operate in all 50 states and the District of Columbia.
Income Statement Overview
Despite the revenue growth, the company faced operational challenges, resulting in a net loss from operations of $4,396,615, or 16.2% of total revenues. This contrasts sharply with a net loss from operations of $1,642,904 (6.8% of revenues) in Q2 2023. The following diagram illustrates the income statement for Q2 2024 and Q2 2023:
| Aug 2023 | Aug 2024 | |
|---|---|---|
Net Income | 553.7K | -10.26M |
Net Income to Non-controlling Interest | -1.17M | 1.63M |
Profit | -623.6K | -8.63M |
Net Income Continuing | -623.6K | -8.63M |
Income Tax Expense | -6.51M | -3.35M |
Pretax Income | -7.14M | -11.99M |
Non-operating Income | -459.0K | -1.30M |
Operating Income | -6.68M | -10.68M |
Revenue | 91.07M | 101.8M |
Costs and Expenses | 97.76M | 112.5M |
Cost of Revenue | 30.12M | 32.92M |
Operating Expenses | 67.63M | 79.62M |
Depreciation, Depletion & Amortization | 10.61M | 13.45M |
Selling, General & Administrative | 45.11M | 53.31M |
Other Operating Expenses | 11.90M | 12.85M |
2. Net Loss and Other Income
Boston Omaha's net loss attributable to common stockholders for the second quarter was $2,235,219, translating to a loss per share of $0.07, based on 31,853,692 diluted weighted average shares outstanding. This is a significant downturn compared to the same quarter last year when the company reported a net income of $1.54 million.
On a more positive note, the company reported net other income of $2,357,407 for Q2 2024, which included non-cash gains of $2,957,387 from unconsolidated affiliates and $313,775 from interest and dividend income.
3. Cash Flow and Liquidity Position
The company's cash flow statement indicates a complex financial landscape. For the first six months of fiscal 2024, Boston Omaha reported:
- Net cash provided by operating activities: $6,920,547.
- Net cash provided by investing activities: $30,155,714, a notable improvement compared to the previous year.
- Net cash used in financing activities: $39,086,411.
However, the overall net change in cash for the second quarter was -$22.66 million, highlighting the company's ongoing investments and operational costs. The following diagram presents the cash flow statement for Q2 2024 and Q2 2023:
| Aug 2023 | Aug 2024 | |
|---|---|---|
Net Change in Cash | -2.10M | -22.17M |
Net Cash from Operating Activities | 13.87M | 18.61M |
Operating Profit | -623.6K | -8.63M |
Adjustment to Operating Profit | 14.50M | 27.25M |
Net Cash from Investing Activities | -62.08M | 5.05M |
Business & Interest in Affiliates | 61.47M | 8.29M |
Investments | -5.94M | -62.52M |
Productive Assets | 47.32M | 48.21M |
Other Investing Activities | 40.77M | -957.8K |
Net Cash from Financing Activities | 46.09M | -45.84M |
Debt | -5.48M | 8.24M |
Equity Issuance/Repurchase | 37.73M | -16.76M |
Other Financing Activities | 13.84M | -37.32M |
4. Balance Sheet Analysis
As of June 30, 2024, Boston Omaha's total assets stood at $723 million, down from $773.1 million in the previous year. The company's liabilities also showed a minor increase to $157.6 million from $156.9 million.
The equity and non-controlling interests totaled $565.4 million, with retained earnings reflecting a negative balance of -$8.49 million. The balance sheet is summarized in the following diagram:
| Aug 2023 | Aug 2024 | |
|---|---|---|
Total Assets | 773.1M | 723.0M |
Total Current Assets | 158.2M | 100.6M |
Cash and Equivalents | 32.27M | 24.61M |
Short-term Investments | 83.15M | 44.39M |
Accounts Receivable | 7.35M | 13.51M |
Non-trade Receivables | 191.5K | 63.74K |
Restricted Cash and Investments | 27.30M | 12.78M |
Prepaid Expenses | 8.00M | 5.27M |
Total Non-current Assets | 614.9M | 622.4M |
Intangible Assets | 247.3M | 244.7M |
Long-term Investments | 102.4M | 82.71M |
Net PP&E | 130.2M | 154.2M |
Lease Assets | 63.42M | 60.21M |
Other Non-current Assets | 71.39M | 80.54M |
Total Liabilities and Equity | 773.1M | 723.0M |
Temporary Equity and Redeemable Non-controlling Interest | 15.66M | 0 |
Total Liabilities | 156.9M | 157.6M |
Total Current Liabilities | 52.67M | 49.96M |
Accounts Payable and Accrued Liabilities | 13.31M | 19.28M |
Current Debt | 5.96M | 6.04M |
Current Deferred Revenue | 2.86M | 2.63M |
Other Current Liabilities | 30.53M | 21.99M |
Total Non-current Liabilities | 104.3M | 107.6M |
Long-term Debt | 26.93M | 36.10M |
Asset Retirement and Litigation Obligation | 3.67M | 3.90M |
Non-current Deferred Tax Liabilities | 14.30M | 11.16M |
Other Non-current Liabilities | 59.38M | 56.52M |
Total Equity and Non-controlling Interests | 600.5M | 565.4M |
Total Equity | 542.6M | 530.4M |
Non-controlling Interests | 57.92M | 34.92M |
5. Outlook and Strategic Initiatives
Boston Omaha Corp. continues to invest in strategic initiatives aimed at expanding its market share across its business segments. The company has filed a shelf registration statement that allows it to raise up to $500 million through the sale of securities, which could be used to fund future acquisitions and investments.
Additionally, the company maintains an "at the market" equity offering program, enabling it to sell up to $100 million of its Class A common stock.
Conclusion
While Boston Omaha Corp. has demonstrated a solid revenue growth trajectory, the significant net losses in Q2 2024 raise questions about its operational efficiency and strategic direction moving forward. The company’s continued investment in its segments, combined with its robust liquidity position, may provide the foundation needed for recovery in the upcoming quarters. Investors will be keenly watching how Boston Omaha navigates these challenges and capitalizes on its growth opportunities.
