Boston Omaha Corporation, the publicly traded (NASDAQ: BOMN) Parent Company of Link Media posted 1st quarter results. Since Link is only one of their three majority owned business sectors (outdoor advertising, surety insurance and broadband telecommunications services) Insider is providing results and comments related to Link Media from their 10Q (so you don’t have to).
Comments from Boston Omaha’s management discussion:
As of April 30, 2020, we operate approximately 3,000 billboards with approximately 5,600 advertising faces. One of our principal business objectives is to continue to acquire additional billboard assets through acquisitions of existing billboard businesses in the United States when they can be made at what we believe to be attractive prices relative to other opportunities generally available to us.
Currently, we own billboards in Alabama, Florida, Georgia, Illinois, Iowa, Kansas, Missouri, Nebraska, Nevada, Virginia, West Virginia and Wisconsin.
One of our principal business objectives is to continue to acquire additional billboard assets through acquisitions of existing billboard businesses in the United States when they can be made at what we believe to be attractive prices relative to other opportunities generally available to us.
Recent Developments – Impact of the COVID-19 Disease on Our Business – We expect that the impact of “stay at home” and other governmental mandates closing retail and other businesses will adversely impact revenues for our billboard business and the ability of certain customers to pay outstanding invoices.
Comparison of the First Quarter of Fiscal 2020 to the First Quarter of Fiscal 2019. In the first quarter of fiscal 2020, there was a 6.4% increase in net billboard revenues from the first quarter of fiscal 2019, reflecting improving rental and occupancy rates in our Illinois and Kansas City markets as well as the acquisition of billboards from Image in the third quarter of fiscal 2019. Segment income from billboard operations improved mainly due to the reduction in amortization expense. In the fourth quarter of fiscal 2019, we updated our analysis of economic lives of customer relationships and extended the amortization period from 3 years to 10 years to better reflect the estimated economic lives of our billboard customers. The key factors affecting our billboard operations results during the first quarter of fiscal 2020 were as follows:
● Ground rent expense decreased as a percentage of total segment operating revenues from 23.5% in the first quarter of fiscal 2019 to 21.9% in the first quarter of fiscal 2020.
● Commissions paid increased as a percentage of total segment operating revenues from 8.8% in the first quarter of fiscal 2019 to 9.8% in the first quarter of fiscal 2020. The increase is associated with an increase in net billboard revenues driven mainly by improving rental and occupancy rates in our Illinois and Kansas City markets as well as the acquisition of billboards from Image in the third quarter of fiscal 2019. For additional comparison, commissions paid as a percentage of total segment operating revenues was 9.5% for all of fiscal 2019.
● Employee costs increased $125,438, or 9.0% in the first quarter of fiscal 2020 when compared to the first quarter of fiscal 2019.
Insider’s Take: Link Media is well financed, with little outstanding debt and is well prepared to make acquisitions either as tuck ins or to open new markets. History has shown in new territory that Link will need to have a larger acquisition to get them to the scale they desire. Jim McLaughlin did a very competent job, leading Link through the majority of their initial growth. Scott LaFoy, as the new CEO, provides a seamless transition moving forward. Boston Omaha is in the business for the long haul so can afford to be patient, if needed, moving forward.
[wpforms id=”9787″]
Paid Advertisement
