Boston Omaha (the parent of Link Media Outdoor) released its 2019 annual letter.  It’s delightful to read an investment document in clear, straightforward jargon-free English.   Contrast this jargon laden non-speak from one of the other public out of home companies “We seek to leverage our leadership position in technology and data in out of home to enhance out of home’s core proposition…” with this language in Boston Omaha’s letter “If you have a business to sell and this sounds attractive to you, give us a call at (857) 256-0079 and don’t worry about the voicemail greeting. That is there to discourage the cold calls for corporate phone services as well as any foreign Prince’s long-lost brother-inlaw looking for us to wire them money so they can send us lottery winnings.”

Out of home dominates Boston Omaha Assets

Out of home assets account for $221 million of the company’s $437 million in assets as you can see from the table below.  Lots of dry powder as well via $84 million of cash.  Out of home assets grew more slowly in 2019 as the company assimilated several large acquisitions from 2018.

Boston Omaha Business Segments 2015-2019

Margins are improving.

Overhead as a % of assets has been declining as assets have grown and headquarter executive expense is spread over more boards.  Lease costs have declined to a reasonable 22% of revenue.  Insider considers 20% normal for most out of home companies.

Link Media Outdoor Financial Performance 2015-2019

Strong Balance Sheet.

The annual letter points out that Link Media is in strong financial condition to weather covid-19 disruptions:  “Link Media Outdoor (“Link”) has a modest amount of debt, well under three times trailing 2019 free cash flow, that is non-recourse to Boston Omaha. Link also has no financially material contractual capital commitments.”

Insider’s take:  Link Media is in great financial shape with lots of cash and low leverage.  Liquidity provides freedom.  Link is  only public financial out of home company which hasn’t put acquisitions on hold.  And guess who’s hiring people right now?

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