Boston Omaha (BOC 0.52%) recently announced full-year 2018 results, outlining the implications of its ambitious acquisitions in recent months, explaining its continued book-value growth, and offering investors clarity on what to expect -- and what not to expect -- in the coming quarters.

Let's dig deeper, then, to see what the billboard advertising and surety insurance specialist accomplished over the past year, as well as what shareholders should be watching.

Blank billboard next to a country road

Image source: Getty Images.

Boston Omaha results: The raw numbers




Year-Over-Year Growth


$20.021 million

$9.014 million


GAAP net income (loss) attributable to common shareholders

($9.114 million)

($6.468 million)


GAAP earnings (loss) per share




Data source: Boston Omaha 2018 10-K SEC Filing. 

What happened with Boston Omaha in 2018?

  • Book value per share was $14.27 as of Dec. 31, up 90.8% from $7.48 in the same year-ago period. This growth was driven by stock issued at a premium to book value, which once again more than offset Boston Omaha's reported losses.
  • Revenue consisted of the following:
    • $14.065 million from billboard rentals, for growth of 167% year over year.
    • $3.184 million from premiums earned, up 56.7% year over year.
    • $2.606 million from insurance commissions, up 64.3% year over year.
    • $165,918 from investments and other income, up 26.8% year over year.
  • Boston Omaha ended 2018 with $331.2 million in total assets (up from $153.5 million a year ago), including $172.8 million of billboard assets (up from $32 million this time last year), $35.6 million in insurance assets (up from $24.2 million last year), $29.8 million of minority and other investments (up from $11.1 million previously), and $94 million in cash (up from $86.2 million a year earlier).
  • Link Media Outdoor now owns roughly 2,900 billboard structures -- up from 479 a year earlier and zero in 2015 -- offering approximately 5,400 advertising faces (or 5,900 counting digital face flips) in 11 states. 
    • Much of this growth stemmed from the three large billboard acquisitions Boston Omaha made between late July and August of last year.
    • To date, Boston Omaha has invested more than $178 million in billboard assets.
  • Boston Omaha has deployed $29.3 million of capital into General Indemnity Group (GIG), which now consists of five businesses including United Casualty and Surety Insurance Company (UCS) and four surety-only insurance agencies. After being admitted to write surety insurance in California -- where GIG writes more surety than anywhere else in the country -- starting in the fourth quarter of 2018, UCS is now licensed to write surety in all 50 states and the District of Columbia.
  • Boston Omaha's minority investments are now composed of three operating businesses: a 30% stake in Logical Commercial Real Estate acquired to $360,000, a 4.7% stake of Dream Finders Homes acquired for $10 million, and a 15% stake in Crescent Bank and Trust parent company CB&T Holding acquired for $19.1 million.  These investments collectively generated more than $2 million in pre-tax earnings last year, most of which was retained by their respective businesses.

What management had to say

In Boston Omaha's fourth annual letter to shareholders -- which, as usual, I strongly suggest reading, if not for its business insight than for its wit -- management mused about its collective busy-ness in the second half of the year:

We won't often spend time in these letters talking about a particular quarter; we prefer to think in terms of years. But to paraphrase a quote from Lenin (Vladimir, not John), "There are decades where nothing happens, weeks where decades happen, and months where you spend $138mm on billboards and get approved to write insurance in the biggest state in the country." (Apologies to the Lenin family...[co-CEO Adam Peterson's] Russian is a little rusty).

Management also warned that, as a result of recent billboard acquisitions, Boston Omaha will expense around $25 million of accumulated depreciation and amortization charges "over the next couple of years."

"Those charges will result in some large non-cash expenses," management elaborated; "however, that is far and away above our estimate of the capital expenditures necessary to retain and improve the productive capacity of the billboards we purchased."

Looking forward

As for forward guidance, management added, "You are more likely to see the Patriots or Red Sox lose in the [Super Bowl] or World Series to a team from L.A. than to catch us making quarterly or annual earnings forecasts."

Fair enough.

Instead, Boston Omaha management once again reminded investors of the company's "general decision-making framework," namely for providing proper incentives to align employees' interests with those of shareholders, decentralizing the company's management structure, focusing on the best ways to "durably" generate cash over time, and always maintaining a long-term mindset.

All things considered, that's as much as any patient investor can hope to ask as this promising business continues to build its foundation.