Air Methods Reports 2Q2008 Results and 3Q2008 Update
08/07/08
Fully-Diluted Earnings Per-Share of $0.38 In Line with Previously Announced
Expectations
DENVER, Aug. 7 /PRNewswire-FirstCall/ -- Air Methods Corporation (Nasdaq: AIRM), the largest air medical transportation company in the world, reported financial results for the second quarter ended June 30, 2008 and provided an update on July 2008 flight volumes. For the quarter, revenue increased 41% to $128.0 million from $90.7 million in the prior-year quarter. For the six-month period, revenue increased 43% to $246.1 million, compared with $172.2 million in the prior-year six-month period.
For the quarter, net income decreased 38% to $4.8 million, or $0.38 per diluted share, as compared with prior-year quarter net income of $7.8 million, or $0.63 per diluted share. Net income for the six-month period was $7.2 million, or $0.57 per diluted share, compared to $11.5 million, or $0.93 per diluted share, for the prior-year six-month period.
As previously announced, the decrease in net income was primarily attributed to decreases in community-based patient transports as a result of increased weather cancellations, and higher than anticipated fuel and maintenance expenditures. Community-based patient transports for bases in operation greater than one year (Same-Base Transports) decreased by 651 transports, while weather cancellations for these same bases increased by 459, as compared with the prior-year quarter. Same-Base Transports and weather cancellations exclude bases acquired from CJ Systems Aviation Group, Inc. (CJ) effective October 1, 2007. Aircraft maintenance expense per flight hour during the quarter, excluding aircraft acquired in the CJ acquisition, increased 15% as compared with the prior-year quarter, resulting in an increase of $1.7 million in maintenance expense based on actual flight volume for the quarter. The actual increase in maintenance expense was smaller than the previously announced increase of 21% as a result of final quarter-end adjustments to preliminary calculations. Maintenance expense per flight hour, excluding CJ aircraft, decreased 6% during the current quarter as compared to the first quarter of 2008. As previously reported, fuel expense per community-based patient transport increased 58% as compared with the prior-year quarter, resulting in an increase of approximately $1.8 million in fuel costs based on patients transported during the quarter. The second quarter 2008 financial results also include approximately $0.7 million in uninsured costs associated with recent accidents, slightly higher than previously reported preliminary results.
The current-year quarter and six-month period include approximately $1.1 million and $2.2 million, respectively for the re-training of CJ pilots to transition operations to a single Federal Aviation Administration (FAA) operating certificate. These costs include incremental compensation expense for pilots and training personnel, in addition to hourly maintenance and fuel expenses associated with incremental training flights. This re-training process was completed at the end of the second quarter.
The increase in revenue for the current-year quarter and six-month period is primarily attributed to the acquisition of CJ. Excluding revenue generated from operating bases added in the CJ acquisition, consolidated revenue increased approximately 11% for the current-year quarter and six-month period as compared with the prior year.
For the second quarter, community-based revenue increased 26% to $77.7 million compared to $61.8 million in the prior year, while segment net income decreased 22% to $11.2 million from $14.3 million. Excluding CJ operating locations, community-based revenue increased 7%. As previously reported, total community-based patient transports were 11,635, as compared with 9,769 in the prior-year quarter. Net revenue per community-based transport was $6,727 for the current-year quarter, compared with $6,412 in the prior-year quarter and $6,622 in the first quarter of 2008. Hospital-based revenue increased 69% to $47.0 million compared to $27.9 million in the prior-year period, while segment net income decreased slightly to $1.1 million from $1.3 million. Excluding CJ operating locations, hospital-based revenue increased 11%. The decrease in segment net income for both divisions is attributed to the factors discussed above.
The Company also provided an update on July 2008 flight volume. Total community-based transports were 3,832 during July 2008 compared with 3,495 in July 2007. Same-Base Transports during the month of July decreased by 415 transports or 12% as compared with July 2007. The decrease in transports was partially attributed to a 218 increase in weather cancellations for bases in operation greater than one year and excluding bases acquired from CJ. A small portion of the remaining decrease in Same-Base Transports during the month is also attributed to fewer patients being transported from auto accident scenes. The recent spike in fuel prices is believed to have reduced discretionary travel, resulting in decreased demand for service. Although scene flights typically represent only 40% of total patient transports with the remaining 60% representing transports between hospitals, almost 50% of the reduction in Same-Base Transports in July was attributed to a decrease in scene flights.
Aaron Todd, CEO, stated, "Weather has been more severe than the prior-year period in every month in 2008 except January. This has had the most significant impact on our year-over-year results due to the high fixed-cost nature of our operating expenses. Recent spikes in fuel prices and higher than anticipated maintenance expenditures have also impacted our results. Despite these challenges, we remain optimistic for future periods. Weather will eventually moderate. Fuel prices have fallen significantly from their recent highs, while the cost of consolidating FAA certificates is now behind us. In addition, we continue to realize improvement in net reimbursement per transport from recent price increases. We would anticipate a return to growth in profits as these expectations become realized."
The Company will discuss these results in a conference call scheduled today at 4:15 p.m. Eastern. Interested parties can access the call by dialing (888) 396-5640 (domestic) or (706) 643-0580 (international) or by accessing the web cast at http://www.airmethods.com. A replay of the call will be available at (800) 642-1687 (domestic) or (706) 645-9291 (international), access number 55489810, for 3 days following the call and the web cast can be accessed at http://www.airmethods.com for 30 days.
Air Methods Corporation (http://www.airmethods.com) is a leader in emergency air medical transportation and medical services. The Hospital Based Services Division is the largest provider of air medical transport services for hospitals. The Community Based Services Division is the largest community-based provider of air medical services. The Products Division specializes in the design and manufacture of aeromedical and aerospace technology. The Company's fleet of owned, leased or maintained aircraft features over 330 helicopters and fixed wing aircraft.
Forward Looking Statements: This news release includes certain forward-looking statements, which are subject to various risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including but not limited to the integration of CJ into our existing operations, the size, structure and growth of the Company's air medical services and products markets; the collection rates for patient transports; the continuation and/or renewal of air medical service contracts; the acquisition of profitable Products Division contracts and other flight service operations; the successful expansion of the community-based operations; and other matters set forth in the Company's public filings.
CONTACTS: Aaron D. Todd, Chief Executive Officer, (303) 792-7413 or Trent
Carman, Chief Financial Officer, at (303) 792-7591. Please contact Christine
Clarke at (303) 792-7579 to be included on the Company's fax and/or mailing
list.
- FINANCIAL STATEMENTS ATTACHED -
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
June 30, 2008 December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents $9,574 5,134
Trade receivables, net 136,042 135,633
Other current assets 55,352 74,090
Total current assets 200,968 214,857
Net property and equipment 121,910 114,746
Other assets, net 43,371 39,949
Total assets $366,249 369,552
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable related to assets held
for sale $19,627 24,203
Current portion of indebtedness 17,012 18,350
Accounts payable, accrued expenses
and other 56,897 59,546
Total current liabilities 93,536 102,099
Long-term indebtedness 76,294 76,751
Other non-current liabilities 45,556 48,682
Total liabilities 215,386 227,532
Total stockholders' equity 150,863 142,020
Total liabilities and stockholders'
equity $366,249 369,552
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Revenue:
Flight operations $124,746 89,695 239,219 168,856
Product operations 3,213 1,038 6,839 3,335
Total revenue 127,959 90,733 246,058 172,191
Expenses:
Operating expenses 97,496 61,068 190,783 119,409
Gain on disposition of
assets, net (130) (497) (1,438) (345)
General and administrative 17,578 12,568 34,724 24,719
Depreciation and
amortization 4,202 3,479 8,300 6,890
119,146 76,618 232,369 150,673
Operating income 8,813 14,115 13,689 21,518
Interest expense (1,106) (1,318) (2,673) (2,740)
Other, net 609 491 1,252 946
Income before income taxes 8,316 13,288 12,268 19,724
Income tax expense (3,482) (5,463) (5,104) (8,201)
Net income $4,834 7,825 7,164 11,523
Income per common share:
Basic $0.40 0.66 0.59 0.97
Diluted $0.38 0.63 0.57 0.93
Weighted average common
shares outstanding -
basic 12,181,790 11,886,613 12,166,566 11,881,751
Weighted average common
shares outstanding -
diluted 12,608,043 12,431,098 12,617,804 12,382,830
SOURCE Air Methods Corporation
-0- 08/07/2008
/CONTACT: Aaron D. Todd, Chief Executive Officer, +1-303-792-7413, or
Trent Carman, Chief Financial Officer, +1-303-792-7591, or Christine Clarke,
+1-303-792-7579, all of Air Methods Corporation/
/Web site: http://www.airmethods.com /
(AIRM)
CO: Air Methods Corporation
ST: Colorado
IN: TRN HEA
SU: ERN ERP CCA
GS-AH
-- LATH115 --
6481 08/07/2008 16:01 EDT http://www.prnewswire.com
Copyright © 2006-2010 Air Methods. All rights reserved. 