Press Releases

Air Methods Reports Fourth Quarter And 2015 Full Year Results

Feb 25, 2016

Air Methods Corporation (Nasdaq: AIRM), the global leader in air medical transportation, today reported financial results for the quarter and year ended December 31, 2015.

Q4-2015 Q4-2014 YOY Change (%) 12-Months Ending 12/31/15 12-Months Ending 12/31/14 YOY Change (%)
Revenue $272.4 million $249.2 Million 9.3% $1,085.7
million
$1,004.8
million
8.1%
Diluted EPS from Continuing Operations $0.57 $0.59 -3.4% $2.74 $2.56 7.0%

 

Aaron Todd, CEO of Air Methods, stated, “We are pleased with our fourth quarter results given the severe weather experienced in the quarter and $4.6 million in costs that were higher than normal. Same-base transports declined by 223 in the quarter, while same-base weather cancellations increased by 852. The impact to revenue of the same-base transport decline was approximately $2.8 million. Adjusting for this and the aforementioned costs, we estimate both revenue and earnings growth would have exceeded 10% in the quarter. Demand for both our air medical services and our tourism business remains strong, our pipeline of potential hospital base conversions is full, and we have a solid balance sheet that can be used either for additional acquisitions and/or to repurchase shares as we did in December and January.”

Fourth quarter 2015 results include a $1.8 million loss related to workers compensation claims from accidents in 2015, $1.0 million in acquisition-related costs, $1.0 million in severance, a $0.4 million loss related to the disposition of assets, and $0.4 million in other non-operational costs. This compares to a loss of $0.7 million from similar costs in the prior-year quarter. All losses are pre-tax.

Basic and diluted earnings per share from continuing operations for the twelve months ended December 31, 2015 were decreased by $0.02 for an adjustment to the value of equity put options related to both of our redeemable non-controlling interests in consolidated subsidiaries. While net income on the consolidated statement of comprehensive income was not decreased for the valuation adjustment, earnings per share are required to be calculated after decreasing net income for the change in valuation. For the prior year twelve-month period, basic and diluted earnings per share increased by $0.05 for the same type of adjustment.

Fourth Quarter Performance by Segment

For the fourth quarter, Air Medical Services (AMS) revenue increased by 7.6% to $236.0 million compared to $219.4 million in the prior-year quarter, while its segment net income decreased 2.2% to $49.9 million compared to $51.1 million for the fourth quarter of 2014.  Community-based patient transports were 15,817 during the current-year quarter compared to 14,209 in the prior-year quarter, an 11.3% increase. Patients transported for community bases in operation greater than one year (Same-Base Transports) decreased 1.6%, or 223 transports, while weather cancellations for these same bases increased by 852 transports compared to the prior-year period. Same-base requests for community-based service increased 3.8%. Net revenue per patient transport increased 2.2% from $12,238 to $12,508 in the current-year quarter. AMS maintenance expense was 16.0% higher in the current-year quarter compared to the prior-year quarter, while total flight volume increased 3.2%. AMS fuel expense decreased $0.6 million compared to the prior-year quarter, while fuel expense per flight hour decreased 19.6%.

Tourism revenues increased 9.8% to $28.9 million in the current-year quarter compared to $26.3 million in the prior-year quarter.  Tourism segment net income was $0.3 million compared to a net loss of $0.4 million in the prior-year quarter. Total passengers increased 10.2% to 104,751 during the current-year quarter compared to 95,064 in the prior-year quarter. Tourism maintenance expense increased $1.2 million or 19.9% in the current-year quarter compared to the prior-year quarter, while total flight volume increased 8.0%. Tourism fuel expense per flight hour decreased 23.8%.

United Rotorcraft’s external revenue increased 119.7% to $7.4 million compared to $3.4 million in the prior-year quarter. Its segment external earnings improved from a loss of $2.7 million in the year-ago period to a loss of $0.1 million in the current-year quarter.

Tri-State Care Flight

As previously announced, the company completed the acquisition of Tri-State Care Flight (“Tri-State”) on January 19th. Tri-State generated net revenue of approximately $81.0 million for the fiscal year ended Dec. 31, 2015. The transaction is expected to be immediately accretive to Air Methods’ earnings per share by more than $0.20 in the first year and more than $0.30 in the second year.

Share Repurchase Program

In the fourth quarter 2015 and the first quarter 2016, the company has repurchased 640,010 shares for $25.9 million, leaving $174.1 million remaining on the authorized repurchase program.

1Q16 Update

The Company also provided an update on preliminary January and February 2016 flight volume. Total community-based transports increased 14.6% to 5,216 during January 2016 compared to 4,550 in January 2015.  January 2016 same-base transports were virtually flat on a weather-adjusted basis. Flight volume in February is on pace to increase approximately 27.0%.

Before considering the impact of Tri-State, preliminary net revenue per patient transport in January 2016 decreased 15.0% to $10,841 from $12,754 in January 2015. In the first quarter of 2015, net revenue per patient transport ranged from $10,055 to $12,754 and averaged $11,651.

Fourth Quarter 2015 Conference Call

The Company will discuss these results in a conference call scheduled today at 4:30 p.m. Eastern. Interested parties can access the call by dialing (855) 601-0049 (domestic) or (720) 398-0100 (international) or by accessing the web cast at www.airmethods.com. A replay of the call will be available at (855) 859-2056 (domestic) or (404) 537-3406 (international), access number 40033031, for 3 days following the call and the web cast can be accessed at www.airmethods.com for 30 days. Concurrently, the Company will post a financial supplement that contains final operating statistics on its website, www.airmethods.com.

Air Methods Corporation (www.airmethods.com) is the global leader in air medical transportation. The Air Medical Services Division is the largest provider of air medical transport services in the United States. The United Rotorcraft Division specializes in the design and manufacture of aeromedical and aerospace technology. The Tourism Division is comprised of Sundance Helicopters, Inc. and Blue Hawaiian Helicopters, which provide helicopter tours and charter flights in the Las Vegas/Grand Canyon region and Hawaii, respectively. Air Methods’ fleet of owned, leased or maintained aircraft features approximately 500 helicopters and fixed wing aircraft.

 

Forward Looking Statements: Forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements in this press release that are “forward-looking statements”, including statements we make with regard to the demand for the Company’s air medical services and tourism, the Tri-State acquisition being immediately accretive to the Company’s earnings per share, the Company’s January and February 2016 operational and financial results, including those related to (i) total community-based patient transports, (ii) same-base transports, (iii) weather cancellations,  and (iv) net revenue per patient transport, and statements regarding hospital-based conversions, future acquisitions, and share repurchases, are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including but not limited to, the Company’s completion of its final quarter-end closing and review procedures, the size, structure and growth of the Company's air medical services, United Rotorcraft Division and Tourism Division; the collection rates for patient transports; the continuation and/or renewal of air medical service contracts; weather conditions across the U.S.; development and changes in laws and regulations, including, without limitation, the impact of the Patient Protection and Affordable Care Act; increased regulation of the health care and aviation industry through legislative action and revised rules and standards; and other matters set forth in the Company's filings with the SEC. The Company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. 

Important Additional Information and Where to Find It 

Air Methods intends to file a proxy statement with the SEC in connection with the solicitation of proxies for the 2016 Annual Meeting (the “2016 Proxy Statement”).  AIR METHODS STOCKHOLDERS ARE URGED TO READ THE 2016 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING WHITE PROXY CARD AND ANY OTHER RELEVANT DOCUMENTS THAT AIR METHODS WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

The participants in the solicitation of proxies from Air Methods’ stockholders in connection with the 2016 Annual Meeting may include the directors and director nominees of Air Methods: George W. Belsey, Ralph J. Bernstein, Mark D. Carleton, John J. Connolly, Jeffrey A. Dorsey, Claire M. Gulmi, C. David Kikumoto, Carl H. McNair, Jr., Morad Tahbaz, Aaron D. Todd and Jessica Garfola Wright.  In addition, the following persons may be participating in such solicitation: Michael D. Allen (President, Domestic Air Medical Services), Trent J. Carman (Chief Financial Officer), David M. Doerr (EVP, Business Development) and Crystal L. Gordon (General Counsel, Secretary, and Senior Vice President).

As of the date of this press release, the participants may be deemed to beneficially own (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) the number of shares of common stock, par value $0.06 per share, of Air Methods following their name: George W. Belsey: 77,092, Ralph J. Bernstein: 2,752,565, Mark D. Carleton: 30,343, John J. Connolly: 22,023, Jeffrey A. Dorsey: 22,023, Claire M. Gulmi: 4,506, C. David Kikumoto: 87,437, Carl H. McNair, Jr.: 181,210, Morad Tahbaz: 56,172, Aaron D. Todd: 94,677, Jessica Garfola Wright: 0, Michael D. Allen: 35,808, Trent J. Carman: 79,360, David M. Doerr: 30,457, and Crystal L. Gordon: 17,434.

Shareholders will be able to obtain, free of charge, copies of the 2016 Proxy Statement and any other documents filed by Air Methods with the SEC in connection with the 2016 Annual Meeting at the SEC’s website (www.sec.gov), at Air Methods’ website (www.airmethods.com) or by writing to Air Methods’ Corporate Secretary at Air Methods, 7211 South Peoria Street, Englewood, Colorado 80112, or by calling Air Methods’ Corporate Secretary at (303) 792-7400.

022516- 2015 Q4 Tables

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