Press Releases

Air Methods Reports Fourth Quarter 2016 Results

Feb 28, 2017

DENVER, CO., February 28, 2017 -- Air Methods Corporation (Nasdaq: AIRM), the global leader in air medical transportation, today reported financial results for the quarter ended December 31, 2016.

Fourth Quarter 2016 Results:

  • Revenue of $297.5 million, compared to $272.4 million for the fourth quarter of 2015, an increase of 9.2%.
  • Diluted earnings per share from continuing operations of $0.54, compared to $0.57 for the fourth quarter of 2015, a decrease of 5.3%.
  • Depreciation and amortization expense of $23.5 million and interest expense of $8.1 million, compared to $21.3 million and $7.0 million for the fourth quarter of 2015, respectively, due primarily to the Tri-State Care Flight (TSCF) acquisition. This represents increases of 10.3% and 17.0%, respectively.
  • Adjusted EBITDA from continuing operations* (a non-GAAP measure) of $66.4 million, compared to $65.6 million for the fourth quarter of 2015, an increase of 1.2%.

Aaron Todd, CEO of Air Methods, stated, “Patient transports rebounded in the fourth quarter, increasing 11.1% in total and 1.5% on a same-base basis as the Company benefited from changes implemented towards the end of the third quarter and early in the fourth quarter and from more normal weather. We remain focused on driving shareholder value by improving the utilization of the Company’s assets, increasing its net revenue per transport through improvements in the Company’s revenue cycle operations and increasing the percent of commercial claims that are in network, growing the Company’s air medical footprint, and increasing the revenue and profitability of the Tourism operations.”

Peter Csapo, CFO of Air Methods, added, “In the fourth quarter, we continued to make significant progress on one of our highest priorities, achieving a year-over-year reduction in DSOs of 6 days to 124 days. When coupled with the 38% reduction in capital expenditures in 2016, the Company’s free cash flow* (a non-GAAP measure) for 2016 improved by $111.7 million over the prior year.”

* Adjusted EBITDA and free cash flow are non-GAAP measures. Reconciliations of Adjusted EBITDA to net income (loss) and free cash flow to net cash provided by continuing operating activities, the most directly comparable financial measures presented in accordance with GAAP, are set forth in the schedules accompanying this release. See “Non-GAAP Financial Measures.”

Fourth Quarter Performance by Segment

For the fourth quarter, Air Medical Services (AMS) revenue increased 11.4% to $262.9 million compared to $236.0 million in the prior-year quarter. Excluding the acquisition of TSCF, revenues increased 7.1%. Key operating statistics include: 

 

4Q16

4Q15

YOY Change (%)

Transports

17,571

15,817

11.1%

Transports + Weather Cancellations

23,924

22,945

4.3%

Same-Base Transports (SBTs)

15,107

14,891

1.5%

SBT + Weather Cancellations

20,837

21,664

(3.8%)

Net Revenue per Transport

$12,875

$12,508

2.9%

 

Flight center and aircraft operations expenses increased 12.3% to $156.6 million in the current quarter compared to $139.4 million in the prior year quarter. AMS maintenance expense increased 13.0% per flight hour during the fourth quarter compared to the prior-year quarter. This was offset partially by a 13.0% decline in the cost per hour for fuel during the fourth quarter compared to the fourth quarter of 2015. AMS segment adjusted EBITDA (a non-GAAP measure) increased 5.8% to $77.0 million compared to $72.7 million for the fourth quarter of 2015. 

Tourism revenues increased 2.5% to $29.6 million in the fourth quarter compared to $28.9 million in the prior-year quarter.  Total passengers decreased 1.6% to 101,623 during the fourth quarter compared to 103,261 in the prior-year quarter. Total revenue per passenger increased 4.3% to $292 in the fourth quarter compared to $280 in the prior-year quarter. Tourism operating expenses increased 1.5% to $20.7 million in the fourth quarter compared to $20.4 million in the prior-year quarter. Results benefitted from an 18.1% reduction in the maintenance cost per flight hour and a 4.1% reduction in the fuel cost per flight hour in the fourth quarter of 2016 compared to the fourth quarter of 2015. Tourism segment adjusted EBITDA (a non-GAAP measure) increased 18.9% to $4.9 million in the fourth quarter compared to $4.1 million in the prior-year quarter. 

United Rotorcraft’s external revenue declined by 34.2% to $4.9 million in the fourth quarter compared to $7.4 million in the prior-year quarter. Its segment adjusted EBITDA (a non-GAAP measure) declined in the fourth quarter to a loss of $1.1 million from a gain of $1.5 million in the prior year period.

Share Repurchase Program

The Company did not repurchase shares during the fourth quarter. To date, it has repurchased 3.1 million shares for $109.9 million and has $90.1 million remaining on its authorized program.

Fourth Quarter 2016 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 10184903, 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.

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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 Company’s focus on driving shareholder value by (i) improving utilization of the Company’s assets (ii) increasing its net revenue per transport through, among other things, (x) improvements in the Company’s revenue cycle operations; and (y) increases in the number of commercial claims that are in-network; (iii) expanding the Company’s air medical footprint; and (iv) increasing the revenue and profitability of the Company’s Tourism operations; 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; collection of future price increases for patient transports; requests for air medical services; shifts in payer mix resulting in a decrease of the number of privately insured transports, execution of the integration plan for Tri-State Care Flight; the continuation and/or renewal of air medical service contracts; general trends in the health care industry; weather conditions across the U.S.; development and changes in laws and regulations, including, without limitation, 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 ADDITONAL INFORMATION AND WHERE TO FIND IT

Air Methods intends to file a proxy statement with the U.S. Securities and Exchange Commission (the “SEC”) with respect to its 2017 Annual Meeting (the “2017 Proxy Statement”). AIR METHODS STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE 2017 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING WHITE PROXY CARD AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

 

Air Methods, its directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies from Air Methods stockholders in connection with the matters to be considered at Air Methods’ 2017 Annual Meeting. Information about Air Methods’ directors and executive officers is available in Air Methods’ proxy statement, dated April 29, 2016, for its 2016 Annual Meeting. To the extent holdings of Air Methods’ securities by such directors or executive officers have changed since the amounts printed in the 2016 proxy statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the 2017 Proxy Statement and other materials to be filed with the SEC in connection with Air Methods’ 2017 Annual Meeting. Stockholders will be able to obtain the 2017 Proxy Statement, any amendments or supplements thereto and other documents filed by Air Methods with the SEC free of charge at the SEC’s website at www.sec.gov. Copies also will be available free of charge 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.

 

CONTACTS: Peter P. Csapo, Chief Financial Officer, (peter.csapo@airmethods.com). Please contact Christina Brodsly at (christina.brodsly@airmethods.com) to be included on the Company’s e-mail distribution list.

 

– FINANCIAL STATEMENTS ATTACHED –

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