Air Methods Reports 2Q2007 Results and 3Q2007 Update
DENVER, Aug. 9 /PRNewswire-FirstCall/ — Air Methods Corporation reported financial results for the quarter ended June 30, 2007. Revenue increased 16% to $90.7 million from $78.5 million in the year-ago quarter. For the six-month period, revenue increased 14% to $172.2 million, compared with $151.5 million in the prior-year six-month period.
For the quarter, net income increased 105% to $7.8 million, or $0.63 per diluted share, as compared with prior-year quarter net income of $3.8 million, or $0.31 per diluted share. Net income for the six-month period was $11.5 million, or $0.93 per diluted share, compared to $6.4 million, or $0.52 per diluted share, for the prior-year six-month period. The current-year quarter includes a $0.5 million pre-tax gain from disposition of assets, comparable to a $0.6 million pre-tax gain in the prior-year quarter from such dispositions.
The increase in net income for the quarter is primarily attributed to increases in net reimbursement per community-based transports, combined with decreases in maintenance expense. For the quarter, net reimbursement per transport increased 14% from $5,559 in the prior-year quarter to $6,330 in the current-year quarter. Maintenance expense for the current-year quarter decreased 15% or $2.2 million, as compared with the prior-year quarter, even though total flight volume increased by 1.7%.
Second Quarter Highlights
Community-Based Services: Revenue from community-based services increased 25% to $61.9 million, while segment net income increased 93% to $14.3 million during the second quarter, as compared with net income of $7.4 million in the prior-year quarter. The increase in segment net income was primarily attributed to the increase in reimbursement rates and decrease in maintenance expense discussed above. Community-based transports completed during the second quarter were 9,769 as compared with 8,924 in the prior-year quarter, a 9.5% increase. Community-based transports for bases in operation greater than one year (Same-Base Transports) decreased by 245, or 2.9%, while weather cancellations for bases in operation greater than one year increased by 85, or 5.5%, from the prior-year quarter. The decrease in Same-Base Transports in excess of the increase in weather cancellations is attributed to shifting of transports to newly-opened bases in adjacent locations. Excluding these adjacent locations and the effects of increased weather cancellations on remaining bases, Same-Base Transports would have increased 0.6%.
Hospital-Based Services: Revenue from hospital-based services increased by approximately 1% to $27.9 million, while segment net income increased from break-even results during the prior-year second quarter to net income of $1.3 million in the current quarter. The increase in earnings is primarily attributed to a decrease in maintenance expense per flight hour from $605 in the prior-year quarter to $462 in the current-year quarter, a 24% decrease. The increase in divisional revenues from new contracts and price increases was offset by the conversion of a hospital-based services customer to the community-based service delivery model and the cessation of service under two separate contracts during the prior year.
Products Division: Revenue, including revenue generated from internal projects, increased 51% to $6.4 million, while segment net income decreased slightly to $1.0 million from $1.1 million during the second quarter as compared with the prior-year quarter. Growth in revenue did not correspond to growth in net income due to change in product mix.
The Company also provided an update on July 2007 flight volume. Total community-based transports of 3,478 during July 2007 compared with 3,282 in the prior-year month. Same-Base Transports during the month of July decreased 176 transports, while weather cancellations for these same bases increased by 97. While more weather cancellations affected the monthly transports, overall transports were 146 higher than the previous month of June.
Aaron Todd, Chief Executive Officer, stated, “Our second quarter results were in line with our expectations and reflect continued strength in reimbursement, lower maintenance expense, and relatively consistent flight volume. Days’ sales outstanding in receivables for community-based services decreased significantly during the quarter from 130 days as of June 30, 2006 to 106 days as of June 30, 2007, based on annualized trailing three-month revenue. This reduction in days’ sales outstanding, combined with the strength of our operating results, resulted in $22.5 million net cash provided by operating activities during the six months ended June 30, 2007. Long-term debt less cash decreased by $12.3 million during the same six-month period, as well. We are obviously pleased with these results and believe that we are well on our way to achieving another year of strong growth in both top-line and bottom-line performance.”
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 (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 7215644, 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 aeromedical 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 one of the largest community-based providers 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 200 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 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 Joe Dorame at Lytham Partners, LLC at (602) 889-9700. Please contact Christine Clarke at (303) 792-7579 to be included on the Company’s fax and/or mailing list.
AIR METHODS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Amounts in thousands) June 30, 2007 December 31, 2006 ASSETS Current assets: Cash and cash equivalents $4,182 4,219 Receivables, net 106,125 107,755 Other current assets 41,522 27,887 Total current assets 151,829 139,861 Property and equipment 97,020 95,575 Other assets, net 17,142 14,721 Total assets $265,991 250,157 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Notes payable related to assets held for sale $19,100 9,560 Current portion of indebtedness 10,633 9,963 Accounts payable, accrued expenses and other 34,710 28,306 Total current liabilities 64,443 47,829 Long-term indebtedness 49,379 62,346 Other non-current liabilities 31,496 32,668 Total liabilities 145,318 142,843 Total stockholders’ equity 120,673 107,314 Total liabilities and stockholders’ equity $265,991 250,157 AIR METHODS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Amounts in thousands, except share and per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Revenue: Flight operations $89,695 77,037 168,856 148,461 Product operations 1,038 1,440 3,335 3,045 Total revenue 90,733 78,477 172,191 151,506 Expenses: Operating expenses 61,068 58,509 119,409 112,977 Gain on disposition of assets, net (497) (647) (345) (562) General and administrative 12,568 10,021 24,719 19,848 Depreciation and amortization 3,479 3,194 6,890 6,365 76,618 71,077 150,673 138,628 Operating income 14,115 7,400 21,518 12,878 Interest expense (1,318) (1,470) (2,740) (2,826) Other, net 491 394 946 740 Income before income taxes 13,288 6,324 19,724 10,792 Income tax expense (5,463) (2,511) (8,201) (4,399) Net income $7,825 3,813 11,523 6,393 Income per common share: Basic $0.66 0.32 0.97 0.55 Diluted $0.63 0.31 0.93 0.52 Weighted average common shares outstanding – basic 11,886,613 11,760,986 11,881,751 11,698,504 Weighted average common shares outstanding – diluted 12,431,098 12,318,161 12,382,830 12,300,428
Air Methods Corporation
CONTACT: Aaron D. Todd, Chief Executive Officer of Air MethodsCorporation, +1-303-792-7413; or Joe Dorame of Lytham Partners, LLC,+1-602-889-9700, for Air Methods Corporation
Web site: http://www.airmethods.com/