Air Methods Reports 3Q2012 Results and 4Q2012 Update

Thu Nov 8, 2012 4:03pm EST

* Reuters is not responsible for the content in this press release.

DENVER, Nov. 8, 2012 (GLOBE NEWSWIRE) -- Air Methods Corporation (Nasdaq:AIRM) reported results for the quarter ended September 30, 2012. Revenue increased 20% to $221.3 million from $185.2 million in the year-ago quarter. For the nine-month period, revenue increased 36% to $634.6 million, up from $467.2 million in the prior-year nine-month period. For the quarter, net income increased 50% to $27.8 million, or $2.14 per diluted share, as compared with 2011 third quarter net income of $18.5 million, or $1.44 per diluted share. Net income for the nine-month period increased 110% to $71.7 million, or $5.52 per diluted share, compared to $34.2 million, or $2.67 per diluted share, for the prior-year period. Financial results for the three and nine months ended September 30, 2012 include operations associated with the Company's acquisition of OF Air Holdings and its subsidiaries (together, Omniflight) effective August 1, 2011. Accordingly, only two months of consolidated operations are reflected in the prior-year quarter and nine months ended September 30, 2011.

After-tax earnings for the current year quarter include $0.6 million net loss on disposition of assets. The current year after-tax quarterly earnings were further reduced by $0.9 million associated with the non-recurring cumulative effect of changes in expected blended state income tax rates. Prior-year after-tax earnings for the quarter ended September 30, 2011 were reduced by approximately $1.4 million for transaction and non-recurring transition costs and employee severance expense related to the acquisition of Omniflight.

Effective September 1, 2012, the Company combined its community-based and hospital-based services divisions. This combination of the Company's two air medical services divisions was made in order to improve efficiency and coordination. Accordingly, net patient transport revenue (previously referred to as net community-based services revenue) no longer includes revenue from military base air medical services contracts. Air medical services contract revenue includes both fixed fee and hourly flight fee revenue associated with air medical service agreements with hospital and military customers. 

Third Quarter Highlights

Net patient transport revenue increased 28% to $153.1 million from $119.3 million. Net revenue per community-based transport (excluding military base services revenue) increased 14% to $10,316 compared with $9,054 in the prior-year quarter.  Total community-based patient transports increased 13% to 14,829 in the current-year quarter from 13,173 in the prior-year quarter. Community-based patient transports for bases open greater than one year (Same-Base Transports) and excluding Omniflight transports for July 2012 increased 3%, or 362 transports, as compared with the prior-year quarter. Weather cancellations for these same-base locations decreased by 172 transports compared with the prior-year quarter.  Air medical services contract revenue increased by 5% to $58.0 million from $55.4 million.

Consolidated maintenance expense for the current-year quarter increased by 27%, or $5.7 million, despite an increase in flight volume of only 5%. Excluding the impact of the fuel derivative agreements, the cost of aircraft fuel per flight hour increased 3% over the prior-year quarter. 

Revenue from our United Rotorcraft Division, excluding revenue generated from internal projects, decreased 4% to $8.4 million from $8.7 million in the prior-year quarter. Segment net income, excluding internal projects, decreased 12% to $1.7 million from $1.9 million in the prior-year quarter.

The Company also provided an update on preliminary October 2012 flight volume. Total community-based transports during October 2012 were 4,670 compared with 4,814 during October 2011, reflecting a 3% decrease. Same-Base Transports for October decreased 93 transports, or 2%, while weather cancellations for these same bases increased by 225 transports. 

Aaron Todd, Chief Executive Officer, stated, "During the third quarter of 2012, we completed our first full year of consolidated operations following the Omniflight acquisition. Our financial results have confirmed the accretive benefits of this acquisition and the realization of anticipated synergies. We are pleased to have experienced a return to Same-Base Transport growth during the third quarter, including on a weather-adjusted basis. Preliminary October 2012 flight volume also reflects growth in Same-Base Transports on a weather-adjusted basis. Our strong earnings growth during the current-year quarter has been achieved despite higher than anticipated maintenance expenditures."

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 (877) 883-0656 (domestic) or (706) 643-8826 (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 59981547, for 3 days following the call and the web cast can be accessed at www.airmethods.com for 30 days.

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 for hospitals and one of the largest community-based providers of air medical services. United Rotorcraft Division specializes in the design and manufacture of aeromedical and aerospace technology. Air Methods' fleet of owned, leased or maintained aircraft features over 400 helicopters and fixed wing aircraft.

The Air Methods Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6955

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 regarding the Company's preliminary October 2012 flight volume, 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 size, structure and growth of the Company's air medical services and United Rotorcraft Division; the collection rates for patient transports; the continuation and/or renewal of air medical service contracts; the anticipated impact from the Company's internal reorganization; extreme 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.

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 SHEETS
(Amounts in thousands)
(unaudited)
     
  September 30, 2012 December 31, 2011
     
     
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 3,807 3,562
Trade receivables, net 235,764 187,056
Other current assets 79,860 65,101
     
Total current assets 319,431 255,719
     
Net property and equipment 551,944 569,578
Other assets, net 197,420 203,174
     
Total assets  $ 1,068,795 1,028,471
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Notes payable related to assets held for sale  $ 4,640  27,940
Current portion of indebtedness 62,593 67,989
Accounts payable, accrued expenses and other 77,868 74,779
     
Total current liabilities 145,101 170,708
     
Long-term indebtedness 462,958 483,886
Other non-current liabilities 92,957 85,975
     
Total liabilities 701,016 740,569
     
Total stockholders' equity 367,779 287,902
     
Total liabilities and stockholders' equity  $ 1,068,795 1,028,471
 
 
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share amounts)
(unaudited)
         
  Three Months Ended
September 30,
Nine Months Ended
September 30,
  2012 2011 2012 2011
         
Revenue:        
Patient transport revenue, net  $ 153,095 119,332 437,865 286,497
Air medical services contract revenue 58,014 55,381 168,854 153,629
Product operations 8,490 8,702 23,238 22,044
Other 1,691 1,757 4,627 5,069
Total revenue 221,290 185,172 634,584 467,239
         
Expenses:        
Operating expenses 124,961 107,408 365,918 286,800
General and administrative 23,478 23,331 73,902 60,338
Loss (gain) on disposition of assets, net 985 (264) 774 (290)
Depreciation and amortization 20,638 19,030 62,460 52,217
  170,062 149,505 503,054 399,065
         
Operating income 51,228 35,667 131,530 68,174
         
Interest expense (5,022) (5,383) (15,887) (14,204)
Other, net 711 872 2,639 2,985
         
Income before income taxes 46,917 31,156 118,282 56,955
         
Income tax expense (19,073) (12,616) (46,551) (22,783)
         
Net income  $ 27,844   18,540   71,731   34,172
         
Income per common share:        
 Basic  $ 2.16   1.46   5.58   2.70
 Diluted  $ 2.14   1.44   5.52   2.67
         
Weighted average common shares outstanding:      
 Basic 12,896,812 12,688,791  12,850,529  12,651,949
 Diluted 13,016,749 12,837,530  12,989,979  12,806,716
CONTACT: Trent J. Carman, Chief Financial Officer, 
         (303) 792-7591