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Air Methods Reports 3Q2009 Results and 4Q2009 Update
Fully-Diluted Earnings Per-Share of $1.01 Reflects 51% Growth in Net Income
DENVER, Nov. 5 /PRNewswire-FirstCall/ -- Air Methods Corporation (Nasdaq: AIRM) reported results for the quarter ended September 30, 2009. Revenue increased 3% to $137.6 million from $133.8 million in the year-ago quarter. For the nine-month period, revenue increased 3% to $390.4 million, up from $379.9 million in the prior-year nine-month period. The prior-year quarter and nine-month period included $7.3 million in revenue generated from hurricane response activities, as compared with no revenue from such activities during the current-year periods. Excluding revenue generated from hurricane response activities in the prior-year periods, revenue increased 9% and 5% for the quarter and nine-month period ended September 30, 2009, respectively.
For the quarter, net income increased 51% to $12.6 million, or $1.01 per diluted share, as compared with prior-year quarter net income of $8.4 million, or $0.67 per diluted share. Net income for the nine-month period increased 69% to $26.2 million, or $2.12 per diluted share, compared to $15.5 million, or $1.23 per diluted share, for the prior-year period. The current-year and prior-year quarters included pre-tax net gains on disposition of assets of $0.2 million and $1.1 million, respectively.
Third Quarter Highlights
Community-Based Services: Revenue from Community-Based Services decreased 3% to $80.2 million from $82.6 million, while segment net income increased 4% to $18.3 million during the third quarter, as compared with segment net income of $17.5 million in the prior-year quarter. The decrease in revenue is entirely attributed to the absence of hurricane response revenue in the current-year quarter. Excluding the hurricane response revenue generated in the prior-year quarter, Community-Based Services revenue increased 7%. Total community-based patient transports increased slightly to 10,752 in the current-year quarter from 10,690 in the prior-year quarter. Community-based patient transports for bases open greater than one year (Same-Base Transports) decreased 2% or 171 transports, as compared with the prior-year quarter. Weather cancellations for these same-base locations increased by 220 compared with the prior-year quarter.
The increase in segment net income is attributed to improved net revenue per community-based transport, combined with lower maintenance and fuel expenditures. Net revenue per community-based transport increased 7% to $7,509, compared with $7,047 in the prior-year quarter. Divisional maintenance expense decreased by $1.6 million over the prior-year quarter, reflecting an 18% decrease in cost per flight hour. In addition, fuel expense decreased by $2.1 million over the prior-year quarter, reflecting a 41% decrease per hour flown. The improvement in net revenue per community-based transport is attributed to recent price increases, while reduction in maintenance expenditures is attributed to fleet rejuvenation activities and converting several twin-engine helicopters to more efficient single-engine aircraft. Decrease in fuel expense reflects reduced cost per gallon.
Hospital-Based Services: Revenue from Hospital-Based Services increased by 6% to $51.6 million from $48.6 million, while segment net income increased to $5.3 million in the current-year quarter from $0.4 million during the prior-year third quarter. The increase in segment net income is primarily attributed to decreased maintenance expenses and improved pricing from renewed contracts. Maintenance expense for the quarter decreased by $4.3 million, reflecting a 21% decrease in cost per flight hour. This reduction in expense is attributed to the same factors discussed above within the Community-Based Services segment.
Products Division: Revenue, excluding revenue generated from internal projects, increased to $5.9 million from $2.7 million in the prior-year quarter. Segment net income, excluding internal projects, increased to $1.8 million from $0.7 million in the prior-year quarter.
The Company also provided an update on October 2009 flight volume. Total community-based transports during October 2009 were 3,065 compared with 3,495 during October 2008. Same-Base Transports decreased 489 transports or 15%, while weather cancellations for these same bases increased by 636 transports. Weather cancellations almost doubled as compared with the prior-year month, reflecting very severe weather conditions.
Aaron Todd, Chief Executive Officer, stated, "We are pleased with the continued strength in our financial performance through the third quarter of 2009. Despite more severe weather and the lack of hurricane response activities in the current-year quarter compared with the prior-year quarter, the Company has achieved strong earnings growth. Our cost reduction initiatives continue to improve our operating margins and our fleet rejuvenation and conversion activities will be ongoing throughout future periods. Our strong cash flows from operating activities of $52 million has allowed the Company to repay its line of credit in full, while also providing liquidity to finance aircraft purchases and safety technology upgrades. Although we experienced our most severe weather month of the entire year during October, our Same-Base Transports would have increased by over 4% absent the increase in weather cancellations."
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 (800) 642-1687 (domestic) or (706) 645-9291 (international), access number 38313928, 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 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 300 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 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)
September 30, December 31,
2009 2008
------------- ------------
ASSETS
------
Current assets:
Cash and cash equivalents $23,181 13,147
Trade receivables, net 126,109 133,467
Other current assets 58,187 61,134
------ ------
Total current assets 207,477 207,748
Net property and equipment 183,603 146,167
Other assets, net 38,338 41,009
------ ------
Total assets $429,418 394,924
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable related to assets held for sale $12,531 19,520
Current portion of indebtedness 15,330 15,638
Accounts payable, accrued expenses and other 64,152 56,628
------ ------
Total current liabilities 92,013 91,786
Long-term indebtedness 88,429 85,858
Other non-current liabilities 56,776 56,816
------ ------
Total liabilities 237,218 234,460
Total stockholders' equity 192,200 160,464
------- -------
Total liabilities and stockholders' equity $429,418 394,924
======== =======
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------ -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Flight operations $131,723 131,079 370,917 370,298
Product operations 5,879 2,753 19,448 9,592
----- ----- ------ -----
Total revenue 137,602 133,832 390,365 379,890
------- ------- ------- -------
Expenses:
Operating expenses 96,290 100,141 285,197 290,924
General and administrative 15,978 15,947 48,388 50,671
Gain on disposition of
assets, net (239) (1,130) (772) (2,568)
Depreciation and
amortization 4,758 4,328 13,976 12,628
----- ----- ------ ------
116,787 119,286 346,789 351,655
------- ------- ------- -------
Operating income 20,815 14,546 43,576 28,235
Interest expense (1,285) (1,270) (3,643) (3,943)
Other, net 935 928 2,698 2,180
--- --- ----- -----
Income before income taxes 20,465 14,204 42,631 26,472
Income tax expense (7,861) (5,835) (16,387) (10,939)
------ ------ ------- -------
Net income $12,604 8,369 26,244 15,533
======= ===== ====== ======
Income per common share:
Basic $1.02 0.69 2.15 1.28
Diluted $1.01 0.67 2.12 1.23
Weighted average common
shares outstanding:
Basic 12,337,120 12,179,714 12,218,369 12,170,980
Diluted 12,498,320 12,522,932 12,397,026 12,590,252
SOURCE Air Methods Corporation