Air Methods (AIRM) 8-K Air Methods Announces Year 2008 Financial Results

The #1 Airborne Healthcare Company

Air Methods Announces Year 2008 Financial Results

And Provides First Quarter 2009 Update

DENVER, CO., March 10, 2009 -- Air Methods Corporation (NasdaqGS: AIRM), the largest air medical transportation company in the world, reported revenue and net income for the year and fourth quarter ended December 31, 2008.

For the year, revenue increased 26% to $498.8 million compared to $396.3 million in the prior year.  Net income decreased 30% from $27.5 million, or $2.20 per diluted share, in the prior year to $19.3 million, or $1.54 per diluted share, in the current year.  The current year results include a $1.5 million ($0.12 per diluted share) decrease in income tax expense resulting from a decrease in the effective state income tax rate due to a change in Colorado statute.  The prior-year results included a decrease in income tax expense of $1.1 million ($0.08 per diluted share) resulting from approved changes in tax depreciation methods.

For the fourth quarter, revenue decreased 3% to $118.9 million as compared with $122.6 million during the prior-year period.  Net income decreased 23% to $3.7 million, or $0.30 per diluted share, compared to net income of $4.8 million, or $0.38 per diluted share, in the prior-year period.  The current-year quarter results include a $1.5 million ($0.12 per diluted share) decrease in income tax expense as discussed above, while the prior-year fourth quarter included a decrease in income tax expense of $1.1 million ($0.08 per diluted share) also discussed above.   The Company had previously announced that its current-year fourth quarter results included a 39% increase in employee healthcare costs of $1.2 million ($0.06 per diluted share after taxes) as compared with the prior-year fourth quarter, attributed to several large individual claims.

During the fourth quarter of 2008, total patients transported within community-based operations were 9,496, as compared with 10,738 during the prior-year quarter, a 12% decrease.  Patients transported for community bases in operation greater than one year (Same-Base Transports) decreased by 831 transports, or 8%, while weather cancellations for these same bases decreased by 394 transports compared with the prior-year period.  Revenue per community-based transport increased from $6,597 in the fourth quarter of 2007 and $7,047 in the third quarter of 2008, to $7,156 in the current-year fourth quarter.  Consolidated maintenance expenses per flight hour of $572 during the current-year quarter were mostly unchanged from the prior-year fourth quarter.  Fuel expenses per community-based transport decreased by 4% to $330 as compared with the prior-year quarter.

The Company also provided an update on first quarter 2009 operations to-date.  Same-Base Transports within community-based operations through February were down 424 patient transports, or 7%, as compared with the prior-year period, while weather cancellations for these same bases decreased by 664 as compared with the prior-year period.  Total community-based patient transports for the two-month period were 5,936 as compared with 6,818 in the prior-year period.  For the month of February, Same-Based Transports were down only 2%.

The Company also announced that maintenance expenses for the month of January were significantly below historical levels.  Preliminary maintenance expenses were approximately 20% below the 2008 monthly average and January 2008 actual results.  In addition, net revenue per community-based transport in January reflected healthy increases over the fourth quarter 2008 average.  This improvement was attributed, in part, to the 5% price increase in gross charges effective January 1, 2009.  Fuel expenses per community-based transport in January were $241, reflecting a 24% decrease from the prior-year month.

Aaron Todd, CEO of Air Methods, commented, “We are pleased with our fourth quarter results considering the recent softness in demand for service caused by the current economic environment.   Fuel prices and maintenance expenditures showed moderation during the last quarter of 2008 and have continued to improve significantly during the first month of 2009.  Our reimbursement continues to reflect benefits from previous price increases, while our flight volume through February is in line with our beginning-of-the-year expectations.”

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 88611116, 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 320 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.  Please contact Christine Clarke at (303) 792-7579 to be included on the Company’s fax and/or mailing list.

– FINANCIAL STATEMENTS ATTACHED –

	December 31, 2008		December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	13,147	$	5,134
Trade receivables, net		133,467		135,633
Other current assets		61,134		74,090
Total current assets		207,748		214,857
Net property and equipment		146,167		114,746
Other assets, net		41,009		39,949
Total assets	$	394,924	$	369,552
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable related to assets held for sale	$	19,520	$	24,203
Current portion of indebtedness		15,638		18,350
Accounts payable, accrued expenses and other		56,628		59,546
Total current liabilities		91,786		102,099
Long-term indebtedness		85,858		76,751
Other non-current liabilities		56,816		48,682
Total liabilities		234,460		227,532
Total stockholders' equity		160,464		142,020
Total liabilities and stockholders' equity	$	394,924	$	369,552

	Quarter Ended						Year Ended
	December 31,						December 31,
	2008			2007			2008			2007
Revenue:
Flight operations	$	114,886			118,934			485,184			386,377
Product operations		4,026			3,675			13,618			9,972
Total revenue		118,912			122,609			498,802			396,349
Expenses:
Operating expenses		93,144			94,991			381,500			279,006
General and administrative		16,809			15,719			67,480			53,298
Depreciation and amortization		4,462			4,133			17,090			14,418
		114,415			114,843			466,070			346,722
Operating income		4,497			7,766			32,732			49,627
Interest expense		(1,254	)		(1,700	)		(5,197	)		(5,609	)
Loss on early extinguishment of debt		-			-			-			(757	)
Other, net		763			629			2,943			2,187
Income before income taxes		4,006			6,695			30,478			45,448
Income tax expense		(270	)		(1,872	)		(11,209	)		(17,911	)
Net income	$	3,736			4,823			19,269			27,537
Income per common share:	$	0.31			0.40			1.59			2.30
Basic	$	0.30			0.38			1.54			2.20
Diluted
Weighted average common shares outstanding:
Basic		12,107,981			12,095,296			12,155,144			11,953,871
Diluted		12,343,920			12,634,687			12,530,381			12,512,077