Air Methods (AIRM) 8-K Air Methods Reports Second Quarter 2016 Results

EXHIBIT 99.1

Air Methods Reports Second Quarter 2016 Results

DENVER, Colo., Aug. 04, 2016 (GLOBE NEWSWIRE) -- Air Methods Corporation (Nasdaq:AIRM), the global leader in air medical transportation, today reported financial results for the quarter ended June 30, 2016.

Second Quarter 2016 Results:

• Revenue of $292.6 million, compared to $263.6 million for the second quarter of 2015, an increase of 11.0%.
• Diluted earnings per share from continued operations of $0.70, compared to $0.69 for the second quarter of 2015, an increase of 1.4%.
• EBITDA from continuing operations of $76.2 million, compared to $71.2 million for the second quarter of 2015, an increase of 7.0%.
• The company repurchased 688,210 shares in the second quarter and an additional 718,000 shares in the third quarter through August 3, 2016.

Aaron Todd, CEO of Air Methods, stated, “While we continued to grow the company with 11.0% top line growth in the second quarter, lower than planned air medical transport and tourism passenger volumes resulted in weaker earnings growth. The accelerated training for Tri-State employees is mostly complete, resulting in improved in-service rates and transports in July. Tourism passenger volumes also have recovered in July, declining only 1.6% over the prior year. With these issues now behind us, we are still positioned to achieve our financial targets for the full year.”

Second Quarter Performance by Segment

For the second quarter, Air Medical Services (AMS) revenue increased by 12.6% to $252.9 million compared to $224.7 million in the prior-year quarter. The acquisition of Tri-State Care Flight (TSCF) added $11.2 million in revenues. Excluding TSCF, revenues grew 7.6%. Key operating statistics include:

		2Q16		2Q15	YOY Change (%)
Transports		18,662		16,105		15.9	%
Transports + Weather Cancellations		24,626		22,071		11.6	%
Same-Base Transports (SBTs)		15,464		15,397		0.4	%
SBT + Weather Cancellations		20,544		21,120		-2.7	%
Net Revenue per Transport	$	11,516	$	11,298		1.9	%

Flight center and aircraft operations expenses increased 11.1% to $144.2 million in the current quarter compared to $129.8 million in the prior year quarter. TSCF added $8.6 million in flight center and aircraft operations expenses. Excluding TSCF, these expenses increased 4.4% despite revenues growing 7.6% for the corresponding AMS operations. Drivers of the margin expansion include the Company’s investment in its fleet and lower fuel prices. AMS segment net income increased 6.6% to $55.4 million compared to $51.9 million for the second quarter of 2015. On a stand-alone basis, TSCF lost $3.2 million (pre-tax) in the quarter. This does not include the positive contribution from transports retained at consolidated bases.

Tourism revenues decreased 6.4% to $32.2 million in the current quarter compared to $34.4 million in the prior-year quarter.  Total passengers decreased 9.7% to 114,615 during the current quarter compared to 126,953 in the prior-year quarter. Total revenue per passenger increased 3.7% to $281 in the current quarter compared to $271 in the prior-year quarter. Tourism operating expenses decreased 4.1% to $22.1 million in the current quarter compared to $23.1 million in the prior-year quarter. The year-over-year decline was driven primarily by a reduction in maintenance and fuel expense. Tourism segment net income was $2.0 million in the current quarter compared to net income of $3.9 million in the prior-year quarter. 

United Rotorcraft’s external revenue increased 66.4% to $7.4 million in the current quarter compared to $4.4 million in the prior-year quarter. Its segment external earnings improved from a loss of $0.4 million in the year-ago period to a loss of $0.2 million in the current-year quarter.

Share Repurchase Program

During the second quarter and current quarter-to-date through August 3, 2016, the Company repurchased 1.4 million shares for $50.6 million bringing the total number and amount of shares repurchased since the program was initiated to 2.1 million and $77.5 million, respectively. The company presently has $122.5 million remaining on its authorized program.

3Q16 Update

The Company also provided an update on preliminary July 2016 air medical and tourism flight volume. Total community-based transports increased 9.6% to 6,376 during July 2016 compared to 5,816 in July 2015.  July 2016 same-base transports decreased by 354 transports as compared with July 2015. Weather cancellations during July 2016 for these same bases decreased by 6 compared with the prior-year month.

Tourism passengers declined 1.6% to 49,203 during July 2016 compared to 50,015 in July 2015.

Basic and diluted earnings per share from continuing operations for the six-month period ended June 30, 2016 were decreased by $0.02 for an adjustment to the value of equity put options related to both of our redeemable non-controlling interests in consolidated subsidiaries. While net income on the consolidated statement of comprehensive income is not decreased for the valuation adjustment, earnings per share are required to be calculated after decreasing net income for the change in valuation. Basic and diluted earnings per share in the quarters-ended June 30, 2016 and  2015 and six-month period ended June 30, 2015 were not impacted by the adjustment.

Second 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 52621462, 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.

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 (i) expected financial results for 2016; and (ii) preliminary results of community-based transports, same-base transports and weather cancellations and tourism passengers for July 2016, 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 third quarter 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; shifts in payer mix resulting in a decrease of the number of privately insured transports, the continuation and/or renewal of air medical service contracts; 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. 

Please contact Christina Brodsly at (303) 256-4122 to be included on the Company’s e-mail distribution list. 

– FINANCIAL STATEMENTS ATTACHED –

AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(unaudited)
		June 30, 2016	December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	6,619	5,808
Trade receivables, net		414,470	376,300
Other current assets		83,724	91,251
Total current assets		504,813	473,359
Net property and equipment		866,950	799,656
Other assets, net		435,889	278,693
Total assets	$	1,807,652	1,551,708
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable related to aircraft pending long-term financing	$	-	2,955
Current portion of indebtedness		70,187	58,304
Accounts payable, accrued expenses and other		95,453	87,211
Total current liabilities		165,640	148,470
Long-term indebtedness		865,397	635,615
Other non-current liabilities		190,348	185,198
Total liabilities		1,221,385	969,283
Redeemable non-controlling interests		155	8,550
Total stockholders' equity		586,112	573,875
Total liabilities and stockholders' equity	$	1,807,652	1,551,708

AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share amounts)
(unaudited)
		Three Months Ended					Six Months Ended
		June 30,					June 30,
			2016		2015			2016		2015
Revenue:
Patient transport revenue, net	$		215,310		182,260			413,142		344,076
Air medical services contract revenue			34,175		38,775			67,819		79,414
Tourism revenue			32,234		34,444			59,461		62,665
Product operations			7,406		4,450			14,363		8,587
Dispatch and billing service revenue			3,447		3,673			7,185		7,159
Total revenue			292,572		263,602			561,970		501,901
Expenses:
Operating expenses			177,341		160,090			343,765		316,833
General and administrative			39,992		33,622			79,384		69,347
Depreciation and amortization			23,499		21,154			46,065		41,198
			240,832		214,866			469,214		427,378
Operating income			51,740		48,736			92,756		74,523
Interest expense			(7,908	)	(5,163	)		(15,708	)	(10,148	)
Other, net			464		1,172			774		1,536
Income from continuing operations before income taxes			44,296		44,745			77,822		65,911
Income tax expense			(17,315	)	(17,339	)		(30,417	)	(25,629	)
Income from continuing operations			26,981		27,406			47,405		40,282
Loss on discontinued operations, net of income taxes			-		(340	)		-		(349	)
Net income			26,981		27,066			47,405		39,933
Income attributable to redeemable non-controlling interests			(1	)	243			(30	)	482
Net income attributable to Air Methods Corporation and subsidiaries	$		26,982		26,823			47,435		39,451
Income per common share:
Basic
Continuing operations	$		0.70		0.69			1.21		1.01
Discontinued operations			-		(0.01	)		-		(0.01	)
Diluted
Continuing operations	$		0.70		0.69			1.20		1.01
Discontinued operations			-		(0.01	)		-		(0.01	)
Weighted average common shares outstanding - basic			38,396,241		39,272,325			38,600,029		39,267,222
Weighted average common shares outstanding - diluted			38,461,238		39,405,889			38,664,976		39,400,193

AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
				Six Months Ended
				June 30,
					2016		2015
Cash flows from operating activities:
	Net income		$		47,405		39,933
	Loss from discontinued operations, net of income taxes				-		349
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			46,065		41,198
		Deferred income tax expense			7,003		2,491
		Stock-based compensation			3,140		3,604
		Loss on disposition of assets			178		269
		Unrealized loss (gain) on derivative instrument			(970	)	256
		Loss from equity method investee			264		353
		Changes in assets and liabilities, net of effects of acquisitions			(10,746	)	19,933
		Net cash provided by continuing operating activities			92,339		108,386
		Net cash used by discontinued operating activities			-		(47	)
		Net cash provided by operating activities			92,339		108,339
Cash flows from investing activities:
	Acquisition of subsidiaries				(225,519	)	-
	Acquisition of property and equipment				(57,675	)	(48,355	)
	Payments for hospital contract conversions				-		(43,481	)
	Buy-out of previously leased aircraft				(10,529	)	(7,569	)
	Proceeds from disposition of equipment				5,189		2,664
	Decrease (increase) in other assets				(6,542	)	(10,741	)
		Net cash used by continuing investing activities			(295,076	)	(107,482	)
		Net cash provided (used) by discontinued investing activities			-		25
		Net cash used by investing activities			(295,076	)	(107,457	)
Cash flows from financing activities:
	Proceeds from issuance of common stock, net				803		408
	Purchases of common stock				(38,288	)	-
	Net borrowings (payments) under line of credit				8,000.00		-
	Payments for financing costs				(68	)	(54	)
	Proceeds from long-term debt				271,792		55,321
	Payment of long-term debt and capital lease obligations				(38,691	)	(40,861	)
		Net cash provided (used) by continuing financing activities			203,548		14,814
		Net cash provided (used) by discontinued financing activities			-		-
		Net cash provided (used) by financing activities			203,548		14,814
Increase (decrease) in cash and cash equivalents					811		15,696
Cash and cash equivalents at beginning of period					5,808		13,165
Cash and cash equivalents at end of period			$		6,619		28,861

AIR METHODS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO EBITDA
(Amounts in thousands)
(unaudited)
	Quarter Ended				Six Months Ended
	June 30,				June 30,
		2016	2015			2016	2015
Net income attributable to Air Methods Corporation and subsidiaries	$	26,982	26,823		$	47,435	39,451
Loss on discontinued operations, net of income taxes		-	(340	)		-	(349	)
Net income from continuing operations attributable to Air Methods Corporation and subsidiaries		26,982	27,163			47,435	39,800
Interest expense *		7,908	5,118			15,708	10,063
Income tax expense *		17,315	17,339			30,417	25,629
Depreciation and amortization *		23,499	21,061			46,065	41,017
Loss on disposition of assets, net *		508	531			178	269
EBITDA from continuing operations	$	76,212	71,212		$	139,803	116,778
* Excludes amounts attributable to redeemable non-controlling interests

CONTACTS: Peter P. Csapo, Chief Financial Officer, (303) 792-7561.