EXHIBIT 99.1
[GRAPHIC OMITTED] AIR METHODS
- --------------------------------------------------------------------------------
The #1 Airborne Healthcare Company
AIR METHODS REPORTS 2Q2004 RESULTS
Revenue Increases 29% for the Quarter; Diluted Earnings per Share of $0.22
DENVER, CO., August 12, 2004 -- Air Methods Corporation (NASDAQ: AIRM) reported
results for the quarter ended June 30, 2004. Revenue increased 29% to $74.3
million from $57.5 million in the year-ago quarter. For the six-month period,
revenue increased 24% to $135.9 million, up from $109.8 million in the
prior-year six-month period.
Net income increased 93% to $2.5 million or $0.23 per basic and $0.22 per
diluted share as compared with prior-year quarter net income of $1.3 million or
$0.14 per basic and $0.13 per diluted share. Net income for the six-month
period was $10.6 million ($0.97 per basic and $0.94 per diluted share) compared
to $0.8 million ($0.08 per basic and diluted share) for the prior-year six-month
period. The current six-month period results include a first quarter increase
to net income of $8.6 million or $0.79 per basic and $0.76 per diluted share
from the cumulative effect of a change in accounting principle, net of tax
effect. Income before cumulative effect of change in accounting principle was
$2.0 million or $0.18 per basic and diluted share for the six-month period.
The cumulative effect stated above relates to the Company's decision to change
its method of accounting for major engine and airframe component overhaul costs
from the accrual method to the direct expense method, effective January 1, 2004.
Under the direct expense method, maintenance costs are recognized as expense as
maintenance services are performed. Pro forma results, assuming the change in
accounting principle had been applied retroactively, would reflect net income of
$2.6 million and basic and diluted income per share of $0.28 and $0.27,
respectively, for the quarter ended June 30, 2003. Pro forma results for the
six-month period ended June 30, 2003 would reflect net income of $3.5 million
($0.36 per basic and $0.35 per diluted share).
SECOND QUARTER HIGHLIGHTS
Community-Based Operations: Revenue from community-based operations increased
51% to $50.8 million, and segment net income increased 65% to $4.4 million
during the second quarter, as compared with the prior-year quarter. These
increases were primarily the result of the addition of 15 new bases during or
subsequent to the second quarter of 2003 and an 11% increase over the prior-year
period in transports for bases in operation greater than one year (Same-Base
Transports). Net revenue after bad debt expense per transport for the current
year second quarter was $4,414, as compared with $4,445 in the prior-year
quarter and $4,189 in the first quarter of 2004.
Hospital-Based Operations: Revenue from hospital-based operations decreased by
0.1% to $22.1 million and segment net income decreased 26% to $1.2 million
during the second quarter as compared with the prior-year quarter. The slight
decrease in revenue was attributed to the discontinuance of service under three
contracts and the conversion of another contract to the community-based
operating model prior to the second quarter of 2004, offset by a 6.9% increase
in flight volume, annual price increases, and the addition of one new hospital
contract. The decrease in divisional earnings was attributed to unfavorable
budget variances in maintenance expense that exceeded $800,000 during the
current quarter due, in part, to higher than anticipated engine overhaul
expenditures. Maintenance expense as a percentage of divisional revenue
increased to 31.4% from 26.5% as compared with the prior-year quarter.
Products Division: Revenue, including revenue generated from internal projects,
increased 23% to $3.1 million, while segment net income increased $578,000 to
$800,000 during the second quarter as compared with the prior-year quarter. The
increase in earnings was attributed to higher margins from changes in product
mix and from a decrease in fixed production costs as a percentage of revenue.
Aaron Todd, Chief Executive Officer, stated, "We are very pleased with our
second quarter results. Flight volumes within both services divisions
experienced healthy growth over the prior-year quarter due to more moderate
weather patterns and elevated marketing efforts. Although net revenue after bad
debt expense per community-based transport was largely unchanged from the
prior-year quarter, the Company did experience a 5.4% improvement in this
measure over the first quarter of 2004. While aggregate maintenance expenses
for both divisions were $1.6 million higher than anticipated for the current
quarter, the Company was still able to achieve healthy growth in net income. I
am also pleased to report that our first quarter efforts to enhance our
collection capabilities have helped reduce our debt, net of cash, by over $11
million during the second quarter."
"July Same-Base Transports were 2.3% lower than July 2003 primarily due to
higher weather-related flight cancellations, but total community-based
transports for the month still exceeded June 2004 results by 1.7%. With the
strength of our second quarter results, the Company is presently on track to
achieve its objective to grow basic earnings per share by 20% or greater in
2004," said Todd.
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 (888)
396-5640 (domestic) or (706) 643-0580 (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 8985040,
for 3 days following the call; and the web cast can be accessed at
www.airmethods.com for 30 days.
- ------------------
Air Methods Corporation (http://www.airmethods.com/) is a leader in emergency
--------------------------
aeromedical transportation, medical services and technology. The Air Medical
Services Division is the largest provider of air medical transport services for
hospitals. The LifeNet 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 180 helicopters and fixed
wing aircraft.
AIRM
[GRAPHIC OMITTED] NASDAQ
LISTED
- --------------------------------------------------------------------------------
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; successful integration of Rocky Mountain Holdings, LLC operations
and other matters set forth in the Company's public filings.
- --------------------------------------------------------------------------------
CONTACTS: Aaron D. Todd, Chief Executive Officer, (303) 792-7413 or RCG Capital
Markets Group, Inc. at (480) 675-0400. 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)
June 30, 2004 December 31, 2003
-------------- -----------------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 5,298 5,574
Trade receivables, net 63,226 59,566
Other current assets 16,800 17,204
-------------- -----------------
Total current assets 85,324 82,344
Net equipment and leasehold improvements 94,267 113,077
Other assets, net 19,058 18,586
-------------- -----------------
Total assets $ 198,649 214,007
============== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Notes payable and other indebtedness $ 8,627 8,996
Accounts payable, accrued expenses and other 24,638 29,666
-------------- -----------------
Total current liabilities 33,265 38,662
Long-term indebtedness 76,782 76,931
Other non-current liabilities 17,079 37,726
-------------- -----------------
Total liabilities 127,126 153,319
Total stockholders' equity 71,523 60,688
-------------- -----------------
Total liabilities and stockholders' equity $ 198,649 214,007
============== =================
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -----------------------
2004 2003 2004 2003
------------ ---------- ----------- ----------
Revenue:
Flight operations $ 72,861 55,638 132,438 106,358
Product operations 1,394 1,826 3,451 3,404
------------ ---------- ----------- ----------
Total revenue 74,255 57,464 135,889 109,762
------------ ---------- ----------- ----------
Expenses:
Operating expenses 58,810 45,459 110,536 89,463
General and administrative 6,795 5,520 13,117 10,224
Depreciation and amortization 2,734 2,808 5,411 5,556
------------ ---------- ----------- ----------
68,339 53,787 129,064 105,243
------------ ---------- ----------- ----------
Operating income 5,916 3,677 6,825 4,519
Interest expense (2,033) (1,928) (4,120) (3,934)
Other, net 277 394 563 712
------------ ---------- ----------- ----------
Income before income taxes 4,160 2,143 3,268 1,297
Income tax expense (1,642) (836) (1,294) (506)
------------ ---------- ----------- ----------
Income before cumulative effect of change in accounting principle 2,518 1,307 1,974 791
Cumulative effect of change in accounting principle, net - - 8,595 -
------------ ---------- ----------- ----------
Net income $ 2,518 1,307 10,569 791
============ ========== =========== ==========
Income per common share - basic:
Income before cumulative effect of change in accounting principle $ 0.23 0.14 0.18 0.08
Cumulative effect of change in accounting principle, net - - 0.79 -
------------ ---------- ----------- ----------
Net income $ 0.23 0.14 0.97 0.08
============ ========== =========== ==========
Income per common share - diluted:
Income before cumulative effect of change in accounting principle $ 0.22 0.13 0.18 0.08
Cumulative effect of change in accounting principle, net - - 0.76 -
------------ ---------- ----------- ----------
Net income $ 0.22 0.13 0.94 0.08
============ ========== =========== ==========
Weighted average common shares outstanding:
Basic 10,867,002 9,561,705 10,849,728 9,541,905
Diluted 11,264,313 9,931,526 11,260,892 9,896,207