EXHIBIT 99.1
[GRAPHIC OMITTED]
Air Methods
- --------------------------------------------------------------------------------
The #1 Airborne Healthcare Company
AIR METHODS REPORTS 1Q2005 RESULTS AND 2Q2005 UPDATE
Company Also Announces Completion of its Refinancing of $23M in Subordinated
Indebtedness
DENVER, CO., May 10, 2005 -- Air Methods Corporation (NASDAQ: AIRM) reported
results for the quarter ended March 31, 2005 and provided an update of second
quarter 2005 events. Revenue increased 11.2% to $68.5 million from $61.6 million
in the year-ago quarter. The Company reported a net loss of $(0.5) million or
$(0.04) per basic and diluted share as compared with prior-year period net
income of $8.1 million or $0.74 per basic and diluted share. The prior-year
quarter results include an increase to net income of $8.6 million or $0.79 per
basic and diluted share from the cumulative effect of a change in accounting
principle, net of tax effect. Loss before cumulative effect of change was $(0.5)
million or $(0.05) per basic and diluted share.
As previously disclosed, the first quarter results were adversely impacted from
increases in weather- induced flight cancellations, primarily during the months
of January and February. Although March flight volume rapidly improved to a more
normalized pattern, it was insufficient to offset the adverse impact of January
and February. For the quarter, patients transported for community bases in
operation greater than one year (Same-Base Transports) decreased by 638 flights
or 9.3%. Of this amount, 497 were directly attributed to an increase in missed
flights due to weather cancellations as compared with the prior-year quarter.
The first quarter results also include approximately $0.6 million (pre-tax) in
workers compensation premium expenses for the self-insured portion of claims
relating to accidents which occurred in January. Third-party expenses incurred
during the first quarter of 2005 related to the 2004 audit of internal controls
required by Section 404 of the Sarbanes-Oxley Act exceeded $0.3 million
(pre-tax).
The lower flight volume and increased premium and regulatory compliance expenses
were more than offset by higher net revenue after bad debt expense per
community-based transport. Net revenue after bad debt per community-based
transport increased from $4,189 to $5,118, a 22.2% increase. This improvement
was attributed to price increases, improved payer mix, and more timely billing
and collection efforts. Days' sales outstanding for community-based operations
decreased from 148 days at March 31, 2004 to 105 days at March 31, 2005.
Compared to the year-ago quarter, community-based operations revenue increased
14.3% to $44.6 million, while current period divisional net income of $0.5
million compares with divisional net loss of $(0.2) million in the prior-year
period. Hospital-based operations revenue increased 8.8% to $22.4 million, while
divisional net income increased to $0.6 million from $0.1 million in the
prior-year quarter. External revenue for the Products Division decreased 24.7%
from $2.0 million to $1.5 million in the current year quarter, while divisional
net income from external projects decreased from $1.3 million to $0.4 million.
Effective yesterday, the Company completed the refinancing of its subordinated
notes totaling $23 million with lower cost, variable interest rate,
senior-secured financing with commercial banks with whom the Company has
existing relationships. The second quarter results will include the write off of
approximately $1.8 million in debt origination costs and note discount related
to the subordinated debt, as well as a $1.4 million prepayment penalty. For the
first quarter of 2005, the effective interest rate on the subordinated debt,
including amortization of debt origination costs and note discount, was 16.2%.
The current blended interest rate on the newly financed senior-secured
financing, including amortization of origination costs, is 6.8%.
The Company disclosed that weather, which began to improve in March, continued
to be moderate in April. Total community-based transports of 2,704 during the
month of April, compare favorably with an average of 2,246 per month during the
first quarter of 2005 and 2,634 during the month of March. Same-Base Transports
during the month of April decreased by 60 transports or 2.3% as compared with
the prior-year month. Weather cancellations for community bases in operation
greater than one year increased by 79 transports as compared with the prior-year
month.
Aaron Todd, CEO, stated, "We are pleased to have generated improvement in
operating results, despite the very severe weather experienced during the months
of January and February. Reimbursement rates for community-based operations
during the first quarter have exceeded expectations, while maintenance expenses
were in line with budgeted expectations. Should weather continue to be moderate
and reimbursement rates remain near current levels, our outlook for strong
growth in earnings for 2005 is a very reasonable expectation. Our outlook is
further justified with the expected decrease in interest expense associated with
our debt refinancing, excluding the effect of write-offs of origination costs,
note discount, and prepayment penalties. We are also excited about pending and
anticipated new contracts within the Products Division that we hope to announce
soon."
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 5845787,
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
------------------
aeromedical transportation, medical services and technology. The Air Medical
Services Division is the largest provider of air medical transport services for
hospitals in the world. 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 185 helicopters and
fixed wing aircraft.
[GRAPHIC OMITTED] AIRM
------
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; 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)
December 31,
March 31, 2005 2004
--------------- ------------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 2,761 2,603
Trade receivables, net 64,080 63,178
Other current assets 18,000 25,222
--------------- ------------
Total current assets 84,841 91,003
Net equipment and leasehold improvements 96,259 96,752
Other assets, net 16,417 16,968
--------------- ------------
Total assets $ 197,517 204,723
=============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Notes payable and other indebtedness $ 8,167 11,556
Accounts payable, accrued expenses and other 28,522 30,598
--------------- ------------
Total current liabilities 36,689 42,154
Long-term indebtedness 71,159 72,942
Other non-current liabilities 16,941 16,548
--------------- ------------
Total liabilities 124,789 131,644
Total stockholders' equity 72,728 73,079
--------------- ------------
Total liabilities and stockholders' equity $ 197,517 204,723
=============== ============
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Quarter Ended
March 31,
-------------------------
2005 2004
------------ -----------
Revenue:
Flight operations $ 66,958 59,577
Product operations 1,550 2,057
------------ -----------
Total revenue 68,508 61,634
------------ -----------
Expenses:
Operating expenses 56,063 50,526
General and administrative 8,763 7,522
Depreciation and amortization 2,897 2,677
------------ -----------
67,723 60,725
------------ -----------
Operating income 785 909
Interest expense (1,893) (2,087)
Other, net 373 286
------------ -----------
Loss before income taxes (735) (892)
Income tax benefit 267 348
------------ -----------
Loss before cumulative effect of change in accounting principle (468) (544)
Cumulative effect of change in accounting principle, net - 8,595
------------ -----------
Net income (loss) $ (468) 8,051
============ ===========
Income (loss) per common share - basic and diluted:
Loss before cumulative effect of change in accounting principle $ (0.04) (0.05)
Cumulative effect of change in accounting principle, net - 0.79
------------ -----------
Net income (loss) $ (0.04) 0.74
============ ===========
Basic and diluted weighted average common shares outstanding 10,998,232 10,832,455