EXHIBIT 99.1
AIR METHODS
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The #1 Airborne Healthcare Company
AIR METHODS REPORTS 3Q2005 RESULTS
Company Earns $0.50 of Basic EPS, Revenue Increases 31% to $90.5 Million
DENVER, CO., November 9, 2005 -- Air Methods Corporation (NASDAQ: AIRM) reported
results for the quarter ended September 30, 2005. Revenue increased 31% to $90.5
million from $68.9 million in the year-ago quarter. For the nine-month period,
revenue increased 20% to $246.7 million, up from $204.8 million in the
prior-year nine-month period.
For the quarter, net income increased over 2.7 times to $5.5 million ($0.50 per
basic and $0.47 per diluted share) as compared with prior-year quarter net
income of $1.5 million ($0.13 per basic and diluted share). Net income for the
nine-month period was $8.4 million ($0.76 per basic and $0.72 per diluted share)
compared to $12.0 million ($1.11 per basic and $1.06 per diluted share) for the
prior-year nine-month period. The current year nine-month period includes a loss
on early extinguishment of debt of $3.1 million before the effect of income
taxes. Net of income taxes, this loss reduced nine-month net income by $1.9
million, or $0.17 per basic share. The prior-year nine-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 $3.4 million, or $0.32 per basic and $0.30
per diluted share, for the prior-year nine-month period.
Third Quarter Highlights
Community-Based Operations: Revenue from community-based operations increased
42% to $61.8 million, and segment net income increased nearly two-fold to $7.7
million during the third quarter, as compared with $2.7 million in the
prior-year quarter. The increase in segment net income was primarily attributed
to increases in net revenue after bad debt expense per transport, which
increased from $4,339 in the prior-year quarter to $5,072 in the current
quarter. The increase in net reimbursement was attributed to price increases and
improved billing and collection processes. Community-based transports completed
during the third quarter were 8,733 as compared with 8,018 in the prior-year
quarter. Community-based transports for bases in operation greater than one year
(Same-Base Transports) increased by 251, or 3%, while weather cancellations for
bases in operation greater than one year increased by 354, or 27%, from the
prior-year quarter. Improvement in segment net income was also attributed to a
decrease in maintenance expense per flight hour as compared with the prior year
quarter. Even with flight hours increasing by 18%, maintenance expense was
relatively unchanged at $5.4 million, as compared with the prior-year quarter.
This decrease in maintenance expense per flight hour was attributed, in part, to
fewer engine overhaul events, deployment of new aircraft with lower per hour
costs, and redeployment of older aircraft with higher per hour costs into lower
use environments.
Hospital-Based Operations: Revenue from hospital-based operations increased by
12% to $26.3 million and segment net income increased over 2.4 times to $3.1
million during the third quarter as compared with $0.9 million in the prior-year
quarter. The increase in revenue is primarily attributed to the expansion of
eight existing contracts either during or subsequent to the third quarter of
2004 and from annual price increases. The increase in segment net income is
primarily attributed to decreases in maintenance expenses relative to revenue
flight hours. Divisional maintenance expense decreased by approximately 11% to
$7.2 million, while divisional revenue flight hours increased by about 11%. This
decrease in maintenance expense was attributed to the same factors as those
stated above within the community-based operations. The division also benefited
from net contribution earned on $2.1 million in incremental quarterly revenue
from new operating bases begun either during or subsequent to the prior-year
third quarter.
Products Division: Revenue, including revenue generated from internal projects,
increased 7% to $3.9 million, while segment net income decreased by 37% to $0.8
million during the third quarter as compared with the prior-year quarter.
Segment net income did not increase in proportion to revenue growth due to
changes in product mix which reduced the overall margin percentage.
Aaron Todd, Chief Executive Officer, stated, "We are pleased that our third
quarter financial results reflect a continuation of the strong performance
experienced during the second quarter of this year. Reimbursement rates for
community-based operations have remained healthy, while related Same-Base
Transport flight volumes have shown growth, despite increases in weather
cancellations. The overall decrease in maintenance expense, even with growth in
flight volume, confirms that our fleet rejuvenation initiatives are helping to
moderate our maintenance expenditures. We also have continued to benefit from
reduced interest expense attributed to the refinancing of our subordinated debt
during the second quarter. We will continue to see this benefit over the next
three quarters, as well."
"We are also happy to report that our fourth quarter has begun with healthy
flight volume in October. Same-Base Transports for community-based operations
during the month were 7% or 165 transports higher than October 2004, while
weather-related flight cancellations decreased by 33% or 285 transports over the
prior-year month, " 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)
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642-1687 (domestic) or (706) 645-9291 (international), access number 1229552,
for 3 days following the call; and the web cast can be accessed at
www.airmethods.com for 30 days.
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Air Methods Corporation (www.airmethods.com) is a leader in emergency
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aeromedical transportation and medical services. 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 approximately 190 helicopters and
fixed wing aircraft.
AIRM
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NASDAQ
LISTED
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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.
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CONTACTS: Aaron D. Todd, Chief Executive Officer, (303) 792-7413 or Joe Dorame
at The RCG Group, at (602) 889-9700. 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,
September 30, 2005 2004
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ASSETS
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Current assets:
Cash and cash equivalents $ 3,066 2,603
Trade receivables, net 80,237 63,178
Other current assets 18,074 25,222
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Total current assets 101,377 91,003
Net equipment and leasehold improvements 92,718 96,752
Other assets, net 15,978 16,968
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Total assets $ 210,073 204,723
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Notes payable and other indebtedness $ 11,894 11,556
Accounts payable, accrued expenses and other 28,832 30,598
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Total current liabilities 40,726 42,154
Long-term indebtedness 60,346 72,942
Other non-current liabilities 27,333 16,548
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Total liabilities 128,405 131,644
Total stockholders' equity 81,668 73,079
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Total liabilities and stockholders' equity $ 210,073 204,723
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AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
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2005 2004 2005 2004
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Revenue:
Flight operations $ 88,094 66,958 240,917 199,396
Product operations 2,444 1,991 5,809 5,442
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Total revenue 90,538 68,949 246,726 204,838
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Expenses:
Operating expenses 68,475 53,565 190,036 161,705
General and administrative 9,146 8,643 26,974 24,156
Depreciation and amortization 3,022 2,729 8,890 8,140
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80,643 64,937 225,900 194,001
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Operating income 9,895 4,012 20,826 10,837
Interest expense (1,228) (1,816) (4,646) (5,936)
Loss on early extinguishment of debt - - (3,104) -
Other, net 361 182 694 745
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Income before income taxes 9,028 2,378 13,770 5,646
Income tax expense (3,530) (926) (5,416) (2,220)
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Income before cumulative effect of change in accounting principle 5,498 1,452 8,354 3,426
Cumulative effect of change in accounting principle, net - - - 8,595
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Net income $ 5,498 1,452 8,354 12,021
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Income per common share - basic:
Income before cumulative effect of change in accounting
principle $ 0.50 0.13 0.76 0.32
Cumulative effect of change in accounting principle, net - - - 0.79
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Net income $ 0.50 0.13 0.76 1.11
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Income per common share - diluted:
Income before cumulative effect of change in accounting
principle $ 0.47 0.13 0.72 0.30
Cumulative effect of change in accounting principle, net - - - 0.76
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Net income $ 0.47 0.13 0.72 1.06
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Weighted average common shares outstanding:
Basic 11,034,754 10,921,369 11,020,936 10,873,783
Diluted 11,634,024 11,296,854 11,536,716 11,272,876