EXHIBIT 99.1
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Air Methods
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The #1 Airborne Healthcare Company
AIR METHODS REPORTS 3Q2006 RESULTS AND 4Q2006 UPDATE
Company Earns $0.78 Diluted EPS; Revenue Grows 28%
DENVER, CO., November 7, 2006 -- Air Methods Corporation (NASDAQ: AIRM) reported
results for the quarter ended September 30, 2006. Revenue increased 28% to
$116.1 million from $90.5 million in the year-ago quarter. For the nine-month
period, revenue increased 26% to $310.8 million, up from $246.7 million in the
prior-year nine-month period.
For the quarter, net income increased 75% to $9.6 million, or $0.78 per diluted
share, as compared with prior-year quarter net income of $5.5 million, or $0.47
per diluted share. Net income for the nine-month period was $16.0 million, or
$1.30 per diluted share, compared to $8.4 million, or $0.72 per diluted share
for the prior-year nine-month period. The prior-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 net income for the
nine-month period in the prior year by $1.9 million, or $0.16 per diluted share.
The current-year quarter includes a $1.4 million pre-tax gain from a litigation
settlement. Net of income taxes, this gain increased net income by $0.9 million,
or $0.07 per diluted share.
THIRD QUARTER HIGHLIGHTS
Community-Based Operations: Revenue from community-based operations increased
40% to $86.7 million, and segment net income increased 140% to $18.6 million
during the third quarter, as compared with $7.7 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 $5,072 in the prior-year quarter to $6,716 in the current quarter. The
increase in net reimbursement was attributed to price increases and to increases
to bad debt reserves during the prior-year quarter for lower than anticipated
collections. The current-year quarter collections were mostly in-line with
expectations. Days' sales outstanding for community-based operations decreased
by 13 days during the quarter. Community-based transports completed during the
third quarter were 9,186 as compared with 8,733 in the prior-year quarter.
Community-based transports for bases in operation greater than one year
(Same-Base Transports) decreased by 332, or 4%, due to higher weather
cancellations. Weather cancellations for bases in operation greater than one
year increased by 427, or 27%, from the prior-year quarter. Segment net income
in the current-year quarter also reflects the above stated $1.4 million gain
from the settlement of a lawsuit for lost revenue associated with a fatal
accident in 2002. Maintenance expense increased by $1.2 million, or 22%,
despite only a 5% increase in patients transported, due to higher overhaul and
parts replacement events and inflationary influences.
Hospital-Based Operations: Revenue from hospital-based operations increased by
8% to $28.4 million, while segment net income decreased from $3.1 million during
the prior-year third quarter, to a net loss of $0.1 million in the current-year
quarter. The increase in revenue is primarily attributed to the expansion of
six existing contracts, the addition of two new contracts either during or
subsequent to the third quarter of 2005, and annual price increases. The
decrease in segment earnings is partially attributed to increases in pilot
compensation and benefits of $0.9 million related to the implementation of the
collective bargaining agreement effective January 1, 2006. The decrease is also
attributed to a $2.8 million, or 41%, increase in maintenance expense, despite a
3% decrease in patient flights, due to higher overhaul and parts replacement
events, and inflationary influences.
Products Division: Revenue, including revenue generated from internal projects,
increased 78% to $7.0 million, while segment net income increased by 86% to $1.5
million during the third quarter as compared with the prior-year quarter. The
majority of the revenue (80%) and segment net income (65%) related to internal
projects and has been eliminated in the consolidated financial results.
Aaron Todd, Chief Executive Officer, stated, "We are obviously pleased that our
third quarter financial results reflect a return to strong year-over-year growth
in both top line and bottom line. As anticipated, reimbursement rates for
community-based operations improved significantly over this year's second
quarter and prior-year third quarter, while our days' sales outstanding have
decreased. We are especially pleased to have generated strong results given the
impact of weather in reducing our Same-Base Transports and the higher than usual
maintenance costs incurred during the quarter."
"We are also happy to report that our fourth quarter has begun with healthy
flight volume in October. Community-based transports increased 10% to 2,972 in
October, as compared with 2,706 in October of last year. Same-Base Transports
for community-based operations during the month were 84 transports, or 3%,
higher than October 2005, while weather-related flight cancellations decreased
by 83 transports, or 13%, over the prior-year month. Although the increase in
the cost of our operations continues to outpace the rate of inflation, we remain
confident that eventual moderation in maintenance activity levels, combined with
strong market conditions and increased pricing, should provide for continued
earnings growth moving forward. In addition, we anticipate continued growth in
our operations through base expansions at a similar pace to recent quarters,"
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 9285700,
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 one of the largest community-based providers
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 200 helicopters and fixed
wing aircraft.
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AIRM
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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---FINANCIAL STATEMENTS ATTACHED---
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
September 30, December 31,
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2006 2005
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ASSETS
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Current assets:
Cash and cash equivalents $ 3,805 3,218
Trade receivables, net 106,490 83,567
Other current assets 43,130 25,726
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Total current assets 153,425 112,511
Net property and equipment 96,232 93,530
Other assets, net 14,874 15,491
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Total assets $ 264,531 221,532
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Notes payable and other indebtedness $ 27,801 16,502
Accounts payable, accrued expenses and other 33,186 29,170
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Total current liabilities 60,987 45,672
Long-term indebtedness 67,852 58,392
Other non-current liabilities 30,812 31,257
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Total liabilities 159,651 135,321
Total stockholders' equity 104,880 86,211
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Total liabilities and stockholders' equity $ 264,531 221,532
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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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2006 2005 2006 2005
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Revenue:
Flight operations $ 114,517 88,094 306,143 240,917
Product operations 1,571 2,439 4,616 5,809
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Total revenue 116,088 90,533 310,759 246,726
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Expenses:
Operating expenses 85,386 68,470 240,966 190,036
General and administrative 10,341 9,146 30,189 26,974
Depreciation and amortization 3,239 3,022 9,604 8,890
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98,966 80,638 280,759 225,900
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Operating income 17,122 9,895 30,000 20,826
Interest expense (1,522) (1,228) (4,348) (4,646)
Loss on early extinguishment of debt - - - (3,104)
Other, net 452 361 1,192 694
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Income before income taxes 16,052 9,028 26,844 13,770
Income tax expense (6,446) (3,530) (10,845) (5,416)
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Net income $ 9,606 5,498 15,999 8,354
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Income per common share:
Basic $ 0.82 0.50 1.36 0.76
Diluted $ 0.78 0.47 1.30 0.72
Weighted average common shares outstanding:
Basic 11,774,700 11,034,754 11,724,182 11,020,936
Diluted 12,275,968 11,634,024 12,291,559 11,536,716