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Air Methods Reports 3Q2013 Results and 4Q2013 Update

Air Methods Corporation

DENVER, Nov. 7, 2013 (GLOBE NEWSWIRE) -- Air Methods Corporation (Nasdaq:AIRM) reported results for the quarter ended September 30, 2013. Revenue increased 14% to $252.4 million from $221.3 million in the year-ago quarter. For the nine-month period, revenue increased 4% to $657.8 million, up from $634.6 million in the prior-year nine-month period. For the quarter, net income increased 28% to $35.6 million, or $0.91 per diluted share, as compared with 2012 third quarter net income of $27.8 million, or $0.71 per diluted share. Net income for the nine-month period decreased 32% to $49.1 million, or $1.25 per diluted share, compared to $71.7 million, or $1.84 per diluted share, for the prior-year period. Financial results for the three and nine months ended September 30, 2013 include operations associated with the Company's acquisition of Sundance Helicopters, Inc., a Grand Canyon tour operator (Sundance), on December 31, 2012. Revenue generated by Sundance during the quarter and nine months ended September 30, 2013 was $16.0 million and $42.4 million, respectively.

The current year after-tax quarterly earnings were increased by $0.7 million associated with the cumulative effect of changes in expected blended state income tax rates, compared with a $0.7 million reduction in after-tax earnings in the prior-year quarter for similar changes. Prior year after-tax quarterly earnings were further reduced by $0.6 million associated with a net loss on disposition of assets.

Third Quarter Highlights

Community-based patient transports were 14,570 during the current-year quarter, compared with 14,829 in the prior-year quarter, a 2% decrease. Patients transported for community bases in operation greater than one year (Same-Base Transports) decreased by 6%, or 854 transports, while weather cancellations for these same bases increased by 436 transports compared with the prior-year quarter. Requests for community-based service decreased 3% for bases open greater than one year. Net revenue per patient transport increased 18% to $12,141, compared with $10,316 in the prior-year quarter.

Maintenance expense, excluding Sundance, decreased $1.8 million, or 7%, compared with the prior-year quarter, while flight hours decreased by 8%. Excluding Sundance, fuel expense increased by $0.3 million, or 5%, as compared with the prior-year quarter. Fuel expense per flight hour increased 6% over the prior-year quarter.

For the third quarter, Air Medical Services revenue increased by 8% to $230.8 million compared with $212.8 million in the prior-year quarter, while its segment net income increased by 21% from $52.7 million to $63.6 million. Sundance generated segment net income of $3.8 million on revenue of $16.0 million during the quarter. United Rotorcraft Division's external revenue decreased 33% to $5.6 million compared with $8.4 million in the prior-year quarter, while its external segment net income decreased from $1.7 million in the prior-year quarter to a loss of $0.4 million in the current-year quarter.

The Company also provided an update on preliminary October 2013 flight volume. Total community-based transports increased 1% to 4,703 during October 2013, compared with 4,674 in October 2013. October 2013 Same-Base Transports decreased by 116 transports, or 3%, while weather cancellations increased by 46 transports compared with October 2012.

Aaron Todd, CEO, stated, "Our third quarter reflects a return to growth in earnings fueled by strong growth in net revenue per patient transport and more moderate maintenance expenditures as anticipated. Our growth in net revenue per transport reflects more stable year-over-year payer mix and has been realized while reducing our days' sales outstanding, which decreased from 108 days as of September 30, 2012 and 99 days as of June 30, 2013, to 92 days as of September 30, 2013 based on 90-day annualized net revenue. We are also very pleased that our investment in Sundance and the tourism sector continues to generate accretive financial results, in line with our initial expectations."

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 (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 94368497, 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 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., which provides helicopter tours and charter flights, primarily focusing on Grand Canyon tours. Air Methods' fleet of owned, leased or maintained aircraft features over 400 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 regarding the Company's preliminary October 2013 flight volume, anticipated earnings results and anticipated weather and maintenance trends, 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 size, structure and growth of the Company's air medical services and United Rotorcraft Division; the collection rates for patient transports; the continuation and/or renewal of air medical service contracts; the final results of October 2013 flight volume; weather conditions across the U.S.; development and changes in laws and regulations, including, without limitation, the impact of the Patient Protection and Affordable Care Act; 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 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 SHEETS
(Amounts in thousands)
(unaudited)
September 30, 2013 December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents $ 19,159 3,818
Trade receivables, net 236,560 232,929
Other current assets 76,231 70,058
Total current assets 331,950 306,805
Net property and equipment 611,480 597,238
Other assets, net 216,290 214,820
Total assets $ 1,159,720 1,118,863
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable related to assets held for sale $ 0 3,570
Current portion of indebtedness 63,305 63,139
Accounts payable, accrued expenses and other 79,321 76,743
Total current liabilities 142,626 143,452
Long-term indebtedness 563,794 581,019
Other non-current liabilities 98,266 94,782
Total liabilities 804,686 819,253
Total stockholders' equity 355,034 299,610
Total liabilities and stockholders' equity $ 1,159,720 1,118,863
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2013 2012 2013 2012
Revenue:
Flight operations $ 227,543 211,109 593,311 606,719
Product operations 5,616 8,490 15,026 23,238
Tourism operations 16,002 -- 42,385 --
Other 3,224 1,691 7,097 4,627
Total revenue 252,385 221,290 657,819 634,584
Expenses:
Operating expenses 139,527 124,961 415,880 365,918
General and administrative 30,448 23,478 87,738 73,902
Loss on disposition of assets, net 118 985 326 774
Depreciation and amortization 19,781 20,638 59,790 62,460
189,874 170,062 563,734 503,054
Operating income 62,511 51,228 94,085 131,530
Interest expense (5,190) (5,022) (15,169) (15,887)
Other, net 349 711 964 2,639
Income before income taxes 57,670 46,917 79,880 118,282
Income tax expense (22,065) (19,073) (30,815) (46,551)
Net income $ 35,605 27,844 49,065 71,731
Income per common share:
Basic $ 0.91 0.72 1.26 1.86
Diluted $ 0.91 0.71 1.25 1.84
Weighted average common shares outstanding:
Basic 38,933,915 38,690,436 38,882,943 38,551,587
Diluted 39,194,532 39,050,247 39,228,113 38,969,937

CONTACT: Trent J. Carman, Chief Financial Officer, (303) 792-7591

Source:Air Methods Corporation