DENVER, Nov. 6, 2014 (GLOBE NEWSWIRE) -- Air Methods Corporation (Nasdaq:AIRM) reported results for the quarter ended September 30, 2014. Revenue increased 10% to $277.8 million from $252.4 million in the year-ago quarter. For the nine-month period, revenue increased 15% to $759.4 million, up from $657.8 million in the prior-year nine-month period. For the quarter, net income decreased 5% to $33.7 million, or $0.90 per diluted share, as compared with 2013 third quarter net income of $35.6 million, or $0.91 per diluted share. Net income for the nine-month period increased 50% to $73.4 million, or $1.91 per diluted share, compared to $49.1 million, or $1.25 per diluted share, for the prior-year period. Financial results for the three and nine months ended September 30, 2014 include operations associated with the Company's acquisition of Helicopter Consultants of Maui, LLC (doing business as Blue Hawaiian Helicopters) and certain of its affiliates (collectively, Blue Hawaiian), on December 13, 2013. Revenue generated from Blue Hawaiian during the quarter and nine months ended September 30, 2014 was $15.0 million and $42.5 million, respectively.
Basic and diluted earnings per share for the quarter and nine months ended September 30, 2014 were increased by $0.05 for an adjustment to the value of an equity put option related to one of our redeemable non-controlling interests in one of our consolidated subsidiaries. While net income on the consolidated statement of comprehensive income was not increased for the valuation adjustment, earnings per share are required to be calculated after increasing net income for the change in valuation.
Third Quarter Highlights
Community-based patient transports were 15,796 during the current-year quarter, compared with 14,777 in the prior-year quarter, a 7% increase. Patients transported for community bases in operation greater than one year (Same-Base Transports) decreased by 3%, or 370 transports, while weather cancellations for these same bases increased by 60 transports compared with the prior-year quarter. Community-based service requests increased by 1% for bases open greater than one year. Net revenue per patient transport remained relatively unchanged at $11,972, compared with $11,988 in the prior-year quarter. Days' sales outstanding for community-based patient transports (DSOs) increased from 100 days as of September 30, 2013 to 116 days as of September 30, 2014, based on 180-day annualized net revenue. DSOs decreased seven days compared with the end of the second quarter 2014.
Maintenance expense, excluding tourism operations, increased $0.4 million, or 2%, compared with the prior-year quarter, while flight volume for both community-based and hospital-based operations decreased by 3%. Excluding tourism operations, fuel expense increased by $0.4 million, or 6%, as compared with the prior-year quarter. Fuel expense per community-based and non-revenue flight hour decreased 2% over the prior-year quarter.
For the third quarter, Air Medical Services revenue increased by 3% to $237.6 million compared with $230.8 million in the prior-year quarter, while its segment net income remained relatively unchanged at $63.5 million compared to $63.6 million for the third quarter of 2013. Tourism revenues increased 112% to $33.9 million, compared to $16.0 million in the prior-year quarter, reflecting benefit of the Blue Hawaiian acquisition. Tourism segment net income decreased 13% to $3.3 million, compared with $3.8 million in the prior-year quarter. This decrease was primarily attributed to higher maintenance expense of $1.8 million over the prior-year third quarter associated with the Sundance Helicopters fleet. United Rotorcraft Division's external revenue increased 10% to $6.2 million compared with $5.6 million in the prior-year quarter, while its external segment net income remained relatively unchanged at breakeven.
The Company also provided an update on preliminary October 2014 flight volume. Total community-based transports increased 9% to 5,201 during October 2014, compared with 4,787 in October 2013. October 2014 Same-Base Transports decreased by 34 transports and weather cancellations decreased by 108 transports compared with October 2013.
Aaron Todd, CEO, stated, "While overall flight volume growth is reflecting benefit from base expansions and hospital conversion activity, weakness in net reimbursement per patient transport was more severe than anticipated. Reduction of privately insured patients as a percentage of total transports compared with the prior-year quarter, combined with shifts from higher-paying insurers to lower-paying insurers, resulted in lower than anticipated earnings results for the quarter. An October 1st price increase, combined with strong flight volumes in October, should help offset these factors should they continue into the fourth quarter of 2014."
The Company will discuss these results in a conference call scheduled today at 4:30 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 24332617, for 3 days following the call and the web cast can be accessed at www.airmethods.com for 30 days. Concurrently, a financial supplement that contains operating statistics normally provided during previous earnings calls has been posted on its website, www.airmethods.com.
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. and Blue Hawaiian Helicopters, which provide helicopter tours and charter flights in the Las Vegas/Grand Canyon region and Hawaii, respectively. 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 made with regard to the anticipated impact on the Company's earnings results of (i) the October 1st price increase, (ii) a reduction of privately-insured patients as a percentage of total transports, and (iii) shifts from higher-paying insurers to lower-paying insurers, and the Company's preliminary October 2014 operational results, including those related to (i) total community-based patient transports, (ii) same base transports, and (iii) weather cancellations, 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; the collection rates for patient transports; changes in payer mix; the final results of October 2014 flight volume and weather cancellations; 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 Christina Brodsly at (303) 256-4122 to be included on the Company's e-mail distribution list.
– FINANCIAL STATEMENTS ATTACHED –
|AIR METHODS CORPORATION AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Amounts in thousands)|
|September 30, 2014||December 31, 2013|
|Cash and cash equivalents||$ 16,832||9,862|
|Trade receivables, net||296,301||237,856|
|Other current assets||81,702||92,832|
|Total current assets||394,835||340,550|
|Net property and equipment||696,291||664,842|
|Other assets, net||244,519||247,149|
|Total assets||$ 1,335,645||1,252,541|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Notes payable related to aircraft pending long-term financing||$ 2,729||2,616|
|Current portion of indebtedness||70,357||68,531|
|Accounts payable, accrued expenses and other||101,472||91,171|
|Total current liabilities||174,558||162,318|
|Other non-current liabilities||114,538||105,864|
|Redeemable non-controlling interests||6,747||8,113|
|Total stockholders' equity||448,876||367,959|
|Total liabilities and stockholders' equity||$ 1,335,645||1,252,541|
|AIR METHODS CORPORATION AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME|
|(Amounts in thousands, except share and per share amounts)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Patient transport revenue, net||$ 190,370||177,793||505,672||434,568|
|Air medical services contract revenue||44,278||49,750||134,829||158,743|
|General and administrative||35,913||28,292||103,702||82,582|
|Depreciation and amortization||20,121||19,781||60,910||59,790|
|Income before income taxes||55,392||57,670||121,249||79,880|
|Income tax expense||(21,552)||(22,065)||(47,433)||(30,815)|
|Income attributable to redeemable non-controlling interests||123||--||420||--|
|Net income attributable to Air Methods Corporation and subsidiaries||$ 33,717||35,605||73,396||49,065|
|Income per common share:|
|Weighted average common shares outstanding - basic||39,168,873||38,933,915||39,146,609||38,882,943|
|Weighted average common shares outstanding - diluted||39,343,405||39,194,532||39,329,121||39,228,113|
|AIR METHODS CORPORATION AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|(Amounts in thousands)|
|Nine Months Ended|
|Cash flows from operating activities:|
|Net income||$ 73,816||49,065|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Depreciation and amortization||60,910||59,790|
|Deferred income tax expense||17,926||13,780|
|Tax benefit from exercise of stock options||(1,779)||(2,173)|
|Loss on disposition of assets||1,290||326|
|Unrealized loss on derivative instrument||70||143|
|Loss from equity method investee||738||--|
|Changes in assets and liabilities, net of effects of acquisitions||(39,304)||(9,905)|
|Net cash provided by operating activities||116,533||113,815|
|Cash flows from investing activities:|
|Acquisition of subsidiaries||(3,182)||(1,435)|
|Acquisition of property and equipment||(87,965)||(41,279)|
|Buy-out of previously leased aircraft||(17,296)||(51,403)|
|Proceeds from disposition of equipment||12,637||17,266|
|Increase in other assets||(660)||(5,206)|
|Net cash used in investing activities||(96,466)||(82,057)|
|Cash flows from financing activities:|
|Proceeds from issuance of common stock, net||1,190||1,397|
|Tax benefit from exercise of stock options||1,779||2,173|
|Net borrowings (payments) under line of credit||(12,000)||(47,000)|
|Payments for financing costs||(81)||(221)|
|Proceeds from long-term debt||54,503||120,480|
|Payment of long-term debt, notes payable, and capital lease obligations||(58,586)||(93,246)|
|Proceeds from non-controlling interests||98||--|
|Net cash used in financing activities||(13,097)||(16,417)|
|Increase (decrease) in cash and cash equivalents||6,970||15,341|
|Cash and cash equivalents at beginning of period||9,862||3,818|
|Cash and cash equivalents at end of period||$ 16,832||19,159|
CONTACT: Trent J. Carman, Chief Financial Officer (303) 792-7591
Source:Air Methods Corporation