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Air Methods Announces Year 2008 Financial Results and Provides First Quarter 2009 Update

DENVER, March 10 /PRNewswire-FirstCall/ -- Air Methods Corporation (Nasdaq: AIRM), the largest air medical transportation company in the world, reported revenue and net income for the year and fourth quarter ended December 31, 2008.

For the year, revenue increased 26% to $498.8 million compared to $396.3 million in the prior year. Net income decreased 30% from $27.5 million, or $2.20 per diluted share, in the prior year to $19.3 million, or $1.54 per diluted share, in the current year. The current year results include a $1.5 million ($0.12 per diluted share) decrease in income tax expense resulting from a decrease in the effective state income tax rate due to a change in Colorado statute. The prior-year results included a decrease in income tax expense of $1.1 million ($0.08 per diluted share) resulting from approved changes in tax depreciation methods.

For the fourth quarter, revenue decreased 3% to $118.9 million as compared with $122.6 million during the prior-year period. Net income decreased 23% to $3.7 million, or $0.30 per diluted share, compared to net income of $4.8 million, or $0.38 per diluted share, in the prior-year period. The current-year quarter results include a $1.5 million ($0.12 per diluted share) decrease in income tax expense as discussed above, while the prior-year fourth quarter included a decrease in income tax expense of $1.1 million ($0.08 per diluted share) also discussed above. The Company had previously announced that its current-year fourth quarter results included a 39% increase in employee healthcare costs of $1.2 million ($0.06 per diluted share after taxes) as compared with the prior-year fourth quarter, attributed to several large individual claims.

During the fourth quarter of 2008, total patients transported within community-based operations were 9,496, as compared with 10,738 during the prior-year quarter, a 12% decrease. Patients transported for community bases in operation greater than one year (Same-Base Transports) decreased by 831 transports, or 8%, while weather cancellations for these same bases decreased by 394 transports compared with the prior-year period. Revenue per community-based transport increased from $6,597 in the fourth quarter of 2007 and $7,047 in the third quarter of 2008, to $7,156 in the current-year fourth quarter. Consolidated maintenance expenses per flight hour of $572 during the current-year quarter were mostly unchanged from the prior-year fourth quarter. Fuel expenses per community-based transport decreased by 4% to $330 as compared with the prior-year quarter.

The Company also provided an update on first quarter 2009 operations to-date. Same-Base Transports within community-based operations through February were down 424 patient transports, or 7%, as compared with the prior-year period, while weather cancellations for these same bases decreased by 664 as compared with the prior-year period. Total community-based patient transports for the two-month period were 5,936 as compared with 6,818 in the prior-year period. For the month of February, Same-Based Transports were down only 2%.

The Company also announced that maintenance expenses for the month of January were significantly below historical levels. Preliminary maintenance expenses were approximately 20% below the 2008 monthly average and January 2008 actual results. In addition, net revenue per community-based transport in January reflected healthy increases over the fourth quarter 2008 average. This improvement was attributed, in part, to the 5% price increase in gross charges effective January 1, 2009. Fuel expenses per community-based transport in January were $241, reflecting a 24% decrease from the prior-year month.

Aaron Todd, CEO of Air Methods, commented, "We are pleased with our fourth quarter results considering the recent softness in demand for service caused by the current economic environment. Fuel prices and maintenance expenditures showed moderation during the last quarter of 2008 and have continued to improve significantly during the first month of 2009. Our reimbursement continues to reflect benefits from previous price increases, while our flight volume through February is in line with our beginning-of-the-year 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 (877) 883-0656 (domestic) or (706) 643-8826 (international) or by accessing the web cast at A replay of the call will be available at (800) 642-1687 (domestic) or (706) 645-9291 (international), access number 88611116, for 3 days following the call and the web cast can be accessed at for 30 days.

Air Methods Corporation ( is a leader in emergency air medical transportation and medical services. The Hospital Based Services Division is the largest provider of air medical transport services for hospitals. The Community Based Services 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 320 helicopters and fixed wing aircraft.

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. Please contact Christine Clarke at (303) 792-7579 to be included on the Company's fax and/or mailing list.


                            (Amounts in thousands)

                                    December 31, 2008 December 31, 2007
                                    ----------------- -----------------


    Current assets:
    Cash and cash equivalents                 $13,147            $5,134
    Trade receivables, net                    133,467           135,633
    Other current assets                       61,134            74,090
                                               ------            ------

    Total current assets                      207,748           214,857

    Net property and equipment                146,167           114,746
    Other assets, net                          41,009            39,949
                                               ------            ------

    Total assets                             $394,924          $369,552
                                             ========          ========


    Current liabilities:
    Notes payable related to assets
     held for sale                            $19,520           $24,203
    Current portion of indebtedness            15,638            18,350
    Accounts payable, accrued
     expenses and other                        56,628            59,546
                                               ------            ------

    Total current liabilities                  91,786           102,099

    Long-term indebtedness                     85,858            76,751
    Other non-current liabilities              56,816            48,682
                                               ------            ------

    Total liabilities                         234,460           227,532

    Total stockholders' equity                160,464           142,020
                                              -------           -------

    Total liabilities and stockholders'
     equity                                  $394,924          $369,552
                                             ========          ========

            (Amounts in thousands, except share and per share amounts)

                                      Quarter Ended            Year Ended
                                       December 31,            December 31,
                                       ------------            ------------

                                     2008        2007        2008        2007
                                     ----        ----        ----        ----

    Flight operations            $114,886     118,934     485,184     386,377
    Product operations              4,026       3,675      13,618       9,972
                                    -----       -----      ------       -----
    Total revenue                 118,912     122,609     498,802     396,349
                                  -------     -------     -------     -------

    Operating expenses             93,144      94,991     381,500     279,006
    General and administrative     16,809      15,719      67,480      53,298
    Depreciation and
     amortization                   4,462       4,133      17,090      14,418
                                    -----       -----      ------      ------
                                  114,415     114,843     466,070     346,722
                                  -------     -------     -------     -------

    Operating income                4,497       7,766      32,732      49,627

    Interest expense               (1,254)     (1,700)     (5,197)     (5,609)
    Loss on early extinguishment
     of debt                            -           -           -        (757)
    Other, net                        763         629       2,943       2,187
                                      ---         ---       -----       -----

    Income before income taxes      4,006       6,695      30,478      45,448

    Income tax expense               (270)     (1,872)    (11,209)    (17,911)
                                     ----      ------     -------     -------

    Net income                     $3,736       4,823      19,269      27,537
                                   ======       =====      ======      ======

    Income per common share:        $0.31        0.40        1.59        2.30
       Basic                        $0.30        0.38        1.54        2.20

    Weighted average common
     shares outstanding:
       Basic                   12,107,981  12,095,296  12,155,144  11,953,871
       Diluted                 12,343,920  12,634,687  12,530,381  12,512,077

SOURCE Air Methods Corporation
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