Quarterly Revenue Increases 12%; Fully-Diluted EPS Increases to $0.89 per
DENVER, Nov. 8 /PRNewswire-FirstCall/ -- Air Methods Corporation (Nasdaq: AIRM) reported results for the quarter ended September 30, 2007. Revenue increased 12% to $101.5 million from $90.5 million in the year-ago quarter. For the nine-month period, revenue increased 13% to $273.7 million, up from $242.0 million in the prior-year nine-month period.
For the quarter, net income increased 17% to $11.2 million, or $0.89 per diluted share, as compared with prior-year quarter net income of $9.6 million, or $0.78 per diluted share. Net income for the nine-month period was $22.7 million, or $1.82 per diluted share, compared to $16.0 million, or $1.30 per diluted share for the prior-year nine-month period. The current-year quarter includes a $1.2 million pre-tax net gain on disposition of assets, offset by a $0.8 million loss on early extinguishment of debt. Net of income taxes, the gain on disposition less the loss on early extinguishment of debt increased net income by approximately $0.3 million or $0.02 per diluted share. The prior-year quarter included a $1.4 million gain from a litigation settlement. Net of income taxes, the litigation settlement gain increased prior-year quarter net income by approximately $0.8 million or $0.07 per diluted share.
The third quarter 2007 financial results do not reflect any operations of FSS Airholdings, Inc., the parent company of CJ Systems Aviation Group, Inc. (CJ), since the acquisition was not completed until October 1, 2007.
Third Quarter Highlights
Community-Based Services: Revenue from community-based services increased 12% to $69.3 million, and segment net income increased 10% to $20.5 million during the third quarter, as compared with segment net income of $18.6 million in the prior-year quarter. The increase in segment net income was partly attributed to decreases in maintenance expense as compared with the prior-year quarter. Maintenance expense decreased 3% or $183,000, even though flight volume increased by 14%. This decrease was attributed to fewer maintenance events related to older models of aircraft than during the 2006 period. Community-based transports completed during the third quarter were 10,466 as compared with 9,187 in the prior-year quarter, a 14% increase. Community- based transports for bases in operation greater than one year (Same-Base Transports) increased slightly by 16 transports, while weather cancellations for bases in operation greater than one year decreased by 253 transports or 11%. The increase in transports did not correspond to the decrease in weather cancellations primarily due to shifting of transports to newly-opened bases in adjacent locations. Net reimbursement per transport of $6,519 in the current- year quarter compares with $6,716 and $6,330 in the prior-year quarter and the second quarter of 2007, respectively.
Hospital-Based Services: Revenue from hospital-based services increased by 6% to $29.4 million, while segment net income increased to $2.0 million in the current-year quarter from a loss of $0.1 million during the prior-year third quarter. The increase in revenue is primarily attributed to annual price increases and a 6.2% increase in flight volume. The net increase in segment earnings is primarily attributed to a decrease in maintenance expense. Maintenance expense for the quarter decreased by $1.1 million, or 12%, despite the increase in flight volume, attributed to the same factors mentioned above.
Products Division: Revenue, including revenue generated from internal projects, increased 12% to $7.8 million, while segment net income increased 18% to $1.8 million from $1.5 million during the third quarter as compared with the prior-year quarter. The majority of the current year quarterly revenue (63%) and segment net income (62%) related to internal projects and has been eliminated in the consolidated financial results.
The Company also provided an update on October 2007 flight volume. Total community-based transports of 3,793 during October 2007 compared with 2,971 during October 2006. Of the October 2007 transports, 631 are from community bases added as a result of our acquisition of CJ. Same-Base Transports, which exclude CJ bases and other new locations, during the month of October decreased 151 transports, while weather cancellations for these same bases increased by 129 transports.
Aaron Todd, Chief Executive Officer, stated, "We are pleased to have shown healthy growth in both top line and bottom line performance during the quarter, especially since the prior-year third quarter was an exceptionally strong quarter for us. Continued strength in net reimbursement rates, moderation of maintenance expense, and consistent Same-Base Transports for community-based services have all contributed to this growth in earnings. Days' sales outstanding in receivables for community-based services reflect a decrease from 117 days as of September 30, 2006 to 107 days of September 30, 2007. The reduction in days' sales outstanding, combined with the strength of our operating results, resulted in $31.8 million in net cash provided by operating activities for the nine months ended September 30, 2007. Long-term debt less cash decreased by $20.7 million during the same nine-month period, as well. We are well on our way to achieving our beginning of the year objective of growing earnings per share by greater than 20%."
The Company will discuss these results in a conference call scheduled today at 9:00 a.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 http://www.airmethods.com. A replay of the call will be available at (800) 642-1687 (domestic) or (706) 645-9291 (international), access number 19673272, for 3 days following the call and the web cast can be accessed at http://www.airmethods.com for 30 days.
Air Methods Corporation (http://www.airmethods.com) 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 330 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 integration of CJ into our existing operations, 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 or Joe Dorame at Lytham Partners, LLC at (602) 889-9700. Please contact Christine Clarke at (303) 792-7579 to be included on the Company's fax and/or mailing list.
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
September 30, December 31,
Cash and cash equivalents $10,477 4,219
Receivables, net 114,785 107,755
Other current assets 37,296 27,887
Total current assets 162,558 139,861
Property and equipment 97,241 95,575
Other assets, net 17,142 14,721
Total assets $276,941 250,157
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable related to assets held
for sale $15,540 9,560
Current portion of indebtedness 12,448 9,963
Accounts payable, accrued expenses
and other 37,927 28,306
Total current liabilities 65,915 47,829
Long-term indebtedness 45,370 62,346
Other non-current liabilities 31,529 32,668
Total liabilities 142,814 142,843
Total stockholders' equity 134,127 107,314
Total liabilities and stockholders' equity $276,941 250,157
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Flight operations $98,587 88,949 267,443 237,410
Product operations 2,962 1,571 6,297 4,616
Total revenue 101,549 90,520 273,740 242,026
Operating expenses 66,151 61,219 185,561 174,196
General and administrative 12,861 10,341 37,579 30,189
Loss (gain) on disposition
of assets, net (1,201) 16 (1,546) (546)
Litigation settlement - (1,417) - (1,417)
amortization 3,395 3,239 10,285 9,604
81,206 73,398 231,879 212,026
Operating income 20,343 17,122 41,861 30,000
Interest expense (1,169) (1,522) (3,909) (4,348)
Loss on early
extinguishment of debt (757) - (757) -
Other, net 612 452 1,558 1,192
Income before income taxes 19,029 16,052 38,753 26,844
Income tax expense (7,838) (6,446) (16,039) (10,845)
Net income $11,191 9,606 22,714 15,999
Income per common share:
Basic $0.94 0.82 1.91 1.36
Diluted $0.89 0.78 1.82 1.30
Weighted average common
Basic 11,954,332 11,774,700 11,906,211 11,724,182
Diluted 12,542,816 12,275,968 12,448,801 12,291,559
|SOURCE Air Methods Corporation|
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