Air Methods Reports 1Q2015 Results and 2Q2015 Update
08 May 2015 - 6:01AM
Air Methods Corporation (Nasdaq:AIRM), the global leader in air
medical transportation, reported financial results for the quarter
ended March 31, 2015 and provided an update on preliminary April
2015 flight volume. For the quarter, revenue increased 8% to $238.3
million from $221.1 million in the prior-year quarter. Net income
from continuing operations for the first quarter of 2015 was $12.9
million, or $0.32 per diluted share, compared with $11.6 million,
or $0.29 per diluted share, in the first quarter of 2014. The first
quarter 2015 results include $2.6 million in pre-tax expenses
(reducing EPS by $0.04) to remediate certification documentation
issues associated with previous night-vision technology
installations on certain aircraft. No further costs are anticipated
related to this remediation effort in future quarters.
Community-based patient transports were 13,852 during the
current-year quarter, compared with 12,941 in the prior-year
quarter, a 7% increase. Patients transported for community bases in
operation greater than one year (Same-Base Transports) decreased by
less than 1%, or 63 transports, while weather cancellations for
these same bases increased by 1,005 transports compared with the
prior-year quarter. Requests for community-based service increased
7% for bases open greater than one year. Net revenue per
community-based transport increased 7% from $10,928 to $11,651 in
the current-year quarter due to the benefit of price increases, net
of deterioration in payer mix.
Maintenance expense, excluding tourism operations, increased
$7.5 million, or 34%, compared with the prior-year quarter, even
though total flight volume increased only 1%. In addition to
remediation costs referenced above, increase in maintenance expense
per flight hour was attributed to typical quarterly fluctuations
associated with scheduled and unscheduled maintenance events.
Excluding tourism operations, fuel expense decreased $1.2 million
compared with the prior-year quarter, while fuel expense per flight
hour decreased by 26%.
For the first quarter, Air Medical Services revenue increased by
9% to $205.9 million compared with $188.9 million in the prior-year
quarter, while its segment net income from continuing operations
increased 14% from $27.9 million to $31.9 million. Tourism revenue
increased 16% from $24.3 million to $28.2 million, while Tourism
segment net income decreased from $1.9 million to $0.8 million.
United Rotorcraft Division's external revenue decreased to $4.1
million compared with $7.8 million in the prior-year quarter, while
its external segment net loss was $0.3 million for the first
quarter of 2015 compared to break-even for the prior-year
quarter.
The Company also provided an update on preliminary April 2015
flight volume. Total community-based transports increased 11% to
5,070 during April 2015, compared with 4,572 in April 2014. April
2015 Same-Base Transports increased by 18 transports as compared
with April 2014. Weather cancellations during April 2015 for these
same bases increased by 526 compared with the prior-year month.
Aaron Todd, CEO, stated, "We are pleased to have realized
double-digit growth in earnings during the first quarter despite
significant increase in weather cancellations and higher than
anticipated maintenance expenditures. The steadiness in Same-Base
Transports, even with an increase in weather cancellations during
the quarter, reveals underlying strength in demand for our
services. This strength in demand continued into April despite
higher weather cancellations, as well."
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 number32877339, 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. and
Blue Hawaiian Helicopters, which provide helicopter tours and
charter flights, primarily focusing 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
those related to (i) preliminary flight volume for April 2015; and
(ii) increasing demand for our services, 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, United Rotorcraft Division and Tourism Division;
the collection rates for patient transports; pace of collections;
the continuation and/or renewal of air medical service contracts;
the final results of April 2015 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.
About Non-GAAP Financial Information: This
press release discusses EBITDA, which is not calculated in
conformity with U.S. Generally Accepted Accounting Principles
(GAAP). The Company defines EBITDA as earnings before interest,
income taxes, depreciation, amortization and gain or loss on
disposition of assets. A table is provided in this press release to
reconcile such non-GAAP financial measure to net income, which is
the most directly comparable financial measure prepared in
accordance with GAAP. Such table below includes all information
reasonably available to the Company at the date of this press
release and adjustments that the Company can reasonably predict.
Events that could cause the reconciliation to change include, but
are not limited to, acquisitions and divestitures of businesses and
goodwill and other asset impairments.
To supplement the Company's consolidated financial statements
presented on a GAAP basis, management believes that this non-GAAP
measure provides useful information about the Company's core
operating results and thus is appropriate to enhance the overall
understanding of the Company's past financial performance and its
prospects for the future. Management believes the additions and
subtractions from net income used to calculate EBITDA reflect the
measurements that its bank creditors and third party stock analysts
use in evaluating the Company. These adjustments to the Company's
GAAP results are made with the intent of providing both management
and investors a more complete understanding of the Company's
underlying operational results and trends and performance.
Management uses this non-GAAP measure to evaluate the Company's
financial results. The presentation of non-GAAP measures is not
meant to be considered in isolation or as a substitute for or
superior to financial results determined in accordance with
GAAP.
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) |
(unaudited) |
|
|
|
|
March 31, 2015 |
December 31, 2014 |
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 24,779 |
13,165 |
Trade receivables, net |
297,958 |
293,985 |
Other current assets |
89,158 |
92,691 |
|
|
|
Total current assets |
411,895 |
399,841 |
|
|
|
Net property and equipment |
720,903 |
721,981 |
Other assets, net |
241,667 |
239,483 |
|
|
|
Total assets |
$ 1,374,465 |
1,361,305 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
Notes payable related to aircraft pending
long-term financing |
$ 5,710 |
11,442 |
Current portion of indebtedness |
69,985 |
69,781 |
Accounts payable, accrued expenses and
other |
97,533 |
99,044 |
|
|
|
Total current liabilities |
173,228 |
180,267 |
|
|
|
Long-term indebtedness |
566,498 |
563,373 |
Other non-current liabilities |
141,290 |
138,775 |
|
|
|
Total liabilities |
881,016 |
882,415 |
|
|
|
Redeemable non-controlling interests |
7,287 |
6,981 |
|
|
|
Total stockholders' equity |
486,162 |
471,909 |
|
|
|
Total liabilities and stockholders'
equity |
$ 1,374,465 |
1,361,305 |
|
|
|
|
|
|
AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME |
(Amounts in thousands, except
share and per share amounts) |
(unaudited) |
|
|
|
|
Quarter Ended |
|
March 31, |
|
2015 |
2014 |
|
|
|
Revenue: |
|
|
Patient transport revenue, net |
$ 161,816 |
141,862 |
Air medical services contract revenue |
40,639 |
44,761 |
Tourism revenue |
28,221 |
24,338 |
Product operations |
4,137 |
7,820 |
Dispatch and billing service revenue |
3,486 |
2,288 |
Total revenue |
238,299 |
221,069 |
|
|
|
Expenses: |
|
|
Operating expenses |
156,743 |
144,596 |
General and administrative |
35,725 |
31,325 |
Depreciation and amortization |
20,044 |
20,372 |
|
212,512 |
196,293 |
|
|
|
Operating income |
25,787 |
24,776 |
|
|
|
Interest expense |
(4,985) |
(5,528) |
Other, net |
364 |
(26) |
|
|
|
Income from continuing operations before
income taxes |
21,166 |
19,222 |
|
|
|
Income tax expense |
(8,290) |
(7,645) |
|
|
|
Income from continuing operations |
12,876 |
11,577 |
|
|
|
Loss on discontinued operations, net of
income taxes |
(9) |
(525) |
|
|
|
Net income |
12,867 |
11,052 |
|
|
|
Income attributable to redeemable
non-controlling interests |
239 |
163 |
|
|
|
Net income attributable to Air Methods
Corporation and subsidiaries |
$ 12,628 |
10,889 |
|
|
|
Income (loss) per common share: |
|
|
Basic |
|
|
Continuing
operations |
$ 0.32 |
0.29 |
Discontinued
operations |
-- |
(0.01) |
Diluted |
|
|
Continuing
operations |
$ 0.32 |
0.29 |
Discontinued
operations |
-- |
(0.01) |
|
|
|
Weighted average common shares outstanding -
basic |
39,262,063 |
39,119,397 |
Weighted average common shares outstanding -
diluted |
39,390,415 |
39,318,180 |
|
|
|
|
|
|
AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Amounts in thousands) |
(unaudited) |
|
|
|
|
Quarter Ended |
|
March 31, |
|
2015 |
2014 |
|
|
|
Cash flows from operating activities: |
|
|
Net income |
$ 12,867 |
11,052 |
Loss from discontinued
operations, net of income taxes |
9 |
525 |
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
Depreciation and
amortization |
20,044 |
20,372 |
Deferred income tax
expense |
6,039 |
5,971 |
Stock-based compensation |
1,848 |
774 |
Tax benefit from exercise of
stock options |
(12) |
(975) |
Loss (gain) on disposition of
assets |
(262) |
407 |
Unrealized loss on derivative
instrument |
149 |
53 |
Loss from equity method
investee |
224 |
441 |
Changes in assets and
liabilities, net of effects of acquisitions |
(6,414) |
(22,682) |
|
|
|
Net cash provided by continuing
operating activities |
34,492 |
15,938 |
Net cash used by discontinued
operating activities |
(96) |
(841) |
Net cash provided by operating
activities |
34,396 |
15,097 |
|
|
|
Cash flows from investing activities: |
|
|
Acquisition of property and
equipment |
(23,493) |
(35,388) |
Buy-out of previously leased
aircraft |
-- |
(5,554) |
Proceeds from disposition of
equipment |
1,997 |
5,567 |
Decrease (increase) in other
assets |
(4,577) |
535 |
|
|
|
Net cash used by continuing
investing activities |
(26,073) |
(34,840) |
Net cash provided (used) by
discontinued investing activities |
25 |
(48) |
Net cash used by investing
activities |
(26,048) |
(34,888) |
|
|
|
Cash flows from financing activities: |
|
|
Proceeds from issuance of
common stock, net |
207 |
479 |
Tax benefit from exercise of
stock options |
12 |
975 |
Net borrowings (payments) under
line of credit |
-- |
13,000 |
Payments for financing
costs |
(4) |
(69) |
Proceeds from long-term
debt |
21,137 |
19,965 |
Payment of long-term debt,
notes payable, and capital lease obligations |
(18,086) |
(16,416) |
Proceeds from non-controlling
interests |
-- |
98 |
|
|
|
Net cash provided by continuing
financing activities |
3,266 |
18,032 |
Net cash provided (used) by
discontinued financing activities |
-- |
-- |
Net cash provided by financing
activities |
3,266 |
18,032 |
|
|
|
Increase (decrease) in cash and cash
equivalents |
11,614 |
(1,759) |
|
|
|
Cash and cash equivalents at beginning of
period |
13,165 |
9,862 |
|
|
|
Cash and cash equivalents at end of
period |
$ 24,779 |
8,103 |
|
|
|
|
|
|
AIR METHODS CORPORATION AND
SUBSIDIARIES |
RECONCILIATION OF NET INCOME TO
EBITDA |
(Amounts in thousands) |
(unaudited) |
|
|
|
|
Quarter Ended |
|
March 31, |
|
2015 |
2014 |
|
|
|
Net income attributable to Air Methods
Corporation and subsidiaries |
$ 12,628 |
10,889 |
Loss on discontinued operations, net of
income taxes |
(9) |
(525) |
Net income from continuing operations
attributable to Air Methods Corporation and subsidiaries |
12,637 |
11,414 |
|
|
|
Interest expense * |
4,945 |
5,495 |
Income tax expense * |
8,290 |
7,645 |
Depreciation and amortization * |
19,956 |
20,289 |
Loss (gain) on disposition of assets, net
* |
(262) |
407 |
|
|
|
EBITDA from continuing operations |
$ 45,566 |
45,250 |
|
|
|
* Excludes amounts attributable
to redeemable non-controlling interests |
CONTACT: Trent J. Carman, Chief Financial Officer, (303) 792-7591
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