Revenue Increases 12.4% Compared to Prior Year
Period
EPS from Continuing Operations Increases 27.5%
Compared to Prior Year Period
Air Methods Corporation (Nasdaq:AIRM), the global leader in air
medical transportation, today reported financial results for the
quarter ended September 30, 2015.
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Q3-2015 |
Q3-2014 |
YOY Change (%) |
9-Months Ending
9/30/15 |
9-Months Ending
9/30/14 |
YOY Change (%) |
Revenue |
$311.3 million |
$276.9 million |
12.4% |
$813.2 million |
$755.6 million |
7.6% |
Diluted EPS from Continuing Operations |
$1.16 |
$0.91 |
27.5% |
$2.17 |
$1.96 |
10.7% |
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Aaron Todd, CEO of Air Methods, stated, "We are very pleased
with our third quarter results, which exceeded expectations.
Same-base transports in the Air Medical Services division increased
2.4%. When coupled with the addition of fourteen new bases since
the third quarter of 2014 from both Greenfields and base
conversions, total patient transports increased 9.7%. The Company's
tourism business also performed well. The number of passengers grew
6.9% year-over-year and bottom-line results increased 47.4% aided
by lower fuel and maintenance costs. Primarily as a result of these
factors, the Company's quarterly diluted EPS from continuing
operations grew 27.5% year-over-year. With the conversion of eight
more hospital bases in early October, our momentum remains
strong."
Third quarter 2015 results include a $2.6 million pre-tax loss
related to the disposition of assets. This compares to a pre-tax
gain of $0.2 million in the prior-year quarter.
Basic and diluted earnings per share from continuing operations
for the quarter and nine months ended September 30, 2015 were
decreased by $0.02 for an adjustment to the value of equity put
options related to both of our redeemable non-controlling interests
in our consolidated subsidiaries. While net income on the
consolidated statement of comprehensive income was not decreased
for the valuation adjustment, earnings per share are required to be
calculated after decreasing net income for the change in valuation.
For the prior year three and nine-month period, basic and diluted
earnings per share increased by $0.05 for the same type of
adjustment.
Third Quarter Performance by Segment
For the third quarter, Air Medical Services (AMS) revenue
increased by 12.7% to $266.8 million, compared with $236.7 million
in the prior-year quarter, while its segment net income increased
34.6% to $85.9 million, compared to $63.8 million for the third
quarter of 2014. Community-based patient transports were
17,330 during the current-year quarter, compared with 15,796 in the
prior-year quarter, a 9.7% increase. Patients transported for
community bases in operation greater than one year (Same-Base
Transports) increased 2.4%, or 367 transports, while weather
cancellations for these same bases increased by 53 transports
compared with the prior-year period. Same-base requests for
community-based service increased 3.6%. Net revenue per
community-based transport increased 7.2% from $11,972 to $12,839 in
the current-year quarter. AMS maintenance expense was flat in the
current-year quarter, compared with the prior-year quarter despite
total flight volume increasing 5.7%. AMS fuel expense decreased
$0.9 million compared with the prior-year quarter, while fuel
expense per flight hour decreased 22.3%.
Tourism revenues increased 6.7% to $36.2 million in the
current-year quarter, compared to $33.9 million in the prior-year
quarter. Tourism segment net income increased 47.4% to $4.9
million compared with $3.3 million in the prior-year
quarter. Total passengers increased 6.9% to 134,157 during the
current-year quarter, compared with 125,515 in the prior year
quarter. Tourism maintenance expense decreased $0.6 million or 8.3%
in the current-year quarter, compared with the prior-year quarter
despite total flight volume increasing 3.9%. Tourism fuel expense
per flight hour decreased 37.8%.
United Rotorcraft's external revenue increased 36.2% to $8.4
million, compared to $6.2 million in the prior-year quarter. Its
segment external earnings improved from a loss of $0.8 million in
the year-ago period to income of $0.5 million in the current-year
quarter.
Credit Facility Refinancing
In the third quarter 2015, the Company completed the previously
announced amendment to its existing credit agreement, expanding its
access to capital by $400 million of which up to $200 million can
be used to repurchase shares.
October Preliminary Flight Volume
The Company also provided an update on preliminary October 2015
flight volume. Total community-based transports increased 12.3% to
5,840 during October 2015, compared with 5,199 in October
2014. October 2015 Same-Base Transports increased by 20
transports as compared with October 2014. Weather cancellations
during October 2015 for these same bases increased by 193 compared
with the prior-year month.
Third Quarter 2015 Conference Call
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 54925007, for 3
days following the call and the web cast can be accessed at
www.airmethods.com for 30 days. Concurrently, the Company will post
a financial supplement that contains final operating statistics 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 provides 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 450 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 we make with regard to the
Company's preliminary October 2015 operational results, including
those related to (i) total community-based patient transports, (ii)
same-base transports, and (iii) weather cancellations, and
statements regarding potential share repurchases, 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 Company's completion of its final quarter-end
closing and review procedures, the size, structure and growth of
the Company's air medical services, United Rotorcraft Division and
Tourism Division; the collection rates for patient transports; the
continuation and/or renewal of air medical service contracts;
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.
AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Amounts in thousands) |
(unaudited) |
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September 30, 2015 |
December 31, 2014 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 14,963 |
13,165 |
Trade receivables, net |
359,768 |
293,985 |
Other current assets |
92,562 |
92,691 |
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Total current assets |
467,293 |
399,841 |
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Net property and equipment |
768,598 |
721,981 |
Other assets, net |
273,779 |
239,483 |
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Total assets |
$ 1,509,670 |
1,361,305 |
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LIABILITIES AND STOCKHOLDERS'
EQUITY |
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Current liabilities: |
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Notes payable related to aircraft pending
long-term financing |
$ 11,112 |
11,442 |
Current portion of indebtedness |
72,433 |
69,781 |
Accounts payable, accrued expenses and
other |
111,744 |
99,044 |
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Total current liabilities |
195,289 |
180,267 |
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Long-term indebtedness |
597,249 |
563,373 |
Other non-current liabilities |
145,920 |
138,775 |
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Total liabilities |
938,458 |
882,415 |
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Redeemable non-controlling interests |
8,585 |
6,981 |
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Total stockholders' equity |
562,627 |
471,909 |
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Total liabilities and stockholders'
equity |
$ 1,509,670 |
1,361,305 |
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AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME |
(Amounts in thousands, except
share and per share amounts) |
(unaudited) |
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Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
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2015 |
2014 |
2015 |
2014 |
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Revenue: |
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Patient transport revenue, net |
$ 222,842 |
189,469 |
566,918 |
501,870 |
Air medical services contract revenue |
40,329 |
44,278 |
119,743 |
134,829 |
Tourism revenue |
36,212 |
33,941 |
98,877 |
89,709 |
Product operations |
8,379 |
6,237 |
16,966 |
21,461 |
Dispatch and billing service revenue |
3,580 |
2,992 |
10,739 |
7,754 |
Total revenue |
311,342 |
276,917 |
813,243 |
755,623 |
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Expenses: |
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Operating expenses |
168,830 |
160,061 |
485,663 |
452,153 |
General and administrative |
39,351 |
35,602 |
108,698 |
102,734 |
Depreciation and amortization |
20,884 |
19,972 |
62,082 |
60,467 |
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229,065 |
215,635 |
656,443 |
615,354 |
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Operating income |
82,277 |
61,282 |
156,800 |
140,269 |
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Interest expense |
(4,893) |
(5,342) |
(15,041) |
(16,439) |
Other, net |
(266) |
322 |
1,270 |
588 |
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Income from continuing operations before
income taxes |
77,118 |
56,262 |
143,029 |
124,418 |
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Income tax expense |
(30,235) |
(21,891) |
(55,864) |
(48,668) |
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Income from continuing operations |
46,883 |
34,371 |
87,165 |
75,750 |
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Loss on discontinued operations, net of
income taxes |
(29) |
(531) |
(378) |
(1,934) |
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Net income |
46,854 |
33,840 |
86,787 |
73,816 |
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Income attributable to redeemable
non-controlling interests |
202 |
123 |
684 |
420 |
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Net income attributable to Air Methods
Corporation and subsidiaries |
$ 46,652 |
33,717 |
86,103 |
73,396 |
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Income per common share: |
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Basic |
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Continuing
operations |
$ 1.17 |
0.92 |
2.18 |
1.97 |
Discontinued
operations |
-- |
(0.01) |
(0.01) |
(0.05) |
Diluted |
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Continuing
operations |
$ 1.16 |
0.91 |
2.17 |
1.96 |
Discontinued
operations |
-- |
(0.01) |
(0.01) |
(0.05) |
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Weighted average common shares outstanding -
basic |
39,293,453 |
39,168,873 |
39,276,062 |
39,146,609 |
Weighted average common shares outstanding -
diluted |
39,420,354 |
39,343,405 |
39,408,239 |
39,329,121 |
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AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Amounts in thousands) |
(unaudited) |
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Nine Months Ended |
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September 30, |
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2015 |
2014 |
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Cash flows from operating activities: |
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Net income |
$ 86,787 |
73,816 |
Loss from discontinued
operations, net of income taxes |
378 |
1,934 |
Adjustments to reconcile net
income to net cash provided by operating activities: |
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Depreciation and
amortization |
62,082 |
60,467 |
Deferred income
tax expense |
6,397 |
17,998 |
Stock-based
compensation |
5,733 |
2,866 |
Tax benefit from
exercise of stock options |
(184) |
(1,779) |
Loss on
disposition of assets |
2,876 |
1,028 |
Unrealized loss
on derivative instrument |
369 |
70 |
Loss from equity
method investee |
1,193 |
738 |
Changes in assets
and liabilities, net of effects of acquisitions |
(40,301) |
(38,762) |
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Net cash provided
by continuing operating activities |
125,330 |
118,376 |
Net cash used by
discontinued operating activities |
(100) |
(1,843) |
Net cash provided
by operating activities |
125,230 |
116,533 |
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Cash flows from investing activities: |
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Acquisition of
subsidiaries |
-- |
(3,182) |
Acquisition of property and
equipment |
(95,494) |
(87,803) |
Payments for hospital contract
conversions |
(43,481) |
-- |
Buy-out of previously leased
aircraft |
(9,519) |
(17,296) |
Proceeds from disposition of
equipment |
3,642 |
12,378 |
Decrease (increase) in other
assets |
(10,900) |
(660) |
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Net cash used by continuing
investing activities |
(155,752) |
(96,563) |
Net cash provided (used) by
discontinued investing activities |
25 |
97 |
Net cash used by investing
activities |
(155,727) |
(96,466) |
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Cash flows from financing activities: |
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Proceeds from issuance of
common stock, net |
409 |
1,190 |
Tax benefit from exercise of
stock options |
184 |
1,779 |
Net borrowings (payments) under
line of credit |
-- |
(12,000) |
Payments for financing
costs |
(4,472) |
(81) |
Proceeds from long-term
debt |
105,525 |
54,503 |
Payment of long-term debt and
capital lease obligations |
(69,351) |
(58,586) |
Proceeds from non-controlling
interests |
-- |
98 |
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Net cash provided (used) by
continuing financing activities |
32,295 |
(13,097) |
Net cash provided (used) by
discontinued financing activities |
-- |
-- |
Net cash provided (used) by
financing activities |
32,295 |
(13,097) |
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Increase (decrease) in cash and cash
equivalents |
1,798 |
6,970 |
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Cash and cash equivalents at beginning of
period |
13,165 |
9,862 |
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Cash and cash equivalents at end of
period |
$ 14,963 |
16,832 |
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AIR METHODS CORPORATION
AND SUBSIDIARIES |
RECONCILIATION OF NET INCOME TO
EBITDA |
(Amounts in thousands) |
(unaudited) |
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Quarter Ended |
Nine Months Ended |
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September 30, |
September 30, |
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2015 |
2014 |
2015 |
2014 |
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Net income attributable to Air Methods
Corporation and subsidiaries |
$ 46,652 |
33,717 |
$ 86,103 |
73,396 |
Loss on discontinued operations, net of
income taxes |
(29) |
(531) |
(378) |
(1,934) |
Net income from continuing operations
attributable to Air Methods Corporation and subsidiaries |
46,681 |
34,248 |
86,481 |
75,330 |
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Interest expense * |
4,857 |
5,304 |
14,920 |
16,332 |
Income tax expense * |
30,235 |
21,891 |
55,864 |
48,668 |
Depreciation and amortization * |
20,783 |
19,893 |
61,800 |
60,220 |
Loss on disposition of assets, net * |
2,607 |
(186) |
2,876 |
1,027 |
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EBITDA from continuing operations |
$ 105,163 |
81,150 |
$ 221,941 |
201,577 |
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* Excludes amounts attributable to redeemable
non-controlling interests |
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CONTACT: Trent J. Carman, Chief Financial Officer, (303) 792-7591
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