EX-99.1 2 doc2.txt PRESS RELEASE EXHIBIT 99.1 [GRAPHIC OMITED] AIR METHODS -------------------------------------------------------------------------------- The #1 Airborne Healthcare Company AIR METHODS REPORTS 1Q2004 RESULTS Diluted Earnings Per Share of $0.74 Includes Cumulative Effect of $0.79 for Change in Accounting Principle Results before Effect of Change in Accounting Principle In Line with Previously Announced Expectations DENVER, CO., May 12, 2004 -- Air Methods Corporation (NASDAQ: AIRM) reported results for the quarter ended March 31, 2004. Revenue increased 14% to $61.6 million from $54.0 million in the year-ago period. The Company reported net income of $8.1 million or $0.74 per basic and diluted share as compared with prior year period net loss of $0.5 million or $(0.05) per basic and diluted share. The current quarter results include an increase to net income of $8.6 million or $0.79 per basic and diluted share from the cumulative effect of a change in accounting principle, net of tax effect. Loss before cumulative effect of change was $0.5 million or $(0.05) per basic and diluted share, in line with expectations announced in April. The cumulative effect stated above relates to the Company's decision to change its method of accounting for major engine and airframe component overhaul costs from the accrual method to the direct expense method, effective January 1, 2004. Under the direct expense method, maintenance costs are recognized as expense as maintenance services are performed. The Company believes the new method is preferable in the circumstances because the maintenance liability is not recorded until there is an obligating event and because this method is the predominant method used in the transportation industry. The new method also eliminates significant estimates and judgments inherent in the accrual method. Pro forma results, assuming the change in accounting principle had been applied retroactively, would reflect net income of $0.8 million and basic and diluted income per share of $0.08 for the quarter ended March 31, 2003. Trent Carman, Chief Financial Officer, stated, "As previously disclosed, our first quarter results were adversely affected by a decrease in net revenue after bad debt expense per community-based transport as compared with the prior year first quarter. This decrease was offset, in part, by a 16% increase in patients transported from community bases which were in operation for over one year as compared with the prior year period. While net revenue after bad debt expense per community-based transport was down 8.8% compared with the prior year first quarter, the decrease, as compared with the fourth quarter of 2003, was 3.0%." Compared to the year-ago quarter, community-based operations revenue increased 24% to $39.0 million, while current period divisional net loss of $228,000 compares with divisional net income of $523,000 in the prior year period. Hospital-based operations revenue decreased 2.2% to $20.6 million, while divisional net income decreased 86% to $135,000 from $939,000. The decrease in revenue is attributed to two hospital contracts that did not renew at expiration in late 2003 and early 2004 and to a hospital customer that converted to the Air Methods' community-based model in late 2003. The decrease in hospital-based divisional earnings was primarily attributed to higher than anticipated maintenance expense of $659,000. External revenue for the Products Division increased 52% from $1.3 million to $2.0 million in the current year quarter, while divisional net income from external projects increased from $112,000 to $1,255,000. Increases in both external revenue and net income for the division were attributed to a three-fold increase in backlog beginning in 2004 as compared with 2003, and to increased margins due to changes in product line mix during the quarter. Aaron Todd, CEO, noted, "While we are obviously disappointed that reimbursement continued to show weakness during our first quarter, we are pleased that this weakness has been offset by higher flight volumes and strength within our Products Division. Flight volume has continued to be robust through the date of this release. In addition, reimbursement rates began to decline during the second quarter of 2003; accordingly, the quarterly comparisons should improve on a relative basis throughout the remainder of 2004 if reimbursement rates stabilize. As a result, we continue to believe that our objective to grow basic earnings per share by 20% is still achievable. This expectation, however, is subject to the continuation of growth in flight volume and stabilized reimbursement rates at current levels." 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 (888) 396-5640 (domestic) or (706) 643-0580 (international) or by accessing the web cast at www.airmethods.com. A replay of the call will be available at (800) ------------------ 642-1687 (domestic) or (706) 645-9291 (international), access number 7116623, 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 a leader in emergency ------------------ aeromedical transportation, medical services and technology. The Air Medical Services Division is the largest provider of air medical transport services for hospitals. The LifeNet 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 180 helicopters and fixed wing aircraft. [GRAPHIC OMITED] AIRM NASDAQ LISTED -------------------------------------------------------------------------------- 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; successful integration of RMH operations and other matters set forth in the Company's public filings. -------------------------------------------------------------------------------- CONTACTS: Aaron D. Todd, Chief Executive Officer, (303) 792-7413 or RCG Capital Markets Group, Inc. at (480) 675-0400. Please contact Christine Clarke at (303) 792-7579 to be included on the Company's fax and/or mailing list. --FINANCIAL STATEMENTS ATTACHED -
AIR METHODS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Amounts in thousands) March 31, December 31, ---------- ------------ 2004 2003 ---------- ------------ ASSETS ------ Current assets: Cash and cash equivalents $ 1,536 5,574 Trade receivables, net 67,543 59,566 Other current assets 17,516 17,204 ---------- ------------ Total current assets 86,595 82,344 Net equipment and leasehold improvements 95,717 113,077 Other assets, net 18,350 18,586 ---------- ------------ Total assets $ 200,662 214,007 ========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Notes payable and other indebtedness $ 8,871 8,996 Accounts payable, accrued expenses and other 24,368 29,666 ---------- ------------ Total current liabilities 33,239 38,662 Long-term indebtedness 83,913 76,931 Other non-current liabilities 14,725 37,726 ---------- ------------ Total liabilities 131,877 153,319 Total stockholders' equity 68,785 60,688 ---------- ------------ Total liabilities and stockholders' equity $ 200,662 214,007 ========== ============
AIR METHODS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share amounts) Quarter Ended March 31, ------------------------ 2004 2003 Revenue: Flight operations $ 59,577 52,376 Product operations 2,057 1,578 ------------ ---------- Total revenue 61,634 53,954 ------------ ---------- Expenses: Operating expenses 51,726 45,660 General and administrative 6,322 4,704 Depreciation and amortization 2,677 2,748 ------------ ---------- 60,725 53,112 ------------ ---------- Operating income 909 842 Interest expense (2,087) (2,006) Other, net 286 318 ------------ ---------- Loss before income taxes (892) (846) Income tax benefit 348 330 ------------ ---------- Loss before cumulative effect of change in accounting principle (544) (516) Cumulative effect of change in accounting principle, net 8,595 - ------------ ---------- Net income (loss) $ 8,051 (516) ============ ========== Income (loss) per common share - basic and diluted: Loss before cumulative effect of change in accounting principle $ (0.05) (0.05) Cumulative effect of change in accounting principle, net 0.79 - ------------ ---------- Net income (loss) $ 0.74 (0.05) ============ ========== Weighted average common shares outstanding: Basic 10,832,455 9,521,884 Diluted 11,258,883 9,864,211