EX-99.1 2 ex99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 AIR METHODS -------------------------------------------------------------------------------- The #1 Airborne Healthcare Company AIR METHODS REPORTS 2Q2006 RESULTS AND 3Q2006 UPDATE Company Earns $0.31 Diluted EPS; Revenue Grows 21% DENVER, CO., August 8, 2006 -- Air Methods Corporation (NASDAQ: AIRM) reported results for the quarter ended June 30, 2006. Revenue increased 21% to $105.9 million from $87.7 million in the year-ago quarter. For the six-month period, revenue increased 25% to $195.2 million, up from $156.2 million in the prior-year six-month period. For the quarter, net income increased 15% to $3.8 million, or $0.31 per diluted share, as compared with prior-year quarter net income of $3.3 million, or $0.29 per diluted share. Net income for the six-month period was $6.4 million, or $0.52 per diluted share, compared to $2.9 million, or $0.25 per diluted share, for the prior-year six-month period. The prior-year quarter and six-month period include a loss on early extinguishment of debt of $3.1 million before the effect of income taxes. Net of income taxes, this loss reduced prior-year quarterly and six-month net income by $1.9 million, or $0.16 per diluted share. The current-year quarter includes a $0.6 million pre-tax gain from disposition of assets, offset in part by $0.3 million of accrued severance expense before tax benefit associated with changes of two management positions. As previously reported, the current-year second quarter results reflect a decrease in net revenue after bad debt per community-based transport from $5,978 in the first quarter of 2006, to $5,559 in the current quarter. Net reduction to pre-tax earnings attributed to the decline in reimbursement rate was approximately $3.7 million. The decrease was attributed to a shift in payer mix from insured patients to uninsured and Medicaid categories, as well as to increases in bad debt reserves from lower than anticipated collections. SECOND QUARTER HIGHLIGHTS Community-Based Operations: Revenue from community-based operations increased 25% to $75.4 million, while segment net income decreased 6% to $7.4 million during the second quarter, as compared with $7.9 million in the prior-year quarter. The decrease in segment net income was primarily attributed to weaker than anticipated reimbursement rates as discussed above. Although net revenue after bad debt expense per transport increased from $5,221 in the prior-year quarter to $5,559 in the current quarter, the second quarter rate reflected a $419 per transport decrease from first quarter 2006 results. Community-based transports completed during the second quarter were 8,924 as compared with 8,562 in the prior-year quarter. Community-based transports for bases in operation greater than one year (Same-Base Transports) decreased slightly by 48, or less than 1%, while weather cancellations for bases in operation greater than one year increased by 116, or 9%, from the prior-year quarter. Community-based operations also experienced a 19% increase in fuel cost per flight hour during the current-year quarter as compared with the prior-year quarter. This resulted in a $0.4 million increase in fuel expense based on hours flown. Hospital-Based Operations: Revenue from hospital-based operations increased by 13% to $28.5 million, while segment net income decreased from $2.8 million during the prior-year second quarter to break-even results in the current quarter. The decrease in earnings is primarily attributed to a $0.8 million increase in pilot compensation expenses associated with implementation of a new collective bargaining agreement effective January 1, 2006. The decrease is also attributed to increases in maintenance expense per transport which increased from $531 in the prior-year quarter to $717 in the current-year quarter, a 35% increase. Products Division: Revenue, including revenue generated from internal projects, increased 23% to $4.2 million, while segment net income increased 41% to $1.1 million during the second quarter as compared with the prior-year quarter. Growth in segment net income outpaced growth in revenue due to change in product mix. Aaron Todd, Chief Executive Officer, stated, "We continue to remain optimistic that the severity of the change in payer mix during the second quarter does not reflect a longer-term trend. We have seen a significant improvement in both June and July as compared with the three-month period ended in May. Days' sales outstanding for community-based operations began to decline in May, a trend we expect to continue throughout the summer months. "We are pleased to report that our third quarter has begun with healthy flight volume in July as well. Community-based transports increased to 3,282 in July, as compared with 2,981 in June and 2,981 in July of 2005. Our operating margins have been affected by higher inflationary pressures attributed to first-year implementation of the pilots' collective bargaining agreement, as well as to employee benefits, fuel, and spare parts; however, we believe strong market conditions and recent price increases should provide for improving margins looking forward," said Todd. 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 2913460, 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 and medical services. 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 approximately 200 helicopters and fixed wing aircraft. 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; 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. ---FINANCIAL STATEMENTS ATTACHED---
AIR METHODS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Amounts in thousands) June 30, December 31, 2006 2005 -------------- ------------ ASSETS ------ Current assets: Cash and cash equivalents $ 2,778 3,218 Trade receivables, net 96,891 83,567 Other current assets 33,863 25,726 -------------- ------------ Total current assets 133,532 112,511 Property and equipment 93,154 93,530 Other assets, net 14,643 15,491 -------------- ------------ Total assets $ 241,329 221,532 ============== ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Notes payable and other indebtedness $ 19,828 16,502 Accounts payable, accrued expenses and other 28,538 29,170 -------------- ------------ Total current liabilities 48,366 45,672 Long-term indebtedness 67,618 58,392 Other non-current liabilities 30,546 31,257 -------------- ------------ Total liabilities 146,530 135,321 Total stockholders' equity 94,799 86,211 -------------- ------------ Total liabilities and stockholders' equity $ 241,329 221,532 ============== ============
AIR METHODS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share amounts) Three Months Ended Six Months Ended June 30, June30, ------------------------- ------------------------ 2006 2005 2006 2005 ------------------------- ------------------------ Revenue: Flight operations $ 103,795 85,865 191,626 152,823 Product operations 1,440 1,820 3,045 3,370 Other, net 647 - 562 - ------------------------- ------------------------ Total revenue 105,882 87,685 195,233 156,193 ------------------------- ------------------------ Expenses: Operating expenses 85,267 65,503 156,142 121,566 General and administrative 10,021 9,065 19,848 17,828 Depreciation and amortization 3,194 2,971 6,365 5,868 ------------------------- ------------------------ 98,482 77,539 182,355 145,262 ------------------------- ------------------------ Operating income 7,400 10,146 12,878 10,931 Interest expense (1,470) (1,525) (2,826) (3,418) Loss on early extinguishment of debt - (3,104) - (3,104) Other, net 394 (40) 740 333 ------------------------- ------------------------ Income before income taxes 6,324 5,477 10,792 4,742 Income tax expense (2,511) (2,153) (4,399) (1,886) ------------------------- ------------------------ Net income $ 3,813 3,324 6,393 2,856 ========================= ======================== Income per common share: Basic $ 0.32 0.30 0.55 0.26 Diluted $ 0.31 0.29 0.52 0.25 Weighted average common shares outstanding: Basic 11,760,986 11,029,421 11,698,504 11,013,912 Diluted 12,318,161 11,519,944 12,300,428 11,511,675