Company Posts EPS of $0.20 on $23.5 Million Revenue
Six Month Results Reflect On-Budget Performance
DENVER, Aug. 8 /PRNewswire/ -- Air Methods Corporation (Nasdaq: AIRM - news) reported financial results for the second quarter and six months ended June 30, 2001.
For the quarter, revenue increased 21 percent to $23.5 million, while net income decreased 17 percent to $1,680,000 or $0.20 per basic and diluted share compared to the year ago period. For the six months, revenue increased 28 percent to $43.5 million, while net income decreased nine percent to $2.2 million or $0.26 per basic and diluted share compared to the year ago period. The increase in revenue was primarily attributed to inclusion of ARCH Air Medical Service, Inc. ``ARCH'' (acquired in late April 2000) for a full period, increase in number of operating bases, and a seven percent increase in flight volume from continuing hospital contracts during the six month period. The decrease in net income for the quarter was primarily attributed to slower than anticipated collections within Mercy Air Service, Inc. (Mercy Air) as compared with stronger than anticipated collections during the second quarter of 2000.
George Belsey, Chairman and CEO, said, ``Given that prior year earnings were heavily weighted toward the first half of 2000, we believe these results keep us on pace to achieve our beginning of the year objective of 15% growth in net income. Although the quarterly results were slightly lower than our budgeted expectations, the company remains on budget year-to date.''
Second Quarter Highlights:
-- Air Medical Services: Air Medical Services revenue increased more
than 16 percent compared to the year ago quarter due in part to the
13 percent increase in flight volume from continuing contracts and an
increase in number of operating bases. Divisional net profit
increased more than 24 percent to $793,000, slightly outpacing the
growth in revenue.
-- Mercy Air Service, Inc.: Mercy Air's consolidated (inclusive of ARCH)
revenue increased 32 percent to $12.1 million from $9.2 million, while
segment net income decreased nine percent to $1,460,000. With a full
quarter of operations in 2001 and new bases of operation, ARCH revenue
increased 70 percent to $5.2 million, while net income increased
185 percent to $819,000. ARCH earnings outpaced revenue growth due to
stronger than anticipated collections, which reduced bad debt expense
as a percentage of revenue. Excluding ARCH, Mercy Air's revenue
increased 12 percent to $6.9 million; however, net income decreased by
more than $600,000 due, in part, to lower than anticipated collections
during the quarter, which compared with significantly higher than
anticipated collections during the prior year quarter. On a combined
basis, bad debt expense for Mercy Air and ARCH as a percentage of
revenue increased by 1.9 percent, an impact of $230,000.
-- Products Division: Products Division revenue decreased four percent
to $2.2 million, while net divisional income decreased $149,000 to
$362,000. When combined with the first quarter performance, the
Products Division has posted a 20 percent increase in revenue and a
15 percent increase in divisional net income for the six month period.
Belsey added, ``Looking ahead to the second half of 2001 and subject to the risk factors set forth in our public filings, the company expects second half earnings to exceed first half results. This expectation is created by the addition of new contracts within the Air Medical Services and Products Divisions (including five additional HH-60L -- formerly UH-60Q -- Multi- Mission Medevac Systems for the U.S. Army), as well as anticipated earnings from recent expansion within the community-based operations in the St. Louis region.
``In addition, the company is actively pursuing the completion of two acquisitions which would affect both our community-based and hospital-based operations. The final decisions to complete these transactions are pending negotiation of final terms and conditions and resolution of due diligence matters. The company did terminate acquisition discussions with a third entity, which would have expanded the Products Division's operations, due to seller valuation expectations being considered too high by the company. Management continues to pursue other acquisition opportunities within this segment.'' |
