Air Methods Announces Financial Impact of Third Quarter EventsCompany Remains on Track to Achieve Stated Goals for 2002
PR NEWSWIRE - October 23, 2002 07:01
DENVER, Colo., Oct 23, 2002 /PRNewswire-FirstCall via COMTEX/ -- Air Methods Corporation (Nasdaq: AIRM), the largest air medical transportation company in the United States, today announced that its third quarter earnings before income taxes were negatively impacted by approximately $450,000 due to a previously announced accident in Las Vegas. In addition, the quarterly pre-tax earnings were reduced by approximately $325,000 from a slight reduction in collection percentage for community-based transport billings. Despite these events the Company reiterated that it is on track to achieve its objective of 15 percent growth in pre-tax earnings for the year.
The financial impact from Mercy Air Service, Inc.'s September accident was primarily attributed to reduced flight revenue caused by out-of-service bases of operation. Following the accident, all three of the Las Vegas bases were temporarily shutdown. By the end of the third quarter, two of the three bases were back in operation. The third base is expected to be back in service by December 1st. The remainder of the financial impact was attributed to insurance deductibles, workers compensation premium adjustments, and loss from disposition of aircraft. These factors accounted for approximately one third of the overall financial impact for the quarter.
Lower than anticipated collections during the quarter reduced the overall collection percentage as compared with the first half of 2002. As a result, bad debt as a percentage of revenue was higher for the quarter.
Mr. Aaron Todd, Chief Operating and Financial Officer, noted, "Despite the financial impact from these two factors, the Company remains on track to exceed the objective of 15 percent growth in pre-tax earnings. While mild fluctuations in collection rates are typical in our industry, the Company's annual price adjustment during the fourth quarter should neutralize the impact of increased bad debt and other increases in costs of operations." |
