Back on track
Air Methods Reports 2Q2005 Results
Tuesday August 9, 7:00 am ET
Company Earns $0.30 of Basic EPS, Inclusive of $0.17 Per Share Loss on Early Extinguishment of Debt
DENVER, Aug. 9 /PRNewswire-FirstCall/ -- Air Methods Corporation (Nasdaq: AIRM - News) reported results for the quarter ended June 30, 2005. Revenue increased 18% to $87.7 million from $74.3 million in the year-ago quarter. For the six-month period, revenue increased 15% to $156.2 million, up from $135.9 million in the prior-year six-month period.
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For the quarter, net income increased 32% to $3.3 million ($0.30 per basic and $0.29 per diluted share) as compared with prior-year quarter net income of $2.5 million ($0.23 per basic and $0.22 per diluted share). Net income for the six-month period was $2.9 million ($0.26 per basic and $0.25 per diluted share) compared to $10.6 million ($0.97 per basic and $0.94 per diluted share) for the prior-year six-month period. The current year quarter and six-month period includes a loss on early extinguishment of debt of $3.1 million before the effect of income taxes. Net of income taxes, this loss reduced quarterly and six-month net income by $1.9 million, or $0.17 per basic share. By refinancing its $23 million in subordinated notes, the Company reduced its effective interest rate by over 9%, based on current rates. The prior-year six-month period results include a first quarter increase to net income of $8.6 million, or $0.79 per basic and $0.76 per diluted share, from the cumulative effect of a change in accounting principle, net of tax effect. Income before cumulative effect of change in accounting principle was $2.0 million, or $0.18 per basic and diluted share, for the prior-year six-month period.
Second Quarter Highlights
Community-Based Operations: Revenue from community-based operations increased 19% to $60.6 million, and segment net income increased 80% to $7.9 million during the second quarter, as compared with the prior-year quarter. The increase in segment net income was primarily attributed to increases in net revenue after bad debt expense per transport, which increased from $4,414 in the prior-year quarter to $5,221 in the current quarter. Net revenue after bad debt expense per transport was $5,122 during the first quarter of 2005. The increase in net reimbursement was attributed to price increases and improved billing and collection processes. Community-based transports completed during the second quarter were 8,560 as compared with 8,010 in the prior-year quarter. Community-based transports for bases in operation greater than one year (Same-Base Transports) increased by 47, or less than 1%, while weather cancellations for bases in operation greater than one year decreased by 53, or 4%, from the prior-year quarter.
Hospital-Based Operations: Revenue from hospital-based operations increased by 15% to $25.3 million and segment net income increased 136% to $2.8 million during the second quarter as compared with the prior-year quarter. These increases were primarily attributed to decreases in maintenance expenses relative to flight fees. Divisional maintenance expense decreased by approximately 1%, while divisional flight fees increased by about 20%. The division also benefited from net contribution associated with $1.8 million in increased quarterly revenue from new operating bases begun either during or subsequent to the prior-year second quarter.
Products Division: Revenue, including revenue generated from internal projects, increased 11% to $3.5 million, while segment net income remained constant at $0.8 million during the second quarter as compared with the prior-year quarter. Segment net income did not increase in proportion to revenue growth due to changes in product mix which reduced the overall margin percentage.
Aaron Todd, Chief Executive Officer, stated, "We are obviously pleased with our strong financial performance. We are especially pleased to have generated healthy top-line and bottom-line growth from both services divisions. Base expansion, moderate weather and on-budget maintenance expenses have combined with significantly improved net reimbursement per transport to generate these strong quarterly results. We remain very optimistic that our goal to achieve strong year-over-year financial results is well within reach."
"We are happy to report that our third quarter has begun with healthy flight volume in July. Same-Base Transports for community-based operations during the month were 5% higher than July 2004, despite higher weather-related flight cancellations which increased 23% over the prior-year month. July flight volume exceeded June volume by 158 transports, even though flights missed due to weather were 132 higher than in June. We believe this indicates that our efforts to improve utilization at our existing operating bases through marketing and outreach programs are leading to positive results. Additionally, we believe that interest savings from our refinancing of the subordinated notes should also contribute to improved overall performance during the remainder of 2005," 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 8227358, for 3 days following the call; and the web cast can be accessed at www.airmethods.com for 30 days. |
