Air Methods Expects Preliminary Loss of $0.06-$0.09 Per Share for 4Q98
January 15, 1999 08:01 AM
DENVER, Jan. 15 /PRNewswire/ -- Air Methods Corporation AIRM said preliminary results indicate a loss of $0.06-$0.09 per share for the fourth quarter ended December 31, 1999 compared to a $0.07 profit in the year ago quarter, which included a $0.03 gain. The preliminary estimate is pending final adjustments and year-end audit procedures.
Earlier in the quarter, the Company had indicated the period, seasonally the Company's smallest, would include approximately $0.03 per share in start-up expenses due to recent business expansion and costs associated with discontinuing a lease for a Lear Jet. Over the course of the quarter, the Company's Mercy Air unit began to experience lower than expected revenues due to increased competition from alternative air ambulance providers, both public and private, in recently expanded and existing service areas. Separately, Mercy began to experience higher bad debt expense as a result of lower than expected collections.
"We are vigorously responding to this competitive reaction," said George W. Belsey, Chairman and CEO of Air Methods. "With support of local police, fire, safety and health officials, we are actively pursuing legal alternatives and possible strategic alliances with other operators." Mercy Air is a 24-hour, 7-day a week, independent provider of helicopter emergency transportation and medical services. "Due to the high fixed-cost nature of providing this level of service to these communities, any major softness in revenues can quickly affect the bottom line," Mr. Belsey said. "We are disappointed, but hopeful we can resolve these issues early in 1999."
Mr. Belsey noted that the significant maintenance cost overruns experienced in the third quarter have been greatly reduced over the course of the fourth quarter and that the Company's Flight Service and Products divisions performed generally in line with expectations. Air Methods plans to announce more details related to its Fiscal 1999 turnaround plan, as well as long-term growth plans for Air Methods, on Tuesday, January 19th.
Air Methods Corporation is the leading provider of medical transportation, services and technology to more than 60 hospitals in 17 states and the U.S. Army and Air Force through major government contracts. Since it was founded in 1980, the Company has transported more than 150,000 critically ill and injured people.
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 flight services and products markets; the continuation and/or renewal of flight service contracts; the acquisition of new and profitable Products Division contracts and other flight service operations; the successful expansion of Mercy Air operations; continued royalty revenue from the Company's foreign franchise, and other matters.
CONTACT: Aaron D. Todd, Chief Financial Officer, 303-792-7413; or Gary Fishman or Kimberly Boshara, Investor Relations, 212-527-4808, both of Hudson Stone for Air Methods Corporation.
SOURCE Air Methods Corporation
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