Air Methods Corporation (Nasdaq:AIRM), the global leader in air
medical transportation, reported financial results for the quarter
and year ended December 31, 2014.
For the year, revenue increased 14% to $1,004.8 million compared
to $879.2 million in the prior year. Income from continuing
operations after minority interests increased 57% to $98.8 million,
or $2.56 per diluted share, in the current year from $62.9 million,
or $1.55 per diluted share, in the prior year. For the fourth
quarter, revenue increased 12% to $249.2 million as compared with
$222.4 million during the prior-year period. Earnings from
continuing operations after minority interests increased 72% to
$23.4 million, or $0.59 per diluted share, compared to $13.7
million, or $0.29 per diluted share, in the prior-year period.
The Company made the decision during the fourth quarter of 2014
to discontinue all operations conducted by its subsidiary, American
Jets, Inc. (AJI), a long-range fixed wing medical transportation
provider acquired in July 2013. Ongoing operating losses were a key
factor in the decision to discontinue all of AJI's operations in
late December 2014. Accordingly, after-tax losses of $2.0 million,
or $.05 per share, and $3.9 million, or $0.10 per share, for the
quarter and year ended December 31, 2014, respectively, have been
excluded from results from continuing operations. The loss from
this discontinued operation was $0.01 per diluted share for the
quarter and year ended December 31, 2013.
The fourth quarter of 2013 included $2.4 million in pre-tax
charges associated with severance for certain terminated employees,
reserves for pending legal matters, impairment/disposition losses
on aircraft and certain intangible assets, and transaction costs
associated with acquisition activities. The current-year quarter
includes $1.1 million in pre-tax charges from these activities.
Basic and diluted earnings per share for the quarter and year
ended December 31, 2013, were reduced by $0.05 for the impact of an
equity put option related to our redeemable non-controlling
interest in one of our consolidated subsidiaries. The equity put
option allows the non-controlling interest party to sell its
ownership interest in a joint venture to the Company at a future
date for a minimum pre-established amount. While net income on the
consolidated statements of comprehensive income was not reduced by
the amount of this equity put option, earnings per share are
required to be calculated after reducing net income by the amount
of the equity put option. Basic and diluted earnings per share for
the year ended December 31, 2014 were increased by $0.05 associated
with an adjustment to the value of the same equity put option
during the third quarter of 2014.
Financial results for the quarter and year ended December 31,
2014, include operations associated with the Company's acquisition
of Helicopter Consultants of Maui, LLC (doing business as Blue
Hawaiian Helicopters) and certain of its affiliates (collectively,
Blue Hawaiian) on December 13, 2013. Revenue generated from Blue
Hawaiian during the quarter and year ended December 31, 2014 was
$13.8 million and $56.3 million, respectively, compared with $2.8
million from December 13 through December 31 of 2013.
Fourth Quarter Highlights
Net patient transport revenue increased 15% to $174.3 million
from $151.9 million in the prior-year quarter. Net revenue per
patient transport increased 6% to $12,238 from $11,531 in the
prior-year quarter. Total patient transports from community-based
locations increased 9% to 14,209 from 13,054. Patient transports
from community-based locations open greater than one year
(Same-Base Transports) increased 71 transports, as compared with
the prior-year quarter. Weather cancellations for these same base
locations increased by 272 transports compared with the prior-year
quarter. Air medical services contract revenue decreased by 8% to
$41.9 million from $45.8 million.
Maintenance expense (excluding tour operations) for the fourth
quarter of 2014 compared to the prior-year period decreased by 10%,
or $2.5 million, while flight volume, including volume associated
with hospital contracts, decreased by 2%. Fuel costs (excluding
tour operations) per flight hour decreased by 14% during the
current year quarter.
Revenue and divisional net loss from tour operations were $26.3
million and $0.4 million, respectively, for the quarter ended
December 31, 2014, compared with revenue and net income of $14.2
million and $1.3 million, respectively, for the prior year quarter.
Decrease in divisional net income was attributed, in part, to more
severe weather in certain markets.
Revenue from our United Rotorcraft Division, excluding revenue
generated from internal projects, decreased to $3.4 million from
$9.3 million in the prior-year quarter, a 63% decrease. Excluding
internal projects, the division generated a net loss of $2.7
million in the current-year quarter compared to a net loss of $1.0
million in the prior-year quarter.
The Company also provided an update on preliminary January
flight volume and net revenue per patient transport. Total
community-based transports during January 2015 were mostly
unchanged at 4,534 compared with 4,542 during January 2014.
Same-Base Transports for January decreased 335 transports, or 8%,
while weather cancellations for these same bases increased by 365
transports. Preliminary net revenue per patient transport during
January 2015 increased 15% to $12,740 compared with $11,074 during
January 2014. The Company also announced that community-based
transports for February to date reflect a 13% increase, due in part
to reduction in weather cancellations month to date.
Aaron Todd, Chief Executive Officer, stated, "We have achieved a
key milestone in exceeding $1 billion in revenue in 2014. Healthy
growth in air medical flight volume throughout 2014 and quarter to
date in 2015 is very encouraging. We have also seen less
seasonality in our net reimbursement results during the winter
months thus far, as well. Fuel price decreases and continued
outsourcing activity within our hospital-based operations should
continue to be key earnings growth drivers in 2015. We are also
pleased to have generated strong earnings accretion from our
helicopter tourism diversification in 2014, despite more severe
weather conditions in both key markets."
The Company will discuss these results in a conference call
scheduled today at 4:30 p.m. Eastern. Interested parties can access
the call by dialing (855) 601-0049 (domestic) or (720) 398-0100
(international) or by accessing the web cast at www.airmethods.com.
A replay of the call will be available at (855) 859-2056 (domestic)
or (404) 537-3406 (international), access number90055964, for 3
days following the call and the web cast can be accessed at
www.airmethods.com for 30 days. Concurrently, a financial
supplement that contains operating statistics normally provided
during previous earnings calls has been posted on its website,
www.airmethods.com.
Air Methods Corporation (www.airmethods.com) is the global
leader in air medical transportation. The Air Medical Services
Division is the largest provider of air medical transport services
in the United States. The United Rotorcraft Division specializes in
the design and manufacture of aeromedical and aerospace technology.
The Tourism Division is comprised of Sundance Helicopters, Inc. and
Blue Hawaiian Helicopters, which provide helicopter tours and
charter flights in the Las Vegas/Grand Canyon region and Hawaii,
respectively. Air Methods' fleet of owned, leased or maintained
aircraft features approximately 450 helicopters and fixed wing
aircraft.
Forward-Looking
Statements: Forward-looking statements in this news
release are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Statements
in this press release that are "forward-looking statements,"
including statements made with regard to the Company's preliminary
January and February 2015 operational and financial results,
including those related to (i) total community-based patient
transports, (ii) same base transports, (iii) weather cancellations,
and (iv) net revenue per patient transport, and the anticipated
impact of fuel price decreases and outsourcing activity, are based
on current expectations and assumptions that are subject to 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, United Rotorcraft Division and Tourism
Division; the collection rates for patient transports; the
continuation and/or renewal of air medical service contracts;
weather conditions across the U.S.; development and changes in laws
and regulations, including, without limitation, the impact of the
Patient Protection and Affordable Care Act; increased regulation of
the health care and aviation industry through legislative action
and revised rules and standards; and other matters set forth in the
Company's filings with the SEC. The Company is under no
obligation (and expressly disclaims any obligation) to update or
alter its forward-looking statements, whether as a result of new
information, future events or otherwise.
About Non-GAAP Financial Information: This
press release discusses EBITDA, which is not calculated in
conformity with U.S. Generally Accepted Accounting Principles
(GAAP). The Company defines EBITDA as earnings before interest,
income taxes, depreciation, amortization and gain or loss on
disposition of assets. A table is provided in this press release to
reconcile such non-GAAP financial measure to net income, which is
the most directly comparable financial measure prepared in
accordance with GAAP. Such table below includes all information
reasonably available to the Company at the date of this press
release and adjustments that the Company can reasonably predict.
Events that could cause the reconciliation to change include, but
are not limited to, acquisitions and divestitures of businesses and
goodwill and other asset impairments.
To supplement the Company's consolidated financial statements
presented on a GAAP basis, management believes that this non-GAAP
measure provides useful information about the Company's core
operating results and thus is appropriate to enhance the overall
understanding of the Company's past financial performance and its
prospects for the future. Management believes the additions and
subtractions from net income used to calculate EBITDA reflect the
measurements that its bank creditors and third party stock analysts
use in evaluating the Company. These adjustments to the Company's
GAAP results are made with the intent of providing both management
and investors a more complete understanding of the Company's
underlying operational results and trends and performance.
Management uses this non-GAAP measure to evaluate the Company's
financial results. The presentation of non-GAAP measures is not
meant to be considered in isolation or as a substitute for or
superior to financial results determined in accordance with
GAAP.
Please contact Christina Brodsly at (303) 256-4122 to be
included on the Company's e-mail distribution list.
– FINANCIAL STATEMENTS ATTACHED –
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AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Amounts in thousands) |
(unaudited) |
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December 31, 2014 |
December 31, 2013 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 13,165 |
$ 9,862 |
Trade receivables, net |
293,985 |
237,856 |
Other current assets |
92,691 |
92,832 |
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Total current assets |
399,841 |
340,550 |
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Net property and equipment |
721,981 |
664,842 |
Other assets, net |
239,483 |
247,149 |
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Total assets |
$ 1,361,305 |
$ 1,252,541 |
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LIABILITIES AND STOCKHOLDERS'
EQUITY |
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Current liabilities: |
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Notes payable related to aircraft pending
long-term financing |
$ 11,442 |
$ 2,616 |
Current portion of indebtedness |
69,781 |
68,531 |
Accounts payable, accrued expenses and
other |
99,044 |
91,171 |
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Total current liabilities |
180,267 |
162,318 |
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Long-term indebtedness |
563,373 |
608,287 |
Other non-current liabilities |
138,775 |
105,864 |
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Total liabilities |
882,415 |
876,469 |
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Redeemable non-controlling interests |
6,981 |
8,113 |
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Total stockholders' equity |
471,909 |
367,959 |
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Total liabilities and stockholders'
equity |
$ 1,361,305 |
$ 1,252,541 |
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AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME |
(Amounts in thousands, except
share and per share amounts) |
(unaudited) |
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Quarter Ended |
Year Ended |
|
December 31, |
December 31, |
|
2014 |
2013 |
2014 |
2013 |
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Revenue: |
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Patient transport revenue, net |
$ 174,343 |
151,923 |
676,213 |
585,459 |
Air medical services contract revenue |
41,915 |
45,769 |
176,744 |
204,512 |
Tourism revenue |
26,327 |
14,206 |
116,036 |
56,591 |
Product operations |
3,383 |
9,279 |
24,844 |
24,305 |
Dispatch and billing service revenue |
3,182 |
1,197 |
10,936 |
8,294 |
Total revenue |
249,150 |
222,374 |
1,004,773 |
879,161 |
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Expenses: |
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Operating expenses |
151,098 |
145,268 |
603,251 |
565,605 |
General and administrative |
34,743 |
30,092 |
137,477 |
112,502 |
Depreciation and amortization |
20,100 |
19,794 |
80,567 |
79,514 |
|
205,941 |
195,154 |
821,295 |
757,621 |
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Operating income |
43,209 |
27,220 |
183,478 |
121,540 |
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Interest expense |
(5,311) |
(5,154) |
(21,750) |
(20,323) |
Other, net |
522 |
172 |
1,110 |
1,136 |
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Income from continuing operations before
income taxes |
38,420 |
22,238 |
162,838 |
102,353 |
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Income tax expense |
(14,792) |
(8,846) |
(63,460) |
(39,752) |
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Income from continuing operations |
23,628 |
13,392 |
99,378 |
62,601 |
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Loss on discontinued operations, net of
income taxes |
(1,974) |
(388) |
(3,908) |
(532) |
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Net income |
21,654 |
13,004 |
95,470 |
62,069 |
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Income (loss) attributable to redeemable
non-controlling interests |
179 |
(270) |
599 |
(270) |
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Net income attributable to Air Methods
Corporation and subsidiaries |
$ 21,475 |
13,274 |
94,871 |
62,339 |
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Income per common share: |
23,449 |
13,662 |
98,779 |
62,871 |
Basic |
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Continuing
operations |
$ 0.60 |
0.30 |
2.57 |
1.56 |
Discontinued
operations |
(0.05) |
(0.01) |
(0.10) |
(0.01) |
Diluted |
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Continuing
operations |
$ 0.59 |
0.29 |
2.56 |
1.55 |
Discontinued
operations |
(0.05) |
(0.01) |
(0.10) |
(0.01) |
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Weighted average common shares
outstanding: |
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Basic |
39,211,958 |
39,042,683 |
39,163,080 |
38,923,206 |
Diluted |
39,367,533 |
39,273,193 |
39,348,291 |
39,210,392 |
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AIR METHODS CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Amounts in thousands) |
(unaudited) |
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Year Ended |
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December 31, |
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2014 |
2013 |
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Cash flows from operating activities: |
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Net income |
$ 95,470 |
62,069 |
Loss from discontinued
operations, net of income taxes |
3,908 |
532 |
Adjustments to reconcile net
income to net cash provided by operating activities: |
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Depreciation and
amortization |
80,567 |
79,514 |
Deferred income tax
expense |
45,051 |
26,935 |
Stock-based compensation |
4,134 |
3,560 |
Tax benefit from exercise of
stock options |
(1,951) |
(3,015) |
Loss on disposition of
assets |
455 |
519 |
Unrealized loss on derivative
instrument |
70 |
143 |
Loss from equity method
investee |
624 |
212 |
Changes in assets and
liabilities, net of effects of acquisitions |
(51,027) |
(20,077) |
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Net cash provided by continuing
operating activities |
177,301 |
150,392 |
Net cash used by discontinued
operating activities |
(1,672) |
(742) |
Net cash provided by operating
activities |
175,629 |
149,650 |
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Cash flows from investing activities: |
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Acquisition of
subsidiaries |
(3,182) |
(65,641) |
Acquisition of property and
equipment |
(119,753) |
(62,410) |
Buy-out of previously leased
aircraft |
(28,751) |
(57,458) |
Proceeds from disposition of
equipment |
19,001 |
20,471 |
Decrease (increase) in other
assets |
1,316 |
(6,660) |
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Net cash used by continuing
investing activities |
(131,369) |
(171,698) |
Net cash provided (used) by
discontinued investing activities |
97 |
(3,394) |
Net cash used by investing
activities |
(131,272) |
(175,092) |
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Cash flows from financing activities: |
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Proceeds from issuance of
common stock, net |
1,422 |
1,749 |
Tax benefit from exercise of
stock options |
1,951 |
3,015 |
Net borrowings (payments) under
line of credit |
(12,000) |
(55,000) |
Payments for financing
costs |
(126) |
(868) |
Proceeds from long-term
debt |
89,911 |
194,628 |
Payment of long-term debt,
notes payable, and capital lease obligations |
(122,310) |
(112,380) |
Proceeds from non-controlling
interests |
98 |
342 |
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Net cash provided (used) by
continuing financing activities |
(41,054) |
31,486 |
Net cash provided (used) by
discontinued financing activities |
-- |
-- |
Net cash provided (used) by
financing activities |
(41,054) |
31,486 |
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Increase (decrease) in cash and cash
equivalents |
3,303 |
6,044 |
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Cash and cash equivalents at beginning of
period |
9,862 |
3,818 |
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Cash and cash equivalents at end of
period |
$ 13,165 |
9,862 |
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AIR METHODS CORPORATION AND
SUBSIDIARIES |
RECONCILIATION OF NET INCOME TO
EBITDA |
(Amounts in thousands) |
(unaudited) |
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Quarter Ended |
Year Ended |
|
December 31, |
December 31, |
|
2014 |
2013 |
2014 |
2013 |
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|
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Net income attributable to Air Methods
Corporation and subsidiaries |
$ 21,475 |
13,274 |
94,871 |
62,339 |
Loss on discontinued operations, net of
income taxes |
(1,974) |
(388) |
(3,908) |
(532) |
Net income from continuing operations
attributable to Air Methods Corporation and subsidiaries |
23,449 |
13,662 |
98,779 |
62,871 |
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Interest expense * |
5,272 |
5,154 |
21,604 |
20,323 |
Income tax expense * |
14,792 |
8,846 |
63,460 |
39,752 |
Depreciation and amortization * |
20,013 |
19,768 |
80,225 |
79,488 |
Loss (gain) on disposition of assets, net
* |
(572) |
193 |
456 |
519 |
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EBITDA from continuing operations |
$ 62,954 |
47,623 |
264,524 |
202,953 |
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* Excludes amounts attributable
to redeemable non-controlling interests |
CONTACT: Trent J. Carman, Chief Financial Officer, (303) 792-7591
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