DENVER, CO., August 6, 2015 — Air Methods Corporation (Nasdaq: AIRM), the global leader in air medical transportation, reported financial results for the quarter and six months ended June 30, 2015 and provided an update on preliminary July 2015 flight volume. For the quarter, revenue increased 2% to $263.6 million from $257.6 million in the prior-year quarter. For the six-month period, revenue increased 5% to $501.9 million, compared to $478.7 million in the prior-year six-month period.
For the quarter, net income from continuing operations was $27.4 million, or $0.69 per diluted share, compared with $29.8 million, or $0.75 per diluted share, in the second quarter of 2014. For the six-month period, net income from continuing operations was $40.3 million, or $1.01 per diluted share, compared with $41.4 million, or $1.05 per diluted share, in the prior-year six-month period.
Community-based patient transports were 16,105 during the current-year quarter, compared with 14,994 in the prior-year quarter, a 7% increase. Patients transported for community bases in operation greater than one year (Same-Base Transports) decreased by 2%, or 318 transports, while weather cancellations for these same bases increased by 1,250 transports compared with the prior-year quarter. Requests for community-based service increased 4% for bases open greater than one year. Net revenue per community-based transport decreased less than 1% from $11,353 to $11,298 in the current-year quarter due to deterioration in payer mix and collection rate net of the benefit of price increases.
Maintenance expense, excluding tourism operations, increased $2.1 million, or 10%, compared with the prior-year quarter, even though total flight volume decreased 1%. Excluding tourism operations, fuel expense decreased $1.9 million compared with the prior-year quarter, while fuel expense per flight hour decreased by 32%. During the second quarter and six-month period ending June 30, 2015, the Company incurred higher expenses related to employee health insurance and workers compensation benefits. On a year-over-year basis, these costs increased $4.0 million and $4.2 million, respectively.
For the second quarter, Air Medical Services revenue increased by 3% to $224.7 million compared with $218.8 million in the prior-year quarter, while its segment net income from continuing operations decreased 6% from $55.5 million to $52.3 million. Tourism revenue increased 10% from $31.4 million to $34.4 million, while Tourism segment net income decreased 14% from $4.9 million to $4.2 million. Maintenance expense in the Tourism division increased $2.3 million, or 50%, despite flight hours increasing only 5%. United Rotorcraft Division’s external revenue decreased 40% to $4.4 million compared with $7.4 million in the prior-year quarter, while its external segment net loss was $0.4 million for the second quarter of 2015 compared to $0.1 million for the prior-year quarter.
The Company also provided an update on preliminary July 2015 flight volume. Total community-based transports increased 6% to 5,814 during July 2015, compared with 5,497 in July 2014. July 2015 Same-Base Transports decreased by 53 transports as compared with July 2014. Weather cancellations during July 2015 for these same bases increased by 393 compared with the prior-year month.
Aaron Todd, CEO, stated, “Missed flights due to weather, less favorable payor mix and collection rates, and higher maintenance expense have been headwinds for financial results year-to-date, as well as in the second quarter. Despite this, we remain optimistic for the future because of the continued growth in requests and same-base transports adjusted for weather cancellations, continued interest in hospital-based conversions, opportunities for future acquisitions, a strong balance sheet and solid cash flow as evidenced by the 7% growth in cash receipts per transport over the last twelve months and 45% growth in year-to-date cash flow from continuing operations. With our stock at its current level and our optimism about the future, our Board of Directors authorized a repurchase program of up to $200 million of the Company’s common stock.”
Shares will be repurchased in the open market at times and amounts considered appropriate by the Company based on factors including price and market conditions. This share repurchase program does not obligate the Company to acquire any particular amount of common stock. The Company’s share repurchase program may be suspended, discontinued or resumed at any time.
The Company is in the process of amending its credit agreement to allow for the execution of the share repurchase program. The amendment to the credit agreement is expected to be complete in the third quarter.
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 number 77221453, for 3 days following the call and the web cast can be accessed at www.airmethods.com for 30 days.
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 provides 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 over 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 we make with regard to the Company’s second quarter 2015 operational and financial results, including those related to (i) total community-based patient transports, (ii) same-base transports, (iii) weather cancellations, (iv) net revenue per patient transport, and (v) net income per share, and statements regarding hospital-based conversions, future acquisitions, anticipated amendment to our credit agreement, and share repurchases, 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 Company’s completion of its final quarter-end closing and review procedures, 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.