The #1 Airborne Healthcare Company
 
Air Methods Announces Year 2008 Financial Results
And Provides First Quarter 2009 Update

DENVER, CO., March 10, 2009 -- Air Methods Corporation (NasdaqGS: AIRM), the largest air medical transportation company in the world, reported revenue and net income for the year and fourth quarter ended December 31, 2008.
 
For the year, revenue increased 26% to $498.8 million compared to $396.3 million in the prior year.  Net income decreased 30% from $27.5 million, or $2.20 per diluted share, in the prior year to $19.3 million, or $1.54 per diluted share, in the current year.  The current year results include a $1.5 million ($0.12 per diluted share) decrease in income tax expense resulting from a decrease in the effective state income tax rate due to a change in Colorado statute.  The prior-year results included a decrease in income tax expense of $1.1 million ($0.08 per diluted share) resulting from approved changes in tax depreciation methods.
 
For the fourth quarter, revenue decreased 3% to $118.9 million as compared with $122.6 million during the prior-year period.  Net income decreased 23% to $3.7 million, or $0.30 per diluted share, compared to net income of $4.8 million, or $0.38 per diluted share, in the prior-year period.  The current-year quarter results include a $1.5 million ($0.12 per diluted share) decrease in income tax expense as discussed above, while the prior-year fourth quarter included a decrease in income tax expense of $1.1 million ($0.08 per diluted share) also discussed above.   The Company had previously announced that its current-year fourth quarter results included a 39% increase in employee healthcare costs of $1.2 million ($0.06 per diluted share after taxes) as compared with the prior-year fourth quarter, attributed to several large individual claims.
 
During the fourth quarter of 2008, total patients transported within community-based operations were 9,496, as compared with 10,738 during the prior-year quarter, a 12% decrease.  Patients transported for community bases in operation greater than one year (Same-Base Transports) decreased by 831 transports, or 8%, while weather cancellations for these same bases decreased by 394 transports compared with the prior-year period.  Revenue per community-based transport increased from $6,597 in the fourth quarter of 2007 and $7,047 in the third quarter of 2008, to $7,156 in the current-year fourth quarter.  Consolidated maintenance expenses per flight hour of $572 during the current-year quarter were mostly unchanged from the prior-year fourth quarter.  Fuel expenses per community-based transport decreased by 4% to $330 as compared with the prior-year quarter.
 
The Company also provided an update on first quarter 2009 operations to-date.  Same-Base Transports within community-based operations through February were down 424 patient transports, or 7%, as compared with the prior-year period, while weather cancellations for these same bases decreased by 664 as compared with the prior-year period.  Total community-based patient transports for the two-month period were 5,936 as compared with 6,818 in the prior-year period.  For the month of February, Same-Based Transports were down only 2%.
 

 
 
 


 
The Company also announced that maintenance expenses for the month of January were significantly below historical levels.  Preliminary maintenance expenses were approximately 20% below the 2008 monthly average and January 2008 actual results.  In addition, net revenue per community-based transport in January reflected healthy increases over the fourth quarter 2008 average.  This improvement was attributed, in part, to the 5% price increase in gross charges effective January 1, 2009.  Fuel expenses per community-based transport in January were $241, reflecting a 24% decrease from the prior-year month.
 
Aaron Todd, CEO of Air Methods, commented, “We are pleased with our fourth quarter results considering the recent softness in demand for service caused by the current economic environment.   Fuel prices and maintenance expenditures showed moderation during the last quarter of 2008 and have continued to improve significantly during the first month of 2009.  Our reimbursement continues to reflect benefits from previous price increases, while our flight volume through February is in line with our beginning-of-the-year expectations.”
 
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 (877) 883-0656 (domestic) or (706) 643-8826 (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 88611116, 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 a leader in emergency air medical transportation and medical services. The Hospital Based Services Division is the largest provider of air medical transport services for hospitals. The Community Based Services Division is the largest community-based provider of air medical services. The Products Division specializes in the design and manufacture of aeromedical and aerospace technology. The Company's fleet of owned, leased or maintained aircraft features over 320 helicopters and fixed wing aircraft.



 
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 air medical services and products markets; the collection rates for patient transports; the continuation and/or renewal of air medical service contracts; the acquisition of profitable Products Division contracts and other flight service operations; the successful expansion of the community-based operations; and other matters set forth in the Company's public filings.

 
CONTACTS:  Aaron D. Todd, Chief Executive Officer, (303) 792-7413.  Please contact Christine Clarke at (303) 792-7579 to be included on the Company’s fax and/or mailing list.
 

 
– FINANCIAL STATEMENTS ATTACHED –
 

 
 
 



   
December 31, 2008
    
December 31, 2007
  
             
             
ASSETS
            
             
Current assets:
            
Cash and cash equivalents
   $ 13,147     $ 5,134  
Trade receivables, net
     133,467       135,633  
Other current assets
     61,134       74,090  
                 
Total current assets
     207,748       214,857  
                 
Net property and equipment
     146,167       114,746  
Other assets, net
     41,009       39,949  
                 
Total assets
   $ 394,924     $ 369,552  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
Current liabilities:
                
Notes payable related to assets held for sale
   $ 19,520     $ 24,203  
Current portion of indebtedness
     15,638       18,350  
Accounts payable, accrued expenses and other
     56,628       59,546  
                 
Total current liabilities
     91,786       102,099  
                 
Long-term indebtedness
     85,858       76,751  
Other non-current liabilities
     56,816       48,682  
                 
Total liabilities
     234,460       227,532  
                 
Total stockholders' equity
     160,464       142,020  
                 
Total liabilities and stockholders' equity
   $ 394,924     $ 369,552  
                 

 
 
 


   
Quarter Ended
    
Year Ended
  
   
December 31,
    
December 31,
  
                         
   
2008
    
2007
    
2008
    
2007
  
                         
Revenue:
                        
Flight operations
   $ 114,886       118,934       485,184       386,377  
Product operations
     4,026       3,675       13,618       9,972  
Total revenue
     118,912       122,609       498,802       396,349  
                                 
Expenses:
                                
Operating expenses
     93,144       94,991       381,500       279,006  
General and administrative
     16,809       15,719       67,480       53,298  
Depreciation and amortization
     4,462       4,133       17,090       14,418  
      114,415       114,843       466,070       346,722  
                                 
Operating income
     4,497       7,766       32,732       49,627  
                                 
Interest expense
     (1,254 )     (1,700 )     (5,197 )     (5,609 )
Loss on early extinguishment of debt
     -       -       -       (757 )
Other, net
     763       629       2,943       2,187  
                                 
Income before income taxes
     4,006       6,695       30,478       45,448  
                                 
Income tax expense
     (270 )     (1,872 )     (11,209 )     (17,911 )
                                 
Net income
   $ 3,736       4,823       19,269       27,537  
                                 
Income per common share:
   $ 0.31       0.40       1.59       2.30  
   Basic
   $ 0.30       0.38       1.54       2.20  
   Diluted
                                
                                 
Weighted average common shares outstanding:
                                
   Basic
     12,107,981       12,095,296       12,155,144       11,953,871  
   Diluted
     12,343,920       12,634,687       12,530,381       12,512,077