Air Methods Corporation (AIRM)
Q2 2010 Earnings Call
August 5, 2010 4:15 pm ET
Christine Clarke – IR
Aaron Todd – CEO
Trent Carman - CFO
Bob Labick – CJS Securities
Kevin Ellich – RBC Capital Markets
Christina Balzac – William Blair
Kevin Campbell – Avondale Partners
Good afternoon. My name is Sarah and I will be your conference operator today.
Previous Statements by AIRM
» Air Methods Corporation Q1 2010 Earnings Call Transcript
» Air Methods Corp. Q4 2008 Earnings Call Transcript
» Air Methods Corporation Q3 2008 Earnings Call Transcript
At this time I would like to welcome everyone to the Air Methods Report Second Quarter 2010 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer sessions. (Operator Instructions).
Thank you, Miss Clarke, you may begin your conference.
Good afternoon. Thank you for joining us today to review Air Methods’ Second Quarter Financial Results ended June 30th, 2010.
As the operator indicated, my name is Christine Clarke and I am with Air Methods Corporation. Also on the call today representing the company are Mr. Aaron Todd, Chief Executive Officer; and Mr. Trent Carman, Chief Financial Officer.
At the conclusion of today’s prepared remarks we will open the call for a question-and-answer session.
I would like to remind everyone this conference call includes statements that constitute forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995.
This conference call includes certain forward-looking statements which are subject to various risk and uncertainties. Actual results could differ from materially from those currently anticipated due to a number of factors, including but not limited to the size, structure and a growth of the company’s Air Medical Services and product market, the collection rates for patient transport, the continuation and/or renewal of Air Medical service contract, the acquisition of profitable products division contracts and other flight service operations, the successful expansion of the community-based operation and other matters set forth in the company’s public filing. With that having been said I would like to turn the call over to Mr. Aaron Todd, Chief Executive Officer of Air Methods Corporation.
Thank you Christine. First, let me apologize to you. We are new to our service through NASDAQ has some kind of a glitch and is backlogged in trying to get the press releases out.
The 8-K has been filed and the exhibit to the 8-K that you can access on EDGAR does have the entire body of the release, but many of you may not have been able to access that. Although a bit awkward, I’m going to just go ahead and read to you the narrative of the press release in case you have not received it to date and then I will offer some commentary.
The headline is Air Methods Reports Second Quarter 2010 Results and Third Quarter 2010 Update.
The underlying states that second quarter fully diluted EPS of $1.02 reflects 47% growth in that income.
Dated August 5
; Air Methods Corporation, the largest air medical transportation company in the world, reported their financial results for the second quarter ended June 30
, 2010 and provide an update on July 2010 community-based patient transports.
For the quarter revenue increased 8% from 129 million to 139.2 million in the current year quarter. For the six month period revenue increased 1% to 257.7 million compared with 254.4 million in the prior year six month period.
For the quarter net income increased 47% to 12.8 million or $1.02 per diluted share as compared with prior year’s second quarter net income of 8.7 million or $0.70 per diluted share.
Net income for the six month period decreased 6% to 12.9 million or $1.03 per diluted share compared to 13.6 million or $1.11 per diluted share for the prior year’s six month period. The increase in quarterly net income was primarily attributed to an increase in net revenue for community-based patient transport and lower maintenance expense per flight hour.
The current year quarter includes a pre-tax gain on disposition of assets of 0.1 million compared with the pre-tax gain of 0.6 million in the prior year quarter.
For the second quarter community-based revenue increased 19% to 86.6 million compared to 72.7 million in the prior year, while segment net income increase 77% to 20.4 million from 11.5 million.
Total community-based patient transport increased slightly to 10,507 as compared with 10,414 in the prior year quarter.
I believe that the release is now out and you can follow along if you would like.
Community-based patient transport for bases open greater than one year, same-base transports decreased 2% or 246 patient transports as compared with the prior year quarter.
Weather cancellations for community-based transport was $8,138 for the current year quarter compared with $6,969 in the prior year quarter, a 17% increase. This increase was attributed to recent price increases as well as weakness in collections experienced in the prior year quarter which reduced the net revenue for transport by 5% compared with 2009 average.
Hospital-based revenue decreased by 3% to 49.1 million compared to 50.5 million in the prior year quarter, while segment had income decrease 5% to 5.1 million from 5.4 million.
External revenue within the products division decrease 2.4 million or 40 % compared with the prior year quarter.
Consolidated maintenance expense decreased by 3% per flight hour, contributing to an overall decline in expense of 0.7 million as compared with the prior year quarter.