Air Methods (AIRM) Prelim. Q2 EPS Misses Expectations

Air Methods (NASDAQ: AIRM) provided an update on second quarter results. While community-based patient transports for the second quarter 2015 increased 7.4% to approximately 16,105 from the prior-year quarter, patients transported for community bases in operation greater than one year decreased an estimated 318 transports, or 2.2%. Weather cancellations for these same bases increased by an estimated 1,250 transports compared with the prior-year quarter.

Preliminary net revenue per community-based transport for the second quarter 2015 declined slightly to $11,298, as compared with $11,353 in the prior-year quarter. Net revenue per transport did not increase with gross price increases due to a decrease in privately insured patients as a percentage of transports and a decrease in collections as a percentage of gross charges from private insurers. Specifically,

• Transports of privately insured patients decreased from 26.8% to 26.1% of total transports during the second quarter, compared with the prior-year quarter.
• Collections as a percentage of gross charges from private insurers decreased from 81.7% in the prior-year quarter to 77.5% in current-year quarter. The vast majority of this decline is due to the cessation of a national contract with a commercial payor.

Primarily as a result of these factors, the Company expects to report net income from continuing operations of approximately $0.67 to $0.69 per share for the second quarter of 2015, compared with net income from continuing operations of $0.75 per share in the prior-year quarter. These preliminary results are subject to final quarter-end closing and review procedures and are therefore subject to change.

*** The Street was looking for Q2 revenue of $275 million and EPS of $0.83.

Aaron Todd, CEO, stated, "Weather has been a significant headwind for financial results year-to-date, as well as in the second quarter. Demand, however, remained strong during the quarter as evidenced by the growth in transports plus weather cancellations in total and on a same-base basis (16.7% and 5.0%, respectively). Furthermore, cash collections on a per transport basis increased 7% over the past twelve months despite days sales outstanding increasing eight days year-over-year."

Some preliminary statistics can be found in the table below.

The Company will report financial results for the second quarter ended June 30, 2015 after the close of the market on Thursday, August 6, 2015. Concurrently, the Company will post a financial supplement that contains final operating statistics on its website, www.airmethods.com.

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