Air Methods Announces Year 2007 Financial Results and Provides First Quarter 2008 Update

DENVER (Map) - DENVER, March 12 /PRNewswire-FirstCall/ -- Air Methods Corporation (Nasdaq: AIRM), the largest air medical transportation company in the world, reported revenue and net income for the year and fourth quarter ended December 31, 2007.

For the year, revenue increased 24% to $396.3 million compared to $319.5 million in the prior year. Net income was $27.5 million or $2.20 per diluted share compared to $17.2 million or $1.40 per diluted share, a 57% increase. The current year results include a $1.1 million ($0.08 per diluted share) decrease in income tax expense resulting from approved changes in tax depreciation methods applied to prior years. The prior-year results included an increase in income tax expense of $0.5 million (0.04 per diluted share) resulting from a higher expected federal tax rate applied to deferred income tax liabilities.

For the fourth quarter, revenue increased 58% to $122.6 million as compared with $77.5 million during the prior-year period. Net income increased to $4.8 million or $0.38 per diluted share compared to net income of $1.2 million or $0.10 per diluted share in the prior-year period. The current-year quarter results include a $1.1 million ($0.08 per diluted share) decrease in income tax expense as discussed above, offset in part by a $0.5 million after tax loss ($0.04 per diluted share) on disposition of assets. The prior-year fourth quarter included an increase in income tax expense of $0.8 million ($0.06 per diluted share) resulting from the higher expected federal tax rate applied to deferred income tax liabilities mentioned above.

Approximately $30.3 million of the $45.1 million increase in revenue during the fourth quarter was attributed to hospital-based and community-based revenue generated from bases added in the acquisition of the parent company of CJ Systems Aviation Group, Inc. (CJ) effective October 1, 2007. Excluding revenue related to the CJ acquisition, revenue growth was 19% during the fourth quarter as compared with the prior-year quarter.

During the fourth quarter of 2007, total patients transported within community-based operations were 10,737, as compared with 8,382 during the prior-year quarter. Patients transported for community bases in operation greater than one year and excluding CJ bases (Same-Base Transports) decreased by 543 patients or 7%, while weather cancellations for these same bases increased by 521 transports or 25%, compared with the prior-year period. Revenue per community-based transport increased from $5,958 in the fourth quarter of 2006 and $6,519 in the third quarter of 2007, to $6,597 in the current-year fourth quarter.

The Company also provided an update on first quarter 2008 flight volume. Same-Base Transports within community-based operations through February were down 205 patient transports or 4% as compared with the prior-year period, while weather cancellations for these same bases increased 560 or 40% as compared with the prior-year period. Total community-based patient transports for the two-month period were 6,812, as compared with 5,190 in the prior-year period.

Aaron Todd, CEO of Air Methods, commented, "We are extremely proud of our 2007 annual and fourth quarter results. To have achieved such significant growth in fourth quarter earnings despite the severe weather experienced during the month of December is strong evidence that the CJ acquisition is on track to achieve its first year objectives. The ongoing strength in reimbursement for community-based transports, combined with continued moderation of maintenance expenditures associated with our fleet rejuvenation initiatives, also offset the impact of weather during the quarter."

Mr. Todd added, "Despite the impact of weather on transports during the first two months of 2008, we remain very optimistic that we can achieve another year of healthy earnings growth. With the acquisition of CJ closing on October 1, 2007, we look forward to the expected benefit of a full year of combined operating results in 2008. With deliveries of over 45 new aircraft anticipated in 2008, fleet rejuvenation activity will accelerate and should favorably impact historical hourly maintenance costs in the future. These new aircraft also create expansion opportunities within both services divisions."

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 (888) 396-5640 (domestic) or (706) 643-0580 (international) or by accessing the web cast at http://www.airmethods.com. A replay of the call will be available at (800) 642-1687 (domestic) or (706) 645-9291 (international), access number 37598727, for 3 days following the call and the web cast can be accessed at http://www.airmethods.com for 30 days.

Air Methods Corporation (http://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 330 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 integration of CJ into our existing operations, 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 or Joe
Dorame at Lytham Partners, LLC at (602) 889-9700.  Please contact Christine
Clarke at (303) 792-7579 to be included on the Company's fax and/or mailing
list.
                      - FINANCIAL STATEMENTS ATTACHED -
                   AIR METHODS CORPORATION AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEET
                            (Amounts in thousands)
                                                 December 31,     December 31,
                                                    2007             2006
    ASSETS
    Current assets:
    Cash and cash equivalents                       $5,134            $4,219
    Trade receivables, net                         135,633           100,559
    Other current assets                            74,090            35,083
    Total current assets                           214,857           139,861
    Net property and equipment                     114,746            95,575
    Other assets, net                               39,949            14,721
    Total assets                                  $369,552          $250,157
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Notes payable related to assets held for sale  $24,203            $9,560
    Current portion of indebtedness                 18,350             9,963
    Accounts payable, accrued expenses and other    59,546            28,306
    Total current liabilities                      102,099            47,829
    Long-term indebtedness                          76,751            62,346
    Other non-current liabilities                   48,682            32,668
    Total liabilities                              227,532           142,843
    Total stockholders' equity                     142,020           107,314
    Total liabilities and stockholders' equity    $369,552          $250,157
                   AIR METHODS CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
          (Amounts in thousands, except share and per share amounts)
                                     Quarter Ended            Year Ended
                                      December 31,            December 31,
                                   2007        2006        2007        2006
    Revenue:
    Flight operations            $118,934      76,469     386,377     313,879
    Product operations              3,675       1,009       9,972       5,625
    Total revenue                 122,609      77,478     396,349     319,504
    Expenses:
    Operating expenses             94,991      59,084     279,006     231,317
    General and administrative     15,719      10,521      53,298      40,710
    Depreciation and amortization   4,133       3,306      14,418      12,910
                                  114,843      72,911     346,722     284,937
    Operating income                7,766       4,567      49,627      34,567
    Interest expense               (1,700)     (1,473)     (5,609)     (5,821)
    Loss on early extinguishment
     of debt                          -           -          (757)        -
    Other, net                        629         406       2,187       1,598
    Income before income taxes      6,695       3,500      45,448      30,344
    Income tax expense             (1,872)     (2,299)    (17,911)    (13,144)
    Net income                     $4,823       1,201      27,537      17,200
    Income per common share:
       Basic                        $0.40        0.10        2.30        1.46
       Diluted                      $0.38        0.10        2.20        1.40
    Weighted average common
     shares outstanding:
       Basic                   12,095,296  11,819,102  11,953,871  11,748,107
       Diluted                 12,634,687  12,344,396  12,512,077  12,306,047