Air Methods Corporation (AIRM, Financial) is the global leader in air medical transportation. The Air Medical Services Division is the largest provider of air medical transport services in the U.S. Currently, Air Methods has more than 300 bases of operations that serve 48 states. Over the years, they have fortified market presence through a variety of acquisitions.
The Tourism Division is comprised of Sundance Helicopters Inc. and Blue Hawaiian Helicopters, which provide helicopter tours and charter flights in the Las Vegas and Grand Canyon region, as well as Hawaii. Air Methods’ fleet of owned, leased or maintained aircraft features over 450 helicopters and fixed wing aircraft.
It has built its reputation on a commitment to quality patient care and safety in aviation operations. It reported solid third quarter results and is an impressive growth stock. The company is on a growing spree and has a lot of upside to offer. Air Methods will continue to deliver returns to its shareholders.
Strong third quarter
The number of passengers grew 6.9% year-over-year and bottom-line results increased by 47.4% aided by lower fuel and maintenance costs. Primarily as a result of these factors, the company’s quarterly diluted EPS from continuing operations grew 27.5% year-over-year.
Third quarter 2015 results include a $2.6 million pre-tax loss related to the disposition of assets (which was a pre-tax gain of $200,000 in the prior-year quarter).
In the third quarter 2015, the company completed the previously announced amendment to its existing credit agreement, expanding its access to capital by $400 million of which up to $200 million can be used to repurchase shares.
Segment performance
For the third quarter, Air Medical Services revenue increased by 12.7% year over year to $266.8 million. Segment net income increased by 34.6% and was $85.9 million.Â
Net revenue per community-based transport increased by 7.2% from $11,972 to $12,839 in the current-year quarter.
Tourism revenues increased by 6.7% year over year to $36.2 million. Tourism segment net income increased by 47.4% and was $4.9 million.Â
Acquisition Spree
Air Methods has acquired Tri-State Care Flight, which will continue to operate as a critical care transport provider servicing Arizona, New Mexico, Nevada and Colorado.
On Oct. 5, 2015, Air Methods announced that it had acquired San Antonio AirLIFE, owned by Baptist Health System of San Antonio/Tenet Corporation.
Strong attributes of the company:
- Solid free cashflow.
- Tourism diversification and consolidation.
- Operational efficiencies.
- Solid participation in price increases.
- Declining fuel prices.
- Increased demand.
- Strategic expansions.
On a concluding note
Air Methods has remained a leading performer in this industry. With its current momentum it is expected to grow in the near future. Growth in the demand for its services provided an impetus to this company. Declining oil prices also contributed to this growth.Â
Disclosure: I do not hold any position in the company.
