Air Methods Corp. has a market cap of $398.1 million; its shares were traded at around $31.97 with a P/E ratio of 13.8 and P/S ratio of 0.7. Air Methods Corp. had an annual average earning growth of 17% over the past 10 years. GuruFocus rated Air Methods Corp. the business predictability rank of 4-star.
Highlight of Business Operations:Net flight revenue decreased $3,735,000, or 3.2%, from $117,014,000 to $113,279,000 for the three months ended March 31, 2010, compared to 2009. Flight revenue is generated by both CBS and HBS operations and is recorded net of provisions for contractual discounts and uncompensated care.
Interest expense increased $226,000, or 18.3%, in the first quarter of 2010, compared to the first quarter of 2009, primarily because of $44.8 million in long-term notes with a weighted average interest rate of 6.5% entered into subsequent to March 31, 2009. Interest on the new notes was offset in part by the fact that we had no balance outstanding against our revolving line of credit during the first quarter of 2010, compared to an average balance of $18.2 million during the first quarter of 2009.
Our working capital position as of March 31, 2010, was $125,650,000, compared to $133,366,000 at December 31, 2009. Cash generated by operations was $18,939,000 in the first quarter of 2010, compared to $15,682,000 in the first quarter of 2009, due primarily to a decrease in days sales outstanding for CBS operations, measured by comparing net revenue for the annualized previous 3-month period to outstanding open net accounts receivable, from 107 days at December 31, 2009, to 100 days at March 31, 2010. In the first quarter of 2010, we also billed approximately $5.6 million for medical interiors and other products which were completed and shipped; the majority of the related receivable balances were paid prior to the end of the first quarter.
Cash used by investing activities totaled $14,688,000 in 2010 compared to $7,877,000 in 2009. Equipment acquisitions in the first quarter of 2010 included six aircraft for approximately $9.2 million, as well as medical interiors and avionics upgrades. Significant equipment acquisitions in the first quarter of 2009 included the purchase of two aircraft for approximately $4.7 million. During the quarter, we sold two aircraft for total proceeds of $1.2 million.
Financing activities used $166,000 in 2010 compared $11,899,000 in 2009. The primary use of cash in both 2010 and 2009 was regularly scheduled payments of long-term debt and capital lease obligations. In 2010 we used proceeds of $3.8 million from notes payable to finance three aircraft. The notes are payable over five-year terms with variable interest rates tied to LIBOR. In 2009 we paid off a $3.9 million short-term note payable to an aircraft manufacturer for the delivery of an EC135 helicopter and paid $5.5 million against the balance outstanding against our revolving line of credit. We have not carried a balance against our line of credit during 2010.
Our cost of operations is also affected by changes in the price and availability of aircraft fuel. Generally, our HBS customers pay for all fuel consumed in medical flights. Based on actual CBS fuel usage for the quarter ended March 31, 2010, the impact on operating costs of an increase of 10% in the cost of aircraft fuel per hour flown would be approximately $270,000 for the quarter. Flight volume for CBS operations can vary due to weather conditions and other factors. Therefore, the impact of a change in fuel cost based first quarter 2010 volume is not necessarily indicative of the impact on subsequent quarters or years. We have financial derivative agreements to protect against increases in the cost of Gulf Coast jet fuel above $2.35 per gallon for wholesale purchases from January 1, 2010, through June 30, 2010, and above $2.71 per gallon from July 1, 2010, through December 31, 2010. The derivatives cover approximately 70% of the Company s anticipated fuel consumption for 2010.
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