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Air Methods Corp. Message Board

  • airmshareholder airmshareholder Mar 11, 2005 11:40 AM Flag


    Airm has missed the last 4 quarters. Is there a chance of reversing the trend? They say not to fight the friend and the trend is your friend, but the share price may be telling us otherwise.

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    • Elliot,

      Putting a low interest mortgage on the Helicopters is not subjecting the business to undue risk. Looks like this agreement below cost another $500,000. When your company operates on extremely thin margins every penny counts. The agreement below also includes allot more restrictions than a simple mortgage type loan on your company assets.

      I like buying stocks when everyone else is turned off. I seem to be the only buyer the last three days.

      Subordinated Debt

      On October 16, 2002, the Company issued $23 million in subordinated notes to Prudential Capital Partners, L.P. and Prudential Capital Partners Management Fund, L.P. (together, the Subordinated Lenders) to finance the acquisition of RMH. The notes are unsecured and provide for quarterly payment of interest only at 12% per annum, with all principal due October 16, 2007. With certain exceptions as defined in the notes, the notes may not be prepaid until January 1, 2005, and prepayments after January 1, 2005, will be at a declining premium.

      The purchase agreement entered into in connection with the notes contains various covenants that limit, among other things, the Company's ability to create liens, declare dividends, make certain loans, enter into real property leases exceeding specified expenditure levels, make any material change to the nature of the Company's business, enter into any transaction with affiliates other than on arms' length terms, prepay indebtedness, enter into a merger or consolidation, sell or discount receivables, or sell assets. The credit facility also places limits on the amount of new indebtedness, operating lease obligations, and unfinanced capital expenditures which the Company can incur in a fiscal year. The Company is required to maintain certain financial ratios as defined in the purchase agreement. As of December 31, 2003, the Company was in compliance with the covenants.

      Payment obligations under the subordinated notes accelerate upon the occurrence of defined events of default, including the following: failure to pay principal or interest, or to perform covenants under the notes and related purchase agreement or other indebtedness; events of insolvency or bankruptcy; failure to timely discharge judgments of $500,000 or more; failure to file and keep effective a registration statement relating to the warrants issued to the Subordinated Lenders; and a change of control in the Company.

      Under an amendment to the agreement signed in November 2003, the Company may be assessed a one-time fee if consolidated Earnings before interest, taxes, depreciation, and amortization (EBITDA), as defined in the agreement, for the year ending December 31, 2004, is less than $34 million. The maximum fee would be $500,000 if EBITDA is less than $30 million and reduces by $100,000 for each $1 million incremental increase in EBITDA above $30 million.

    • Dave,

      If you can believe it, I am only now getting over the "black plague" flu I had. Will hit the beach today hopefully.

      It turns out that one of the condo neighbors is nice enough to leave their WAP wide open so I have full DSL bandwidth for free. Hope all is well on your end.


    • Correction of stupid, absent-minded typing error: in the second paragraqph that should be "for a variety of reasons," not "for a variety of acquisitions."

    • I have not spoken with anyone in Air Methods since December. Based on all that I know, here are my predictions for Wednesday:

      2004 earnings will be 38 (+/-3) cents.

      Guidance will be cautious for q1 because of exceptionally bad weather in LA where Mercy is based. But Guidance for the year will be 40-50% increase over 2004 depending upon whether the numbers come in at the top or bottom of the range indicated above.

      That level of guidance is very conservative and leaves management a lot of wiggle room for weather and other variables. However results could come in much higer for 2005.

      I am putting an umbrella over my rose-colored glasses now as I am sure a lot of cold water will be thrown at me on this board. Have at it.

      • 2 Replies to ecl61
      • And you would be satisfied with ????

        The shareholders deserve better!

        If you take the earnings a few years ago and increased them by any the least acceptable multiplier and then accept the extra-ordinary items (i.e weather, maintenance, collections,).These one time items are getting monotonous. If theses items are continual, then shouldn't they be forseen by the CFO.
        If we end up with your .38 then there hasn't been any growth at all. This management is having a hard time managing the larger company. They give guidance and never achieve the numbers and this is acceptable to the Board of Directors. They have made the necessary moves to build the larger company but obviously cannot control the scale of expenses.

        We are still in a low interest environment but the leaders of this company padded their pockets with finders fees and sold us out in a 12% financing deal. The Finders fee of $500,000 plus 100,000 warrants in the money seem a bit high. Now the heads get a larger weekly paycheck and the amount of options is larger for all. The annual 0ne-time-excuses do NOT hurt the decision makers....only the share price. Why don't they re-fi the debt while money is cheap to take the burden off the shareholders. They were not pro active re:the collections until they became re-active to the lousy and scary numbers that were already history. I would like to know the intentions of the Acquisitor regardibg these lousy management decisions and other shortcomings. I understood they also were more proactive. Maybe there are no answers to my concerns but now I feel better.

        nuff said

      • I hope you are right. It is time for a good company to also have a good stock price.

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