Note 14. Condensed Consolidating Financial Information of Guarantor Subsidiaries

12 Months Ended

Dec. 31, 2011

Condensed Consolidating Financial Information Of Guarantor Subsidiaries

(14)         Condensed Consolidating Financial Information of Guarantor Subsidiaries

The Company has outstanding certain indebtedness that is guaranteed by all of its U.S. subsidiaries. However, the indebtedness is not guaranteed by the Company’s foreign subsidiaries. The guarantor subsidiaries are wholly owned and the guarantees are made on a joint and several basis and are full and unconditional. Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management believes that such information would not be material to investors. However, condensed consolidating financial information is presented as of and for the years ended December 31, 2011 and 2010.  The Company had no foreign subsidiaries for the year ended December 31, 2009. The condensed consolidating financial information of the Company is as follows:

Condensed Consolidating Statement of Operations for the year ended December 31, 2011
(In thousands)
	ExamWorks Group, Inc. (Parent Corporation) and Guarantor Subsidiaries (1)			Non-Guarantor Subsidiaries			Consolidated Totals
Revenues	$	298,056		$	99,804		$	397,860
Costs and expenses:
Costs of revenues		203,651			58,591			262,242
Selling, general and administrative expenses		55,139			28,994			84,133
Depreciation and amortization		34,081			13,358			47,439
Total costs and expenses		292,871			100,943			393,814
Income from operations		5,185			(1,139	)		4,046
Interest and other expenses, net		14,148			2,313			16,461
Loss before income taxes		(8,963	)		(3,452	)		(12,415	)
Provision (benefit) for income taxes		(5,331	)		1,249			(4,082	)
Net loss	$	(3,632	)	$	(4,701	)	$	(8,333	)

(1) The net operations and net assets of the parent corporation, ExamWorks Group, Inc., are not deemed to be material.  As such, the parent corporation has been combined with the guarantor subsidiaries.

Condensed Consolidating Statement of Operations for the year ended December 31, 2010
(In thousands)
	ExamWorks Group, Inc. (Parent Corporation) and Guarantor Subsidiaries (1)			Non-Guarantor Subsidiaries			Consolidated Totals
Revenues	$	147,917		$	15,594		$	163,511
Costs and expenses:
Costs of revenues		94,238			9,368			103,606
Selling, general and administrative expenses		34,789			2,900			37,689
Depreciation and amortization		17,044			2,461			19,505
Total costs and expenses		146,071			14,729			160,800
Income (loss) from operations		1,846			865			2,711
Interest and other expenses, net		10,034			1,199			11,233
Loss before income taxes		(8,188	)		(334	)		(8,522	)
Provision (benefit) for income taxes		(2,538	)		54			(2,484	)
Net loss	$	(5,650	)	$	(388	)	$	(6,038	)

(1) The net operations and net assets of the parent corporation, ExamWorks Group, Inc., are not deemed to be material.  As such, the parent corporation has been combined with the guarantor subsidiaries.

Condensed Consolidating Balance Sheet as of December 31, 2011
(In thousands)
	ExamWorks Group, Inc. (Parent Corporation) and Guarantor Subsidiaries (1)		Non-Guarantor Subsidiaries		Consolidation and Elimination Entries			Consolidated Totals
Assets
Current assets:
Cash and cash equivalents	$	6,044	$	2,372	$	—		$	8,416
Accounts receivable, net		44,690		99,351		—			144,041
Other receivables		26		14		—			40
Prepaid expenses		2,694		1,793		—			4,487
Deferred tax assets		1,373		267		—			1,640
Other current assets		14		1,159		—			1,173
Total current assets		54,841		104,956		—			159,797
Property, equipment and leasehold improvements, net		7,745		1,173		—			8,918
Goodwill		240,252		60,008		—			300,260
Intangible assets, net		84,833		61,335		—			146,168
Deferred tax assets, noncurrent		—		1,913		(1,913	)		—
Deferred financing costs, net		11,458		—		—			11,458
Other assets		438		—		—			438
Total assets	$	399,567	$	229,385	$	(1,913	)	$	627,039
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	16,728	$	25,914	$	—		$	42,642
Accrued expenses		4,272		24,138		—			28,410
Accrued interest expense		7,011		3,236		—			10,247
Deferred revenue		192		1,140		—			1,332
Current portion of subordinated unsecured notes payable		1,932		—		—			1,932
Current portion of contingent earnout obligation		91		—		—			91
Other current liabilities		2,925		2,534		—			5,459
Total current liabilities		33,151		56,962		—			90,113
Senior unsecured notes payable		250,000		—		—			250,000
Senior revolving credit facility and working capital facilities		5,000		39,063		—			44,063
Long-term subordinated unsecured notes payable, less current portion		717		—		—			717
Long-term contingent earnout obligation, less current portion		86		—		—			86
Deferred tax liability, noncurrent		4,072		—		(1,913	)		2,159
Other long-term liabilities		1,691		286		—			1,977
Total liabilities		294,717		96,311		(1,913	)		389,115
Commitments and contingencies
Stockholders’ equity (2)		104,850		133,074		—			237,924
Total liabilities and stockholders' equity	$	399,567	$	229,385	$	(1,913	)	$	627,039

(1) The net operations and net assets of the parent corporation, ExamWorks Group, Inc., are not deemed to be material.  As such, the parent corporation has been combined with the guarantor subsidiaries.

(2) Includes intercompany investments in subsidiaries.

Condensed Consolidating Balance Sheet as of December 31, 2010
(In thousands)
	ExamWorks Group, Inc. (Parent Corporation) and Guarantor Subsidiaries (1)			Non-Guarantor Subsidiaries				Consolidation and Elimination Entries	Consolidated Totals
Assets
Current assets:
Cash and cash equivalents	$	31,192		$	2,432		$	—	$	33,624
Accounts receivable, net		19,271			19,367			—		38,638
Other receivables		48			(15	)		—		33
Prepaid expenses		1,586			589			—		2,175
Deferred tax assets		14			54			—		68
Other current assets		42			—			—		42
Total current assets		52,153			22,427			—		74,580
Property, equipment and leasehold improvements, net		4,712			158			—		4,870
Goodwill		67,676			22,906			—		90,582
Intangible assets, net		50,844			16,070			—		66,914
Deferred tax assets, noncurrent		5,448			2,221			—		7,669
Deferred financing costs, net		4,176			—			—		4,176
Other assets		271			—			—		271
Total assets	$	185,280		$	63,782		$	—	$	249,062
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	14,376		$	5,623			—	$	19,999
Accrued expenses		4,907			4,507			—		9,414
Accrued interest expense		(1,079	)		1,079			—		—
Deferred revenue		159			113			—		272
Current portion of subordinated unsecured notes payable		2,312			—			—		2,312
Current portion of contingent earnout obligation		2,478			—			—		2,478
Other current liabilities		1,344			1,761			—		3,105
Total current liabilities		24,497			13,083			—		37,580
Senior revolving credit facility and working capital facilities		—			4,998			—		4,998
Long-term subordinated unsecured notes payable, less current portion		2,546			—					2,546
Long-term contingent earnout obligation, less current portion		2,032			—			—		2,032
Other long-term liabilities		1,666			—			—		1,666
Total liabilities		30,741			18,081			—		48,822
Commitments and contingencies
Stockholders’ equity (2)		154,539			45,701			—		200,240
Total liabilities and stockholders' equity	$	185,280		$	63,782		$	—	$	249,062

(1) The net operations and net assets of the parent corporation, ExamWorks Group, Inc., are not deemed to be material.  As such, the parent corporation has been combined with the guarantor subsidiaries.

(2) Includes intercompany investments in subsidiaries.

Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2011
(In thousands)
	ExamWorks Group, Inc. (Parent Corporation) and Guarantor Subsidiaries (1)			Non-Guarantor Subsidiaries			Consolidated Totals
Net cash provided by operating activities	$	33,994		$	5,549		$	39,543
Investing activities:
Cash paid for acquisitions, net		(320,496	)		(1,752	)		(322,248	)
Purchases of equipment and leasehold improvements, net		(6,048	)		(808	)		(6,856	)
Working capital and other settlements for acquisitions		(5,007	)		(1,703	)		(6,710	)
Net cash used in investing activities		(331,551	)		(4,263	)		(335,814	)
Financing activities:
Borrowings under credit facilities		278,000			—			278,000
Borrowings under senior unsecured notes payable		250,000			—			250,000
Net borrowings under working capital facilities		37,145			(1,524	)		35,621
Proceeds from the exercise of options and warrants		2,292			—			2,292
Repayment of subordinated unsecured notes payable		(2,421	)		—			(2,421	)
Purchases of stock for treasury		(9,421	)		—			(9,421	)
Payment of deferred financing costs		(9,746	)		—			(9,746	)
Repayment under credit facilities		(273,000	)		—			(273,000	)
Other		(440	)		—			(440	)
Net cash provided by (used in) financing activities		272,409			(1,524	)		270,885
Exchange rate impact on cash and cash equivalents		—			178			178
Net decrease in cash and cash equivalents		(25,148	)		(60	)		(25,208	)
Cash and cash equivalents, beginning of year		31,192			2,432			33,624
Cash and cash equivalents, end of year	$	6,044		$	2,372		$	8,416

(1) The net operations and net assets of the parent corporation, ExamWorks Group, Inc., are not deemed to be material.  As such, the parent corporation has been combined with the guarantor subsidiaries.

Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2010
(In thousands)
	ExamWorks Group, Inc. (Parent Corporation) and Guarantor Subsidiaries (1)			Non-Guarantor Subsidiaries			Consolidated Totals
Net cash provided by operating activities	$	14,565		$	3,738		$	18,303
Investing activities:
Cash paid for acquisitions, net		(115,331	)		106			(115,225	)
Purchases of equipment and leasehold improvements, net		(1,728	)		(2	)		(1,730	)
Working capital and other settlements for acquisitions		418			—			418
Net cash provided by (used in) investing activities		(116,641	)		104			(116,537	)
Financing activities:
Borrowings under credit facilities		67,315			—			67,315
Net borrowings (repayments) under working capital facilities		6,447			(1,450	)		4,997
Excess tax benefit related to share-based compensation		974			—			974
Proceeds from the exercise of options and warrants		703			—			703
Issuance of preferred stock, net		32,421			—			32,421
Issuance of common stock, net		136,660			—			136,660
Repayments of related party notes		(3,500	)		—			(3,500	)
Repayment of subordinated unsecured notes payable		(2,167	)		—			(2,167	)
Payment of deferred financing costs		(6,534	)		—			(6,534	)
Repayment under credit facilities		(100,550	)		—			(100,550	)
Net cash provided by (used in) financing activities		131,769			(1,450	)		130,319
Exchange rate impact on cash and cash equivalents		—			40			40
Net increase in cash and cash equivalents		29,693			2,432			32,125
Cash and cash equivalents, beginning of year		1,499			—			1,499
Cash and cash equivalents, end of year	$	31,192		$	2,432		$	33,624

(1) The net operations and net assets of the parent corporation, ExamWorks Group, Inc., are not deemed to be material.  As such, the parent corporation has been combined with the guarantor subsidiaries.