Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries

12 Months Ended

Dec. 31, 2013

Condensed Consolidating Financial Information Of Guarantor Subsidiaries [Abstract]

Condensed Consolidating Financial Information Of Guarantor Subsidiaries [Text Block]

(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 100% 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 as of December 31, 2012 and 2013, and for the three years ended December 31, 2013 is presented below. The Company (issuer of the Senior Unsecured Notes) was formed in June 2010 to implement a holding company organizational structure. As a result, all operating activities are conducted through the Company’s 100% owned  subsidiaries. On August 31, 2012, the Company acquired 100% of the outstanding common stock of MedHealth Holdings Pty Limited ("MedHealth"), an Australian entity. In connection with this acquisition, the Company formed a new Delaware holding company, ExamWorks AP, Inc. (“ExamWorks AP”). ExamWorks AP was added to the Indenture as a guarantor of the Senior Unsecured Notes and is a direct subsidiary of the Company.

Condensed Consolidating Statement of Operations

for the year ended December 31, 2011

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		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 (loss) 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 before earnings of consolidated subsidiaries	$	(3,632	)	$	(4,701	)	$	—		$	—	$	(8,333	)
Net income (loss) of consolidated subsidiaries		(4,701	)		—			(4,701	)		9,402		—
Net income (loss)	$	(8,333	)	$	(4,701	)	$	(4,701	)	$	9,402	$	(8,333	)

Condensed Consolidating Statement of Operations

for the year ended December 31, 2012

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	340,200		$	181,037		$	—		$	—	$	521,237
Costs and expenses:
Costs of revenues		241,281			102,770			—			—		344,051
Selling, general and administrative expenses		60,255			53,255			—			—		113,510
Depreciation and amortization		34,339			24,212			—			—		58,551
Total costs and expenses		335,875			180,237			—			—		516,112
Income from operations		4,325			800			—			—		5,125
Interest and other expenses, net		24,411			3,640			—			—		28,051
Loss before income taxes		(20,086	)		(2,840	)		—			—		(22,926	)
Provision (benefit) for income taxes		(10,320	)		2,333			—			—		(7,987	)
Net loss before earnings of consolidated subsidiaries	$	(9,766	)	$	(5,173	)	$	—		$	—	$	(14,939	)
Net income (loss) of consolidated subsidiaries		(5,173	)		—			(5,173	)		10,346		—
Net income (loss)	$	(14,939	)	$	(5,173	)	$	(5,173	)	$	10,346	$	(14,939	)

 Condensed Consolidating Statement of Operations

for the year ended December 31, 2013

(In thousands) 

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	374,817		$	241,199		$	—		$	—	$	616,016
Costs and expenses:
Costs of revenues		264,999			140,330			—			—		405,329
Selling, general and administrative expenses		70,681			63,189			—			—		133,870
Depreciation and amortization		31,787			30,961			—			—		62,748
Total costs and expenses		367,467			234,480			—			—		601,947
Income from operations		7,350			6,719			—			—		14,069
Interest and other expenses, net		22,107			7,534			—			—		29,641
Loss before income taxes		(14,757	)		(815	)		—			—		(15,572	)
Provision (benefit) for income taxes		(11,540	)		6,184			—			—		(5,356	)
Net loss before earnings of consolidated subsidiaries	$	(3,217	)	$	(6,999	)	$	—		$	—	$	(10,216	)
Net income (loss) of consolidated subsidiaries		(6,999	)		—			(6,999	)		13,998		—
Net income (loss)	$	(10,216	)	$	(6,999	)	$	(6,999	)	$	13,998	$	(10,216	)

Condensed Consolidating Balance Sheet as of December 31, 2012

(In thousands)

	Guarantor Subsidiaries		Non-Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Assets
Current assets:
Cash and cash equivalents	$	4,125	$	4,502	$	—	$	—		$	8,627
Accounts receivable, net		43,939		100,737		—		—			144,676
Other receivables		17		4		—		—			21
Intercompany receivable		12,799		—		10,918		(23,717	)		—
Prepaid expenses		2,723		2,613		—		—			5,336
Deferred tax assets		37		—		—		(21	)		16
Other current assets		—		1,213		—		—			1,213
Total current assets		63,640		109,069		10,918		(23,738	)		159,889
Property, equipment and leasehold improvements, net		8,339		1,994		—		—			10,333
Investment in subsidiaries		224,033		—		435,248		(659,281	)		—
Intercompany notes receivable		175,182		—		175,182		(350,364	)		—
Goodwill		258,890		111,253		—		—			370,143
Intangible assets, net		62,420		90,476		—		—			152,896
Long-term accounts receivable, less current portion		—		31,708		—		—			31,708
Deferred tax assets, noncurrent		61		4,112		—		—			4,173
Deferred financing costs, net		10,258		—		10,258		(10,258	)		10,258
Other assets		495		606		—		—			1,101
Total assets	$	803,318	$	349,218	$	631,606	$	(1,043,641	)	$	740,501
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	14,756	$	32,184	$	—	$	—		$	46,940
Intercompany payable		10,918		12,799		—		(23,717	)		—
Accrued expenses		8,067		27,928		—		—			35,995
Accrued interest expense		—		—		10,918		—			10,918
Deferred revenue		103		3,848		—		—			3,951
Current portion of subordinated unsecured notes payable		275		—		—		—			275
Deferred tax liability		—		21		—		(21	)		—
Current portion of contingent earnout obligation		91		—		—		—			91
Current portion of working capital facilities		—		5,983		—		—			5,983
Other current liabilities		2,226		3,747		—		—			5,973
Total current liabilities		36,436		86,510		10,918		(23,738	)		110,126
Senior unsecured notes payable		—		—		250,000		—			250,000
Senior secured revolving credit facility and working capital facilities, less current portion		—		28,476		99,926		—			128,402
Intercompany notes payable		175,182		175,182		—		(350,364	)		—
Long-term subordinated unsecured notes payable, less current portion		300		—		—		—			300
Other long-term liabilities		1,493		6,032		—		—			7,525
Total liabilities		213,411		296,200		360,844		(374,102	)		496,353
Commitments and contingencies
Stockholders’ equity (deficit)		589,907		53,018		270,762		(669,539	)		244,148
Total liabilities and stockholders' equity (deficit)	$	803,318	$	349,218	$	631,606	$	(1,043,641	)	$	740,501

Condensed Consolidating Balance Sheet as of December 31, 2013

(In thousands)

	Guarantor Subsidiaries		Non-Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Assets
Current assets:
Cash and cash equivalents	$	760	$	12,069	$	—	$	—		$	12,829
Accounts receivable, net		46,828		123,077		—		—			169,905
Other receivables		—		—		—		—			—
Intercompany receivable		19,120		—		10,431		(29,551	)		—
Prepaid expenses		2,889		2,896		—		—			5,785
Deferred tax assets		437		—		—		(4	)		433
Other current assets		61		1,237		—		—			1,298
Total current assets		70,095		139,279		10,431		(29,555	)		190,250
Property, equipment and leasehold improvements, net		6,760		4,190		—		—			10,950
Investment in subsidiaries		217,034		—		414,802		(631,836	)		—
Intercompany notes receivable		174,826		—		174,826		(349,652	)		—
Goodwill		259,316		109,996		—		—			369,312
Intangible assets, net		37,172		57,692		—		—			94,864
Long-term accounts receivable, less current portion		—		35,952		—		—			35,952
Deferred tax assets, noncurrent		15,470		6,021		—		—			21,491
Deferred financing costs, net		8,100		93		8,100		(8,100	)		8,193
Other assets		497		1,004		—		—			1,501
Total assets	$	789,270	$	354,227	$	608,159	$	(1,019,143	)	$	732,513
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	17,524	$	35,148	$	—	$	—		$	52,672
Intercompany payable		10,431		19,120		—		(29,551	)		—
Accrued expenses		10,839		27,609		—		—			38,448
Accrued interest expense		—		—		10,431		—			10,431
Deferred revenue		100		5,695		—		—			5,795
Current portion of subordinated unsecured notes payable		318		—		—		—			318
Deferred tax liability		—		4		—		(4	)		—
Current portion of contingent earnout obligation		—		2,032		—		—			2,032
Current portion of working capital facilities		—		—		—		—			—
Other current liabilities		2,116		4,322		—		—			6,438
Total current liabilities		41,328		93,930		10,431		(29,555	)		116,134
Senior unsecured notes payable		—		—		250,000		—			250,000
Senior secured revolving credit facility and working capital facilities, less current portion		—		37,943		45,027		—			82,970
Intercompany notes payable		174,826		174,826		—		(349,652	)		—
Long-term subordinated unsecured notes payable, less current portion		—		—		—		—			—
Long-term contingent earnout obligation, less current portion		—		2,373		—		—			2,373
Deferred tax liability, noncurrent		—		—		—		—			—
Other long-term liabilities		1,791		6,374		—		—			8,165
Total liabilities		217,945		315,446		305,458		(379,207	)		459,642
Commitments and contingencies
Stockholders’ equity (deficit)		571,325		38,781		302,701		(639,936	)		272,871
Total liabilities and stockholders' equity (deficit)	$	789,270	$	354,227	$	608,159	$	(1,019,143	)	$	732,513

Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2011

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	33,994		$	5,549		$	—		$	—	$	39,543
Investing activities:
Cash paid for acquisitions, net		(212,139	)		(110,109	)		—			—		(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	)
Intercompany investments and other		—			—			—			—		—
Net cash used in investing activities		(223,194	)		(112,620	)		—			—		(335,814	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			278,000			—		278,000
Borrowings under senior unsecured notes payable		—			—			250,000			—		250,000
Proceeds from the exercise of options and warrants					—			2,292					2,292
Borrowings (repayments) under working capital facilities					35,621			—					35,621
Purchases of stock for treasury					—			(9,421	)				(9,421	)
Payment of deferred financing costs					—			(9,746	)				(9,746	)
Repayment of subordinated unsecured notes payable		(2,421	)		—			—			—		(2,421	)
Repayment under senior secured revolving credit facility		—			—			(273,000	)		—		(273,000	)
Intercompany notes and investments and other		166,473			71,212			(238,125	)		—		(440	)
Net cash provided by financing activities		164,052			106,833			—			—		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

Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2012

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	18,131		$	6,646		$	—		$	—	$	24,777
Investing activities:
Cash paid for acquisitions, net		(12,378	)		(96,592	)		—			—		(108,970	)
Purchases of equipment and leasehold improvements, net		(5,071	)		(770	)		—			—		(5,841	)
Working capital and other settlements for acquisitions		(857	)		1,284			—			—		427
Intercompany investments and other					—						—		—
Net cash used in investing activities		(18,306	)		(96,078	)		—			—		(114,384	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			170,640			—		170,640
Proceeds from the exercise of options and warrants					—			2,258					2,258
Excess tax benefit related to share-based compensation					—			2,853					2,853
Net repayments of working capital facilities					(6,279	)		—					(6,279	)
Purchases of stock for treasury					—			(387	)				(387	)
Payment of deferred financing costs					—			(1,074	)				(1,074	)
Repayment of subordinated unsecured notes payable		(2,193	)		—			—			—		(2,193	)
Repayment under senior secured revolving credit facility		—			—			(76,000	)		—		(76,000	)
Intercompany notes and investments and other		449			97,747			(98,290	)		—		(94	)
Net cash provided by (used in) financing activities		(1,744	)		91,468			—			—		89,724
Exchange rate impact on cash and cash equivalents		—			94			—			—		94
Net increase (decrease) in cash and cash equivalents		(1,919	)		2,130			—			—		211
Cash and cash equivalents, beginning of year		6,044			2,372			—			—		8,416
Cash and cash equivalents, end of year	$	4,125		$	4,502		$	—		$	—	$	8,627

 Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2013

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	23,963		$	12,392		$	—		$	—	$	36,355
Investing activities:
Cash paid for acquisitions, net		(592	)		(2,726	)		—			—		(3,318	)
Purchases of equipment and leasehold improvements, net		(3,197	)		(3,347	)		—			—		(6,544	)
Working capital and other settlements for acquisitions		(444	)		(125	)		—			—		(569	)
Proceeds from foreign currency net investment hedge		1,421			—			—			—		1,421
Other		(1,144	)		—			—			—		(1,144	)
Net cash used in investing activities		(3,956	)		(6,198	)		—			—		(10,154	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			142,473			—		142,473
Proceeds from the exercise of options and warrants					—			24,261			—		24,261
Excess tax benefit related to share-based compensation					—			6,610			—		6,610
Net borrowings under working capital facilities					2,772			—			—		2,772
Payment of deferred financing costs					(116	)		(56	)		—		(172	)
Repayment of subordinated unsecured notes payable		(270	)		—			—			—		(270	)
Repayment under senior secured revolving credit facility		—			—			(196,746	)		—		(196,746	)
Intercompany notes and investments and other		(23,102	)		(356	)		23,458			—		—
Net cash provided by (used in) financing activities		(23,372	)		2,300			—			—		(21,072	)
Exchange rate impact on cash and cash equivalents		—			(927	)		—			—		(927	)
Net increase (decrease) in cash and cash equivalents		(3,365	)		7,567			—			—		4,202
Cash and cash equivalents, beginning of year		4,125			4,502			—			—		8,627
Cash and cash equivalents, end of year	$	760		$	12,069		$	—		$	—	$	12,829