Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries

3 Months Ended

Mar. 31, 2014

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, 2013 and March 31, 2014, and for the three months ended March 31, 2013 and 2014 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.

Condensed Consolidating Statement of Operations

for the three months ended March 31, 2013

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	91,178		$	57,525		$	—		$	—	$	148,703
Costs and expenses:
Costs of revenues		64,131			33,253			—			—		97,384
Selling, general and administrative expenses		18,124			15,133			—			—		33,257
Depreciation and amortization		8,623			7,703			—			—		16,326
Total costs and expenses		90,878			56,089			—			—		146,967
Income from operations		300			1,436			—			—		1,736
Interest and other expenses, net		5,559			1,971			—			—		7,530
Loss before income taxes		(5,259	)		(535	)		—			—		(5,794	)
Provision (benefit) for income taxes		(3,058	)		856			—			—		(2,202	)
Net loss before earnings of consolidated subsidiaries	$	(2,201	)	$	(1,391	)	$	—		$	—	$	(3,592	)
Net income (loss) of consolidated subsidiaries		(1,391	)		—			(1,391	)		2,782		—
Net income (loss)	$	(3,592	)	$	(1,391	)	$	(1,391	)	$	2,782	$	(3,592	)

Condensed Consolidating Statement of Operations

for the three months ended March 31, 2014

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	106,049		$	66,979		$	—		$	—	$	173,028
Costs and expenses:
Costs of revenues		71,067			39,968			—			—		111,035
Selling, general and administrative expenses		21,705			18,823			—			—		40,528
Depreciation and amortization		7,720			6,622			—			—		14,342
Total costs and expenses		100,492			65,413			—			—		165,905
Income from operations		5,557			1,566			—			—		7,123
Interest and other expenses, net		5,692			1,885			—			—		7,577
Loss before income taxes		(135	)		(319	)		—			—		(454	)
Provision (benefit) for income taxes		(1,642	)		1,477			—			—		(165	)
Net loss before earnings of consolidated subsidiaries	$	1,507		$	(1,796	)	$	—		$	—	$	(289	)
Net income (loss) of consolidated subsidiaries		(1,796	)		—			(1,796	)		3,592		—
Net income (loss)	$	(289	)	$	(1,796	)	$	(1,796	)	$	3,592	$	(289	)

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
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
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		—		37,943		45,027		—			82,970
Intercompany notes payable		174,826		174,826		—		(349,652	)		—
Long-term contingent earnout obligation, less current portion		—		2,373		—		—			2,373
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 Balance Sheet as of March 31, 2014

(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	$	1,198	$	7,306	$	—	$	—		$	8,504
Accounts receivable, net		55,230		131,815		—		—			187,045
Intercompany receivable		23,547		—		4,974		(28,521	)		—
Prepaid expenses		4,272		3,924		—		—			8,196
Deferred tax assets		1,821		—		—		(4	)		1,817
Other current assets		—		1,248		—		—			1,248
Total current assets		86,068		144,293		4,974		(28,525	)		206,810
Property, equipment and leasehold improvements, net		6,972		4,266		—		—			11,238
Investment in subsidiaries		215,238		—		518,166		(733,404	)		—
Intercompany notes receivable		174,877		—		174,877		(349,754	)		—
Goodwill		319,810		119,188		—		—			438,998
Intangible assets, net		63,463		62,140		—		—			125,603
Long-term accounts receivable, less current portion		—		41,228		—		—			41,228
Deferred tax assets, noncurrent		7,995		6,218		—		—			14,213
Deferred financing costs, net		7,772		78		—		—			7,850
Other assets		533		1,152		—		—			1,685
Total assets	$	882,728	$	378,563	$	698,017	$	(1,111,683	)	$	847,625
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	20,245	$	38,986	$	—	$	—		$	59,231
Intercompany payable		4,974		23,547		—		(28,521	)		—
Accrued expenses		14,507		27,329		—		—			41,836
Accrued interest expense		—		—		4,974		—			4,974
Deferred revenue		4		6,286		—		—			6,290
Deferred tax liability		—		4		—		(4	)		—
Current portion of contingent earnout obligation		—		6,362		—		—			6,362
Other current liabilities		2,779		5,135		—		—			7,914
Total current liabilities		42,509		107,649		4,974		(28,525	)		126,607
Senior unsecured notes payable		—		—		250,000		—			250,000
Senior secured revolving credit facility and working capital facilities		—		42,436		116,039		—			158,475
Intercompany notes payable		174,877		174,877		—		(349,754	)		—
Long-term contingent earnout obligation, less current portion		—		4,923		—		—			4,923
Other long-term liabilities		1,717		7,026		—		—			8,743
Total liabilities		219,103		336,911		371,013		(378,279	)		548,748
Commitments and contingencies
Stockholders’ equity (deficit)		663,625		41,652		327,004		(733,404	)		298,877
Total liabilities and stockholders' equity (deficit)	$	882,728	$	378,563	$	698,017	$	(1,111,683	)	$	847,625

Condensed Consolidating Statement of Cash Flows for the three months ended March 31, 2013

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by (used in) operating activities	$	(3,794	)	$	2,684		$	—		$	—	$	(1,110	)
Investing activities:
Purchases of equipment and leasehold improvements, net		(919	)		(851	)		—			—		(1,770	)
Net cash used in investing activities		(919	)		(851	)		—			—		(1,770	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			10,000			—		10,000
Proceeds from the exercise of options and warrants		—			—			2,441			—		2,441
Excess tax benefit related to share-based compensation		—			—			407			—		407
Net repayment under working capital facilities		—			(800	)		—			—		(800	)
Payment of deferred financing costs		—			—			(52	)		—		(52	)
Repayment under senior secured revolving credit facility		—			—			(10,000	)		—		(10,000	)
Intercompany notes and investments and other		2,796			—			(2,796	)		—		—
Net cash provided by (used in) financing activities		2,796			(800	)		—			—		1,996
Exchange rate impact on cash and cash equivalents		—			(34	)		—			—		(34	)
Net increase (decrease) in cash and cash equivalents		(1,917	)		999			—			—		(918	)
Cash and cash equivalents, beginning of period		4,125			4,502			—			—		8,627
Cash and cash equivalents, end of period	$	2,208		$	5,501		$	—		$	—	$	7,709

Condensed Consolidating Statement of Cash Flows for the three months ended March 31, 2014

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	1,369		$	1,836		$	—		$	—	$	3,205
Investing activities:
Cash paid for acquisitions, net		(87,615	)		(9,538	)		—			—		(97,153	)
Working capital and other settlements for acquisitions		—			(1,142	)		—			—		(1,142	)
Purchases of equipment and leasehold improvements, net		(402	)		(310	)		—			—		(712	)
Cash paid for foreign currency net investment hedge		(3,356	)		—			—			—		(3,356	)
Other		(839	)		—			—			—		(839	)
Net cash used in investing activities		(92,212	)		(10,990	)		—			—		(103,202	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			121,012			—		121,012
Proceeds from the exercise of options and warrants		—			—			14,637			—		14,637
Excess tax benefit related to share-based compensation		—			—			6,190			—		6,190
Net borrowings under working capital facilities		—			4,123			—			—		4,123
Payment of deferred financing costs		—			—			(225	)		—		(225	)
Repayment of subordinated unsecured notes payable		(333	)		—			—			—		(333	)
Repayment under senior secured revolving credit facility		—			—			(50,000	)		—		(50,000	)
Intercompany notes and investments and other		91,614			—			(91,614	)		—		—
Net cash provided by financing activities		91,281			4,123			—			—		95,404
Exchange rate impact on cash and cash equivalents		—			268			—			—		268
Net increase (decrease) in cash and cash equivalents		438			(4,763	)		—			—		(4,325	)
Cash and cash equivalents, beginning of period		760			12,069			—			—		12,829
Cash and cash equivalents, end of period	$	1,198		$	7,306		$	—		$	—	$	8,504