Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries

6 Months Ended

Jun. 30, 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 June 30, 2014, and for the three and six months ended June 30, 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 June 30, 2013

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	95,493		$	60,655		$	—		$	—	$	156,148
Costs and expenses:
Costs of revenues		67,073			35,045			—			—		102,118
Selling, general and administrative expenses		17,280			16,796			—			—		34,076
Depreciation and amortization		8,256			7,566			—			—		15,822
Total costs and expenses		92,609			59,407			—			—		152,016
Income from operations		2,884			1,248			—			—		4,132
Interest and other expenses, net		5,788			1,912			—			—		7,700
Loss before income taxes		(2,904	)		(664	)		—			—		(3,568	)
Provision (benefit) for income taxes		(1,820	)		1,035			—			—		(785	)
Net loss before earnings of consolidated subsidiaries	$	(1,084	)	$	(1,699	)	$	—		$	—	$	(2,783	)
Net income (loss) of consolidated subsidiaries		(1,699	)		—			(1,699	)		3,398		—
Net income (loss)	$	(2,783	)	$	(1,699	)	$	(1,699	)	$	3,398	$	(2,783	)

Condensed Consolidating Statement of Operations

for the six months ended June 30, 2013

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	186,671		$	118,180		$	—		$	—	$	304,851
Costs and expenses:
Costs of revenues		131,204			68,298			—			—		199,502
Selling, general and administrative expenses		35,404			31,929			—			—		67,333
Depreciation and amortization		16,879			15,269			—			—		32,148
Total costs and expenses		183,487			115,496			—			—		298,983
Income from operations		3,184			2,684			—			—		5,868
Interest and other expenses, net		11,347			3,883			—			—		15,230
Loss before income taxes		(8,163	)		(1,199	)		—			—		(9,362	)
Provision (benefit) for income taxes		(4,878	)		1,891			—			—		(2,987	)
Net loss before earnings of consolidated subsidiaries	$	(3,285	)	$	(3,090	)	$	—		$	—	$	(6,375	)
Net income (loss) of consolidated subsidiaries		(3,090	)		—			(3,090	)		6,180		—
Net income (loss)	$	(6,375	)	$	(3,090	)	$	(3,090	)	$	6,180	$	(6,375	)

Condensed Consolidating Statement of Operations

for the three months ended June 30, 2014

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	117,343		$	79,102		$	—		$	—	$	196,445
Costs and expenses:
Costs of revenues		76,483			48,368			—			—		124,851
Selling, general and administrative expenses		21,846			20,744			—			—		42,590
Depreciation and amortization		8,168			6,690			—			—		14,858
Total costs and expenses		106,497			75,802			—			—		182,299
Income from operations		10,846			3,300			—			—		14,146
Interest and other expenses, net		6,116			1,979			—			—		8,095
Income before income taxes		4,730			1,321			—			—		6,051
Provision for income taxes		1,116			1,403			—			—		2,519
Net income (loss) before earnings of consolidated subsidiaries	$	3,614		$	(82	)	$	—		$	—	$	3,532
Net income (loss) of consolidated subsidiaries		(82	)		—			(82	)		164		—
Net income (loss)	$	3,532		$	(82	)	$	(82	)	$	164	$	3,532

Condensed Consolidating Statement of Operations

for the six months ended June 30, 2014

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	223,392		$	146,081		$	—		$	—	$	369,473
Costs and expenses:
Costs of revenues		147,550			88,336			—			—		235,886
Selling, general and administrative expenses		43,551			39,567			—			—		83,118
Depreciation and amortization		15,888			13,312			—			—		29,200
Total costs and expenses		206,989			141,215			—			—		348,204
Income from operations		16,403			4,866			—			—		21,269
Interest and other expenses, net		11,808			3,864			—			—		15,672
Income before income taxes		4,595			1,002			—			—		5,597
Provision (benefit) for income taxes		(526	)		2,880			—			—		2,354
Net income (loss) before earnings of consolidated subsidiaries	$	5,121		$	(1,878	)	$	—		$	—	$	3,243
Net income (loss) of consolidated subsidiaries		(1,878	)		—			(1,878	)		3,756		—
Net income (loss)	$	3,243		$	(1,878	)	$	(1,878	)	$	3,756	$	3,243

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 June 30, 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	$	999	$	6,892	$	—	$	—		$	7,891
Accounts receivable, net		59,495		143,320		—		—			202,815
Intercompany receivable		36,466		—		10,671		(47,137	)		—
Prepaid expenses		3,880		5,961		—		—			9,841
Deferred tax assets		1,821		—		—		(4	)		1,817
Other current assets		—		1,279		—		—			1,279
Total current assets		102,661		157,452		10,671		(47,141	)		223,643
Property, equipment and leasehold improvements, net		8,517		4,230		—		—			12,747
Investment in subsidiaries		215,156		—		603,347		(818,503	)		—
Intercompany notes receivable		174,882		—		174,882		(349,764	)		—
Goodwill		385,144		124,740		—		—			509,884
Intangible assets, net		79,039		55,485		—		—			134,524
Long-term accounts receivable, less current portion		—		44,533		—		—			44,533
Deferred tax assets, noncurrent		8,283		6,725		—		—			15,008
Deferred financing costs, net		7,226		64		—		—			7,290
Other assets		585		1,478		—		—			2,063
Total assets	$	981,493	$	394,707	$	788,900	$	(1,215,408	)	$	949,692
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	20,834	$	40,911	$	—	$	—		$	61,745
Intercompany payable		10,671		36,466		—		(47,137	)		—
Accrued expenses		14,945		29,564		—		—			44,509
Accrued interest expense		—		—		10,671		—			10,671
Deferred revenue		305		5,814		—		—			6,119
Deferred tax liability		—		4		—		(4	)		—
Current portion of contingent earnout obligation		—		6,529		—		—			6,529
Current portion of working capital facilities		—		40,410		—		—			40,410
Other current liabilities		5,136		5,306		—		—			10,442
Total current liabilities		51,891		165,004		10,671		(47,141	)		180,425
Senior unsecured notes payable		—		—		250,000		—			250,000
Senior secured revolving credit facility and working capital facilities, less current portion		—		—		187,022		—			187,022
Intercompany notes payable		174,882		174,882		—		(349,764	)		—
Long-term contingent earnout obligation, less current portion		—		5,128		—		—			5,128
Other long-term liabilities		1,631		7,513		—		—			9,144
Total liabilities		228,404		352,527		447,693		(396,905	)		631,719
Commitments and contingencies
Stockholders’ equity (deficit)		753,089		42,180		341,207		(818,503	)		317,973
Total liabilities and stockholders' equity (deficit)	$	981,493	$	394,707	$	788,900	$	(1,215,408	)	$	949,692

Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 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	$	8,832		$	8,782		$	—		$	—	$	17,614
Investing activities:
Purchases of equipment and leasehold improvements, net		(1,629	)		(1,684	)		—			—		(3,313	)
Proceeds from foreign currency net investment hedge		3,810			—			—			—		3,810
Net cash provided by (used in) investing activities		2,181			(1,684	)		—			—		497
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			77,000			—		77,000
Proceeds from the exercise of options and warrants		—			—			6,032			—		6,032
Excess tax benefit related to share-based compensation		—			—			1,752			—		1,752
Net borrowings under working capital facilities		—			(3,216	)		—			—		(3,216	)
Payment of deferred financing costs		—			—			(52	)		—		(52	)
Repayment under senior secured revolving credit facility		—			—			(98,300	)		—		(98,300	)
Intercompany notes and investments and other		(13,568	)		—			13,568			—		—
Net cash used in financing activities		(13,568	)		(3,216	)		—			—		(16,784	)
Exchange rate impact on cash and cash equivalents		—			(787	)		—			—		(787	)
Net increase (decrease) in cash and cash equivalents		(2,555	)		3,095			—			—		540
Cash and cash equivalents, beginning of period		4,125			4,502			—			—		8,627
Cash and cash equivalents, end of period	$	1,570		$	7,597		$	—		$	—	$	9,167

Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 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	$	13,234		$	5,521		$	—		$	—	$	18,755
Investing activities:
Cash paid for acquisitions, net		(175,590	)		(9,538	)		—			—		(185,128	)
Purchases of equipment and leasehold improvements, net		(2,864	)		(746	)		—			—		(3,610	)
Working capital and other settlements for acquisitions		(430	)		(1,869	)		—			—		(2,299	)
Cash paid from foreign currency net investment hedge		(5,044	)		—			—			—		(5,044	)
Other		(839	)		—			—			—		(839	)
Net cash used in investing activities		(184,767	)		(12,153	)		—			—		(196,920	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			219,995			—		219,995
Proceeds from the exercise of options and warrants					—			23,090			—		23,090
Excess tax benefit related to share-based compensation					—			7,314			—		7,314
Net borrowings under working capital facilities					1,160			—			—		1,160
Payment of deferred financing costs					—			(241	)		—		(241	)
Repayment of subordinated unsecured notes payable		(333	)		—			—			—		(333	)
Repayment under senior secured revolving credit facility		—			—			(78,000	)		—		(78,000	)
Intercompany notes and investments and other		172,105			—			(172,158	)		—		(53	)
Net cash provided by financing activities		171,772			1,160			—			—		172,932
Exchange rate impact on cash and cash equivalents		—			295			—			—		295
Net increase (decrease) in cash and cash equivalents		239			(5,177	)		—			—		(4,938	)
Cash and cash equivalents, beginning of period		760			12,069			—			—		12,829
Cash and cash equivalents, end of period	$	999		$	6,892		$	—		$	—	$	7,891