Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries

12 Months Ended

Dec. 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 2014, and for the three years ended December 31, 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. 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, 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 Statement of Operations

for the year ended December 31, 2014

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	468,419		$	307,196	$	—	$	—		$	775,615
Costs and expenses:
Costs of revenues		308,962			188,076		—		—			497,038
Selling, general and administrative expenses		92,213			78,984		—		—			171,197
Depreciation and amortization		34,302			25,978		—		—			60,280
Total costs and expenses		435,477			293,038		—		—			728,515
Income from operations		32,942			14,158		—		—			47,100
Interest and other expenses, net		24,909			7,262		—		—			32,171
Income before income taxes		8,033			6,896		—		—			14,929
Provision (benefit) for income taxes		(2,151	)		6,586		—		—			4,435
Net income before earnings of consolidated subsidiaries	$	10,184		$	310	$	—	$	—		$	10,494
Net income (loss) of consolidated subsidiaries		310			—		310		(620	)		—
Net income (loss)	$	10,494		$	310	$	310	$	(620	)	$	10,494

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
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 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 Balance Sheet as of December 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	$	388	$	9,363	$	—	$	—		$	9,751
Accounts receivable, net		55,684		147,505		—		—			203,189
Intercompany receivable		42,002		—		10,667		(52,669	)		—
Prepaid expenses		8,248		5,557		—		—			13,805
Deferred tax assets		3,780		—		—		(4	)		3,776
Other current assets		272		1,165		—		—			1,437
Total current assets		110,374		163,590		10,667		(52,673	)		231,958
Property, equipment and leasehold improvements, net		10,394		5,332		—		—			15,726
Investment in subsidiaries		217,344		—		591,435		(808,779	)		—
Intercompany notes receivable		174,464		—		174,464		(348,928	)		—
Goodwill		387,104		108,575		—		—			495,679
Intangible assets, net		64,530		38,053		—		—			102,583
Long-term accounts receivable, less current portion		—		46,401		—		—			46,401
Deferred tax assets, noncurrent		22,505		7,177		—		—			29,682
Deferred financing costs, net		6,140		29		—		—			6,169
Other assets		663		1,283		—		—			1,946
Total assets	$	993,518	$	370,440	$	776,566	$	(1,210,380	)	$	930,144
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	20,163	$	36,870	$	—	$	—		$	57,033
Intercompany payable		10,667		42,002		—		(52,669	)		—
Accrued expenses		23,904		30,074		—		—			53,978
Accrued interest expense		—		—		10,667		—			10,667
Deferred revenue		244		6,158		—		—			6,402
Deferred tax liability		—		4		—		(4	)		—
Current portion of contingent earnout obligation		—		4,473		—		—			4,473
Current portion of working capital facilities		—		40,396		—		—			40,396
Other current liabilities		2,363		4,587		—		—			6,950
Total current liabilities		57,341		164,564		10,667		(52,673	)		179,899
Senior unsecured notes payable		—		—		250,000		—			250,000
Senior secured revolving credit facility and working capital facilities, less current portion		—		—		143,853		—			143,853
Intercompany notes payable		174,464		174,464		—		(348,928	)		—
Long-term contingent earnout obligation, less current portion		—		2,114		—		—			2,114
Other long-term liabilities		1,795		7,608		—		—			9,403
Total liabilities		233,600		348,750		404,520		(401,601	)		585,269
Commitments and contingencies
Stockholders’ equity (deficit)		759,918		21,690		372,046		(808,779	)		344,875
Total liabilities and stockholders' equity (deficit)	$	993,518	$	370,440	$	776,566	$	(1,210,380	)	$	930,144

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

 Condensed Consolidating Statement of Cash Flows for the year ended December 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	$	33,096		$	12,103		$	—		$	—	$	45,199
Investing activities:
Cash paid for acquisitions, net		(177,864	)		(9,538	)		—			—		(187,402	)
Purchases of equipment and leasehold improvements, net		(7,687	)		(3,207	)		—			—		(10,894	)
Working capital and other settlements for acquisitions		(477	)		(1,854	)		—			—		(2,331	)
Proceeds from foreign currency net investment hedge		4,006			—			—			—		4,006
Other		(1,347	)		(195	)		—			—		(1,542	)
Net cash used in investing activities		(183,369	)		(14,794	)		—			—		(198,163	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			299,255			—		299,255
Proceeds from the exercise of options and warrants		—			—			42,437			—		42,437
Excess tax benefit related to share-based compensation		—			—			9,287			—		9,287
Net borrowings under working capital facilities		—			4,939			—			—		4,939
Payment of deferred financing costs					—			(263	)		—		(263	)
Repayment of subordinated unsecured notes payable		(333	)		—			—			—		(333	)
Payment of contingent earnout obligation		—			(4,362	)		—			—		(4,362	)
Repayment under senior secured revolving credit facility		—			—			(200,429	)		—		(200,429	)
Intercompany notes and investments and other		150,234			—			(150,287	)		—		(53	)
Net cash provided by (used in) financing activities		149,901			577			—			—		150,478
Exchange rate impact on cash and cash equivalents		—			(592	)		—			—		(592	)
Net increase (decrease) in cash and cash equivalents		(372	)		(2,706	)		—			—		(3,078	)
Cash and cash equivalents, beginning of year		760			12,069			—			—		12,829
Cash and cash equivalents, end of year	$	388		$	9,363		$	—		$	—	$	9,751