Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries

6 Months Ended

Jun. 30, 2015

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, 2014 and June 30, 2015, and for the three and six months ended June 30, 2014 and 2015 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, 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 Statement of Operations

for the three months ended June 30, 2015

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	132,125		$	76,613	$	—	$	—		$	208,738
Costs and expenses:
Costs of revenues		88,622			47,803		—		—			136,425
Selling, general and administrative expenses		23,689			19,032		—		—			42,721
Depreciation and amortization		9,071			4,658		—		—			13,729
Total costs and expenses		121,382			71,493		—		—			192,875
Income from operations		10,743			5,120		—		—			15,863
Interest and other expenses, net		27,013			1,554		—		—			28,567
Income (loss) before income taxes		(16,270	)		3,566		—		—			(12,704	)
Provision (benefit) for income taxes		(6,997	)		2,156		—		—			(4,841	)
Net income (loss) before earnings of consolidated subsidiaries	$	(9,273	)	$	1,410	$	—	$	—		$	(7,863	)
Net income (loss) of consolidated subsidiaries		1,410			—		1,410		(2,820	)		—
Net income (loss)	$	(7,863	)	$	1,410	$	1,410	$	(2,820	)	$	(7,863	)

Condensed Consolidating Statement of Operations

for the six months ended June 30, 2015

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	253,843		$	151,211	$	—	$	—		$	405,054
Costs and expenses:
Costs of revenues		170,956			93,645		—		—			264,601
Selling, general and administrative expenses		46,703			38,170		—		—			84,873
Depreciation and amortization		18,482			10,095		—		—			28,577
Total costs and expenses		236,141			141,910		—		—			378,051
Income from operations		17,702			9,301		—		—			27,003
Interest and other expenses, net		33,422			3,149		—		—			36,571
Income (loss) before income taxes		(15,720	)		6,152		—		—			(9,568	)
Provision (benefit) for income taxes		(7,591	)		3,862		—		—			(3,729	)
Net income (loss) before earnings of consolidated subsidiaries	$	(8,129	)	$	2,290	$	—	$	—		$	(5,839	)
Net income (loss) of consolidated subsidiaries		2,290			—		2,290		(4,580	)		—
Net income (loss)	$	(5,839	)	$	2,290	$	2,290	$	(4,580	)	$	(5,839	)

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 Balance Sheet as of June 30, 2015

(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	$	90,778	$	14,315	$	—	$	—		$	105,093
Accounts receivable, net		63,157		160,746		—		—			223,903
Intercompany receivable		49,300		—		5,860		(55,160	)		—
Prepaid expenses		8,898		4,735		—		—			13,633
Deferred tax assets		3,938		96		—		—			4,034
Other current assets		—		1,179		—		—			1,179
Total current assets		216,071		181,071		5,860		(55,160	)		347,842
Property, equipment and leasehold improvements, net		11,961		5,524		—		—			17,485
Investment in subsidiaries		218,225		—		728,711		(946,936	)		—
Intercompany notes receivable		174,326		—		174,326		(348,652	)		—
Goodwill		392,231		104,251		—		—			496,482
Intangible assets, net		56,838		27,358		—		—			84,196
Long-term accounts receivable, less current portion		—		52,109		—		—			52,109
Deferred tax assets, noncurrent		43,920		6,762		—		—			50,682
Deferred financing costs, net		9,962		134		—		—			10,096
Other assets		680		1,613		—		—			2,293
Total assets	$	1,124,214	$	378,822	$	908,897	$	(1,350,748	)	$	1,061,185
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	19,285	$	37,972	$	—	$	—		$	57,257
Intercompany payable		5,860		49,300		—		(55,160	)		—
Accrued expenses		17,858		34,023		—		—			51,881
Accrued interest expense		—		—		5,860		—			5,860
Deferred revenue		164		4,744		—		—			4,908
Current portion of contingent earnout obligation		—		4,567		—		—			4,567
Current portion of working capital facilities		—		—		—		—			—
Other current liabilities		4,757		4,493		—		—			9,250
Total current liabilities		47,924		135,099		5,860		(55,160	)		133,723
Senior unsecured notes payable		—		—		500,000		—			500,000
Senior secured revolving credit facility and working capital facilities, less current portion		—		41,730		—		—			41,730
Intercompany notes payable		174,326		174,326		—		(348,652	)		—
Deferred tax liability, noncurrent		9,554		—		—		—			9,554
Other long-term liabilities		3,417		9,088		—		—			12,505
Total liabilities		235,221		360,243		505,860		(403,812	)		697,512
Commitments and contingencies
Stockholders’ equity (deficit)		888,993		18,579		403,037		(946,936	)		363,673
Total liabilities and stockholders' equity (deficit)	$	1,124,214	$	378,822	$	908,897	$	(1,350,748	)	$	1,061,185

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 for 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

Condensed Consolidating Statement of Cash Flows

 for the six months ended June 30, 2015

(In thousands)

	Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	6,735		$	7,316		$	—		$	—	$	14,051
Investing activities:
Cash paid for acquisitions, net		(11,145	)		—			—			—		(11,145	)
Purchases of equipment and leasehold improvements, net		(3,323	)		(1,520	)		—			—		(4,843	)
Working capital and other settlements for acquisitions		(91	)		—			—			—		(91	)
Cash proceeds from foreign currency net investment hedge		2,930			—			—			—		2,930
Other		(1,310	)		—			—			—		(1,310	)
Net cash used in investing activities		(12,939	)		(1,520	)		—			—		(14,459	)
Financing activities:
Borrowings under senior unsecured notes		—			—			500,000			—		500,000
Borrowings under senior secured revolving credit facility		—			—			25,478			—		25,478
Proceeds from the exercise of options and warrants		—			—			11,451			—		11,451
Excess tax benefit related to share-based compensation		—			—			2,147			—		2,147
Net borrowings under working capital facilities		—			827			—			—		827
Repayment of contingent earnout obligation		—			(1,023	)		—			—		(1,023	)
Payment of deferred financing costs		—			(143	)		(8,533	)		—		(8,676	)
Payment for early redemption of senior unsecured notes					—			(14,618	)		—		(14,618	)
Repayment under senior secured revolving credit facility		—			—			(169,331	)		—		(169,331	)
Repayments of senior unsecured notes		—			—			(250,000	)		—		(250,000	)
Intercompany notes and investments and other		96,594			—			(96,594	)		—		—
Net cash provided by (used in) financing activities		96,594			(339	)		—			—		96,255
Exchange rate impact on cash and cash equivalents		—			(505	)		—			—		(505	)
Net increase in cash and cash equivalents		90,390			4,952			—			—		95,342
Cash and cash equivalents, beginning of period		388			9,363			—			—		9,751
Cash and cash equivalents, end of period	$	90,778		$	14,315		$	—		$	—	$	105,093