Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries

9 Months Ended

Sep. 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 September 30, 2015, and for the three and nine months ended September 30, 2014 and 2015 is presented below. The Company (issuer of the Senior Unsecured Notes) was formed in September 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 September 30, 2014

(In thousands)

	Guarantor Subsidiaries		Non-Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	123,112	$	80,966	$	—	$	—		$	204,078
Costs and expenses:
Costs of revenues		80,796		49,801		—		—			130,597
Selling, general and administrative expenses		22,970		20,564		—		—			43,534
Depreciation and amortization		9,149		6,556		—		—			15,705
Total costs and expenses		112,915		76,921		—		—			189,836
Income from operations		10,197		4,045		—		—			14,242
Interest and other expenses, net		6,346		2,009		—		—			8,355
Income before income taxes		3,851		2,036		—		—			5,887
Provision for income taxes		1,024		1,448		—		—			2,472
Net income before earnings of consolidated subsidiaries	$	2,827	$	588	$	—	$	—		$	3,415
Net income (loss) of consolidated subsidiaries		588		—		588		(1,176	)		—
Net income (loss)	$	3,415	$	588	$	588	$	(1,176	)	$	3,415

Condensed Consolidating Statement of Operations

for the nine months ended September 30, 2014

(In thousands)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Revenues	$	346,504		$	227,047		$	—		$	—	$	573,551
Costs and expenses:
Costs of revenues		228,346			138,137			—			—		366,483
Selling, general and administrative expenses		66,521			60,131			—			—		126,652
Depreciation and amortization		25,037			19,868			—			—		44,905
Total costs and expenses		319,904			218,136			—			—		538,040
Income from operations		26,600			8,911			—			—		35,511
Interest and other expenses, net		18,154			5,873			—			—		24,027
Income before income taxes		8,446			3,038			—			—		11,484
Provision for income taxes		498			4,328			—			—		4,826
Net income (loss) before earnings of consolidated subsidiaries	$	7,948		$	(1,290	)	$	—		$	—	$	6,658
Net income (loss) of consolidated subsidiaries		(1,290	)		—			(1,290	)		2,580		—
Net income (loss)	$	6,658		$	(1,290	)	$	(1,290	)	$	2,580	$	6,658

Condensed Consolidating Statement of Operations

for the three months ended September 30, 2015

(In thousands)

	Guarantor Subsidiaries		Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	128,768	$	77,265	$	—	$	—		$	206,033
Costs and expenses:
Costs of revenues		86,779		47,667		—		—			134,446
Selling, general and administrative expenses		21,904		18,551		—		—			40,455
Depreciation and amortization		8,519		4,478		—		—			12,997
Total costs and expenses		117,202		70,696		—		—			187,898
Income from operations		11,566		6,569		—		—			18,135
Interest and other expenses, net		6,579		1,421		—		—			8,000
Income before income taxes		4,987		5,148		—		—			10,135
Provision for income taxes		970		2,010		—		—			2,980
Net income before earnings of consolidated subsidiaries	$	4,017	$	3,138	$	—	$	—		$	7,155
Net income (loss) of consolidated subsidiaries		3,138		—		3,138		(6,276	)		—
Net income (loss)	$	7,155	$	3,138	$	3,138	$	(6,276	)	$	7,155

Condensed Consolidating Statement of Operations

for the nine months ended September 30, 2015

(In thousands)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	382,611		$	228,476	$	—	$	—		$	611,087
Costs and expenses:
Costs of revenues		257,735			141,312		—		—			399,047
Selling, general and administrative expenses		68,607			56,721		—		—			125,328
Depreciation and amortization		27,001			14,573		—		—			41,574
Total costs and expenses		353,343			212,606		—		—			565,949
Income from operations		29,268			15,870		—		—			45,138
Interest and other expenses, net		40,001			4,570		—		—			44,571
Income (loss) before income taxes		(10,733	)		11,300		—		—			567
Provision (benefit) for income taxes		(6,621	)		5,872		—		—			(749	)
Net income (loss) before earnings of consolidated subsidiaries	$	(4,112	)	$	5,428	$	—	$	—		$	1,316
Net income (loss) of consolidated subsidiaries		5,428			—		5,428		(10,856	)		—
Net income (loss)	$	1,316		$	5,428	$	5,428	$	(10,856	)	$	1,316

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 September 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	$	115,222	$	12,116	$	—	$	—		$	127,338
Accounts receivable, net		64,657		160,852		—		—			225,509
Intercompany receivable		53,593		—		12,892		(66,485	)		—
Prepaid expenses		10,478		4,422		—		—			14,900
Deferred tax assets		4,976		96		—		—			5,072
Other current assets		2,351		1,137		—		—			3,488
Total current assets		251,277		178,623		12,892		(66,485	)		376,307
Property, equipment and leasehold improvements, net		11,979		5,099		—		—			17,078
Investment in subsidiaries		222,773		—		731,849		(954,622	)		—
Intercompany notes receivable		174,375		—		174,375		(348,750	)		—
Goodwill		392,636		96,896		—		—			489,532
Intangible assets, net		49,778		21,718		—		—			71,496
Long-term accounts receivable, less current portion		—		52,497		—		—			52,497
Deferred tax assets, noncurrent		43,727		5,931		—		—			49,658
Deferred financing costs, net		9,635		118		—		—			9,753
Other assets		711		1,389		—		—			2,100
Total assets	$	1,156,891	$	362,271	$	919,116	$	(1,369,857	)	$	1,068,421
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	23,552	$	35,688	$	—	$	—		$	59,240
Intercompany payable		12,892		53,593		—		(66,485	)		—
Accrued expenses		18,717		35,557		—		—			54,274
Accrued interest expense		—		—		12,892		—			12,892
Deferred revenue		162		3,996		—		—			4,158
Other current liabilities		2,173		3,668		—		—			5,841
Total current liabilities		57,496		132,502		12,892		(66,485	)		136,405
Senior unsecured notes payable		—		—		500,000		—			500,000
Senior secured revolving credit facility and working capital facilities		—		38,838		—		—			38,838
Intercompany notes payable		174,375		174,375		—		(348,750	)		—
Deferred tax liability, noncurrent		5,587		—		—		—			5,587
Other long-term liabilities		3,701		9,026		—		—			12,727
Total liabilities		241,159		354,741		512,892		(415,235	)		693,557
Commitments and contingencies
Stockholders’ equity (deficit)		915,732		7,530		406,224		(954,622	)		374,864
Total liabilities and stockholders' equity (deficit)	$	1,156,891	$	362,271	$	919,116	$	(1,369,857	)	$	1,068,421

Condensed Consolidating Statement of Cash Flows for the nine months ended September 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	$	18,266		$	6,695		$	—		$	—	$	24,961
Investing activities:
Cash paid for acquisitions, net		(177,864	)		(9,538	)		—			—		(187,402	)
Purchases of equipment and leasehold improvements, net		(4,171	)		(2,021	)		—			—		(6,192	)
Working capital and other settlements for acquisitions		(497	)		(1,869	)		—			—		(2,366	)
Cash paid for foreign currency net investment hedge		(362	)		—			—			—		(362	)
Other		(939	)		—			—			—		(939	)
Net cash used in investing activities		(183,833	)		(13,428	)		—			—		(197,261	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			269,621			—		269,621
Proceeds from the exercise of options and warrants					—			35,394			—		35,394
Excess tax benefit related to share-based compensation					—			12,700			—		12,700
Net borrowings under working capital facilities					7,506			—			—		7,506
Payment of deferred financing costs					—			(251	)		—		(251	)
Repayment of subordinated unsecured notes payable		(333	)		—			—			—		(333	)
Payment of contingent earnout obligation		—			(4,362	)		—			—		(4,362	)
Repayment under senior secured revolving credit facility		—			—			(151,290	)		—		(151,290	)
Intercompany notes and investments and other		166,121			—			(166,174	)		—		(53	)
Net cash provided by financing activities		165,788			3,144			—			—		168,932
Exchange rate impact on cash and cash equivalents		—			(350	)		—			—		(350	)
Net increase (decrease) in cash and cash equivalents		221			(3,939	)		—			—		(3,718	)
Cash and cash equivalents, beginning of period		760			12,069			—			—		12,829
Cash and cash equivalents, end of period	$	981		$	8,130		$	—		$	—	$	9,111

Condensed Consolidating Statement of Cash Flows for the nine months ended September 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	$	28,717		$	12,911		$	—		$	—	$	41,628
Investing activities:
Cash paid for acquisitions, net		(11,145	)		(625	)		—			—		(11,770	)
Purchases of equipment and leasehold improvements, net		(5,068	)		(2,269	)		—			—		(7,337	)
Working capital and other settlements for acquisitions		(181	)		—			—			—		(181	)
Cash proceeds from foreign currency net investment hedge		4,122			—			—			—		4,122
Other		(1,427	)		—			—			—		(1,427	)
Net cash used in investing activities		(13,699	)		(2,894	)		—			—		(16,593	)
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		—			—			13,737			—		13,737
Excess tax benefit related to share-based compensation		—			—			3,111			—		3,111
Net borrowings under working capital facilities		—			(607	)		—			—		(607	)
Repayment of contingent earnout obligation		—			(5,064	)		—			—		(5,064	)
Payment of deferred financing costs		—			(144	)		(8,562	)		—		(8,706	)
Payment for early redemption of senior unsecured notes		—			—			(14,618	)		—		(14,618	)
Repayment under senior secured revolving credit facility		—			—			(169,331	)		—		(169,331	)
Repayments under senior unsecured notes		—			—			(250,000	)		—		(250,000	)
Intercompany notes and investments and other		99,815			—			(99,815	)		—		—
Net cash provided by (used in) financing activities		99,815			(5,815	)		—			—		94,030
Exchange rate impact on cash and cash equivalents		—			(1,448	)		—			—		(1,448	)
Net increase in cash and cash equivalents		114,833			2,754			—			—		117,587
Cash and cash equivalents, beginning of period		388			9,363			—			—		9,751
Cash and cash equivalents, end of period	$	115,221		$	12,117		$	—		$	—	$	127,338