Delaware
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27-2909425
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(State or other jurisdiction
of incorporation)
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(IRS Employer
Identification No.)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02.
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Results of Operations and Financial Condition.
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Item 9.01.
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Financial Statements and Exhibits.
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Exhibit No.
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Description
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99.1
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Press Release dated February 28, 2012
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ExamWorks Group, Inc | |||
Date: February 28, 2012
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By:
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/s/ J. Miguel Fernandez de Castro | |
J. Miguel Fernandez de Castro | |||
Chief Financial Officer and Senior Executive Vice President |
Exhibit No.
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Description
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99.1
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Press Release dated February 28, 2012
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●
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Revenues for the fourth quarter of 2011 were $115.3 million, an increase of $61.0 million, or 112%, over the year-ago quarter revenue of $54.3 million.
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Adjusted EBITDA for the fourth quarter of 2011 was $16.8 million, an increase of $6.7 million, or 66%, over the year-ago quarter adjusted EBITDA of $10.1 million. Adjusted EBITDA is a non-GAAP measure that is described and reconciled to net loss below and is not a substitute for the GAAP equivalent.
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●
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As previously announced, in September 2011 and October 2011 we completed six acquisitions (collectively the “Q4 2011 Acquisitions”). These acquisitions contributed $8.3 million in revenue and $1.5 million in adjusted EBITDA, respectively, in the fourth quarter of 2011.
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●
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In the fourth quarter of 2011, the Company repurchased approximately 692,000 shares at an average price of $8.49 per share. Since inception of the repurchase plan, the Company has repurchased approximately 1.0 million shares at an average price of $9.34 per share. As of December 31, 2011, the Company has $10.6 million remaining under its current authorization. The Company reissued approximately 203,000 shares out of treasury in connection with the Q4 2011 Acquisitions.
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●
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We ended fiscal year 2011 with pro forma revenues of $483.2 million and pro forma adjusted EBITDA of $80.7 million. On an as reported basis, we ended 2011 with revenues of $397.9 million and adjusted EBITDA of $63.3 million.
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●
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We generated $12.7 million of cash flow from operations in the fourth quarter of 2011 and $39.5 million in the full year 2011. We ended the year with available liquidity in excess of $94 million, including cash on hand and availability under our senior revolving credit facility. As of the end of the year, our consolidated leverage was 3.64x.
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●
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We have approximately 1,900 full-time employees operating out of 45 service centers in North America and the UK. Today we process approximately 900,000 IME and related services annually and our medical panel consist of over 29,000 doctors and medical providers.
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We have more than doubled our revenues since our IPO in October 2010 and we now operate under several leading brands including ExamWorks, MES and Premex.
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We were awarded three national accounts, two in the US and one in the UK. This is in addition to the three existing accounts under the ExamWorks brand and 15 under the MES brand.
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In Q4 2011, we experienced the beginning of the anticipated improvement in the ExamWorks brand organic revenue metric and expect continued improvement over the course of 2012.
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We have successfully validated our robust technology infrastructure and processes by completing an SSAE 16, SOC 1, Type 2 audit (formerly known as SAS 70) for all of the ExamWorks companies in the United States and Canada.
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Pro Forma Revenues
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||||||||||||||||||||||||||||||||||||||||
(In thousands except %)
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||||||||||||||||||||||||||||||||||||||||
Period Ended 2010
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Period Ended 2011
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|||||||||||||||||||||||||||||||||||||||
Q1
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Q2
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Q3
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Q4
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YTD
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Q1
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Q2
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Q3
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Q4
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YTD
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|||||||||||||||||||||||||||||||
ExamWorks brand
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$ | 56,422 | $ | 60,343 | $ | 59,501 | $ | 56,345 | $ | 232,611 | $ | 53,620 | $ | 56,110 | $ | 51,087 | $ | 49,367 | $ | 210,184 | ||||||||||||||||||||
% Change
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(5.0 | )% | (7.0 | )% | (14.1 | )% | (12.4 | )% | (9.6 | )% | ||||||||||||||||||||||||||||||
MES
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30,950 | 32,858 | 33,108 | 32,702 | 129,618 | 34,256 | 37,036 | 35,816 | 34,290 | 141,398 | ||||||||||||||||||||||||||||||
% Change
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10.7 | % | 12.7 | % | 8.2 | % | 4.9 | % | 9.1 | % | ||||||||||||||||||||||||||||||
Premex
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21,032 | 20,659 | 21,277 | 21,647 | 84,615 | 23,636 | 22,510 | 22,315 | 23,267 | 91,728 | ||||||||||||||||||||||||||||||
% Change
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12.4 | % | 9.0 | % | 4.9 | % | 7.5 | % | 8.4 | % | ||||||||||||||||||||||||||||||
Subtotal
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$ | 108,404 | $ | 113,860 | $ | 113,886 | $ | 110,694 | $ | 446,844 | $ | 111,512 | $ | 115,656 | $ | 109,218 | $ | 106,924 | $ | 443,310 | ||||||||||||||||||||
% Change
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2.9 | % | 1.6 | % | (4.1 | )% | (3.4 | )% | (0.8 | )% | ||||||||||||||||||||||||||||||
Q4 2011 Acquisitions
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8,255 | 10,320 | 9,745 | 10,575 | 38,895 | 9,748 | 11,226 | 9,922 | 8,997 | 39,893 | ||||||||||||||||||||||||||||||
% Change
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18.1 | % | 8.8 | % | 1.8 | % | (14.9 | )% | 2.6 | % | ||||||||||||||||||||||||||||||
Total
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$ | 116,659 | $ | 124,180 | $ | 123,631 | $ | 121,269 | $ | 485,739 | $ | 121,260 | $ | 126,882 | $ | 119,140 | $ | 115,921 | $ | 483,203 | ||||||||||||||||||||
% Change
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3.9 | % | 2.2 | % | (3.6 | )% | (4.4 | )% | (0.5 | )% |
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●
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First quarter 2012 reported revenue is expected to range between $116.0 million to $120.0 million. We expect these results to show continued growth at MES and Premex and continued improvement in the ExamWorks brand revenue metric.
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Consistent with Q4 2011, adjusted EBITDA for the first quarter of 2012 is expected to be approximately 14.5% of reported revenues. Adjusted EBITDA is a non-GAAP measure, the use of which by ExamWorks is described below. The reconciliation to GAAP measures of reported 2012 Adjusted EBITDA is expected to be calculated and presented in a manner consistent with the reconciliation set forth below with respect to the three and twelve months ended December 31, 2011.
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●
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For 2012, we expect organic revenue growth between 4-6% based upon our 2011 pro forma revenue of approximately $483 million. Additionally, we expect to complete acquisitions in the second half of 2012 with annual revenues of approximately $75 million.
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For 2012 and consistent with 2011, we expect adjusted EBITDA margins between 15-17% of reported revenues. We expect a gradual increase in EBITDA margins over the course of 2012 as we begin to realize revenue growth and leverage our current infrastructure.
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Three months ended December 31,
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Twelve months ended December 31,
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2010
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2011
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2010
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2011
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Revenues:
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$ | 54,269 | $ | 115,312 | $ | 163,511 | $ | 397,860 | ||||||||
Costs and expenses:
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Costs of revenues
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34,913 | 76,017 | 103,606 | 262,242 | ||||||||||||
Selling, general and administrative expenses
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13,719 | 25,348 | 37,689 | 84,133 | ||||||||||||
Depreciation and amortization
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7,053 | 14,286 | 19,505 | 47,439 | ||||||||||||
Total costs and expenses
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55,685 | 115,651 | 160,800 | 393,814 | ||||||||||||
Income (loss) from operations
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(1,416 | ) | (339 | ) | 2,711 | 4,046 | ||||||||||
Interest and other expenses, net:
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Interest expense, net
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2,755 | 6,558 | 8,178 | 15,480 | ||||||||||||
Loss on early extinguishment of debt
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3,169 | - | 3,169 | 621 | ||||||||||||
(Gain) loss on interest rate swap
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(29 | ) | (75 | ) | 42 | (328 | ) | |||||||||
Realized foreign currency (gain) loss
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(6 | ) | 465 | (156 | ) | 688 | ||||||||||
Total interest and other expenses, net
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5,889 | 6,948 | 11,233 | 16,461 | ||||||||||||
Loss before income taxes
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(7,305 | ) | (7,287 | ) | (8,522 | ) | (12,415 | ) | ||||||||
Income tax benefit
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(1,857 | ) | (2,262 | ) | (2,484 | ) | (4,082 | ) | ||||||||
Net loss
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$ | (5,448 | ) | $ | (5,025 | ) | $ | (6,038 | ) | $ | (8,333 | ) | ||||
Per Share Data:
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Net loss per share:
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Basic and diluted
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$ | (0.20 | ) | $ | (0.15 | ) | $ | (0.33 | ) | $ | (0.25 | ) | ||||
Weighted average number of common shares outstanding:
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Basic and diluted
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27,168,890 | 34,223,906 | 18,500,859 | 33,975,658 | ||||||||||||
Adjusted EBITDA
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$ | 10,057 | $ | 16,809 | $ | 30,321 | $ | 63,304 |
December 31,
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ASSETS
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2010
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2011
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Current assets:
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Cash and cash equivalents
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$ | 33,624 | $ | 8,416 | ||||
Accounts receivable, net
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38,638 | 144,041 | ||||||
Other receivables
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33 | 40 | ||||||
Prepaid expenses
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2,175 | 4,487 | ||||||
Deferred tax assets
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68 | 1,640 | ||||||
Other current assets
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42 | 1,173 | ||||||
Total current assets
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74,580 | 159,797 | ||||||
Property, equipment and leasehold improvements, net
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4,870 | 8,918 | ||||||
Goodwill
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90,582 | 300,260 | ||||||
Intangible assets, net
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66,914 | 146,168 | ||||||
Deferred tax assets, noncurrent
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7,669 | - | ||||||
Deferred financing costs, net
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4,176 | 11,458 | ||||||
Other assets
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271 | 438 | ||||||
Total assets
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$ | 249,062 | $ | 627,039 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$ | 19,999 | $ | 42,642 | ||||
Accrued expenses
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9,414 | 28,410 | ||||||
Accrued interest expense
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- | 10,247 | ||||||
Deferred revenue
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272 | 1,332 | ||||||
Current portion of subordinated unsecured notes payable
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2,312 | 1,932 | ||||||
Current portion of contingent earnout obligation
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2,478 | 91 | ||||||
Other current liabilities
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3,105 | 5,459 | ||||||
Total current liabilities
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37,580 | 90,113 | ||||||
Senior unsecured notes payable
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- | 250,000 | ||||||
Senior secured revolving credit facility and working capital facilities
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4,998 | 44,063 | ||||||
Long-term subordinated unsecured notes payable, less current portion
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2,546 | 717 | ||||||
Long-term contingent earnout obligation, less current portion
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2,032 | 86 | ||||||
Deferred tax liability, noncurrent
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- | 2,159 | ||||||
Other long-term liabilities
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1,666 | 1,977 | ||||||
Total liabilities
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48,822 | 389,115 | ||||||
Commitments and contingencies
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Stockholders’ equity:
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Preferred stock, $0.0001 par value; Authorized 50,000,000 shares; no shares issued and outstanding at December 31, 2010 and December 31, 2011, respectively
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- | - | ||||||
Common stock, $0.0001 par value; Authorized 250,000,000 shares; issued and outstanding 32,216,104 and 34,090,618 at December 31, 2010 and December 31, 2011, respectively
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3 | 3 | ||||||
Additional paid-in capital
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211,861 | 268,162 | ||||||
Accumulated other comprehensive income (loss)
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1,216 | (1,429 | ) | |||||
Accumulated deficit
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(12,840 | ) | (21,549 | ) | ||||
Treasury stock, at cost - no shares and 805,613 shares outstanding at December 31, 2010 and December 31, 2011, respectively
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- | (7,263 | ) | |||||
Total stockholders’ equity
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200,240 | 237,924 | ||||||
Total liabilities and stockholders’ equity
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$ | 249,062 | $ | 627,039 |
Twelve Months Ended December 31,
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2010
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2011
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Operating activities:
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Net loss
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$ | (6,038 | ) | $ | (8,333 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities:
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Loss (gain) on interest rate swap
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42 | (328 | ) | |||||
Depreciation and amortization
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19,505 | 47,439 | ||||||
Amortization of deferred rent
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(61 | ) | (450 | ) | ||||
Share-based compensation
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1,816 | 7,834 | ||||||
Excess tax benefit related to share-based compensation
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(974 | ) | - | |||||
Provision for doubtful accounts
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173 | 2,297 | ||||||
Amortization of deferred financing costs
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872 | 1,941 | ||||||
Deferred income taxes
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(5,406 | ) | (6,364 | ) | ||||
Loss on early extinguishment of debt
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3,169 | 621 | ||||||
Changes in operating assets and liabilities, net of effects of acquisitions:
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Accounts receivable
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(2,098 | ) | (9,047 | ) | ||||
Prepaid expenses and other current assets
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560 | (1,801 | ) | |||||
Accounts payable and accrued expenses
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5,946 | (1,907 | ) | |||||
Accrued interest expense
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- | 10,240 | ||||||
Deferred revenue and customer deposits
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(917 | ) | (169 | ) | ||||
Other liabilities
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1,714 | (2,430 | ) | |||||
Net cash provided by operating activities
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18,303 | 39,543 | ||||||
Investing activities:
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Cash paid for acquisitions, net
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(115,225 | ) | (322,248 | ) | ||||
Purchases of equipment and leasehold improvements, net
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(1,730 | ) | (6,856 | ) | ||||
Working capital and other settlements for acquisitions
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418 | (6,710 | ) | |||||
Net cash used in investing activities
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(116,537 | ) | (335,814 | ) | ||||
Financing activities:
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Borrowings under credit facilities
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67,315 | 278,000 | ||||||
Borrowings under senior unsecured notes payable
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- | 250,000 | ||||||
Net borrowings under working capital facilities
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4,997 | 35,621 | ||||||
Excess tax benefit related to share-based compensation
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974 | - | ||||||
Proceeds from the exercise of options and warrants
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703 | 2,292 | ||||||
Issuance of preferred stock, net
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32,421 | - | ||||||
Issuance of common stock, net
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136,660 | - | ||||||
Payment of related party notes
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(3,500 | ) | - | |||||
Repayment of subordinated unsecured notes payable
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(2,167 | ) | (2,421 | ) | ||||
Purchases of treasury stock
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- | (9,421 | ) | |||||
Payment of deferred financing costs
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(6,534 | ) | (9,746 | ) | ||||
Repayment under credit facilities
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(100,550 | ) | (273,000 | ) | ||||
Other
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- | (440 | ) | |||||
Net cash provided by financing activities
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130,319 | 270,885 | ||||||
Exchange rate impact on cash and cash equivalents
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40 | 178 | ||||||
Net increase (decrease) in cash and cash equivalents
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32,125 | (25,208 | ) | |||||
Cash and cash equivalents, beginning of year
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1,499 | 33,624 | ||||||
Cash and cash equivalents, end of year
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$ | 33,624 | $ | 8,416 | ||||
NON CASH INVESTING AND FINANCING ACTIVITIES:
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Issuance of common stock for acquisitions
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$ | 10,075 | $ | 47,174 | ||||
Issuance of common stock, net of related costs, to settle earnout obligations
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$ | 576 | $ | 808 | ||||
Issuance of subordinated unsecured notes payable for acquisitions
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$ | 1,747 | $ | - | ||||
Issuance of common stock for termination of agreement
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$ | 1,434 | $ | - | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
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Cash paid for interest
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$ | 4,994 | $ | 5,447 | ||||
Cash paid for income taxes
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$ | 231 | $ | 4,061 |
Three months ended December 31,
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Twelve months ended December 31,
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2010
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2011
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2010
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2011
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Reconciliation of Adjusted EBITDA:
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||||||||||||||||
Net loss
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$ | (5,448 | ) | $ | (5,025 | ) | $ | (6,038 | ) | $ | (8,333 | ) | ||||
Share-based compensation expense (1)
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1,257 | 2,449 | 1,816 | 7,834 | ||||||||||||
Depreciation and amortization
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7,053 | 14,286 | 19,505 | 47,439 | ||||||||||||
Acquisition-related transaction costs
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2,975 | 403 | 6,101 | 3,107 | ||||||||||||
Other non-recurring costs
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188 | 10 | 188 | 878 | ||||||||||||
Interest and other expenses, net
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5,889 | 6,948 | 11,233 | 16,461 | ||||||||||||
Benefit for income taxes
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(1,857 | ) | (2,262 | ) | (2,484 | ) | (4,082 | ) | ||||||||
Adjusted EBITDA
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$ | 10,057 | $ | 16,809 | $ | 30,321 | $ | 63,304 |
(1) | Share-based compenation expense of $650,000 and $2.0 million is included in costs of revenues for the three and twelve months ended December 31, 2011 and the remainder is included in SGA expenses. For the three and twelve months ended December 31, 2010, all share-based compensation expense is included in SGA expenses. |